GERMANY.

PROSECUTION BY THE UNITED STATES OF AMERICAN CITIZENS FOR CRIMES COMMITTED IN FOREIGN COUNTRIES.

File No. 22867.

No. 527.]

Chargé Hitt to the Secretary of State.

AMERICAN EMBASSY,

Berlin, December 6, 1909.

SIR: I have the honor to transmit herewith a copy, with translation, of a note which I have received from the foreign office, under date of the 4th instant, relative to one Max Runge, who is being sought by the New York police under a charge of theft, and whose arrest, with a view to extradition, the New York police department has requested of the police president of Berlin.

It will be observed that the foreign office points out that the individual in question would not seem to be extraditable, as the offense against him is not included in the extradition treaty of June 16, 1852, but that if he is a German subject, he might be prosecuted before the German courts, if this was requested by the Government of the United States and the assurance given of reciprocal treatment on the part of the United States in similar cases.

I have, etc.,

The foreign office has the honor to inform the embassy of the United States of America that, under date of November 5, 1909, the New York police department requested the president of police at Berlin to cause the necessary steps to be taken in order that search might be instituted for one Max Runge, a ship steward, born at Berlin, April 3, 1881, wanted in New York for theft, and that in case he should be found he might be provisionally detained for the purpose of his extradition.

Since the fugitive is said to have been born here it is to be presumed that he was born a German subject. The question is raised whether he has in the meanwhile lost his German nationality by acquiring citizenship in the United States of America. In neither case would his extradition come in question, since the offense with which he is charged is not listed in the extradition treaty of June 16, 1852, between Prussia and other States of the Germanic Federation on the one part and the United States of North America on the other part. In case Runge should still possess German nationality it could be considered whether he might not be brought before the German courts to answer for the offense committed in the United States. In order to do this, however, it would be necessary for the Government of the United States of America to request Runge's criminal prosecution and at the same time to declare that it guarantees reciprocity in reverse cases.

The foreign office therefore has the honor to request information concerning the points designated from the embassy of the United States of America.

File No. 22867.

No. 299.]

The Secretary of State to Ambassador Hill.

DEPARTMENT OF STATE,

Washington, January 11, 1910. SIR: The department has received your No. 527 of the 6th ultimo, relative to the request of the New York police authorities for the arrest in Germany of Max Runge, a fugitive from justice in this country, and his possible extradition to the United States.

Inasmuch as, under Anglo-Saxon legal theory, crime is territorial, not personal, and therefore the criminal jurisdiction of the United States does not, as a general rule, extend to crimes committed outside of its jurisdiction, whether by American citizens or aliens, it is not possible to meet the suggestion of the German note verbale that this Government guarantee, in cases the reverse of Max Runge's case, the criminal prosecution in this country of an American citizen charged with the commission of a crime in Germany. It may be remarked that the department has no communication from the New York authorities respecting the Max Runge case and is not advised of the circumstances thereof beyond what is contained in the note verbale from the German foreign office.

ALLEGED DISCRIMINATION AGAINST FOREIGN CREDITORS BY AMERICAN COURTS—AMERICANS AS PREFERRED CREDITORS.

File No. 311.624 D63.

The German Ambassador to the Secretary of State.

No. 2177/10.]

[Translation.]

IMPERIAL GERMAN EMBASSY,
Washington, May 27, 1910.

Mr. SECRETARY OF STATE: By direction of my Government I have the honor to draw your excellency's attention to a case of unequal treatment accorded by American courts to German and American citizens which came to light in the herein below-described litigation.

In August, 1901, the Discontogesellschaft of Berlin brought suit in the circuit court of Milwaukee, Wis., against Gerhard Terlinden, a German subject, who was prosecuted in Germany on account of various criminal acts there committed, had fled to the United States, and was subsequently extradited, for reparation of the damage sustained on account of the aforesaid criminal acts. He took this action in accord with the receiver, who in the meanwhile had been appointed in Germany to take charge of Terlinden's estate, in that it intended to turn over to the estate the money recovered through the suit. At the same time it caused to be legally attached, among other things, an asset of $6,420 held by Terlinden in the First National Bank of Milwaukee. On February 19, 1904, it obtained a judgment in the sum

of $94,145.11 against Terlinden, for whom Attorney Umbreit appeared as counsel in the suit.

