LEGAL POSITION OF FOREIGN
CONCESSIONAIRES IN RUSSIA.

The question of Russian concessions now being offered by the present government in Moscow continues to agitate the minds of the adventurous. More than that, recently the press reported that concessions were actually granted and accepted by a Swedish company and an American concern. An examination of the legal position of these concessionaires in the light of accepted principles of international law is both timely and opportune.

The present government of Russia came into power four years ago, namely on November 7, 1917, as a result of successful revolutionary uprising. During these four years it has consolidated the country around itself, successfully repelled foreign invasions and put down by arms insurrections against its authority. This government is supported by a system of elected bodies called Soviets.

On the other hand, a large body of Russian refugees abroad, continue to regard this government as an usurper without any legal right or authority to its title. Foreign governments with exception of border states grown out of the former Russian Empire continue to withhold recognition of the present rulers of Russia. Still many of them, notably those of Germany and Great Britain, accorded to the Moscow government acknowledgment of its de facto position as the governing body of the Russian Republic, and entered into treaties with it. Formal recognition has been accorded to it by Austria, Esthonia, Finland, Latvia, Lithuania, Persia, Poland and Turkey.

The United States Supreme Court in Thorington v. Smith, 75 U. S. 1 said at pp. 8 and 9:

"There are several degrees of what is called de facto government. Such a government, in its highest degree, assumes a character very closely resembling that of a lawful government. This is when the usurping government expels the regular authorities from their customary seats and functions, and establishes itself in their place, and so becomes the actual government of a country.

The distinguishing characteristic of such government is that adherents to it in war against the government de jure do not incur the penalties of treason; and under certain limitations, obligations assumed by it in behalf of the country or otherwise, will, in general, be respected by the government de jure when restored.

Examples of this description of government de facto are found in English history. The Statute 11, Henry VII c. 1, relieves from penalties for treason all persons, who in defense of the King, for the time being wage war against those, who endeavor to subvert his authority by force of arms, though warranted in so doing by the lawful monarch. But this is where the usurper obtains actual possession of the royal authority of the kingdom; not when he has succeeded only in establishing his power over particular locality. Being in possession, allegiance is due to him as King de facto.

Another example may be found in the government of England under the commonwealth, first by Parliament, and afterwards by Cromwell, as Protector. It was not, in the contemplation of law, a government de juro, but it was a government de facto in the most absolute sense. It incurred obligations and made conquests which remained obligations and conquests of England after the restoration."

However, the courts do not undertake to decide the matter of recognition or a status of a foreign government.

The contents herein are based on the "Commerce Reports" of U. S. Department of Commerce, publications of foreign governments and original contributions by our collaborators.

It is for the political branch of the government to advise the courts of the international status of foreign govern (1919) P. 105, 111; Gelston v. Hoyt, 3 Wheat, 246, 324. ment. Jones v. U. S., 137 U. S. 202, 212; the Annette,

Possibilities Facing the Concessionaires.

The foreign concessionaire of the present government of Russia must reckon with several possibilities. The present government of Russia may be or as we have seen has been already recognized by the government of such concessionaire as a de facto or de jure government of Russia.

The Soviet government may be replaced by a new Russian government which may consider itself a successor of the Soviet government or by a government which will regard the Soviet government as an usurper and consider its acts and laws as a nullity. The rights of the foreign concessionaire in Russia may be variously affected under any of the above events in accordance with the nature of his concession. If the concession affects the property or rights which are in their character a part of the public rights or domain one set of rules may be applicable, but if what may be granted by the concession was formerly private property, then a different set of legal maxims may apply and the latter in their turn may be dissimilar depending on the nature of the private property, e. g., whether it belonged to a foreigner or a Russian citizen prior to its confiscation by the present government of Russia. Finally, this concessionaire may find his position in a foreign court, whether it be that of his own or some other country (Russia excepted), either of advantage or disadvantage in accordance with the position of the present or future Russian government in a suit, e.g. whether it be defendant or plaintiff. We may add here that we are considering throughout this article the situation when the concession is obtained directly from the Soviet government. Of course, the conclusion here arrived at will be applicable to the case of an alien who obtains his concession from another alien, the latter obtaining it directly from the Soviet government. However, if the concession is granted first of all to the citizen under and through whom the alien may derive his title, different principles of law would apply which will not be considered here at all.

