HEINE V. NEW YORK LIFE INS.

CO
HEINE V. NEW YORK LIFE INS. CO.

NO. 6405.

CIRCUIT COURT OF APPEALS, NINTH CIRCUIT.

MAY 25, 1931.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE

DISTRICT OF OREGON; ROBERT S. BEAN, JUDGE.

ACTION BY HENRY HEINE AGAINST THE NEW YORK LIFE INSURANCE

COMPANY. FROM AN ORDER OF DISMISSAL [ 45 F.2D 426], PLAINTIFF

APPEALS.

AFFIRMED.

THIS IS AN APPEAL FROM AN ORDER OF DISMISSAL GRANTED BY THE

COURT IN THE EXERCISE OF ITS POWER OF DISCRETION TO RETAIN OR

REJECT JURISDICTION. THE ACTION WAS BROUGHT IN THE STATE

COURT OF OREGON AND REMOVED BY THE APPELLEE TO THE FEDERAL

COURT. IT IS BASED ON INSURANCE POLICIES, DATED NOVEMBER 10,

1911, ISSUED IN GERMANY TO A GERMAN RESIDENT AND CITIZEN,

WRITTEN IN GERMAN LANGUAGE, AND PAYABLE IN GERMANY IN THE

CURRENCY OF THAT COUNTRY. THE APPELLANT SEEKS TO RECOVER AS

DAMAGES THE CASH SURRENDER VALUE OF THE POLICIES.