Then Attorney Umbreit sued Terlinden for the fees due him, and on March 22, 1904-that is to say, after the attachment effected on account of the Diskonto-Gesellschaft and the judgment rendered in its favor also attached the above-mentioned account in the bank. Terlinden was not represented in that suit and on June 11, 1904, a judgment by default in the sum of $7,500 was rendered against him. Both of Terlinden's creditors-the Diskonto-Gesellschaft and Umbreit-now laid claim on the ground of the decisions rendered in their favor as preferential satisfaction of their demands out of the asset attached by both. The Diskonto-Gesellschaft obtained in the above-named circuit court a judgment based on its prior established right, by which its claim in that respect was recognized. Upon Attorney Umbreit's appeal, however, the supreme court of the State of Wisconsin reversed the judgment of the first court and granted Umbreit the right of preferential satisfaction out of the attached bank credit. The ground on which the judgment was based was that the Diskonto-Gesellschaft, as a German juristice person, even on account of a prior attachment, could not be held to be entitled to seeking preferential satisfaction out of property in Wisconsin as against a citizen of Wisconsin (Umbreit); that is to say, an action brought in an American court by an alien residing out of the State of the court of trial can not, except in case of the protection of proprietary rights to real or personal estate in the said State or of rights growing out of a contract with a resident of the State being in question, be deemed "an action maintainable as a matter of right.' Such actions, together with the mortgage rights exercised in connection therewith, are rather receivable solely on the general principles of "comity. The consequences to be expected from a judgment in favor of the Diskonto-Gesellschaft-namely, the removal of the property in dispute to Germany there to be administered upon for the benefit of Terlinden's German creditors should however be regarded as incompatible with the public policy of Wisconsin.

The Supreme Court of the United States, to which the DiskontoGesellschaft then appealed, found no occasion to alter that decision. On the contrary, in a decision of February 24, 1908, it declares it to be a principle obtaining throughout the territory of the United States of America that, so long as there is no provision of positive law or treaty with foreign States to the contrary, it is for every State of the Union to determine how much it will allow, in accordance with the principles of "comity" and in proportion to these rights, foreign creditors who come in conflict with local creditors." The treaty of May 1, 1828, between the United States and Prussia here. coming under consideration contains no provision which stands. against this conclusion.

In contradistinction to this judicial construction which has obtained recognition here and according to which American creditors. are, in principle, given preference over foreign creditors as to the forcible guarantee and collection of their claims on debtors in America, the German law provides that, no matter whether the creditors are natives or aliens, residents of Germany or other countries, priority is conclusive in all cases as to the precedence of rights established on

coercive measures. Paragraph 804, section 3, of the Rules of Civil Procedure (Reichsgesetzblatt, 1898, p. 410) reads as follows:

The lien established on an earlier attachment takes precedence over that established by a later attachment.

The same principle also obtains in the case of seizure proceedings, paragraph 930, section 1, of the same law, containing the following

provision:

The execution of the seizure of movable property is effected through the process of attachment. Attachment is affected according to the same principles as any other attachment and establishes a lien with the effects specified in paragraph 804.

How injurious the different American judicial construction may prove to the interest of German creditors is shown by the present case. Nor has it escaped notice in Germany and America and it has been keenly discussed in the German press as well as in several American papers. The German Government is of opinion that the law condition above described is apt to effect unfavorably the lively relations which bind to one another wide circles of the people, especially in the commercial world, of both countries. The inequality in the treatment of the respective citizens and subjects could be removed by a special provision in the sense of article 24 of the law putting into effect the rule of civil procedure which would apply to Americans in Germany the principle observed in America towards the Germans. The Imperial Government, however believes it would be preferable to remove the law inequality under consideration by means of an understanding between the two Governments. The question then would be to conclude an arrangement to the effect that the subjects or citizens of one party would derive from the attachments obtained by them in a court of the other party by way of seizure or distraint the same rights as are enjoyed by the citizens or subjects of the other party residing within the district of the court.