Two points may conveniently be disposed of at this stage. If the subject matter of concession is land, no question involving the title to such land may be subject of a litigation in a court other than that of a court of the country where the land is situated. See Companhia de' Mocambique v. British South Africa Co. (1892) 2 Q. B. 358. Of course, a foreign court may pass collaterally upon a title to foreign land, but such determination upon collateral issue will not aid a concessionaire who spent considerable fortune upon improvements or other work on such land to get back his property. Secondly, the law applied in such cases as considered in this article is international law. In Republic of Peru v. Dreyfus Bros. & Co., (1888) 38 Ch. D. 348, 355, 356 the court said:

"The short result of these facts is this. At the present time when Senor Pierola seized upon the supreme power there was a question pending between Messrs. Dreyfus and the Peruvian government as to the result of the accounts of their dealing in guano under the first contract. By article 33 of that contract this question was to be settled by the tribunals of Peru. With the assent of Messrs. Dreyfus this provision was waived, and the amount due was settled by Senor Pierola's government reducing the claim of Messrs. Dreyfus by more than £1,400,000. To this settlement Messrs. Dreyfus assented. They were not subjects of the state of Peru, but of France. The French government had recognized Senor Pierola's government as the de facto government of Peru. Senor Pierola made provision for paying this amount by consigning fresh cargoes of guano to Messrs. Dreyfus. They have recovered these cargoes after long litigation with the Peruvian Guano Company who claimed them, and the present government of Peru are now seeking to deprive them of moneys, the proceeds of these cargoes, on the ground that by the law of Peru the arrangement with Senor Pierola's government was void.

"It is difficult to see how this can be determined by the law of Peru. It is a question of international law of the highest importance whether or not the citizens of a foreign state may safely have such dealings as existed in this case with a government which such state has recognized. If they may not, of what value to the citizens of a foreign state is such recognition by its government? There have been successive governments in European countries-usurpations of the power of previous_governments overthrown-altering the constitution essentially. These have been in turn recognized by this and other nations. When the government of this country recognized the third emperor of the French, if any Englishman entered into contracts with this government, could it be maintained that the validity of such contracts must depend upon the law of France as settled by decree of the Republic which was established on his deposition? Obviously it would follow that no Englishman could safely contract with the present government of France, or, indeed, with any existing government, lest it in turn should be displaced by another government which might treat its acts as void. There is no authority for any such proposition."

It does not mean that ultimately the law applied is not the law of the country of concession. It may well be so, as we shall see hereafter. However, it is always the law as existing at the time of the act and in the place where the act forming the subject matter under the courts review was committed in the absence of special provisions to the contrary in the contract between the parties.

Case of Subsequent Recognition.

Let us assume, then that the present government of Russia will continue in power until recognized by the country of the foreign concessionaire or, in the alternative, the Soviet government will be succeeded by another government which will be recognized by the concessionaire's country but this new government will acknowledge the committments of the Soviet government. The recognition when extended will have a retroactive effect. Oetjen v. Central Leather Co., 246 U. S. 297, 302, 303 the U. S. Supreme Court said:

In

"It is also the result of the interpretation by this court of the principles of international law that when a government which originates in revolution or revolt is recognized by the political department of our government as the de jure government of the country in which it is established, such recognition is retroactive in effect and validates all the actions and conduct of the government so recognized from the commencement and conduct of its existence. Williams v. Bruffy, 96 U. S. 176, 186; Underhill v. Hermandez, 168 U. S. 250, 253; see. S. C. 65 Fed. Rep. 577." However, the recognition of a foreign government originating in revolution does not date back to the commencement of the uprising, but relates to the date when the former government ceases to act and is supplanted by the new governmental authority. Thus, the Soviet gov ernment is apparently recognized as a de facto government of Russia not from November 7th, 1917, but from December 13, 1917, when the Constituent Assembly was dispersed. See Aksionairnoye Obschestvo Dlia Mechanicheskoyi Obrabotky Diereva, A. M. Luther v. Sagor & Co., 65 S. J. 604.

