of the Court, and a decision of the Supreme Court of Croatia would not bear the President's seal. Again, the style of the decision did not conform to decisions of the Supreme Court of Croatia and the document was written in the Serbian language when in fact all decrees issued by the Supreme Court of Croatia are in the Croatian language. Furthermore, the witness testified that the Supreme Court of Croatia had no jurisdiction to issue such a decree. A personal investigation by witness Brncic of the records of the Croatian Supreme Court showed that there was and had been no case involving the taking of the Philips' property.
Witness Brncic also testified that, as a result of the receipt from the United States Government of the purported decision of the Supreme Court of Croatia, an investigation was undertaken in Yugoslavia. The Prosecutor General of Yugoslavia authorized the investigation which was conducted by a judge of a district court in Zagreb; the Supreme Court having no authority to investigate since a purported decision of that Court was involved. No final determination of this investigation has resulted, although it has been underway since 1955. Witness Brncic testified that the investigation has been suspended or continued until such a time as George Philips returns to Yugoslavia and testifies with respect to the purported Supreme Court decision. The investigation was for the purpose of determining whether the document was authentic and, if it were not, who it was that forged it, stole the paper on which it was written and obtained and used the seal of the President of the Court.
No criminal action has ever been instituted in a court of the United States against George Philips with respect to the questioned document, although the authenticity of the document has been questioned by the United States authorities since December of 1954 or early 1955.
It was stipulated that the purported decision of the Supreme Court of Croatia was brought back from Yugoslavia by George Philips in December of 1954, and that it was presented to the Foreign Claims Settlement Commission on behalf of the plaintiffs but not by any one of them.
It was following the receipt of the purported decision of the Supreme Court of Croatia that the Foreign Claims Settlement Commission issued its final decision No. 1497 (Docket No. Y-1459) and final decision No. 1504 (Docket No. Y-1460). In each of those decisions, the Commission stated that it had issued a proposed decision in November, 1954, denying compensation for the taking of the real property located in Yugoslavia which had been owned by Philips. In each instance the Commission stated that when it issued its proposed decision it did so on the ground that the property was taken by the Government of Yugoslavia prior to the dates that the original claimants (Philip Philips in one case, and Philip Philips and Adolph Philips in the other) became nationals of the United States.
According to the final decision in each case, findings of the proposed decision resulted from a January 6, 1953 report to the Commission by the Government of Yugoslavia in which it was asserted that the property had been taken on the basis of a decision of the District Commission for Agrarian Reform and Colonization, pursuant to the Law for Carrying out Agrarian Reform and Colonization of November 24, 1945. The final decision further stated that the Yugoslav Government had submitted certified copies of the decision of the District Commission.
Furthermore, in each case the final decision of the Foreign Claims Settlement Commission stated that the claimants (being the successors of the then deceased Philip Philips and Adolph Philips) had filed objections to the proposed decision contending that the interest of the original claimants in the properties was nationalized or otherwise taken by the Yugoslav Government by operation of the Second Nationalization Act of April 28, 1948 and that the taking was effectuated after Philip Philips and Adolph Philips had become citizens of the United States. In each instance, upon the claimants' request, a hearing was held on December 16, 1954, at which time counsel for the claimants presented oral argument, submitted additional evidence, and was granted leave to file a brief and submit further documentary proof. Claimants' counsel stated that the further documented proof was then in the process of being obtained by George Philips (a plaintiff here), who at the time was in Yugoslavia. The final decision in each instance stated that on December 27, 1954 the claimants filed with the Foreign Claims Settlement Commission a certified copy of the decision of the Croatian Supreme Court, dated December 8, 1954; a decision of the County People's Committee; an official certification by the Local People's Committee; a certified extract from the Land Register of the County Court; and an affidavit by George Philips setting forth the steps taken and procedure followed by him in securing such documentary proof.
The Foreign Claims Settlement Commission in each final decision treated in detail with the Croatian Supreme Court decision which, among other things, provided that the earlier decision of the District Commission for Agrarian Reform and Colonization was vacated; that the real property mentioned in the decision of the District Commission was nationalized under the Law of Nationalization of April 28, 1948; and that the County Court as a land recording court was directed to make the required entries in the land records. Final decision No. 1504 then stated: "[On] the basis of all the evidence and data now [December 30, 1954] of record, the Commission finds that the [Philips] property * * * was not taken by the Government of Yugoslavia on July 23, 1946 * * * but was in fact taken by the Government of Yugoslavia on April 28, 1948 as to Philip Philips' interest in the property and on May 3, 1948 as to Adolph Philips' interest in the property, pursuant to the Second Nationalization Act of April 28, 1948."