THE ANSWER DENIES LIABILITY; PLEADS STIPULATIONS IN THE

POLICIES DESIGNATING CERTAIN SPECIFIED COURTS IN GERMANY AS

HAVING EXCLUSIVE JURISDICTION; PLEADS NOVATION, IN THAT KRONOS

DEUTSCHE LEBEN-VERSICHERUNGS AKTIEN-GESELLSCHAFT, A GERMAN

INSURANCE COMPANY, ASSUMED THE LIABILITY OF THE APPELLEE

UNDER THE POLICIES, WITH THE ASSENT OF THE APPELLANT; PLEADS

THE CURRENCY LEGISLATION OF GERMANY AND THE VALORIZATION

LAWS, STEPS TAKEN BY THE GERMAN AUTHORITIES TO RATE UP

CERTAIN CLASSES OF CONTRACTS PAYABLE IN MARKS, INCLUDING

INSURANCE POLICIES ISSUED IN GERMANY; PLEADS A MUTUAL

ARRANGEMENT BETWEEN THE APPELLEE AND THE GERMAN INSURANCE

AUTHORITIES, ACTING ON BEHALF OF THE GERMAN POLICYHOLDERS,

BY WHICH A FUND WAS ESTABLISHED AND PLACED IN THE CUSTODY OF

THE GERMAN INSURANCE AUTHORITIES TO PAY AND ADJUST ALL

CLAIMS ON POLICIES ISSUED BY THE APPELLEE IN GERMANY,

INCLUDING THE POLICIES IN LITIGATION. ATTACHED TO THE ANSWER

ARE CERTAIN AFFIDAVITS AND COPIES OF THE GERMAN LAWS AND

DECISIONS OF THE GERMAN COURTS AND THE GERMAN FEDERAL

INSURANCE BOARD; A DECISION OF THE GERMAN FEDERAL INSURANCE

BOARD FIXING THE AMOUNT OF THE CONTRIBUTION OF THE APPELLEE

TO THE VALORIZATION FUND, FOR THE PAYMENT OF ALL POLICIES

ISSUED BY IT IN GERMANY, AS $3,000,000 *383383 (12,000,000 MARKS) IN

ADDITION TO 2,000,000 MARKS WHEN CONCESSION WAS GRANTED,

11,607,000 MARKS TO MEET WAR LOSSES AND 37,107,737 MARKS PAID

TO "KRONOS" AT THE TIME THE GERMAN BUSINESS OF THE APPELLEE

WAS TAKEN OVER; A DISTRIBUTION PLAN ISSUED BY THE GERMAN

FEDERAL INSURANCE BOARD FOR THE INSURANCE POLICIES ISSUED BY

THE APPELLEE, AND A TABLE OF THE PERCENTAGES OF THE GOLD

MARK VALUE AT WHICH THE POLICIES OF THE VARIOUS COMPANIES

WERE TO BE RATED UP FOR VALUE, LISTING APPROXIMATELY FIFTY

COMPANIES, INCLUDING APPELLEE. ALL PREMIUMS COLLECTED IN

GERMANY, TOGETHER WITH SUMS DEPOSITED BY THE APPELLEE FOR

LICENSE TO DO BUSINESS, WERE IMPOUNDED IN A RESERVE

DEPOSITORY AND INVESTED UNDER GERMAN APPROVAL FOR

PROTECTION OF POLICYHOLDERS. THE AFFIDAVITS AND STATEMENTS IN

THE RECORD ARE BY AGREEMENT TO BE CONSIDERED AS A PART

THEREOF. THEY ALSO RECITE THAT THE MARK WAS THE SOLE

CIRCULATING MEDIUM OF EXCHANGE AND LEGAL TENDER CURRENCY

OF GERMANY UNTIL THE PASSAGE OF THE COINAGE LAW OF AUGUST,

1924, WHICH CREATED AND ESTABLISHED FOR THE GERMAN REICH AN

ENTIRELY NEW AND DISTINCT CURRENCY CALLED THE REICHSMARK,

MAKING THE REICHSMARK THE SOLE LEGAL TENDER CURRENCY OF

GERMANY AND PROVIDING FOR THE CONVERSION OF THE OLD MARK

INTO THE NEW REICHSMARK AT THE CONVERSION RATIO OF ONE-

MILLION-MILLION OF THE FORMER FOR ONE OF THE LATTER; THAT BY A

DECREE OF SEPTEMBER 28, 1914, CONTRACTS MADE PRIOR TO JULY 1,

1914, CALLING FOR PAYMENT IN GOLD WERE DECLARED NOT BINDING;

THAT THE REICHS CHANCELLOR WAS TO DECIDE AS TO THE DATE WHEN

THIS DECREE SHOULD BECOME INEFFECTIVE; THAT THE DECREE HAS

NOT BEEN REPEALED, NOR HAS THE SUSPENSION OF THE REDEMPTION

OF THE GERMAN TREASURY BILLS AND REICHSBANK GOLD NOTES BEEN

LIFTED, AND THAT THE LAWS OF AUGUST, 1924, IN CONNECTION WITH

THE LOSS OF THE WAR BY GERMANY, CONSTITUTE THE PRIMARY CAUSE

OF THE SUBSEQUENT CATASTROPHIC DEPRECIATION OF THE GERMAN

MARK. (THE POLICIES IN SUIT WERE PAYABLE IN THE OLD CURRENCY,

MARK D. RWG.) ALSO ATTACHED IS AN IRREVOCABLE POWER OF

ATTORNEY TO CERTAIN NAMED PARTIES, WHICH AUTHORIZES AND

EMPOWERS THEM TO SUE FOR, COLLECT, RECEIVE, AND RECEIPT FOR

ALL SUMS DUE OR OWING UNDER THE POLICIES, OR COMPROMISE THE

SAME, IN CONSIDERATION OF THE ASSIGNMENT AND TRANSFER TO

THEM OF AN UNDIVIDED 25 PER CENT. INTEREST IN THE POLICIES, AND

ALL RIGHTS ACCRUING THEREUNDER. IT IS STATED THAT THERE ARE NO

WITNESSES TO ANY OF THE TRANSACTIONS RESIDENT IN THE STATE OF

OREGON; THAT PRACTICALLY ALL OF THE WITNESSES RESIDE IN

GERMANY OR IN THE STATE OF NEW YORK; THAT NO RECORDS OF THE

APPELLEE ARE IN THE STATE OF OREGON; THAT ALL OF APPELLEE'S

ORIGINAL DATA, CORRESPONDENCE, AND DOCUMENTS RELATING TO ITS

BUSINESS IN GERMANY AND POLICIES ISSUED THERE WERE KEPT IN

GERMANY AND STILL ARE THERE IN THE POSSESSION OF THE "KRONOS"