The title to the property passed by a recognized foreign government can not be questioned in the courts of another country, no matter how iniquitously such title is obtained by this government. In Oetjen v. Central Leather Co., 246 U. S. 297, 303 the United States Supreme Court said:

"Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed by sovereign powers as between themselves. Underhill v. Hermandez, 168 U. S. 250, 254; American Banana Co. v. United Fruit Co., 213 U. S. 347."

In other words, no legal redress is available to a foreign concessionaire in case of the recognition. In Ricaud et al. v. American Metal Co., Ltd., 246, U. S. 304, 310, the United States Supreme Court said:

"The third question reads:

"III. If question two is answered in the negative, did the seizure, condemnation, and sale of the bullion in the manner, and for the purpose stated to be assumed in question one have the effect of divesting the title to or ownership of it of a certain citizen of the United States of America not in or a resident of Mexico when such seizure and condemnation occurred?"

"The answer to this question must be in the affirmative for the reason given and upon the authorities cited in the opinion recently announced in cases Nos. 268, 269, Oetjen v. Central Leather Co. The fact that the title to the property in controversy may have been in an American citizen, who was not in or a resident of Mexico, at the time it was seized for military purposes by the legitimate government of Mexico, does not effect the rule of law that the act within its own boundaries of one sovereign state cannot become the subject of re-examination and modification in the courts of another. Such action, when shown to have been taken, becomes, as we have said, a rule of decision for the courts of this country. Whatever rights such an American citizen may have can be asserted only through the courts of Mexico or through the political departments of our government."

It is a general rule of the international law that a recognized foreign government or its representatives can not be sued in the courts of another country. This rule equally applies to the case when goods of such foreign government are within the jurisdiction of a foreign court: In Oetjen v. Central Leather Co., supra, the Court said at page 303:

"The principle that the conduct of one independent government cannot be successfully questioned in the courts of another is as applicable to a case involving the title to property brought within the custody of a court, such as we have here, as it was held to be in the cases cited, in which claims for damages were based upon acts done in a foreign country, for it rests at last upon the highest considerations of international comity and expediency. To permit the validity of the acts of one sovereign state to be re-examined and perhaps condemned by the courts of another would very certainly "imperil the amicable relations between governments and vex the peace of nations."

Nor will the courts of a foreign state interpret a foreign concession or in any way interfere with the exercise or non-exercise of any rights thereunder. In Gladstone v. Ottoman Bank 1 H. & M. 505, 513 Sir W. Page Wood, V. C., said that

"The Court always says it can not interfere to prevent persons from applying to the Legislature, the sovereign power, to grant anything they please; nor is it competent to this court to restrain any gentleman from applying to the Sultan of Turkey for a concession, any more than I could restrain them from applying to our own Legislature for an Act of Parliament; nor, after the grant is made, can I interfere to prevent them from using the grant made by the same sovereign authority."

Neither will any action be taken by the foreign court against its own or alien nationals in the case when the principal, being a foreign state, cannot be subjected to its jurisdiction:

"Now, unless the Court is prepared to hold that this is a contract which it can enforce against the principal, it seems to me impossible (inasmuch as all the rights of the plaintiffs stand upon the contract) to hold that, if the same sovereign power chooses to act in derogation of the right granted by the first sov

ereign act, I can interfere with the sovereign power itself to prevent an act in derogation of it. But if I cannot interfere with the principal, how can I interfere with the accessory, namely the person who is alleged to be aiding in defeating the rights which the sovereign power has granted by the first concession." (See same case at pp. 510, 511.)

