text:
    Robert M. Jackson, Appellant, v. Hunt, Hill & Betts et al., Respondents.
    Argued October 7, 1959;
    decided December 30, 1959.

      Whitman Knapp, Robert McLeod Jackson, Herbert P. Polk and David Simon for appellant.
    I. The interlocutory judgment properly directed defendants to account for all fees earned while plaintiff was a partner. As a matter of law, plaintiff is entitled to such an accounting. (Darcy v. Commissioner of Internal Revenue, 66 F. 2d 581; Avery v. Moffatt, 187 Misc. 576; King v. Leighton, 100 N. Y. 386; Stem v. Warren, 227 N. Y. 538; Hotchkiss v. National City Bank, 200 F. 287.) II. Assuming a question of fact to exist, the extrinsic evidence conclusively establishes the correctness of the interlocutory judgment. (Aron v. Gillman, 309 N. Y. 157; Gillet v. Bank of America, 160 N. Y. 549.) III. The interlocutory judgment properly allowed plaintiff to question defendants’ statement as to his 1954 drawing and cash profits account. IV. The interlocutory judgment properly directed defendants to account for the value of plaintiff’s interest in the firm’s physical equipment.

      William R. Meagher, Barry H. Garfinkel and Elizabeth Head for respondents.
    I. The firm agreement, as correctly construed by the Appellate Division, limits plaintiff to his share of the firm’s cash net profits as of the date of his withdrawal. (White
      v. Knickerbocker Ice Co., 254 N. Y. 152; Tooey v. Percival Co., 192 Iowa 267.) II. The findings of the Appellate Division are supported by the weight of the evidence. The judgment below should therefore be affirmed. (People ex rel. MacCracken v. Miller, 291 N. Y. 55; Matter of City of New York [Newtown Cr. Waterway], 284 N. Y. 493; York Mtge. Corp. v. Clotar Constr. Corp., 254 N. Y. 128; Matter of Smith, 254 N. Y. 283; Matter of Yund, 152 Misc. 785.) III. The Appellate Division properly determined that plaintiff is not entitled to an accounting of the firm’s tangible assets or of the firm’s cash net profits for 1954. (Salomon Bros. & Hutzler v. Pedrick, 105 F. Supp. 210; Corr v. Hoffman, 256 N. Y. 254.) IV. Plaintiff’s rights are governed by the firm agreement and under the agreement he is not entitled to an accounting. V. Plaintiff’s rights are governed by the partnership agreement, not by general principles of partnership law. (Lanier v. Bowdoin, 282 N. Y. 32; Matter of Eddy, 290 N. Y. 677.) VI. The firm was not dissolved on plaintiff’s withdrawal therefrom. (Hermes v. Compton, 260 App. Div. 507, 260 App. Div. 1027; Matter of Eddy, 175 Misc. 1011, 262 App. Div. 1015, 290 N. Y. 677.) VII. The firm agreement determines the withdrawing partner’s rights against the firm. (Soechtig v. Amick, 285 App. Div. 701, 309 N. Y. 988; Sands v. Miner, 16 App. Div. 347, 160 N. Y. 693; Warrin v. Warrin, 169 App. Div. 97.) VIII. Under the firm agreement plaintiff has an adequate remedy at law and is not entitled to an accounting. (Union Circulation Co. v. Hardel Publishers Serv., 6 Misc 2d 340; Matter of Witkind, 167 Misc. 885.) IX. Plaintiff has failed to sustain his burden of showing that the findings of the Appellate Division are not supported by the weight of the evidence.
   Van Voorhis, J.

On December 31,1954 there were 13 partners in the New York City law firm of Hunt, Hill and Betts. Two estates of deceased partners were likewise interested in the firm. Thirteen seems to have been an unsatisfactory number, for three of the partners — A. V. Cherbonnier, Mahlon Dickerson and Robert McLeod Jackson (plaintiff herein) —withdrew from the firm as of that date. Agreements were made with Cherbonnier .and Dickerson under which they were to receive certain earned but uncollected fees when paid. No similar agreement was made with Jackson who now sues to establish his right to participate in fees that were earned but unpaid at the time of his withdrawal, and to participate in the physical assets of the partnership. He won in the trial court, but the judgment was reversed and the complaint dismissed by the Appellate Division, First Department.

Before the trial the complaint had been dismissed at Special Term under rule 106 for insufficiency in law. This earlier judgment was reversed by the Appellate Division (2 A D 2d 971) which remanded the action for trial in a memorandum stating: “ There is sufficient ambiguity in the law partnership agreement in respect of the distributable interest of plaintiff as a retiring partner to indicate a trial rathér than a disposition of the first two causes of action on the pleading. We hold merely that there is ambiguity enough to warrant the consideration of such proof as to actual practice in the firm and other evidence in support of what was understood and acted upon by the partners.”

Thereafter the action proceeded to trial as has been stated, the trial court resolved the ambiguity in plaintiff’s favor but the Appellate Division resolved it against him by a divided court. It seems to us that the trial court was correct both on the law and on the facts. In the absence of a formal partnership agreement, upon the retirement of a partner, the firm would have to be dissolved and, when uncollected fees had been paid, they would have to be collected for the benefit of the members of the firm in liquidation. From this it follows that unless this partnership agreement established a different relationship between the partners, plaintiff, as well as Cherbonnier and Dickerson, is entitled to what he would have received on dissolution and winding up under the Partnership Law. He would not be divested of these participations by a partnership contract which was obscure or which conferred upon him similar property rights to those which he would have possessed in the absence of a formal agreement. The practical construction placed upon this partnership agreement, as disclosed by the evidence taken by the trial court, in our judgment preponderates in favor of the findings and conclusions made by the trial court.

This agreement provides that any partner may withdraw from the firm upon 90 days’ notice, unless the executive committee of the firm causes such withdrawal to take effect before the expiration of 90 days. In event of withdrawal by any partner, section 2 of article V provides that he shall be entitled to receive

“ (b) His share of the Net Profits as determined under the provisions of Article IV Section 2 (b) as his full participating interest in the net fees of the firm; provided, however, the firm shall have the option to delay such payment, in whole or in part, for one year from the effective date of such withdrawal.”

Referring back to section 2 (par. [b]) of article IV, by which the net profits are to be determined, that part of the agreement provides as follows:

‘ ‘ Section 2. The gross fees in all matters, other than the net fees of the so-called APC cases, whether billed or unbilled, unless distribution has been made prior to the date of this amended agreement, shall accrue to the current firm and the Net Profits as defined in Article III, Section 2, shall be distributed in accordance with the Participation Schedule in effect in the year in which such fee or fees are paid, except:
(a) In the event of death of a Partner his estate shall receive his proportionate share of net fees in all matters pending at the time of death, whether billed or unbilled. Such payment of net fees shall be made as if the Partner had remained alive; provided, however, the individual Partners hereby specifically authorize and empower their respective distributees, executors or administrator to make an agreement with the surviving Partners for settlement at any time of all claims the estate of the deceased Partner has against the firm.
“ (b) In the event of the withdrawal of a Partner from the firm an estimate shall be promptly made of the Net Profits of the firm as of the date of such withdrawal, such estimate shall be made by Charles B. Hill and in the event that he does not act, then by the three senior Active Partners and either of such estimates shall be deemed the actual Net Profit of the firm as of the date of such withdrawal; the firm shall have the option to delay payment, in whole or in part, of any Net Profits due the withdrawing Partner for one yeár from the effective date of such withdrawal.”

Some distinction is here drawn between the procedure, at least, in event of a partner dying and what happens in the case of a partner’s withdrawal from the firm. This distinction is the principal basis for plaintiff’s having been defeated at the Appellate Division. In case of the death of a partner, the interest of his estate extends to the ‘ ‘ net fees in all matters pending at the time of death, whether billed or unbilled.” Such payment of net fees is to be made as if the partner had remained alive. That signifies that the personal representatives of a deceased partner are entitled to an accounting of the total assets of the firm, including the professional fees earned but not collected, as of the time of the partner’s death.

In event of the withdrawal of a partner from the firm, an accounting of his interest in the uncollected fees is dispensed with, but in lieu thereof ‘ an estimate shall be promptly made of the Net Profits of the firm as of the date of such withdrawal * * * such estimates shall be deemed the actual Net Profit of the firm as of the date of such withdrawal ’ ’.

Under this construction of the agreement, there is no distinction between what is collectible from the firm by a withdrawing partner and the estate of a deceased partner, except that it was anticipated that greater expedition would be desirable in case of a withdrawing partner so as to close out his relationship to the firm quickly to the end that he could more readily become active in another firm without the embarrassment of conflicting interests or loyalties with respect to the clients who might follow him out of the firm. This was the express interpretation of these clauses given by A. V. Cherbonnier who drew the agreement. In withdrawal the estimate is in lieu of an accounting.

The decision of the appeal hinges on whether the term ‘ ‘ net profits ”, as used in this agreement, includes fees that are earned but uncollected, or only such as shall have been collected at the time when a partner withdraws.

Net fees and net profits, as respondents’ brief says, mean exactly the same thing, except as net profits are net fees less 10% allocated to capital. There is no dispute about the capital accounts of the partners, hence this difference is unimportant for present purposes.