I should be especially thankful to your excellency if you would kindly acquaint me with the position of the Government of the United States on this question.

Accept, etc.,

No. 295.]

J. BERNSTORFF.

The Acting Secretary of State to the German Chargé. DEPARTMENT OF STATE, Washington, August 31, 1910. SIR: I have the honor to acknowledge the receipt of the Imperial German Embassy's note of May 27, 1910, regarding the rival claims of American and German creditors in American courts, with special reference to the case of one Terlinden, a German subject. The questions raised by your note which have received the very careful consideration of this Department, appear to involve the following facts and circumstances:

One Terlinden, a resident of Germany, absconded from the German Empire with money belonging apparently to the Disconto-Gesellschaft, which money he deposited August 9th and 14th, 1901, to the extent of $6,420, in the First National Bank of Milwaukee. The Disconto-Gesellschaft, a banking corporation of Berlin, by the

German Consul began an action August 17, 1901, in the Milwaukee county court in Wisconsin, against Terlinden for the recovery of this money, and at the same time garnisheed the First National Bank. Terlinden hired Umbreit, a citizen of Wisconsin and an attorney, to defend him in the suit. In this cause judgment was given February 19, 1904, against Terlinden for $94,145.11.

Umbreit interpleaded as a defendent in the above suit, and on March 21, 1904, also garnisheed the First National Bank and began suit against Terlinden for the recovery of the value of his services as attorney. As Terlinden had been extradited to Germany upon charges of forgery, counterfeiting, and the utterance of forged papers (see Terlinden v. Ames, 184 U. S., 270) the service of summons was had by publication on June 11, 1904 (about four months after judgment was rendered for the Disconto-Gesellschaft). Judgment was given by default in favor of Umbreit for $7,500.

On the question as to who should have priority, the Disconto Gesellschaft, a foreign corporation, or Umbreit, an American citizen, to the sum of $6,420, on deposit in the First National Bank, the county court held that the Disconto Gesellschaft should come in first. The supreme court of Wisconsin on appeal reversed this judgment and gave priority to Umbreit on the general ground

that no court in such case ever has allowed or should allow the foreigner to seize and carry away property within the jurisdiction when a resident creditor stands also at the bar with his judgment and his provisional lien, and thus force such resident creditor to go to a foreign country to collect his debt. If such action be not prejudicial to the rights and interests of our own citizens, it is difficult to see what action would be prejudicial. Nor does it make any difference that the home creditor's claim may have accrued after that of the foreign creditor; the question is not to be determined by priority in point of time any more than by priority of garnishment, but by the situation at the time when the court is called upon to finally decide which creditor shall receive its aid. So, if the case were devoid of any other facts, comity would require that the interests of the home creditor be protected. (127 Wis., p. 667.)

In regard to Article I of the United States-Prussia treaty of 1828 and the treaty of 1799 between the same parties the court were "unable to see that either of these treaty provisions has any bearing on the questions in controversy here." (P. 677.)

The United States Supreme Court on appeal affirmed the judgment of the supreme court of Wisconsin. The court said:

What property may be removed from a State and subjected to the claims of creditors of other States is a matter of comity between nations and States and is not a matter of absolute right in favor of creditors of another sovereignty, when citizens of the local State or country are asserting rights against property within the local jurisdiction. (208 U. S., 578.)

There being, then, no provision of positive law requiring the recognition of the right of the plaintiff in error to appropriate property in the State of Wisconsin and subject it to distribution for the benefit of foreign creditors as against the demands of local creditors, how far the public policy of the State permitted such recognition was a matter for the State to determine for itself. In determining that the policy of Wisconsin would not permit the property to be thus appropriated to the benefit of alien creditors as against the demands of the citizens of the State, the supreme court of Wisconsin has done no more than has been frequently done by nations and States in refusing to exercise the doctrine of comity in such wise as to impair the right of local creditors to subject local property to their just claims. We fail to perceive how this application of a well-known rule can be said to deprive the plaintiff in error of its property without due process of law. (P. 580.)

In regard to the treaties the court stated that the treaty of 1799 expired by its own terms June 2, 1810, and that the provision of