The only means of protection open to the foreign concessionaire in this case is to insist upon a financially responsible agent, surety or guarantor for the concession in the person of some bank, individual, firm or a corporation. Such agent, surety or guarantor could be sued in foreign courts and a recovery had for all the breaches of concession. Musurus Bey v. Gadban (1894) 2 Q. B. 354; Lariviere v. Morgan (1872) L. R. 7 Ch. 550.

Restoration of Original Government.

We may now pass to the consideration of the case, when a revolutionary uprising is not successful and a pre-revolutionary government returns to power.

There are two cases to be considered under this head. One is that of a foreign concessionaire whose country recognized the revolutionary authorities as a de facto government. Another is that when the country of the foreign concessionaire did not extend even a de facto recognition to such revolutionary authority.

When a revolutionary government is recognized by a state as de facto government its acts are as valid as those of the government de jure.

In Republic of Peru v. Dreyfus Bros. & Co., (1888) 38 Ch. D. 348, 356, Justice Kay made the following statement of the law:

"I must take the law to be that an Englishman or Frenchman might safely contract with Senor Pierola's government, if not before, at any rate after, it was recognized by the government of England and France respectively."

In Williams v. Bruffy, 96 U. S. 176, 185, the Supreme Court of the United States after repeating substantially the definition of a de facto government as given in Thorington v. Smith supra continued as follows:

"As far as other nations are concerned, such a government is treated as in most respects possessing rightful authority; its contracts and treaties are usually enforced; its acquisitions are retained; its legislation is in general recognized; and the rights acquired under it are, with few exceptions, respected after the restoration of the authorities which were expelled."

The revolutionary authority which is recognized as a de facto government by a foreign country enjoys all the privileges and immunities of a de jure government and the law applicable to the latter as stated above applies equally in the case of the former.

It is submitted that the limitations as contained in the above citation from Williams v. Bruffy must be taken to relate to the matters of domestic nature and not to the international affairs. When it is said, that "its legislation is in general, recognized" it means that political legislation, such as institution of a new reigning house or a new form of government will not be upheld. When it is said that "the rights acquired under it are, with few exceptions, respected" it is meant that grants to aliens or its citizens for active support of the usurping government will not be sustained or that confiscated property will be returned to its former owners without a remuneration to its new holders.

The Court of Appeals in England in Aksionairnoye Obschestvo Dlia Mechanicheskoyi Obrabotky Diereva, A. M. Luther v. Sagor & Co., 65 S. J. 604 said per Bankes L. J.:

was

"In this circumstance the whole aspect of the case changed, and it became necessary to consider two matters, which were not material in the court below. The first was a question of law: what was the effect of the recognition by his majesty's government in April, 1921, of the Soviet government as the de facto government of Russia upon the past acts of that government and how far back, if at all, did that recognition extend?

"The Court on the construction which he placed upon the communications from the Foreign Office, must treat the existence of the Soviet government as having commenced at a date anterior to any date material in the dispute between the parties. The plaintiffs' counsel had drawn a distinction between the effect of recognition of a de facto government and a de jure government and argued that the latter form of recognition might relate back to acts of state earlier than the date of recognition, whereas the former could not. For present purposes no distinction could be drawn. His Majesty's government having recognized the Soviet government as the government really in possession of the sovereignty in Russia, the acts of that government must be treated here with all the respect due to the acts of a duly recognized foreign state."

Right of Action Abroad.

The last point raises an interesting question. What is the position of a foreign concessionaire who has obtained a concession from the Soviet government upon a property confiscated by it. We assume here that the country of this concessionaire has recognized the Soviet government as a de facto government of Russia. We have seen already supra that if the concession related to the land, then the law of the land's location will apply and courts of another country have no jurisdiction in the matter. In other words, if the restored government of Russia shall choose to declare such concession invalid, the only redress that the foreign concessionaire could get is the assistance of the political departments of his own government. But let us suppose that the property is personalty and is within the jurisdiction of a foreign court. There are two possibilities here. One, where the government of Russia is party to a suit, and another where it is not such a party. Of course, neither de facto nor the restored government of Russia could be made defendants, but in case the restored government is a plaintiff it will be bound by the terms of the concession. To this point we will return later.