The net profits to be estimated as of the date of the withdrawal of a partner and paid to him under section 2 (par. [b]) of article IV and section 2 (par. [b]) of article V are described in section 2 of article IV as being “ Net Profits as defined in Article III, Section 2 ”. The latter section in the agreement states: “ Section 2. At the end of each year ten percent (10%) of the net fees shall be allocated to the capital fund and the remainder shall be lmown as the Net Profits for the year.”

But in order to ascertain what is meant by ‘ ‘ net fees ’ one has to look back to section 1 of article III which says that “ The net fees in each year shall be the balance remaining ■ after all expenses incurred by the offices of the firm are subtracted from the gross fees earned by the offices of the firm for that year.”

The last words indicate that the gross fees, which determine the amount of the net fees by the deduction of expenses, are not merely such as were collected during the year but comprise fees “ earned * * * for that year.” If this is not already clear, it is demonstrated by the language of section 2 of article IV, which provides that “ The gross fees in all matters, other than the net fees of the so-called APG cases, whether billed or unbilled, unless distribution has been made prior to the date of this amended agreement, shall accrue to the current firm”. (Italics supplied.)

In other words, it is provided that unbilled gross fees accrued to the current firm while plaintiff was a member, and no other disposition is made of the uncollected earnings at the year end except that, in the case of partners remaining in the firm, such portion of the net profits as has not been collected during the year ‘ ‘ shall be distributed in accordance with the Participation Schedule in effect in the year in which such fee or fees are paid ”. The term “ net profits ” has to include more than cash collections during the current year, since otherwise there would be nothing left to be distributed in subsequent years in which the uncollected portion of such fees' are paid. It would be self-contradictory to provide, as this part of the agreement does, ■ that net profits should be distributed in accordance with the participation schedule in effect in years subsequent to the year in which they are earned, unless ex vi termini “ net profits ” included moneys earned but not collected at the close of the current year. That is, of course, the reason on account of which the value of the net profits had to be “ estimated ” in the case of a retiring partner. If the term net profits included only cash paid prior to the date of withdrawal of a partner, as respondents contend, it would be a matter of computation, and there would be no occasion for the provision that an ‘ estimate ’ ’ be made of the net profits as of the date of withdrawal nor for the meticulous direction that “ such estimate shall be made by Chaeles B. Hill and in the event that he does not act, then by the three senior Active Partners and either of such estimates shall be deemed the actual Net Profit of the firm as of the date of such withdrawal The purpose of an estimate of the net profits as of the date of withdrawal was to reduce to figures the amount of fees earned but not billed or collected at the time of withdrawal. Such estimate was to be in lieu of the “ actual ” net profit, which would have been definitely ascertainable by an accounting if respondents’ position were correct that only cash collected before withdrawal was to enter into the computation. The circumstance that the value of the interest of a withdrawing partner would include earned but unpaid fees evidently gave rise to the final clause in paragraph (b) that the firm should have the option to delay payment of any net profits due the withdrawing partner for one year from the date of his withdrawal. There would be no point in the delay if all that the partner were entitled to receive were to have consisted in his share of fees already collected in cash.

Construing this part of the agreement in this manner, which its draftsman testified was the manner intended, changes the pattern of the earlier partnership agreements as regards continuing partners by avoiding the necessity every year of having an accounting of the fees that were earned in previous years. This is covered by the provision that the net profits earned in previous years shall be distributed in accordance with the Participation Schedule in effect in the year in which such fee or fees are paid ”. But this expressly applies only to partners who do not withdraw. Instead of the ‘ referral back system ’ ’ of accounting in previous years, those portions of the net profits which have been earned but not collected are to be distributed to the continuing partners without accounting according to the Participation Schedule of the year or years in which they are collected. This would have divested plaintiff of his interest in earned but unpaid fees, after he ceased to be a partner, except for the saving clause in the case of a withdrawing partner. This saving clause is contained in section 2 of article IY, which provides in addition to the above-quoted language that net profits — including earned but unpaid fees — “shall be distributed in accordance with the Participation Schedule in effect in the year in which such fee or fees are paid except ” in the case of dying or withdrawing partners (italics supplied). Under paragraph (b), as previously stated, “In the event of the withdrawal of a Partner from the firm an estimate shall be promptly made of the Net Profits of the firm as of the date of such withdrawal ’ ’. There would have been no occasion to make an estimate of the net profits if that term included only cash paid prior to the date of withdrawal of a partner, which would have made it a matter of exact computation. More significant is the circumstance that, under the verbiage of the agreement, net profits are determined by deducting expenses from gross profits, and gross profits include fees ‘ ‘ billed or unbilled ”. This demonstrates that, in directing that a withdrawing partner shall receive his share of the net profits, it was intended that, in addition to his portion of the cash collected, an estimate should be made of the value of the earned but unpaid portion of the net profits of the firm as of the date of withdrawal. Respondents’ assertion that “‘Net Profits’, under the agreement, could only mean cash net profits ” is thus at variance with the language and structure of the partnership agreement. Net profits earned in one year could not possibly be distributed in accordance with participation schedules in effect in later years in which such fees were paid, unless the term which we are attempting to define — “ net profits ” — which measures the share of a withdrawing partner, included more than current cash collections. If that were all that went to make up net profits, it would have been meaningless to provide for the disposition of such as should be collected in subsequent years.

To be sure, under this partnership agreement of 1953 (and under the 1951 agreement on which it was patterned) no formal accountings were to be necessary except to determine the shares of the estates of deceased partners. Continuing partners — unlike the result under partnership agreements prior to 1951 — are to get their shares of the net profits of earlier years according to the participation schedules in effect in the years of collection. Withdrawing partners are to receive their shares on the basis of estimates of the net profits — including fees earned but unpaid — as of the date of withdrawal. Since the shares of withdrawing partners would include some uncollected profits, it was provided that the firm should have the option to delay payment for a year from the date of withdrawal. The ‘ ‘ referral back system ’ ’ was abolished, under which the fees collected in each year had to be apportioned to continuing partners according to participation schedules in effect in the various prior years in which the fees were earned, but it is fallacious to assume that this signifies that the term ‘ ‘ net profits ” is comprised exclusively of cash collected in the current year, and that it was intended that a withdrawing partner should forego his proper share iri the earnings of the firm up to the time when he shall have ceased to be a partner. Such a construction nullifies the contractual definition of gross fees as including such as were ‘ ‘ billed or unbilled ’ ’, and ignores that net profits are to be computed by the deduction of the expenses of the firm from gross fees.

The special agreements between the firm and Cherbonnier and Dickerson, upon leaving the firm, are confirmatory of this interpretation of the partnership agreement. These men left the firm as of the same date as plaintiff. The object of having special agreements of severance from the firm in their cases was evidently to avoid the necessity of making estimates of the value of their shares in the fees of the firm that were outstanding and uncollected. The firm assigned to Cherbonnier and Dickerson respectively, upon their withdrawals from the firm, “ all fees due from his clients, whether billed or unbilled, which fees are not reflected in the Firm’s Profit and Loss Statement of December 31, 1954.” Fifteen clients are enumerated as coming within this category in the case of Cherbonnier and 14 clients in the case of Dickerson. Manifestly, these uncollected fees assigned to Cherbonnier and Dickerson were not negligible. In turn, they transferred to the firm ‘ all fees whether billed or unbilled from all clients other than those listed ”. If the Appellate Division rather than Special Term were correct, these provisions in the severance agreements would be entirely gratuitous. There would have been no need for Cherbonnier or Dickerson to assign to the remaining members of the firm their interests in any fees earned but uncollected. These would have belonged to the firm anyhow under the master contract and neither of these retiring partners could have laid claim to any of them. Likewise the fees earned but unpaid from their particular clients of the firm would have belonged to the firm and the transfer of these substantial amounts to Cherbonnier and Dickerson upon their withdrawal would have been a gift without consideration. It is significant that William Logan, Jr., one of the defendants, whose adverse interpretation of the partners’ agreement has been given weight by the Appellate Division, was the member of the firm who negotiated with Cherbonnier on his withdrawal. His acts in reaching this agreement with Cherbonnier could only have been based on an interpretation of the agreement opposite to that which he professed at the time when the partnership agreement was signed.

No reason is apparent on account of which plaintiff should be discriminated against, in favor of these other partners who were similarly situated and who retired at the same time, by being denied payment of his share in the uncollected fees for legal services rendered by the firm at the time of his withdrawal.

Inasmuch as the firm has declined to comply with the clause in the partnership agreement entitling appellant to an estimate of his share of the net profits of the firm as of the date of his withdrawal on December 31, 1954, an accounting is necessary in any event. Such an accounting should extend to the computation of appellant’s share in the entire net profits of the firm, whether in fees that have been paid or earned but not paid.

The judgment appealed from should be reversed and the judgment of the trial court reinstated, with costs in this court and in the Appellate Division.

Chief Judge Conway and Judges Fuld and Froessel concur with Judge Van Voorhis; Judges Desmond, Dye and Burke dissent and vote to affirm.

