Nationalized Debt Case

CourtObsolete Court (Germany)
Docket NumberCase No. 9
Germany (British Zone), Court of Appeal of Hamm.
Case No. 9
Nationlized Debt Case.

Recognition of Acts of Foreign Governments — Nationalization of Business Enterprise — Question of Extra-territorial Validity of Nationalization — Debts Owing to Enterprise — Change of Domicile of Former Owner — Conflicting Claims by Nationalized Enterprise and Former Owner.

The Facts.—Section 372 of the German Civil Code provides that a debtor who is uncertain as to the identity of the person entitled to claim the debt may deposit the amount owing with a public authority appointed for the purpose, provided that the uncertainty in which he finds himself is not due to his own negligence. A debtor who owed certain moneys to a firm domiciled in the Soviet zone of Germany was requested to pay the moneys not only to the authorities which had nationalized the firm by order of the Soviet Army of Occupation, but also to the former owner, who had transferred his domicile to the British zone. Being uncertain as to whether the rightful claimant was the authority which had taken over the creditor's firm or the original creditor himself, the debtor deposited the money as provided by section 372 of the Civil Code.

Held: that, although the nationalization of the creditor's business had no extra-territorial validity and was confined in its. legal effect to the Soviet zone of Germany, and although this view of the law was generally accepted, the debtor's uncertainty as to who was the rightful claimant could not be said to be due to his negligence, and he was accordingly entitled to deposit the money as provided by section 372 of the Civil Code. The Court said:

“The confiscatory measures taken in the Eastern zone comprise the businesses affected thereby in their totality. It follows that the enterprise with all its assets, including all debts owing to it, was intended to be covered by these measures. In assessing the effect of these confiscatory measures we have to consider that they must be accepted as legally relevant facts, but that, in accordance with the principles of private international law, which are applicable to a conflict between zonal legal provisions, they are, being sovereign acts of State, limited in their effect to the sovereign territorial limits of the confiscating country. Accordingly, they are of territorially limited effect and without validity in relation to such of the assets of dispossessed businesses and individuals as are situate in the Western zones (see also the...

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