The right of a foreign recognized government to sue in a foreign court is beyond dispute. Munden v. The Duke of Brunswick, 10 Q. B. 656; Gladstone v. Ottoman Bank, 1 H. & M. 505, 509. That is so particularly in respect to property belonging to the foreign state. the Emperor of Austria v. Day, 3 De Gex F. & J. 217 Lord Campbell L. C. said at page 238:

In

"In the first place they deny the right of the plaintiff as a sovereign prince to maintain this suit, and if the suit was instituted merely to support his political power and prerogatives, or for any alleged wrong sanctioned by the government of England, I should acquiesce in that position. But the King of Spain v. Hullett (7 Bli. N. S. 359), The King of the Two Sicilies v. Willcox (1 Sim. N. S. 332) and various other authorities show that by the law of England a foreign sovereign may sue in our courts for a wrong done to him by an English subject unauthorized by the English government, in respect of property belonging to the foreign sovereign, either in his individual or in his corporate capacity."

In the case where the government of Russia shall not be a party two different situations may arise, depending upon whether the personalty in question had its situs in Russia or abroad at the time of its disposition as a result of which it is brought to a foreign country. With exception of certain specific cases depending on special circumstances, the situs of personalty at the time of its disposition determines the validity of the title to it in the purchaser. See Cammell v. Sewell, 5 H. & N. 728. So that, if the personalty is in Russia, the title conferred, upon a foreign concessionaire can not be attacked in al foreign court. In Aksionairnoye Obschestvo Dlia Mechanicheskoyi Obrabotky Diereva, A. M. Luther v. Sagor & Co., 65 S. J. 604 the court said per Bankes L. J.: "The respondents had argued that the decree of confiscation of June, 1918, even if made by the recognized de facto government of Russia, was in its nature so immoral and so contrary to the principles of justice as recognized by this country that the courts of this country ought not to pay any attention to it. The

question before the court was not, however, one in which the assistance of the court was asked to enforce the law of some foreign country to which legitimate objection might be taken as in Hope v. Hope (8 De G. M. & G. 731); Kaufman v. Geeson (1904) I K. B. 591. The question was as to the title of the goods lying in a foreign country which a subject of that country, being the owner of them by the law of that country, had sold under an f.o.b. contract for export to this country. The court was asked to ignore the law of the foreign country under which the vendor acquired his title and to lend its assistance to prevent the purchasers dealing with the goods. There was no authority to support such a contention, and therefore the appeal must succeed."

It may be added here that when a foreign government concludes a loan abroad it does not thereby, in the absence of specific provisions to that effect submit itself to the foreign system of jurisdiction or the jurisdiction of foreign courts. In Smith v. Weguelin L. R. 8 Eq. 198, 212, 213 the Court said per Lord Romilly, M. R. this:

"It is, in my opinion, a complete misapprehension to suppose, that, because a foreign government negotiates a loan in a foreign country, it thereby introduces into that transaction all the peculiarities of the law of the country in which the negotiation is made. The place where the loan is negotiated does not, in my opinion, in the least degree effect the question of law.

If the French government should negotiate a loan on certain specified terms, whether negotiated in Brussels, in London, or in Paris, the same law must regulate the whole, and that law is the law of France, as much as it had been expressly notified in the articles that the French laws would be that by which the contract must be construed and governed. So, if the English government were to negotiate a loan in Paris or in New York, the English law must be applied to construe and regulate the contract."

And the above rule as to the contractual right being governed by the lex situs is also applicable to the rights ex delicto. In Phillips v. Eyre, L. R. 6 Q. B. 27, the court said at page 30:

"So that where an obligation by contract to pay a debt or damages is discharged and avoided by the law of the place where it was made, the accessory right of action in every court open to the creditor unquestionably falls to the ground. And by strict parity of reasoning, when an obligation, ex delicto, to pay damages is discharged and avoided by the law of the country where it was made, the accessory right of action is in like manner discharged and avoided."