Judgment reversed, etc.

      . The allegations in paragraphs 30 (a) and 30 (b) of the amended complaint may seem to contradict this. They are technically inconsistent with paragraph 30 (c) which immediately follows. What was intended, in the light of the language of the contract, seems to us to be clear. It is that, in making their annual settlements with respect to the distribution of earnings of the firm, the partners dealt on a cash basis. That accords with the clause in section 2 of article IV of the contract which provides that the net profits shall be distributed in accordance with the partners’ participation schedule in effect in the year when the fees are paid. That means, of course, that, insofar as their annual distributive shares are concerned, the partners are on a cash basis, and two thirds of the partners could alter the participation schedules intermediate the time when fees are earned and the time or times when they are distributed. The point is, simply, that this is not a definition of “ net fees ” or “net profits ”, but a direction that net fees or profits shall be distributed annually as collected in the year of distribution in cash. The allegations in paragraphs 30 (a) and 30 (b) of the amended complaint are correct insofar as they reflect that the partners are on an annual cash basis, but they are inartistic in speaking of that circumstance as though it presented a definition of the terms “ net fees ” or “ net profits.” A moment’s reflection discloses that the exact opposite is the meaning of these terms under the contract. It would be impossible to make annual distribution from net profits in the subsequent years during which they are collected, unless net profits included fees earned but unpaid in the year in which they were earned. Otherwise to distribute net profits in a later year or years in which they are collected would be an impossibility. We are only concerned with the practice regarding annual distribution of earnings of the firm insofar as it helps to define the terms “ net fees ” and “ net profits ”, which appear to have been used with the same meaning in the case of a withdrawing partner as in the ease of partners remaining in the firm. The agreement does not say that the net profits are to be wholly distributed each year to continuing partners; it provides that such portion of the net profits as is collected" in cash shall be distributed to nonwithdrawing partners in the current year. It appears conclusively, as it seems to us, that the practice of confining annual distributions to partners to cash collected in the current year — which is alleged in paragraphs 30 (a) and 30 (b) of the amended complaint — does not militate against but requires an interpretation of “ net fees” and “net profits ”, wherever those terms are employed in the contract, as including earned but uncollected items. This is reinforced by the definition elsewhere of “ net fees ” and "net profits” as gross fees less expenses. Gross fees are described as including such as are “billed or unbilled” (art. IV, § 2).


source: Caselaw Access Project

author: Chief Judge Conway. Desmond, J.

license: Public Domain

text:
    Saint Nicholas Cathedral of the Russian Orthodox Church of North America, Appellant, v. Wassil A. Kreshik, as Dean of Saint Nicholas Cathedral, et al., Respondents.
    Argued May 13, 1959;
    decided December 30, 1959.

      Charles H. Tuttle, Ralph Montgomery Arkush, Thomas A. Shaw, Jr., Stuart H. Johnson, Jr., and Walter V. Bouquet for appellant.
    I. The decision below proceeds on a predicate and rationale which are erroneous in law, which disregard all the separate issues stated and defined by this court as separately decisive, and which disregard all the realities, including the Trial Term’s own findings of fact, established by the uncontroverted evidence, as affecting this American religious trust and demonstrating the unreliability and disqualifications of the Moscow ecclesiastical regime as a trustee. Such disregard of the issues and the realities constitutes error in law cognizable by this court. (Kedrovsky v. Rojdesvensky, 242 N. Y. 547.) II. The Trial Term’s dismissal on the rationale that the Patriarchate, though “ a tool exploited by the State ”, nevertheless exists as “ a functioning religious order ” erroneously disregarded the Trial Term’s own findings as to the Soviet dictatorship’s exploitation of that “tool” both here and abroad against the United States, and erroneously disregarded the decisive bearing of those findings on the decisive issues formulated by this court. Such disregard of its own findings and their bearings on the issues constitutes error in law cognizable by this court. (Matter of Daniman v. Board of Educ.

      of City of N. Y., 306 N. Y. 532; Meinhard v. Salmon, 249 N. Y. 458.) III. The contents of the Patriarchate’s Journal and other official publications, which are the subject of the Trial Term’s findings and which are distributed in the United States through the cathedral and other media, are unimaginably vicious and mendacious attacks upon, and ecclesiastical and political activity in and against, the United States as the chief target in the Kremlin’s cold war for world dominion. The Trial Term’s misapprehension of the probativeness of these found and undisputed facts constitutes error in law cognizable by this court. IV. The Trial Term’s findings of fact also enumerate and embody as exhibits the Soviet statutes as to church and religion. They show that the Communist State has made the church an integral part of its own structure; that the Patriarchate is shackled to the Soviet Grovernment; that the church exists and, within a spider’s web of restrictions and the lessons of savage persecutions, functions only by the revocable sufferance of the dictatorship and on condition of subservience, and that, in consequence, the Patriarchate cannot in all common sense be relied on to carry out in America effectively and faithfully the purposes of this American religious trust. Under these findings and incorporated exhibits, the issue here, as regards the proper administration of this American religious trust, is not merely the momentary extent, but decisively the conditionality and mutability of the atheistic government’s present restrictive tolerance and revocable license of the church. The disregard or misapprehension below of this realistic issue constitutes error of law cognizable by this court. (Toomey v. Farley, 2 N Y 2d 71.) V. The Soviet Constitution’s profession of separating church and State is an intentional and confessed sham as regards application to the totalitarian Communist dictatorship itself. VI. The findings of the trial court and the documentary proof show- that the Soviet Communist dictatorship has used, and still uses, the Patriarchate to censor and muzzle the Orthodox church in America by requiring from it written promises of “ loyalty ” and of abstention from “ political activities ’ ’ and ‘ ‘ criticism ’ ’ against the dictatorship and its policies at home and abroad, while, at the same time, the Patriarchate itself partners with the dictatorship in the latter’s political activities and cold war propaganda against the United States, its people and allies. Such requirements disqualify the Moscow ecclesiastical regime as a “ trustee who may be relied upon to carry out more effectively and faithfully the purposes of this religious trust.” The disregard or misapprehension below of the bearing of these findings and this documentary proof constitutes error of law cognizable by this court. (Waipa v. Kushwara, 259 App. Div. 843, 283 N. Y. 780.) VII. Fundamental errors of law also centered in the failure to recognize the legal-consequences of the basic fact that, before this action was begun on April 9, 1945, the cathedral had been lawfully occupied by Platon, Archbishop of the Metropolitan District, until he was ousted by a puppet of the Soviet Government through a judicial decision now acknowledged by this court to have erroneously given continuous occupancy thereafter for over 20 years to such puppet and his appointees down to and following the commencement of this suit. Accompanying errors of law centered in the failure to recognize that administrative autonomy was the only recourse of the church in America, and that its validity has been adjudicated by our courts. Further, accompanying errors of law were Trial Term’s refusals to make on this subject findings in the very terms of determinations by this court, and also the Trial Term’s ruling that “ the burden of proof ’ ’ was upon plaintiff. VIII. The quotations made in the Trial Term’s opinion from various writers on the church in Russia show no more than that in Russia the Orthodox church is allowed existence as a religious cult with license to maintain liturgical practices. The opinion failed to present the unanimous-statements of those and other writers that the church has been granted these privileges in return for the commitment fully to serve the Soviet State at home and abroad. This failure, we submit, again represents the error of law below in regarding church existence rather than the church as a tool as decisive of the trusteeship for this American religious trust. IX. The judicial decisions in parallel cases fully sustain the bases of plaintiff’s case. (Romanian Orthodox Missionary Episcopate of America v. Trutza, 120 F. Supp. 183, 205 F. 2d 107, 346 U. S. 915.)

      Philip Adler for respondents.
    I. The relief sought by plaintiff is barred by section 5, section 15 (subd. 3), and article XV of the Religious Corporations Law. (Watson v. Jones, 13 Wall. [80 U. S.] 679; Trustees of Presbytery v. Westminster Presbyterian Church, 222 N. Y. 305.) II. Plaintiff has not made out a case in ejectment. (Butler v. Frontier Tel. Co., 186 N. Y. 486; Westminster Presbyterian Church v. Presbytery of N. Y., 211 N. Y. 214.) III. The action .is barred by the 15-year Statute of Limitations. (Wilkinson v. First Nat. Fire Ins. Co., 72 N. Y. 499.) IV. The Patriarch and defendants have a property interest in the cathedral. To eject them therefrom would constitute a deprivation of property without due process of law. V. The evidence is conclusive that the Patriarchate functions freely as an Orthodox church. VI. The ouster of the Patriarch and his bishop from St. Nicholas Cathedral by discretion of a civil court would constitute an abridgement of freedom of religion guaranteed by the First Amendment to the United States Constitution, made applicable to the State by the Fourteenth Amendment. (Shelley v. Kraemer, 334 U. S. 1; Barrows v. Jackson, 346 U. S. 249; Prince v. Massachusetts, 321 U. S. 158; Meyers v. Nebraska, 262 U. S. 390; Board of Educ. v. Barnette, 319 U. S. 624.)
   Chief Judge Conway.