LIFE INSURANCE COMPANY; THAT TO DEFEND THIS ACTION IN THE

COURTS OF OREGON WOULD IMPOSE UPON THE APPELLEE GREAT AND

UNNECESSARY DIFFICULTY, INCONVENIENCE AND EXPENSE; THAT THE

APPELLEE MAINTAINS AND INTENDS TO CONTINUE IN GERMANY A

GENERAL REPRESENTATIVE AND ATTORNEY IN FACT, APPOINTED

PURSUANT TO THE INSURANCE LAWS OF GERMANY, UPON WHOM LEGAL

PROCESS MAY BE SERVED; THAT IN ALL ACTIONS COMMENCED IN

GERMANY AT NO TIME HAS THE JURISDICTION OF THE GERMAN COURTS

BEEN EVADED OR ATTEMPT MADE TO INVALIDATE SERVICE; THAT IN ALL

SUCH ACTIONS THE GERMAN COURTS HAVE ASSUMED JURISDICTION;

THAT SUCH COURTS ARE OPEN AND FUNCTIONING AND ARE COMPETENT

AND READY TO TAKE JURISDICTION OF JUSTICIABLE MATTERS. IT IS

FURTHER SHOWN THAT THERE ARE NOW PENDING IN THE COURTS OF

OREGON, AGAINST THE APPELLEE, CASES INVOLVING 192 POLICIES

ISSUED TO GERMAN CITIZENS WHO AT ALL TIMES HAVE BEEN RESIDENT

IN AND NOW RESIDE IN GERMANY, ALL PAYABLE IN GERMANY IN

GERMAN CURRENCY, AND SUBJECT TO GERMAN LAW, AND, IN THE SAME

COURT, ACTIONS AGAINST THE GUARDIAN LIFE INSURANCE COMPANY

INVOLVING 50 POLICIES, AND AGAINST THE GUARDIAN LIFE INSURANCE

COMPANY AND THE APPELLEE ACTIONS INVOLVING 18 POLICIES; THAT

PAUL HERRMANN, APPELLANT IN THE COMPANION CASE SUBMITTED

HEREWITH, 50 F.2D 387, A RESIDENT AND CITIZEN OF GERMANY, IS

PLAINTIFF IN MANY OF THESE CASES; THAT IN ONE CASE BROUGHT BY

HIM THERE ARE INVOLVED 115 POLICIES, IN AS MANY SEPARATE

CAUSES OF ACTION; THAT ANOTHER CASE INVOLVES 39 POLICIES

ISSUED TO DIFFERENT PERSONS, AND ANOTHER INVOLVES 14 POLICIES,

AND OTHERS OF LESS NUMBER. THE RECORD ALSO DISCLOSES THAT

TWO CASES WERE BROUGHT AGAINST THE APPELLEE IN THE STATE OF

NEW YORK ON LIKE POLICIES AND THAT THE NEW YORK COURT

DECLINED TO RETAIN JURISDICTION AND DISMISSED THE SAME. HIGGINS

V. NEW YORK LIFE INS. CO., 220 APP. DIV. 760, 222 N.Y.S. 819.

IT APPEARS THAT FOR SEVERAL YEARS A VIGOROUS CAMPAIGN HAS

BEEN CONDUCTED IN GERMANY TO SECURE CONTROL OF POLICIES

ISSUED IN GERMANY BY AMERICAN COMPANIES, APPROXIMATELY 28,000

FOR PROSECUTION IN THE AMERICAN COURTS, UPON THE

REPRESENTATION THAT A MUCH LARGER RECOVERY MIGHT BE HAD IN

THE AMERICAN COURTS THAN FROM GERMAN COURTS OR GERMAN

ADMINISTRATIVE BODIES. (THE TERM "AMERICAN" IN THIS

MEMORANDUM MEANS UNITED STATES.) *384384

IT FURTHER APPEARS THAT THERE IS PENDING IN THE STATE COURT

FOR MULTNOMAH COUNTY, OR., AN ACTION BROUGHT BY ONE

LUETJOHANN, A CITIZEN AND RESIDENT OF GERMANY, AGAINST THE

APPELLEE, ON A LIKE POLICY, IN WHICH CASE A MOTION HAS BEEN

FILED TO COMPEL THE APPELLEE TO BRING TO PORTLAND FOR

INSPECTION BY PLAINTIFF'S COUNSEL, WHO ALSO REPRESENTS ALL

THE PLAINTIFFS IN THE VARIOUS ACTIONS BROUGHT ON THE GERMAN

POLICIES, THE FOLLOWING:

"ALL OF THE DAY BOOKS, JOURNALS AND LEDGERS KEPT BY

DEFENDANT DURING THE YEARS 1922 TO 1928, WHETHER IN BOOK FORM

OR OTHERWISE; AND

"ALL BALANCE SHEETS AND TRIAL BALANCES;

"ALSO ALL LISTS, REGISTERS AND OTHER RECORDS CONTAINING THE

NAMES OF ALL POLICYHOLDERS AND THE AMOUNTS AND KINDS OF

INSURANCE ISSUED AND IN EFFECT DURING SAID YEARS;

"ALL OTHER BOOKS, PAPERS, DOCUMENTS AND RECORDS IN THE

POSSESSION OF DEFENDANT WHICH DISCLOSE THE AMOUNT OF

PROFITS MADE EACH YEAR BY DEFENDANT AND WHICH DISCLOSE THE

PRESENT WHEREABOUTS, AMOUNT AND SITUS OF THE ASSETS AND

SURPLUS OF THE DEFENDANT AND THE INVESTMENTS THEREOF;

"ALL BOOKS OF ACCOUNT, PAPERS, DOCUMENTS AND RECORDS IN THE

POSSESSION OF THE DEFENDANT WHICH DISCLOSE THE UNIT VALUE,

I.E., AMERICAN DOLLARS OR OTHER UNITS, IN WHICH THE PROFITS,

SURPLUSES AND ASSETS OF THE DEFENDANT WERE EARNED BY

DEFENDANT AND WERE KEPT DURING SAID YEARS AND ARE NOW KEPT

AND FIGURED AND CALCULATED IN SAID BOOKS OF ACCOUNTS."

IT APPEARS THAT THE BOOKS AND RECORDS SO REQUESTED

COMPRISE:

"HUNDREDS OF VOLUMES OF CURRENT BOOKS OF ACCOUNTS,

CONSISTING OF MANY KINDS OF CASH BOOKS, JOURNALS AND

LEDGERS, KEPT BY THE NUMEROUS DEPARTMENTS OF DEFENDANT'S

BUSINESS, AND THEY ALSO INCLUDE HUNDREDS OF THOUSANDS OF

UNBOUND SHEETS OF ACCOUNTS. THESE DAY BOOKS, JOURNALS,

LEDGERS AND ACCOUNTS CONSTITUTE THE CURRENT BOOKS OF

ACCOUNT OF THE DEFENDANT IN ITS VARIOUS DEPARTMENTS. THEY

ARE IN CONSTANT DAILY USE BY SCORES OF THE ACCOUNTANTS AND

ACTUARIES OF THE COMPANY AND THEY COULD NOT BE REMOVED

FROM DEFENDANT'S NEW YORK OFFICE WITHOUT HOPELESSLY

DISRUPTING ALL OF THE DEPARTMENTS OF THE DEFENDANT'S

BUSINESS AND STOPPING THE COMPANY'S OPERATIONS.

"THE `LISTS, REGISTERS AND OTHER RECORDS CONTAINING THE NAMES

OF ALL POLICYHOLDERS AND THE AMOUNTS AND KINDS OF INSURANCE

ISSUED AND IN EFFECT DURING THE YEARS 1922 TO 1928, INCLUSIVE,'