In the alternative instance, e.g. when the situs of the personalty shall be abroad the principles upon which foreign courts will entertain a suit were explained by Willes J. in Phillips v. Eyre, L. R. 6 Q. B. 27, 30:

"As a general rule, in order to found a suit in England for a wrong alleged to have been committed abroad, two conditions must be fulfilled. First, the wrong must be of such a character that it would have been actionable if committed in England, therefore, in the Halley L. R. 2 P. C. 192, the Judicial Committee pronounced against a suit in the Admiralty founded upon a liability by the law of Belgium for collision caused by the act of a pilot whom the shipowner was compelled by that law to employ and for whom, therefore, as not being his agent, he was not responsible by English law. Secondly, the act must not have been justifiable by the law of the place where it was done. Therefore in Blad's case, 3 Swan. 603 and Blad v. Bamfield, 3 Swan 604, Lord Nottingham held that a seizure in Iceland, authorized by the Danish government and valid by the law of the place, could not be questioned by civil action in England, although the plaintiff, an Englishman, insisted that the seizure was a violation of a treaty between that country and Denmark-a matter proper for remonstrance, not litigation."

Assuming, then, that a suit will be commenced in a foreign country, which has recognized the present government of Russia to enforce the confiscation decrees of the Soviet government against the personal property of the indivdiuals, firms or corporations, whose domicile or allegiance are or were in Russia, it would be necessary to prove: (a) that the confiscation decrees are not penal; (b) that such decrees are not contrary to the public policy of the foreign state.

It is submitted that if the title of foreign concessionaire to a personalty shall be based upon legislation

which is penal in its character it could not be enforced in a foreign court. The Antelope, 10 Wheat. 66; Wolff v. Oxholm 6 M. & S. 92, 99. There is hardly a doubt that a confiscatory measure is penal, unless an act of legitimate warfare. See Folliott v. Ogden 1 H. B1 123, 135 and dictum of Lord Penzance in Lynch v. Provisional Government of Paraguay L. R. 2 P. & M. 268.

Confiscation is Contrary to Public Policy. However, such an action it is submitted will be also bad on the ground of it being contrary to the public policy of the foreign state. In Higgins v. Central New England & cet. R. R., 155 Mass. 176 the court said at page 180:

"When an action is brought upon it here, the plaintiff is not met by any difficulty upon these points. Whether our courts will entertain it depends upon the general principles which are to be applied in determining the question whether actions founded upon the laws of other states shall be heard here. These principles require that, in cases of other than penal actions, the foreign law, if not contrary to our public policy, or to abstract justice or pure morals, or calculated to injure the state or its citizens shall be recognized and enforced here. If we have jurisdiction of all necessary parties, and if we can see that, consistently with our own forms of procedure and law of trials, we can do substantial justice between the parties. If the foreign law is a penal statute, or if it offends our own policy, or is repugnant to justice or to good morals, or is calculated to injure this state or its citizens or if we have no jurisdiction of the parties who must be brought in to enable us to give a satisfactory remedy, or if under our forms of procedure an action here cannot give a substantial remedy, we are at liberty to decline jurisdiction. Blanchard v. Russell 13 Mass. 1, 6. Prentiss v. Savage 13 Mass. 20, 24. Ingragham v. Geyer 13 Mass. 146. Tappan v. Poor 15 Mass. 419. Zipcey v. Thompson 1 Gray 243, 245. Erickson v. Nesmith 15 Gray, 221. Halsey v. McLean 12 Allen 438, 443. New Haven Horse Nail Co. v. Linden Spring Co. 142 Mass. 349, 353. Bank of North America v. Rindge 154 Mass. 203."

And in Edgerly v. Bush, 81 N. Y. 199, the New York Court of Appeals said per Folger Ch. J.:

"That rule does not obtain in this state. It has not been our policy to establish it. Our policy has been, and is, to protect the right of ownership, and to leave the buyer to take care that he gets a good title. It would be to the contravention of that policy, and to the inconvenience of our citizens, if we should give effect to these statutes of Lower Canada, to the divesting of titles to movables lawfully acquired and held by our general and statute law, without the assent or intervention, and against the will of the owner by our laws. Notions of property are slight, when a bona fide purchase of stolen goods gives a good title against the original owner. (Per Kent. Ch. J. Wheelwright v. De Peyster, 1 Johns. 470.) We are not required to show comity to that extent."