Two groups contend in this action for the right to the use and occupancy of St. Nicholas Cathedral in New York City. Both partake of the doctrine, creed and spiritual heritage of the Russian Orthodox Church, which is one of a loose association of eastern orthodox churches tracing a common origin and existence to the year 1054 when the Patriarch of Constantinople ceased to recognize the authority of the western or Roman church. In time, the Patriarch of Constantinople acknowledged various branches of the church in other nations as ‘ ‘ autocephalous ’ ’ or completely independent for purposes of government and administration. The Russian Orthodox Church, with its own Patriarch of Moscow, achieved the status of autocephaly in the 16th Century.

The Russian Orthodox Church was ruled by the Patriarch of Moscow until 1700 when Peter the Great established a Most Sacred Governing Synod to rule in place of a Patriarch. Throughout Czarist times, the church appears always to have had a very close connection and relationship with the civil authorities, having been supported by State subsidies and having as a member of the Holy Synod a Chief Procurator appointed by the Czar to protect and effectuate political interests.

To serve the religious needs of Russian immigrants, the Russian Orthodox Church, then ruled by the Holy Synod, established the Diocese of Alaska and the Aleutian Islands, later known as the Diocese of North America and the Aleutian Islands, in the latter part of the 19th Century. St. Nicholas Cathedral, the subject matter of this controversy, was built in 1903 as a parish church of the diocese and became a cathedral in 1905 when the See of the diocese was moved from San Francisco to New York.

Synodal rule of the church was terminated and the Patriarchal form of organization was reinstated by a “ Sobor ” or convention of the Russian Orthodox Church held in Moscow in 1917-1918 and which was convened in the brief interval of freedom between the overthrow of the Czarist regime and the rise of the Bolsheviks. That sobor, which is conceded by all to have been canonical and valid, elected one Tikhon as Patriarch of Moscow. Shortly after Tikhon’s election, when the Communists came to power, there commenced a long campaign' of harassment and persecution aimed at eradicating the church from Russian life.

Upon the occurrence of a vacancy, Patriarch Tikhon appointed one Archbishop Platon as head of the North American Diocese. The appointment was made verbally at first, in view of the difficulty in transmitting such a communication out of Russia, but later, in September, 1923, it was confirmed in writing. At that time, the persecution of the church in Russia by the Soviet Government was at its peak of violence and virulence: The Communists, of course, were militant atheists committed to the doctrine that religion is the opiate of the people. Moreover, many of the ruling clergy, having held positions of importance under the Czar, were obviously counterrevolutionary in outlook and belief. The Soviet Government, therefore, attacked the church with every means available, both directly, through confiscations, arrests, imprisonments, exiles and executions, and, indirectly, through cultivation and support of divisive and dissident elements within the church. As a result, by this time, the activity and authority of the Patriarch in Moscow had virtually ceased to exist.

The North American Diocese, clergy and faithful, were bewildered and confused at the inconsistent and improbable reports and orders emanating from Moscow. For example, only five months after his appointment by Patriarch Tikhon, a document appeared here purporting to have been issued by Tikhon which dismissed Platon as archbishop for engaging in counterrevolutionary “acts * * * directed against the Soviet.” There remains grave doubt as to whether the Patriarch really issued such a document, at least as his own voluntary act. In any event, it had become clear to the North American Diocese that the Patriarch and the church administration in Moscow were no longer in effective control of the church. In addition, as we shall see, imposters were appearing in this country seeking to seize control of the administration of the diocese, and all its properties and temporalities.

The perils and uncertainties then existing prompted Archbishop Platon, still recognized and revered by the American clergy and faithful, to call a sobor of the North American Diocese at Detroit in 1924. The sobor concluded that Patriarch Tikhon was under coercion and duress by the Communists, that failure to act would result in anarchy for the North American Diocese and that it was necessary for the diocese to create its ‘ ‘ own firm Church administration, completely insured against possibility of the direct or indirect influence of the Soviet power.” A resolution was adopted asking Archbishop Platon to head the administration of the church. Another resolution stated it to be the will of the sobor “ Not to break at all the spiritual ties and communion with the Russian Church, but always to pray for her good ”.

The Detroit sobor of 1924, in effect, declared that the North American Diocese (or Metropolitan District, as it came to be called) should exercise administrative autonomy free of the Patriarchate with the right of local election of its bishops. This declaration of autonomy was made under a previous ukase or order of the Patriarch issued in 1920 which permitted dioceses to organize on a local basis in the event the activity of the Patriarchate should stop and in the event such cessation of activity should acquire a protracted or even permanent character. During the imprisonment of the Patriarch, the substance of the ukase was repeated in a circular letter sent to all dioceses on behalf of the Patriarch in 1922 directing local hierarchs to “ administer your archdiocese independently, in accordance with the Holy Writ and the holy canons; and until the restitution of the Supreme Church government decide definitely all affairs about which formerly you were wont to request the decision of the Holy Synod.” The ukase of 1920 had also provided that all local measures were to be submitted for confirmation to the “Central Church Authority” when it is re-established. The Detroit sobor, in establishing the Metropolitan District here, thus stated that the final regulation of questions arising from the relationship of the Russian church and the North American Church would be left to a “ future Sobor of the Russian Orthodox' Church which will be legally convoked, legally elected, will sit with the participation of representatives of the American Church under conditions of political freedom ’ \

Patriarch Tikhon died the following year, 1925. He had provided that the administration of the church, following his death, should be in the hands of a “ locum tenens ” or “ guardian of the Patriarchial Throne.” He had nominated the person so to act, plus an alternate, but by reason of arrests and exiles neither of the named individuals was able to serve for any significant period. They in turn had named further appointments, and, ultimately, there emerged one Sergei who as deputy of the locum tenens became the de facto leader of the church in 1926.

There followed a period of struggle and adjustment between the Soviet State and the church as led by Sergei. He was imprisoned, but later released after he had, in 1927, entered into a modus vivendi with the Soviet under which the Patriarchal church, in return for legal recognition, gave its pledge of loyalty to the government both on behalf of the church in Russia and the church abroad. He “ demanded from the clergy abroad a written promise of their complete loyalty to the Soviet government in all their public activities. Those who fail to make such a promise, or to observe it, shall be expelled from the ranks of the clergy subject to the Moscow patriarchate ”. The agreement amounted to a capitulation by Sergei to the Soviet, but under it, or because of it, Sergei was able to act as leader of the Patriarchal church in Russia over the next, decade, despite the continuance of strong antireligious propaganda and repressive action on the part of the Communists.

During this period, in 1934, Sergei, as locum tenens, issued a condemnation against the declaration of administrative autonomy adopted by the Metropolitan District in 1924. He placed Archbishop Platon and his successor, Archbishop Theophilus, under a prohibition and appointed Benjamin Fedchenkoff to come to America to establish a diocese subject to the jurisdiction of the Patriarchate. Sergei’s insistence upon a pledge of loyalty ” to the Soviet regime was abhorrent to the members of the Metropolitan District and the overwhelming mass of the clergy and faithful here continued to adhere to the Metropolitan District which grew and prospered in ensuing years.

A subsequent effort at rapprochement between the Patriarchate and the Metropolitan District was made in 1945. Following the patriotic support and service rendered by the Patriarchate to the State during the invasion of Russia by Germany, Stalin permitted a sobor to be convened in Moscow in 1943 which elected Sergei as Patriarch and, upon his death, in 1945 another sobor was called. Delegates from the Metropolitan District of America were invited but were prevented from reaching Moscow until after the sobor had adjourned.

They there found that Alqxei had been elected Patriarch. In previous negotiations, while he was locum tenens under Sergei, Alexei had made it clear that any reconciliation would have to be predicated upon “ the demand of the fullest loyalty, that is, complete abstention from attacks on the Soviet Power, is -not a political, but an ecclesiastical condition.” (Emphasis is Alexei’s.) When the American delegates sought to obtain from Alexei, as Patriarch, a lifting of the spiritual separation from the church in Russia on terms of autonomy for the American group, Alexei renewed his demand for a pledge of abstention from political activities and also imposed a requirement of Patriarchal confirmation of the election of an archbishop to replace Theophilus who was apparently to be deposed.

The American group viewed the provision regarding abstention from political activities as tantamount to a pledge of loyalty to a foreign power. Moreover, there was as yet no clear evidence that the subjection of the Patriarchate to an atheistic government— the condition which occasioned the original declaration of autonomy — had in any way ceased or changed. Thus, they felt that acceding to Alexei’s insistence upon ultimate authority over the Metropolitan District (as evidenced by the demand for the right to confirm candidates for bishop together with the right to reward the clergy with higher titles and the right of appeal) would result in acceptance of a hostile and irreligious control over the American church. In view of the failure of this and later attempts at reconciliation, the Moscow Patriarchate has on different occasions issued orders excommunicating the leaders of the Metropolitan District.