DEMANDED BY PLAINTIFF, ARE KEPT BY DEFENDANT ONLY IN CARD

FORM. THERE ARE SEPARATE CARDS FOR EACH KIND OF INFORMATION

CONCERNING EACH POLICY, INCLUDING INDEX CARDS, BRIEF CARDS,

MORTALITY CARDS, PREMIUM CARDS AND DIVIDEND CARDS. THESE

CARDS ARE KEPT IN DIFFERENT DEPARTMENTS AND EACH CARD

CONTAINS ONLY SUCH INFORMATION CONCERNING THE POLICY AS IS

NECESSARY FOR THE PURPOSE OF THE DEPARTMENT IN WHICH IT IS

KEPT. * * * THE COMPANY HAD OUTSTANDING DURING THE PERIOD

COVERED BY PLAINTIFF'S REQUEST MORE THAN 2,500,000 POLICIES. IT

WOULD BE NECESSARY, THEREFORE, IN ORDER TO MEET PLAINTIFF'S

REQUEST, * * * TO SEND TO OREGON MANY MILLIONS OF POLICY CARDS,

WHICH CONSTITUTE ALL OF DEFENDANT'S RECORDS CONCERNING ITS

INDIVIDUAL POLICIES ISSUED AND IN EFFECT DURING THE YEARS 1922

TO 1928. THESE CARDS ARE IN DAILY USE BY HUNDREDS OF

DEFENDANT'S EMPLOYEES IN MAKING LOANS, COMPUTING DIVIDENDS,

CONVERTING POLICIES, PAYING CLAIMS, ANSWERING INQUIRIES AND

OTHERWISE DEALING WITH ITS POLICIES AND POLICYHOLDERS. THE

REMOVAL OF THESE CARDS FROM THE COMPANY'S NEW YORK OFFICE

WOULD ABSOLUTELY STOP THE COMPANY'S FUNCTIONING IN REGARD

TO ITS POLICIES AND POLICYHOLDERS.

"SOME IDEA OF THE VOLUME OF BOOKS AND RECORDS REQUESTED BY

PLAINTIFF MAY BE GLEANED FROM A RECENT EXPERIENCE OF THE NEW

YORK LIFE INSURANCE COMPANY IN MOVING ITS HEADQUARTERS FROM

346 BROADWAY TO ITS PRESENT HEADQUARTERS, 51 MADISON AVENUE.

THE DISTANCE BETWEEN THE OLD HEADQUARTERS AND THE NEW IS

ABOUT ONE AND ONE-HALF MILES. IT TOOK THIRTY TRUCKS, IN

CONSTANT OPERATION FOR FOUR DAYS AND NIGHTS, TO MOVE THE

BOOKS AND RECORDS OF THE COMPANY.

"THE EXPERIENCE OF THE AUDITORS OF THE NEW YORK STATE

DEPARTMENT OF INSURANCE IS ALSO INSTRUCTIVE ON THIS POINT. THE

AUDITORS EXAMINE THE ACCOUNTS OF THE COMPANY EVERY THREE

YEARS. IT TAKES 25 OR 30 ACCOUNTANTS FROM THE STATE

DEPARTMENT OF INSURANCE A PERIOD OF APPROXIMATELY FOUR

MONTHS TO COVER THE BOOKS AND RECORDS OF THE COMPANY FOR A

THREE-YEAR PERIOD."

IT APPEARS THAT THE APPELLATE DIVISION OF THE GERMAN COURTS

REVIEWED THE HISTORY OF THE ACTIVITIES OF THE APPELLEE AND

HELD THAT IT HAD AT ALL TIMES BEEN UNDER THE SUPERVISION OF

THE GERMAN INSURANCE BOARD, REFERRED TO THE FACT THAT IT HAD

AN OFFICE AND GENERAL REPRESENTATIVE IN GERMANY AND LARGE

ASSETS, IN ADDITION TO THOSE TRANSFERRED TO "KRONOS," AND

SAID: "AS THE COURT BELOW EXPRESSLY STATED, THE COMPANY

ALWAYS FULFILLED EVERY ORDER OF THE GERMAN INSURANCE

BOARD." AND IT APPEARS THAT THE LEGAL TENDER STATUS OF

THE *385385 GERMAN MARK WAS CONFIRMED BY DECISION OF THE

GERMAN SUPREME COURT APRIL 16, 1921, REPORTED IN DECISIONS OF

THE SUPREME COURT IN CIVIL CASES, VOL. 102, P. 98, HOLDING THAT

THE STIPULATION OF THE CONTRACT WITH REL ATION TO THE PAYMENT

IS BINDING, AND THAT THE GERMAN COURTS HAVE UNIFORMLY HELD

THAT INSURANCE POLICIES ISSUED IN GERMANY TO GERMAN

NATIONALS ARE GERMAN CONTRACTS AND THAT THEIR CONSTRUCTION,

THE EXTENT OF THE LIABILITY AND THE REMEDY OR DISCHARGE

THEREUNDER ARE DETERMINABLE EXCLUSIVELY BY GERMAN LAW.