Furthermore, Chief Justice Marshall remarked in U. S. v. Percheman, 7 Pet. 51, 86, 87 that:

"It may not be unworthy of remark, that it is very unusual even in cases of conquest, for the conqueror to do more than to displace the sovereign and assume dominion over the country. The modern usage of nations, which have become law, would be violated; that sense of justice and of right which is acknowledged and felt by the whole civilized world would be outraged, if private property should be generally confiscated and private rights annulled. The people change their allegiance and their relation to their ancient sovereign is dissolved, but their relations to each other, and their rights of property, remain undisturbed."

It is true that in Underhill v. Hermandez 168 U. S. 250, 252 Chief Justice Fuller ruled that:

"Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgmnt on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.

"Nor can the principle be confined to lawful or recognized governments, or to cases where redress can manifestly be had through public channels. The immunity of individuals from suits brought in foreign tribunals or acts done within their own states, in the exercise of governmental authority, whether as civil officers or as military commanders, must necessarily extend to the agents of governments ruling by paramount force as a matter of facts."

Yet this statement must be necessarily limited by the facts of the case. There, the government represented by

the revolutionaries was successful and was subsequently recognized by the United States as a de jure government of Venezuela. Moreover, the "civil officers" in the above opinion must be taken to mean "agents of governments ruling by paramount force as a matter of fact" e.g. the case to justify the acts must be one governed by the exigencies of "ruling paramount force." Such was, indeed, the interpretation given to the above decision recently by the Court of Errors and Appeals of New Jersey in O'Neil et al. v. Central Leather Co., 94 Atl. 789, 791:

"The action in Underhill v. Hermandez was an action for personal torts; but we are equally bound by the same legal principle in an action involving the title to personal property, if title thereto can ever be passed by a military commander exercising paramount force. That title can be so passed is well settled, since the right to confiscate property or levy military contributions is one of the rights of the military occupant of a territory. The reason for permitting an armed force to levy contributions or even to confiscate property in territory occupied by them apply as well to insurgents conducting war in a material sense as to recognized belligerents conducting war in a legal sense.

"The reason is the necessity of carrying on the usual operations of government and of supporting the army."

We fail to see how this principle can be extended to a case of wholesale confiscation of private property by a legislative act of a foreign government done as a part of its general public policy and not under a stress of military necessity prompted by actual warfare.

Case of Unsuccessful Revolt.

We finally pass to the consideration of the case where the revolutionary authority is superseded by a de jure government but in the meanwhile fails to get the recognition of the country of a foreign concessionaire. In such a case acts of legitimate warfare, if actual war has been waged, cannot be made a basis of individual liability. The U. S. Supreme Court in Underhill v. Hermandez 168 U. S. 250, 252, 253 said that:

"Where a civil war prevails, that is, where the people of a country are divided into two hostile parties, who take up arms and oppose one another by military force, generally speaking foreign nations do not assume to judge of the merits of the quarrel......

"If the political revolt fails of success, still if actual war has been waged, acts of legitimate warfare cannot be made the basis of individual liability. U. S. v. Rice, 4 Wheat. 246; Fleming v. Page 9, How. 603; Thorington v. Smith, 8 Wall 1; Williams v. Bruffy, 96 U. S. 176; Ford v. Surget, 97 U. S. 594; Dow v. Johnson, 100 U. S. 158; and other cases."

When a government de jure succeeds such unrecognized revolutionary authority, it can not punish foreign citizens or subjects for acts done in the transaction of ordinary, commercial, industrial or financial business nor make any new laws which would have a retroactive effect. Such is the conception of the law as expressed by U. S. Attorney-General Black, 9 Op. Att.-Gen. 140, 142, 143,

145:

"It is equally well settled that, when the former government resumes its possession of the territory, whether by force or under a treaty, it can not call the citizens or subjects of a third nation to account for obeying the authority which was temporarily supreme during the enemy's occupation of the place. The jus post limini has no sort of application to such a case.