In 1945 this action was commenced by the Metropolitan District to obtain the use and occupancy of St. Nicholas Cathedral. The action was brought against an individual, John Kedroff. who was then in possession of the cathedral but who was not affiliated with either the Metropolitan District or the Moscow Patriarchate. Rather, he was a relict of the so-called ‘ ‘ Renovated ” or “ Living ” church, a clique of radical priests in Russia who, disgruntled and ambitious, were organized and supported by the Communists between 1918 and 1927. Because of this active assistance on the part of the Soviet Government, the living church had been able to depose Patriarch Tikhon and seize control of the church administration in Moscow — one of the factual conditions which, as we recall, led to the establishment of the Metropolitan District here.

The living church was relatively short-lived because it had no real popular support and it was eventually abandoned by the Soviet Government after Sergei capitulated in 1927. ■ Nevertheless, during its existence, the living church had attempted to extend its jurisdiction over the North American Diocese by appointing one John S. Kedrovsky (the father of the John Kedroff above mentioned) as Archbishop of North America. Kedrovsky promptly commenced an action here to oust Archbishop Platon from the cathedral. Then, as now, information as to conditions in Russia was difficult to come by. In that action, Kedrovsky, the representative of a splinter group organized by an atheistic civil authority in Russia, was able to prevail over the rightful Archbishop Platon and wrested control of the cathedral from him. The judgment which put Kedrovsky in possession of the cathedral was affirmed by this court by application of the rule (enunciated in the case of Watson v. Jones, 13 Wall. [80 U. S.] 679, 724-727) that, in an ecclesiastical dispute involving a denominational church, the decision of the highest church judicatories will be accepted as final and conclusive by the civil courts. (Kedrovsky v. Rojdesvensky, 242 N. Y. 547.)

The instant action was, therefore, brought against John Kedroff and since he, as successor to Kedrovsky, the appointee of a nonexistent church, had no defense to the ejectment action, he sought out Benjamin, the Archbishop appointed by the Patriarchate, who reordained Kedroff as a priest, whereupon he “gave” the cathedral to Benjamin who was joined as a defendant in the action.

When the case reached us in 1950, the courts below had given judgment to the defendants by applying the rule of Watson v. Jones (supra). We reversed that judgment, dividing our consideration of the case into two phases, one based upon common-law grounds and the other upon a specific statute which the Legislature had enacted in 1945, just prior to the commencement of this action, to govern the situation. (Religious Corporations Law, §§ 105,107.) Since the statute, in terms, clearly evidenced a legislative intent to confirm the Metropolitan District in the possession, use, control and occupancy of St. Nicholas Cathedral, we reversed and granted judgment for the plaintiff, commenting that, in any event, a new trial would have been required on common-law grounds. (St. Nicholas Cathedral v. Kedroff, 302 N. Y. 1, 24.)

Upon appeal to the Supreme Court of the United States, our decision on the- statutory ground was reversed, and the case remanded for further proceedings not inconsistent with the opinion of the Supreme Court. The majority there adopted the view that sections 105 and 107 of the Religious Corporations Law, as construed, constituted “ a transfer by statute of control over churches ” and was beyond the legislative power of the State of New York, violating the constitutional rule against prohibition of the free exercise of religion. (Kedroff v. St. Nicholas Cathedral, 344 U. S. 94, 110.)

Upon the remand, we refused to direct final judgment in favor of the appointees of the Moscow Patriarchate. Instead, we ordered a new trial concluding that, although the Supreme Court had authoritatively eliminated the statutory base for decision, the alternative or common-law ground was still valid and unimpaired. (St. Nicholas Cathedral v. Kedroff, 306 N. Y. 38.)

We held that the ultimate and determinative issue to be tried was as to the domination of the Patriarch by the Communist government (396 N. Y., pp. 46-47; see, also, dissent, p. 56); as to whether the appointees of the Patriarchate were “ mere puppets of a monolithic and atheistic secular power ” (306 1ST. Y., p. 51); and as to whether “ the Patriarchate, though nominally re-established, cannot function except as an arm or agent of an anti-religious civil government ” (306 N. Y., p. 53). We emphasized this point, namely, that the mere existence of a nominal church organization in Russia could not be enough to satisfy us that its appointees would be the proper trustees to administer the cathedral if the Patriarchal church had been absorbed by the Soviet Government and its actions deprived, during the period of such domination, of any religious significance. To permit such a result would constitute an infringement on the right of free exercise of religion on the part of the Metropolitan District and would retard rather than advance the end of religious liberty by ‘1 requiring the communicants of the metropolitan district to acknowledge the administrative rule of persons whom they believe are mere puppets of a monolithic and atheistic secular power ”. (306 N. Y., p. 51.)

To repeat, the issue to be tried was as to the domination of the Patriarchate by the Communist government. Such reiteration is necessary since the Trial Justice and the dissenting opinion here- prefer to treat the case as involving only whether the Patriarchate is the head of a functioning religious order”, paraphrasing out of context portions of our prior opinions. Of course, there never has been any question as to the existence in Moscow of an apparatus known as the Russian Orthodox Church and of an individual known as the Patriarch. The intervention of his appointee in this action is proof of his existence if proof were needed. To demonstrate, therefore, that the Patriarch exists and functions is merely to prove what is not disputed and results in obscurement of the real issue on which we ordered a new trial, namely, as to the subversion of the Patriarchate into an instrumentality of the Kremlin.

That new trial has now been had and, on the record and exhibits, we think that the domination of the Patriarchate by the Communist government, and the necessary subservience of the church in Russia to the Soviet State have been conclusively proved and confirmed so that, as between the archbishop appointed by the Patriarch and the archbishop elected by the Metropolitan District, the latter has demonstrated its right to the use, occupancy and control of St. Nicholas Cathedral.

No one disputes that, prior to any time of trouble or dissension, St. Nicholas Cathedral had been dedicated as the See of the North American Diocese of the Russian Orthodox Church and was to be used and controlled by the archbishop of the diocese who was in turn appointed by and subject to the Holy Synod in Moscow or, in 1918, the Patriarch of Moscow.

Neither can it be disputed, however, that the cataclysmic events in Russia following the revolution there necessarily wrought a profound change in the status, government, organization and administration of the church. It seemed clear on the earlier record, and it is now beyond doubt, that the 1 ‘ general ’ ’ or central authority of this church, the Moscow Patriarchate, persecuted as it was by the Communists, had ceased to exist as an operative and functioning entity by 1924 when the Detroit sobor of the North American Diocese declared its autonomy and assumed the right of local election of its archbishop.

The action was properly taken in pursuance of the Patriarchate’s own grant of authority as evidenced by the ukase of 1920, but, even in the absence of such express authorization, there would have been inherent power in the leaders and faithful of the North American Diocese to protect their property and temporalities against diversion and dissipation by hostile elements operating independently or through the mechanism of a captive Patriarchate. After all, religious property such as St. Nicholas Cathedral was subject to the implied trust that it must be used and employed according to the discipline, rules and usage of the Russian Orthodox denomination and for the benefit of the members of its North American Diocese. The circumstances from 1918 to 1924 clearly warranted the inference that continued control of the property and temporalities of the North American Diocese by those then acting for the Moscow Patriarchate would have resulted in a diversion of the property from this implied trust.

If the Patriarchate had announced its conversion to atheistic communism at that time, no one could rationally contend that the principle of denominational control of property would have required that American churches he turned over for use as anti-religious museums as was done in Russia. In that event, the faithful of the North American Diocese would have had the legal right, indeed, the duty, to see to it that such a broad fundamental departure by the “ general ” or central authority from its essential principles did also not entail the diversion of property from the accustomed use of those adhering to the denominational usage and for whom it was originally dedicated under conditions of implied trust.

What occurred in 1924 was different in degree and clarity, of course, but not in nature. The Patriarchate was being subjected and subordinated to an antireligious civil government. Sergei’s capitulation, his so-called modus vivendi with the Communists, merely completed a process begun in 1918. What emerged was fundamentally different from what had been before. Was the change permanent? Was the Patriarchate, in its new condition of subservience to antireligious rulers, incapable of fulfilling its prior functions? The North American Diocese did not know for certain but they prudently did not delay action until they were divested of all their property.

Under the circumstances then existing, this court must hold that the Detroit sobor of 1924 properly and legally established the administratively autonomous Metropolitan District, with provision for local election of its own archbishop, and for control and use of the properties of the former North American Diocese. The rule of Watson v. Jones (supra) does not and cannot control in a situation in which the conduct, composition or action of the governing body is such that, if given effect as to property rights, there would result a real and substantial departure from and a perversion of the implied trust to which the property is subject.

A recent illustration of this principle is found in a case strikingly similar to that at bar, Romanian Orthodox Missionary Episcopate of America v. Trutza (120 F. Supp. 183, affd. 205 F. 2d 107 [0. A. 6th], cert, denied 346 U. S. 915), which involved an action commenced by a bishop who had been consecrated as such by the Holy Synod and the Patriarch of Bomania in Bucharest and sent here to assume jurisdiction over the Bomanian Orthodox Church in America. In the action, the appointee of the Patriarchate sought to obtain possession and control of land, buildings and funds of the American church.

It was undisputed that by-laws of the American group had been adopted in 1935 providing for the election of the American bishop by the Holy Synod in Bucharest and that the church in America was to be “ administered canonically, spiritually and administratively under the direction ’ ’ of the bishop with the approval of the Holy Synod at Bucharest. This, it is clear, presents a picture of a denominational church with a ‘ ‘ general ’ ’ or central authority, almost exactly parallel with the prerevolutionary condition of the Russian Orthodox Church here.