FERENSDORFF, NEE HERZ V. SWISS LIFE INSURANCE ANNUITY

INSTITUTE, DECIDED BY THE SUPREME COURT DECEMBER 18, 1929;

MESSERSCHMITT V. N Y LIFE INS. CO., DECIDED BY THE BERLIN COURT

OF APPEALS MARCH 12, 1930; HARDT V. N.Y. LIFE INS. CO., DECIDED BY

THE SAME COURT ON THE SAME DATE; MARX V. N.Y. LIFE INS. CO.,

DECIDED BY THE DISTRICT COURT, MAINZ (GERMANY) JANUARY 27,

1930; PROTECTIVE ASSN. OF HOLDERS OF FOREIGN INSURANCE

POLICIES V. SWISS LIFE INSURANCE ANNUITY INSTITUTE, DECIDED BY

THE MUNICH COURT OF APPEALS APRIL 15, 1929 (AFFIRMED BY THE

SUPREME COURT FEBRUARY 21, 1930); DAUNERT V. GUARDIAN LIFE INS.

CO., DECIDED BY THE BERLIN COURT OF APPEALS JULY 11, 1928;

DECISION OF THE GERMAN INSURANCE BOARD OCTOBER 25, 1928, IN

THE MATTER OF NEW YORK LIFE INSURANCE COMPANY, AFFIRMED BY

DECISION OF THE APPELLATE DIVISION FEBRUARY 13, 1929. THE

FOLLOWING DECISIONS BY FRENCH, AUSTRIAN, JUGOSLAVIAN AND

OTHER COURTS, AND BY THE TRIPARTITE CLAIMS COMMISSION, OF

WHICH JUDGE PARKER WAS CHAIRMAN, ARE CITED BY APPELLEE TO

THE SAME EFFECT: CREDIT LYONNAIS V. CREDIT NATIONAL, COUR

D'APPEL DE PARIS, DECIDED FEBRUARY 18, 1927; MASLOVA V. URBAINE

LIFE INS. CO. (4TH CHAMBER, TRIBUNAL OF COMMERCE, DEPT. OF THE

SEINE, PARIS), DECIDED JULY 19, 1926, REPORTED FOL. 156, CASE 6;

BAUCHON V. CREDIT LYONNAIS (1ST CHAMBER, CIVIL COURT), DECIDED

OCTOBER 26, 1925, AFFIRMED BY COURT OF APPEALS OF PARIS,

DALLOZ LAW REPORTS, JUNE 17, 1927; BANQUE HYPOTHECAIRE DE

BALE V. RIEGART, COUR DE CASSATION, DECIDED JANUARY 23, 1924,

REPORTED IN GAZETTE DES TRIBUNAUX APRIL 28, 29, 1924; BANQUE

HYPOTHECAIRE V. RIFF, DECIDED JANUARY 11, 1926, DALLOZ L.R. 1926,

P. 85; GHAN V. ORLOFF, DALLOZ L.R. 1927, P. 62; DECISION OF SUPREME

COURT OF AUSTRIA, JANUARY 18, 1927, OB. III 993-28 "ZENTRALBLATT"

NO. 102 EX 1927; DECISION OF MAY 25, 1927, BY TRIPARTITE CLAIMS

COMMISSION, 21 AM. JOURNAL INTERNATIONAL LAW, 610.

THIS BRIEF STATEMENT OF THE RECORD, MADE UP OF AFFIDAVITS AND

DOCUMENTS, IS NOT DENIED, WHILE THE MATERIAL PARTS OF THE

ANSWER ARE DENIED BY THE REPLY. IT HAS BEEN SET OUT TO THE END

THAT THE HISTORY OF THE ISSUE AND PROCEDURE CAN BE MORE

FULLY APPRECIATED.
C.T. Haas and E.B. Seabrook, both of Portland, Or., for appellant.

Huntington, Wilson Huntington and Clark Clark, all of Portland, Or., for appellee.

Before WILBUR and SAWTELLE, Circuit Judges, and NETERER, District Judge.

NETERER, District Judge (after stating the facts).

The agency in Germany was established as a distinct entity, a German creation under German law.
A reserve fund was made and all premiums received were placed in that fund and invested in
Germany under German official approval. Upon creation of "Kronos," all funds and property of
appellee in Germany were delivered to and supervision and execution of power assumed by the
German Federal Insurance Board, and additional deposits made by the appellee, as required by the
German valorization laws, in accordance with the decisions of the German Federal Insurance Board.
The laws in relation thereto have been interpreted to apply to like policies, and many similar cases
are now pending before the German courts, they being open, able, competent, and efficient, and the
German Federal Insurance Board being active and fully functioning.