"If the party which opposes the previously established government succeeds in overthrowing it entirely, and gets possession of the whole country, nobody can be perverse enough to deny that, in such case, the new government is sovereign, and authorized to dictate the law which shall prevail.

"The laws and jurisdiction of the Peruvian government were superseded at Iquique during the time that place was in possession of its domestic enemy, and its resumption of possessionsupposing possession to have been resumed-gave it no power to punish American citizens for a supposed violation of its laws, while they were suspended, nor to make any new law which would have a retroactive effect. The whole proceeding of the Peruvian government against the two vessels named was contrary to the law of nations, and repugnant to the principles of natural justice."

It is submitted that these principles do not apply to a case of a concession. A concession is a special legislative or administrative grant conferring extraordinary privileges and not an ordinary matter of course, business transaction. Florida Town Improvement Co. v. Bigalsky 44 Fla. 771; Western Mining & Manfg. Co. v. Peytona Camel Coal Co. 8 W. Va. 406, 446; Gladstone v. Ottoman Bank, 1 H. & M. 505.

The legislative acts of a foreign unrecognized government can not be relied upon in the courts of the country which did not recognize it. Aksionairnoye Obschestvo Dlia Mechanicheskoyi Obrabotky Diereva A. M. Luther v. Sagor & Co. (1921) 1 K. B. 456.

Hence, any such concession will be a nullity, unless de jure government will choose to approve it in some form or another.

Unrecognized foreign government can not sue in the courts of a country which did not afford recognition to it. The City of Berne v. The Bank of England, 9 Ves. Jr. 347; The Lomonosoff L. R. (1921), P. 97. But, apparently, if there is property of such unrecognized government within the reach of a foreign court, the latter can exercise its jurisdiction therein, against the person holding such property or analogy, probably, of a non-resident unregistered corporation. See decisions by Justices Hotchkiss and Mullan in N. Y. Law Journal for October 31, 1921, on page 376, affirming writs of attachment granted against the property of the Soviet government in New

York State.

But, if the de jure government decided to sue in a foreign court, for the property acquired from such unrecognized government by foreigners, then de jure government will be held to be bound by the terms of the contracts whereby this property was acquired. In Republic of Peru v. Dreyfus Bros. & Co. (1888) 38 Ch. D. 348, the Court said at pp. 361 and 362:

"In U. S. A. v. Prioleau, 2 H. & M., 559, a similar claim was made to goods which rebellious states of America had sent to a citizen of this country. The rebellious states had been conquered by the United States government; they have never been recognized by England's government. Yet it was held, and the decision has not been questioned, that the contract under which the goods were sent must be recognized, and that they could not be recovered in violation of that contract. It was not doubted that the United States were entitled to all public property belonging to the rebellious states; but where these states had dealt for value with citizens of another country such property could not be recovered by treating the contract as void. In a litigation with the foreigner, party to the contract, they must adopt the contract and merely take such rights as the de facto government of the rebel states might have had under it. This doctrine is recognized in some of the other citations already made, especially in the words of Lord Justice Jamas, which I have quoted. It was applied even in the case of rebel states which had not been recognized by this country. It follows a fortiori in this case that the Republic of Peru can only recover the proceeds of the eleven cargoes of guano if Senor Pierola's government could have done so. That government certainly could not have recovered them in violation of its own contract, as the Republic of Peru are now seeking to do."

Conclusion.

Summing up, it appears that a foreign concessionaire in Russia may safely contract with the Soviets as to the confiscated private property provided that his government has recognized the Soviet authority as the de facto government of Russia. A foreign concessionaire may, further, deal safely with Soviet Government with reference to all the private property requisitioned by it in support of its military operations and under the stress. of military necessity. It is clear that an alien concessionaire whose country recognized the government granting concession may obtain a valid title to the property of a native or a foreign person, firm or a corporation con