In 1947, as recited by the Trial Judge in the Trutza case (supra), “ because of the fear of interference and meddling by the Romanian authorities with church affairs in the United States ”, the American group, through its leadership, the Episcopate Council, “ decided to create an autonomous episcopate ”. This was confirmed by a special Episcopate Congress in Detroit which passed a resolution i 1 restoring complete administrative autonomy to the Episcopate and declaring the right of the Congress henceforth to elect its own bishop.” (120 F. Supp. 183,184-185.)

The Court of Appeals set forth at length a resolution adopted by the American Episcopate Congress (akin to the resolutions adopted by the Metropolitan District of the Russian Orthodox Church) justifying the declaration of autonomy on the ground that, ‘ ‘ following the installation in Romania of a Communist, dictatorial, anti-christian and anti-democratic government,— the Orthodox Church of Romania:

“ (a) is no-longer free to preach the Word of God nor to propagate the true teachings of the Holy Eastern Orthodox Church and her Faith,
“ (b) with complete disregard for the organizational Statutes of our Episcopate continues to meddle in problems, the solution of which is the exclusive right of the members of our Episcopate,
“ (c) through her present leadership, completely enslaved by the political rulers propagates, among our faithful peoples here, ideas which are contrary to the free life conceptions and ideals held and respected by the American citizen,
“ Now, therefore, BE IT RESOLVED, that: 1. The Romanian Orthodox Episcopate of America be and the same is hereby declared to be completely autonomous not only in its administrative but also in its canonical (spiritual) affairs, and thus free from all rules, regulations, orders, decrees, etc., emanating from the Patriarch or from the Holy Synod of Romania.” Both the Trial Judge and the Court of Appeals held that the American group through its Congress was entitled to revoke the by-laws which gave the Holy Synod and Patriarch in Bucharest the power of appointment of American bishops and to assume autonomous status, still retaining control, use and possession of the properties and funds of the Romanian Orthodox Church here. At the time the by-laws were revoked, said the Court of Appeals, the American group had £ discovered that it was dealing, not with the Holy Synod and Patriarch, but with the Communistic government of Romania, which was dictating the appointment of its bishop in the United States of America and Canada. ’ ’

The court continued (205 F. 2d, supra, p. 112): ££ We agree with the District Court that under these circumstances the defendants [the American group] were entitled to revoke their previous by-laws and to re-establish the by-laws of 1932. We also think that this conclusion is in accord with the spirit, if not with the letter, of the Kedrofif case [i.e., the instant St. Nicholas Cathedral case on appeal to the Supreme Court, 344 U. S. 94] which declares that £ Freedom to select the clergy, where no improper methods of choice are proven * * * must now be said to have federal constitutional protection as a part of the free exercise of religion against state interference.’ Since this is true as to protection against the interference of an individual American state, we think it should be equally true as to protection against the domination and interference of a foreign state.” (Emphasis supplied.)

The Trutsa case (supra) and the one at bar are virtually on all fours, the only difference being that the American group of the Romanian Orthodox Church had originally been autonomous and had accepted the denominational control of the Synod and Patriarch of Bucharest in 1935 surrendering their right of local election of bishops. Nevertheless, upon adoption of the new by-laws in 1935, the American group clearly assumed a status in relation to the Patriarch of Bucharest identical with that held by the North American Diocese in relation to the Patriarch of Moscow in 1918. The two cases necessarily involve the same essential question, namely, whether a former diocese or dependency of a foreign mother church can declare its autonomy and retain its temporalities in the face of the radically changed status, control and composition of the mother church as a result of political factors.

The Court of Appeals answered that question in the affirmative and the Supreme Court of the United States, despite the citation of its decision in St. Nicholas Cathedral v. Kedroff (supra), denied certiorari (346 U. S. 915). By this action, which permitted the American adherents of the church to retain their temporalities free of the former central authority, it would seem that the Supreme Court recognized what a majority of this court has always recognized, that, with respect to religious properties within their jurisdiction, American courts have a responsibility and duty to prevent seizure and control by agents of a foreign atheistic State acting in the name and guise of a church administration they have infiltrated and subverted. What worse violation of the religious liberties of our people can be envisioned than to require that they subject themselves to the ecclesiastical rule of persons acting for a godless foreign regime as the price of continued use of their churches!

On the facts of the instant case, and on the reasoning of the Trutsa case (supra) in a parallel situation, we think that religious properties of the former North American Diocese should remain subject to the control, use and occupancy of the faithful here, and of their duly invested clergy, following the declaration of administrative autonomy by the Detroit sobor of 1924.

This could probably have been decided as a matter of law on the record of the first trial herein, on the first appeal or upon the remand by the Supreme Court. There remained, however, some uncertainty as to the condition and status of the Moscow Patriarchate and its relationship with the Soviet State during and after the World War. This action was first tried in 1947 and, apart from other insufficiences of proof, was too close in time to the events involved to provide the proper predicate for final determination. We, therefore, ordered a new trial as set forth earlier.

We have seen that Alexei was elected Patriarch of Moscow at the sobor of 1945 succeeding Sergei who had died. It is a matter of history that when the Soviets were fighting for survival during the World War, and in view of defections by the populace to the German invaders who had opened the churches and proclaimed freedom of worship, Stalin granted concessions to Sergei and received in return the patriotic support of the Patriarchate throughout the war. It is clear that some sort of a bargain was struck, then and since, whereby the Patriarchate was permitted to exist and function on a limited scale in return for some service which it might render to the Soviet State. Of course, we can never hope to know precisely what the terms of the bargain were. The new trial does, however, shed some light in our effort to ascertain the postwar relationship between the Patriarchate and the Communists.

What we see is a picture of the church and its leaders permitted a nominal existence and observance of religious rites within Russia on a narrow scale. We see further certain evidences of religious feeling and interest on the part of a portion of the Russian people. On the other hand, there is overwhelming and conclusive evidence that this nominal existence and the performance of these rites are permitted by the Soviet Government simply as a matter of expediency, that the Patriarchate either willingly or as the price of survival serves the aims, purposes and objectives of the Soviet Government at home and abroad, and that, within the framework of our prior decisions in this case, no essential change has occurred in the Moscow Patriarchate since 1924 and the establishment of the Metropolitan District here, which would now vitiate or impair the declaration of autonomy then validly made.

In the light of the evidence and the realities of the case, it must be held that the Moscow Patriarchate now exists solely by sufferance of the Soviet Government, that it is subject to civil direction and ultimate control by the Soviet, and that, during this period of domination, to permit the Patriarchate to exercise jurisdiction over the St. Nicholas Cathedral would involve an impermissible perversion of the implied trust to which it was dedicated.

If Sergei’s acts as Patriarch may be considered equivocal with respect to his relationship with the Soviet, there is no doubt or vacillation in the policies of his successor, Alexei. The best that can be said is that they have preserved the bare existence of the Russian Orthodox Church in Russia and what is called “ freedom of cult ’ ’, i.e., of liturgical observance. This may be no mean accomplishment but it is a far cry from the kind of existence which would permit resumption of administrative control over the Metropolitan District. Plaintiff’s leading witness, a church historian, concluded that “ the fact remains that the Russian Church is subjugated by the state and exploited as a tool for the latter’s far ranging policies ”, a characterization which the Trial Judge himself adopted, as we shall see.

Patriarch Alexei has always appeared to be an ardent supporter of the Soviet State. He was an outspoken admirer ot‘ Stalin, whom he addressed as the “ God-appointed leader ” and to whom he pledged unswerving loyalty. The proceedings of the 1945 sobor which elected him read more like a Communist party rally than the solemn conclave of a major religious faith. He and his official publications have warmly supported the standard Communist line ” on various political matters. At appointed times, he and the church have sponsored or supported “ Peace Conferences ” extolling Russia and condemning the West. The journals of the Moscow Patriarchate, which have on occasions been excluded from the United States mails on the ground of constituting political propaganda, are replete with virulent and intemperate attacks upon the Government, people and policies of the United States. Every area of political conflict between the United States and Russia becomes the subject of another tirade, more vicious and more effective for the very reason that it appears in a church publication, under ecclesiastical sanction, and couched in phrases borrowed from the religious lexicon.

Thus, the United States has been castigated as the ‘ ‘ fornicatrix of the resurrected Babylon “ the Washington Cain ”, ‘ ‘ the beast of the Apocalypse ’ ’ and ‘ ‘ the contemporary bloodthirsty Baal ”. All the base lies of Soviet propaganda regarding alleged American germ warfare and mass rape in Korea to imperialist and warmongering designs in the Middle East are duly and faithfully parrotted. ‘ ‘ The great blasphemy from the Christian point of view ’ ’, according to the Moscow Patriarchate, ‘ ‘ is the fact that these [American] people call themselves Christians.”