It is obvious that this litigation is not the normal outgrowth of usual business activity and relation, but
that it is the creation of activity to secure representation of some 28,000 insurance policies executed
in Germany by American companies, written in the German language, in the relation of collection
agent or agencies, and file actions thereon in the state and federal courts of the United States, an
indirect appeal from the German judiciary and the German Federal Insurance Board.

Incidentally, it may be said that the courts of the United States have uniformly applied the law of the
place to insurance contracts. Orient Insurance Co. v. Daggs, 172 U.S. 557, 19 S. Ct. 281, 43 L. Ed.
552; Mutual Life Ins. Co. of N.Y. v. Cohen, 179 U.S. 262, 21 S. Ct. 106, 45 L. Ed. 181; Mutual Life
Ins. Co. v. Hill, 193 U.S. 551, 24 S. Ct. 538, 48 L. Ed. 788; Northwestern Mut. Life Ins. Co. v.
McCue, 223 U.S. 234, 32 S. Ct. 220, 56 L. Ed. 419, 38 L.R.A. (N.S.) 57. *386386 And, when suit was
entertained, the cause of which arose in a foreign country, the courts granted relief according to the
laws of the country where the action arose. Slater v. Mexican Nat. Ry. Co., 194 U.S. 120, 24 S. Ct.
581, 48 L. Ed. 900. It has been held that discharge under a foreign obligation in accordance with the
foreign law is a complete defense. Zimmerman v. Sutherland, 274 U.S. 253, 47 S. Ct. 625, 71 L. Ed.
1034. It has also been held that the courts of the United States will not inquire into the validity,
wisdom or justice of the laws of a foreign country, or the administration of foreign agencies. League
v. De Young, 52 U.S. (11 How.) 185, 13 L. Ed. 657; Canada Southern Ry. Co. v. Gebhard, 109 U.S.
527, 3 S. Ct. 363, 27 L. Ed. 1020; Underhill v. Hernandez, 168 U.S. 250, 18 S. Ct. 83, 42 L. Ed. 456;
Hewitt v. Speyer (C.C.A.) 250 F. 367.

Nor does it appear that enlarged rights may be obtained over the German law should a suit by a
policyholder be entertained by the courts of the United States. Sutherland v. Mayer, 271 U.S.
272, 46 S. Ct. 538, 70 L. Ed. 943; Deutsche Bank v. Humphrey, 272 U.S. 517, 47 S. Ct. 166, 71 L.
Ed. 383; see, also, Zimmerman v. Sutherland, supra. Such holding is in harmony with other courts.
See, Chesterman's Trust, (1923) 2 Chancery 466, where the court had before it a debt payable in
German marks which had greatly depreciated, and it was held that it might be paid in the
depreciated marks or in their exchange value converted into British currency. The same rule was
applied in British Bank v. Russian Bank, (1921) 38 Times Law Reports 65, in which Mr. Justice
Russell said that he "had great sympathy with the defendants, but it must be remembered that the
same causes that caused the fall in the value of roubles had produced great depreciation in the
plaintiff's securities." This was approved in Anderson v. Equitable Assurance Society, (1926) 134
Law Times 557.

It is asserted by appellant that, jurisdiction being apparent on the face of the record, it may not be
challenged by motion but must be by plea, and that when, as here, jurisdiction is challenged by plea,
by the answer, and put in issue by the reply, issue must be submitted to the jury for decision on the
merits, and that there is no precedent for the order of the trial court.