At the trial, there was evidence that ‘ freedom of religion ’ ’ in the present Soviet Constitution means merely freedom of cult ” or of ritual observance on a parish basis, there being a prohibition against any religious preaching, charitable activity, instruction or training of the young or other “propaganda”. On the other hand, the Soviet Constitution guarantees freedom of antireligious propaganda.

There is also evidence of the Soviet policies with respect to religious bodies as illustrated hy the actions suppressing the Catholic church in Hungary. There, it was shown, the Communists caused the imprisonment and persecution of the clergy, the confiscation of church properties, the requirement of loyalty oaths, and the interpenetration of remaining church offices and institutions hy Communist party representatives who assumed to themselves the powers of decision formerly exercised by bishops and other clerics.

A Russian expert called by plaintiff, based upon his knowledge of the Soviet State, a visit to Russia and his belief that the Soviet Union is a totalitarian society, testified he felt that the conclusion flows that ‘ ‘ as significant an institution as a major church must be very closely watched and supervised by the Soviet State and that the Soviet State would not permit any such significant institution to operate freely, with all the possible consequences that such free operation might raise for the totalitarian state.”

Likewise, the Moscow Patriarchate has embarked upon an aggressive program to establish hegemony over all the other autocephalous Orthodox Churches of the Eastern Confession. There was an ancient Russian ambition to become the inheritor and repository of the Christian tradition and the true center and leader of Christendom. The idea was based upon the notion that both Rome and Constantinople had possessed and then forfeited the mantle of leadership which should thus pass to Russia. The theory embodying the claim was known as “ Moscow-the-Third-Rome ”, and there is evidence that Patriarch Alexei, sub-serving the aims and purposes of the Soviet foreign policy, has become its great modern exponent. Thus, the Moscow Patriarchate has derided the traditional title of the Patriarch of Constantinople as the “ Ecumenical ” Patriarch and has sought to orient all the other Orthodox churches to Moscow instead. Through visits to their countries, through co-operation of the political officials in the satellite Nations of eastern Europe, through subsidies furnished hy the Soviet Government and through infiltration and pressure, the Moscow Patriarchate is making its influence felt throughout the Orthodox world.

Since World War II, the Moscow Patriarchate in its official publication, the Journal of Moscow Patriarchate, and in other forms, has periodically published and disseminated in Russia and throughout the world, including the United States, the pronouncements of its top hierarchs, including Patriarch Alexei and Metropolitan Nicholai, which have followed and supported the Soviet line in international affairs, and have been denunciatory and defamatory of the United States Government and its people and of the allies of the United States.

The Executive Department of the United States Government has on occasions excluded from the mails and the customs various issues of the Journal of the Moscow Patriarchy on the ground that they constitute political propaganda in accordance with the opinion of the Attorney General of the United States of December 10, 1949.

The State Department of the United States has refused to permit Archbishop Boris Vik, the current appointee of the Moscow Patriarchate, to enter the United States to perform his functions.

Finally, the record is replete with instances of political diatribes issued by the Patriarchate in furtherance of the interests of the Soviet State, many of them delivered by Metropolitan Nicholai, second in power to Alexei and considered his probable successor. While it is not and-cannot be in any way dispositive of this appeal, being dehors the record, it may not be amiss at this point to note that, in testimony on May 5, 1959 before the Internal Security Subcommittee of the Judiciary Committee of the United States Senate, Peter S. Deriabian, a former officer of the NKVD, later known as the Ministry of State Security of the Soviet Government, stated that most of the priests of the church in Russia were agents of the secret police, that the seminarians were systematically recruited for this service, and that Metropolitan Nicholai himself is such an agent of the State security apparatus.

Against the foregoing, defendants brought out on cross-examination that, as a matter of history, various ‘1 loyalty ’ ’ oaths had been required by political leaders of bishops in various countries, that the Soviet Government had never attempted to alter the dogma of the church, and that Soviet law does not require that clergymen be approved by the State. These witnesses, however, stated that the Soviet State does interfere in the internal administration of the church and that it had committed the .Russian Church to a policy of unconditional fealty and blind support in exchange for precarious recognition ”. Defendants also put on three clergymen affiliated with the Moscow Patriarchate who testified that they had visited Russia, stayed there for a short period, observed churches open, in good physical condition, well attended on occasion and religious articles for sale. One witness also stated that no one had suggested that he should make any commitments to the Soviet Government.

With respect to such evidence, attempted comparisons between the present case and historical instances of church-State relationships in other lands and other times are not determinative of the problem. The situation presented here, created as it was by the Communist revolution, finds no exact parallel in history. Likewise, accounts of apparent religious activity in Russia may show that the church retains existence there but this does not go to the ultimate issue of its domination by the State.

On the whole record, we conclude that the Moscow Patriarchate enjoys at best a nominal and conditional existence, at the sufferance of the Communist rulers of the Soviet State, that the Patriarchate is subject and subordinate to the Soviet Government and required to work for the furtherance of its political aims and objectives in Russia and abroad and that the administration of the church is in the hands of individuals who, through coercion, through employment or through conviction, subserve the paramount interests of the State. On this central issue, we are constrained to disregard any contrary findings of the Trial Justice and as a matter of law act in accordance with the facts as clearly and incontrovertibly demonstrated.

Actually, the Trial Justice himself conceded that the question as to the domination of the Patriarch by the Kremlin had to be found in favor of plaintiff by repeated comment that this condition of subservience now is no worse than that which existed prior to the Communist revolution and under the Czars. Thus, he stated that “ The Russian Church as a tool exploited by the State was no new phenomenon.” That fact being conceded, he then went on to excuse the condition by adding: “ i But so it was under the Tsars ’ ”. He dismissed the Patriarchate’s political expressions and activities in support of the Soviet State as 1 ‘ fulminations of an individual ’ ’; yet at another point he commented that analysis of the testimony of one of plaintiff’s expert witnesses reveals no greater, or even as great, a subservience of the church in Russia to the central government as had been acknowledged under the Czarist regimes.”

No other view is possible than that the Russian church is administered as an agency of the Soviet State and we are sure that even our dissenting brethren will agree that no court which sits in judgment on this case can be so naive as to disbelieve, any more than did the trial court, by its own statements, the strong proof that the Patriarch is subservient to the Communist dictatorship in the U. S. S. R. If it be conceded, as it thus is, that the Moscow Patriarchate is subservient to the Soviet State and is a tool exploited by the Communist rulers, it is impossible to excuse that condition on the ground that the former Czar of Russia employed the church as an instrumentality to effectuate the objectives and policies of his government. Common sense tells us that there is an essential and distinguishing difference between the two situations. The Czar did not persecute and harass the church. On the contrary he was a member of the church, a believer of its doctrines, a supporter of its activities and the major source of its revenues. The present Soviet Government is frankly and grossly anti-religious. It attempted to destroy the church and only tolerates it now because it can be useful.

Moreover, the North American Diocese was founded and composed of immigrants from Russia to whom the concept of a divinely appointed Czar was natural and indigenous. There was no incongruity or incompatibility in his close, active and interested participation in the administration of the church and in the corresponding reverence and loyalty accorded him by the faithful. But it passes understanding that anyone can rationally substitute the present atheistic Communist rulers of the Soviet for the Czar of Russia in this picture of church-State relations and conclude that there is no difference between the two. The Czar was sworn to uphold the church; the Communists are committed to its ultimate destruction. There is an obvious distinction between the civil head of an established or State church sworn to support it, and the appointed agent of the State security system posing as a cleric to effectuate the policies of the State including the ultimate elimination of the very church he subverts.

By reason of this radical change in the nature and operation of the former central church authority in Moscow, the rule of Watson v. Jones {supra) is not applicable with respect to properties of the North American Diocese. As we stated in 306 N. Y. at pages 49-51, and particularly at page 51, there is a basic qualification to the application of such rule. The court must always be careful to ascertain whether the central church authority really exists or enjoys sufficient freedom of action to be able to function as such. The rule may not be applied when it would result in a perversion of the trust to which local church properties were dedicated when, as here, the highest church authority has departed, in a broad, fundamental and substantial manner from the customary organization, operation and doctrine of the church. “In other words, where a property right turns upon a decision of the church authority, the civil court is under a duty, if such issue is raised, to ascertain whether the purported authority is duly constituted and functioning.” (306 N. Y., p. 51.)

The described status and situation of the church in Russia has persisted, without essential change, from the period following the Bolshevik revolution down to the present time. It provided the factual basis for the American declaration of autonomy in 1924 and it provides the factual basis for the continued autonomous administration of the church here with right of local election of bishops.

Under these circumstances, the archbishop elected by the Metropolitan District as representative of those for whom the property was originally dedicated and as the trustee * ‘ ‘ who may be relied upon to carry out more effectively and faithfully the purposes of this religious trust’” (306 N. Y., pp. 52-53) is entitled to the use and occupancy of St. Nicholas Cathedral. To hold otherwise, at least as long as the present picture persists of Patriarchal domination and interpenetration by hostile and antireligious civil authorities, and to award the cathedral to an appointee of the Moscow Patriarchate, under present conditions, would involve a violation of the constitutional protection against State interference in the free exercise of religion. As stated in the Trutza case (205 F. 2d 107, 112, supra): “ Since this is true as to protection against the interference of an individual American state, we think it should be equally true as to protection against the domination and interference of a foreign state.”