As to the last objection, to have a precedent there must be an antecedent case; but the lack thereof
does not defeat a right or privilege. No fault can be found with the cases cited by the appellant, the
following of which are the more prominent: Farmington v. Pillsbury,114 U.S. 138, 5 S. Ct. 807, 29 L.
Ed. 114; Hartog v. Memory, 116 U.S. 588, 6 S. Ct. 521, 29 L. Ed. 725; Mexican Central Railway Co.
v. Pinkney, 149 U.S. 194, 13 S. Ct. 859,37 L. Ed. 699; City Railway Co. v. Citizen's Street Railroad
Co., 166 U.S. 557, 17 S. Ct. 653, 41 L. Ed. 1114; Union Mutual Life Insurance Co. v. Kirchoff, 169
U.S. 103, 18 S. Ct. 260, 42 L. Ed. 677; York County Sav. Bank v. Abbot (C.C.) 131 F. 980. These
cases do not point the way. One sustains dismissal when the fact appears to a legal certainty;
another, where a party is collusively added; another holds that the evidence considered must be
pertinent to the issue, or to the inquiry by the court; another holds that where there is reasonable
plausibility of bona fide claim, jurisdiction will be passed to trial on the merits, and another is one
where the court holds that claim rightly viewed unfounded must be denied.

Every requirement appears to be met substantially by the record. Process in this case was served
upon the statutory agent of the appellee in Oregon, appointed as a condition to do business in that
state and for the convenience and protection of residents to whom policies may be issued and afford
them access to the courts of the state or district.

The appellant contends that, notwithstanding the agreement that the German courts shall have
exclusive jurisdiction, such agreement is not binding on the federal courts, vested with their
jurisdiction by the United States Constitution, of which they cannot be deprived by foreign laws or
agreement. The appellant also contends that these are not actions upon the policies. But, whatever
the designation may be, the basis is the policies.

No alien has a constitutional right to sue in the United States courts. Kline v. Burke Construction
Co., 260 U.S. 226, 43 S. Ct. 79, 67 L. Ed. 226, 24 A.L.R. 1077. The United States District Courts
have such jurisdiction as the Congress confers. 28 USCA § 41, grants jurisdiction as follows:

"First. Of all suits of a civil nature, at common law or in equity * * * between citizens of a State and
foreign States, citizens, or subjects. * * *

"Third. Of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right
of a common-law remedy. * * *" *387387
Civil cases and actions in admiralty and maritime jurisdiction have equal status, and the courts have
uniformly, where the question has arisen, declined to entertain jurisdiction in admiralty suits by
nonresidents when in the discretion of the court it would be inconvenient and inexpedient to do so.
And no distinction has been made to civil cases.

Nor is the right to challenge the jurisdiction or to invite the discretion of the court waived or forfeited
by removal from the state to the federal court, or the right of the court, after issue joined, to make
investigation on notice and, in its discretion, decline jurisdiction after such inquiry. 28 USCA, § 81,
provides that in all suits removed the court shall proceed as if the suit had been originally
commenced in the district court and the same proceedings had been taken in such suit in said
district court as shall have been had therein in said state court prior to its removal.

Upon the face of the record the district court had jurisdiction when the case came to it from the state
court. When the issue first came to its attention, and upon inquiry and examination, the court
became cognizant of the status and relation and no doubt had inherent power to protect itself from a
deluge of litigation by nonresidents, inspired by contingent retainers to avoid or overcome foreign
laws and interpretation and application thereof by foreign courts of the country of the situs of the
contract; and it had the power to prefer resident litigants of the district in access to overcrowded
calendars, for, as Justice Holmes said in Douglas v. New York, N.H. H.R. Co., 279 U.S. 377, 387, 49
S. Ct. 355, 356, 73 L. Ed. 747: "There are manifest reasons for preferring residents in access to
often overcrowded Courts, both in convenience and in the fact that broadly speaking it is they who
pay for maintaining the Courts concerned"; and it had the power to prevent imposition upon its
jurisdiction and use of the court as a "cover for injustice to the defendants" (Cuba R. Co. v.
Crosby, 222 U.S. 473, 479, 32 S. Ct. 132, 133, 56 L. Ed. 274, 38 L.R.A. (N.S.) 40) by reason of the
enormous expense involved in bringing across the continent witnesses from Germany and New York
and the records of appellee which plaintiff demands as necessary in another case and, if so, must
also be necessary in this case, the removal of which would destroy the ability of the appellee,
representing more than 2,500,000 policyholders, to function.

Comity between the United States and Germany should also have consideration.

With the foregoing, nothing can be added to the opinion of Judge Robert S. Bean, who at the time of
his recent demise was the dean of the American bench, and whose death terminated a creditable
judicial career of more than forty-eight years on the state and federal bench. His opinion is reported
in (D.C.) 45 F.2d 426, and is adopted as a part of the opinion of the court.

Affirmed.