The First Amendment would nullify identification of a church with the Government of the United States or of a State. We do not understand on what principle it is supposed to sanctify the identification of a church with a foreign State. An act of the Legislature was considered to be necessary in the beginning to permit the incorporation here of Russian churches at the instance of the envoy extraordinary and minister plenipotentiary of Russia to the United States and the Consul General here (L. 1871, ch. 12; Stokes, Church and State in the United States, Yol. 3, p. 359). There can hardly be a constitutional mandate requiring that foreign States shall be allowed to administer churches in the United States. The extent of the establishment of a church by a foreign government having this result may be a matter of degree, but where the identification is as complete as it is held to be in this case, we think that the First Amendment forbids a new foreign government to take over the administration of existing church property here in the interest of its own temporal power and against the wishes of the members of the church here. Even if this be not so, the First Amendment does not stand in the way of the -judicial requirement under the principles of equitable jurisdiction that the property of a religious society shall be administered according to the purposes to which it has been dedicated. Every naturalized citizen of the United States is required to take an oath of allegiance whereby he expressly renounces and abjures all allegiance to any foreign prince, potentate or power. Native citizens are bound to the same renunciation. Can this solemn obligation be circumvented if the foreign power operates in this country through a branch of the State bearing the name of a church — even the name of a church that is old and respected? With all but unanimity the members of that church in this country have said no. It would be strange if our fundamental law, while ordering the separation of church and State, were so awkward an instrument that in functioning it has to produce an opposite result from that at which it aims.

One final word may be said. Our decision does not involve interference with the right of any religious organization to select or appoint its clergy. No one disputes that the Patriarchate as now constituted may appoint and dispatch an archbishop here to minister to those in this country who may still acknowledge the administrative rule of the Patriarch of Moscow. No one disputes that such an archbishop may establish and maintain churches here under the full protection of our constitutional guarantees of freedom of religion. What we do hold is that the appointees of the Patriarchate, by virtue of its radically changed status since 1918, may not assume control of property in this State, such as St. Nicholas Cathedral, which is dedicated to the use of the former North American Diocese and, now, the Metropolitan District.

Moreover, we do not consider our decision to be in conflict with the Kedrojf decision of the Supreme Court (supra). As the Court of Appeals stated in the Trutza case (205 F. 2d, supra, p. 110): “Here no ordinance, statute or congressional enactment is involved. This is not a case of legislation claimed to be violative of the First Amendment to the Constitution of the United States. It is a controversy between the American and Canadian church group and the Communistic government in Romania working through the hierarchy.”

The judgments appealed from should be reversed and judgment directed for plaintiff, with costs.

Desmond, J.

(dissenting). Three limitations on this court’s power forbid reversal of this judgment. First, our State Constitution (art. VI, § 7) denies to us any jurisdiction to review affirmed findings of fact; second, the United States Constitution’s First and Fourteenth Amendments make unlawful (Watson v. Jones, 13 Wall. [80 U. S.] 679) any interference by a State court with the internal affairs of a religious body; and, third, the United States Supreme Court in this very lawsuit (344 U. S. 94) has forbidden such interference by the New York courts with the appointment of this archbishop to this diocese of this cathedral by this Patriarch of Moscow. No one of these restrictions is considered in the majority opinion. Bound as I am by each of them, I vote to affirm.

This is a suit in ejectment brought to decide the right of occupancy of the Russian Orthodox Cathedral in New York City. Each of two trials has resulted in findings and adjudications, affirmed by the Appellate Division on each occasion (276 App. Div. 309; 6 A D 2d 866), that the archbishop consecrated by the Patriarch was entitled as such to possession of this See church of the American archdiocese. This court reversed the first of those judgments (302 N. Y. 1) but the United States Supreme Court reversed us (by a vote of 8 to 1) on grounds which will be quoted in a later part of this opinion. After and despite the Supreme Court’s reversal, this court ordered a new trial. The issues of fact framed by us were then tried. Evidence was taken on both sides. Again, findings of fact were made in favor of defendants and again there was an affirmance by the Appellate Division of those findings and of that judgment. At that point our court under our State Constitution (art. VT, §7) had no further jurisdiction over the case, since the fact question which we had sent for trial (and which we had described as the only issue left in the case) had been, by the trial and Appellate Division affirmance, finally and forever settled in favor of the Patriarch’s appointee. Nonetheless, we granted leave to appeal to this court and are now reversing the judgment below because, as the majority opinion says, “ we are constrained to disregard any contrary findings of [fact] ”. There can be found no other decision in this court wherein we have taken to ourselves power to disregard affirmed findings of fact made on a resolution of a question of fact.

On the second appeal to this court we stated that the issue for trial and the determinative issue in the case ” was ‘ whether there exists in Moscow at the present time a true central organization of the Russian Orthodox Church capable of functioning as the head of a free international religious body ”. We had said exactly the same thing on the first appeal here (see 302 N. Y. 1, 22, supra; 306 N. Y. 38, 46) and the United States Supreme Court (344 U. S. 94, 106, supra) had quoted our language as stating the question of fact which our court thought should be tried. Our order for a new trial did not specify the triable issue but the Trial Justice, of course, took these expressions from the opinions as being a mandate. He went ahead and tried the stated issue and, on conflicting proofs, decided it. He did not construe our opinions as licensing a choice by the New York courts between the Patriarch’s appointee and the priest chosen by the schismatic 1 ‘ Metropolitan District”. (Rejection by our courts of the Patriarch’s nominee for the archbishopric is the same kind of interference with religion of which we accuse the Soviet authorities.)

The Trial Justice, proceeding to the trial of the only issue discernible, took lengthy testimony from both sides on the question of whether, as of the date of the trial, ‘ ‘ the Patriarchate of Moscow is the head of a functioning religious order ”, After examining the opposing proofs he made a finding that the Patriarchate does so exist and does so function. Any other finding would be somewhat startling since the Patriarchate is recognized throughout the religious world (including recognition by the Vatican and by the World Council of Churches and by plaintiff itself) as being the de facto and de jure head of the world-wide Russian Orthodox Church.

The other two obstacles to a reversal here are pointed out in the holding of the United States Supreme Court that the power to appoint this archbishop is and always has been in the Patriarch. To quote (344 U. S. 94, 120-121, supra):

‘1 The record before us shows no schism over faith or doctrine between the Russian Church in America and the Russian Orthodox Church. It shows administrative control of the North American Diocese by the Supreme Church Authority of the Russian Orthodox Church, including the appointment of the ruling hierarch in North America from the foundation of the. diocese until the Russian Revolution. We find nothing that indicates a relinquishment of this power by the Russian Orthodox Church.
“ Ours is a government which by the ‘ law of its being ’ allows no statute, state or national, that prohibits the free exercise of religion. There are occasions when civil courts must draw lines between the responsibilities of church and state for the disposition or use of property. Even in those cases when the property right follows as an incident from decisions of the church custom or law on ecclesiastical issues, the church rule controls. This under our Constitution necessarily follows in order that there may be free exercise of religion. ’ ’

Near the end of our court’s majority opinion on the present appeal, it is said that we are not interfering with the Patriarch’s right to select his clergy or appoint his archbishop but that any archbishop appointed by him may not occupy St. Nicholas Cathedral which, says the majority opinion, is “ dedicated ” to the use of the Metropolitan District, that is, the schismatic group represented by plaintiff. Of course, there is no proof of any such dedication. Like every other cathedral, this edifice is by dedication and by definition an Episcopal church — the archbishop’s church — and, since the Patriarch’s century-old power to appoint bishops to his church’s dioceses is undisputed, the cathedral can never be dedicated by anyone to any other use or trust. Its only dedication was in 1905 and no civil government can rededicate it. This idea of a dedication to plaintiff’s use (time, place and manner of dedication unexplained) is new in this case. If there had been any such dedication there would have been no reason for a new trial and nothing to try. The fact issue we ordered tried — that is, whether the Patriarchate is functioning in Russia as the ruling body of the Orthodox church — would have been quite immaterial if the right to use the New York cathedral had already passed, by some unexplained dedication, out of the Patriarch’s control and into that of plaintiff.

No Judge of this court is unaware of the professed atheism of communism or of the antireligious bias and activities of the Communist rulers of the U. S. S. R. Each of us as an individual deplores and abhors the cruel attacks of the Communist regime on religious institutions and on their clergy and communicants. But we sit here as a court deciding a lawsuit. The same jurisdictional and substantive rules control in this case as in every other one we hear. There are no exceptions for lawsuits against Communists. Neither the basic American constitutional prohibition against government interference in intra-denominational affairs nor our State Constitution’s jurisdictional controls exclude a case where a Communist-oriented or Communist-dominated Patriarch appoints a Communist sympathizer as archbishop.

The judgment should be affirmed, with costs.

Judges Dye, Froessel and Van Voorhis concur with Chief Judge Conway; Judge Desmond dissents in an opinion in which Judges Fuld and Burke concur.

Judgment reversed, with costs in all courts, and judgment directed for plaintiff.