Having reached that conclusion, the Foreign Claims Settlement Commission made an award in each final decision and certified it to the United States Treasury on December 30, 1954, "for payment of the award in accordance with the provisions of Section 8(c) of the International Claims Settlement Act of 1949."
The Secretary of the Treasury having failed to pay the awards, this action was instituted by plaintiffs seeking relief in the form of a mandatory injunction to require the defendant Secretary of the Treasury to pay to the plaintiffs the awards certified. Plaintiffs contend that the payment of the awards by the defendant Secretary of the Treasury would be only a ministerial act and that, therefore, it should be compelled by this Court through the exercise of its equity powers.
Defendant asserts that the Croatian Supreme Court decision is false, fictitious or fraudulent and the filing of that document worked a fraud on the Foreign Claims Settlement Commission. The awards, according to the defendant, were vitiated by the fraud and the plaintiffs are without clean hands and that they are therefore estopped from obtaining the equitable relief they seek here.
I find the purported Croatian Supreme Court decision to be a false document and that the presentation to the Foreign Claims Settlement Commission of what was represented to be a certified copy of an authentic decision of the Croatian Supreme Court worked a fraud on the Commission. I make this false document finding on the testimony of the witness Brncic, the Chief Justice (or President) of the Supreme Court. Although the plaintiffs argue, in their Post-Trial Brief, that Brncic was evasive and contradictory in his testimony, I did not find him to be so. I found him to be a credible witness.
On the other hand, I noted that present at the trial was George Philips, one of the plaintiffs. It was George Philips who, according to Brncic, met with the latter and another judge of the Croatian Court in Zagreb, Yugoslavia, in December, 1954, and who was told that he could not obtain a decision from the Supreme Court of Croatia which would accomplish what the document I find to be false purports to accomplish. And it was George Philips who, according to the stipulation of the parties, brought the false document back from Yugoslavia in December, 1954. Moreover, it was George Philips who certified that the translation of the purported Croatian Supreme Court decision was "a true and accurate translation from the Serbo-Croatian original",
while the witness Brncic testified at the trial that there was no original. If the witness Brncic testified falsely or even evasively in this case, the testimony of George Philips would have made that known in at least some critical areas, as for example that there was an original decision. But George Philips, although, as noted, present at the trial, did not testify. Therefore, as I may, I infer that if he had testified his testimony would have been unfavorable to the plaintiffs. Mammoth Oil Co. v. United States, 275 U.S. 13, 52-53, 48 S. Ct. 1, 72 L. Ed. 137 (1927); Kirby v. Tallmadge, 160 U.S. 379, 383, 16 S. Ct. 349, 40 L. Ed. 463 (1896).
Having found that a fraud was worked upon the Foreign Claims Settlement Commission by filing with it a false document, I conclude the relief sought here must be denied the plaintiffs. Applicable here is the equity maxim: "he who comes into equity must come with clean hands." And that is so whether this action be considered as a suit in equity for a mandatory injunction or an action seeking the legal remedy of mandamus. In either instance equitable principles control the issuance of the writ or order. Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S. Ct. 146, 78 L. Ed. 293 (1933); Duncan Townsite Co. v. Lane, 245 U.S. 308, 311-312, 38 S. Ct. 99, 62 L. Ed. 309 (1917).
That the wrongful conduct of representing to the Foreign Claims Settlement Commission that a decision favorable to plaintiffs' claim has been made by the Supreme Court of Croatia worked a fraud on that agency is obvious from reading the final decisions of the Commission. Critical to the claims of plaintiffs was the nationality status of Philip Philips and Adolph Philips on the dates that their respective interests in the property in Yugoslavia was taken by the Yugoslav Government. The executive agreement
between that Government and the United States provided that claims were to be paid out of the moneys transferred to the United States by Yugoslavia (the Yugoslav Claims Fund) to nationals of the United States "at the time of nationalization or other taking" of their property by Yugoslavia. The Foreign Claims Settlement Commission's proposed decisions found that Philip Philips and Adolph Philips were nationals of Yugoslavia when their properties were taken pursuant to the Law on Agrarian Reform and Colonization in 1946 prior to the dates that Philip Philips and Adolph Philips became citizens of the United States. Thus, if the proposed decisions had become final, the Philips brothers would have been entitled to no award.
But the final decisions did make awards to the successors of Philip Philips and Adolph Philips because the false document purporting to be a decision of the Supreme Court of Croatia held that, by the operation of a later Yugoslav law, the Philips properties were taken on dates that Philip Philips and Adolph Philips were United States citizens.
The fact that in December, 1954, documents in addition to the fraudulent Croatian Court decision were presented to the Commission on behalf of plaintiffs does not alter my conclusion. As in Hazel-Atlas Glass Co. v. Hartford Empire Co., 322 U.S. 238, 246-247, 64 S. Ct. 997, 88 L. Ed. 1250 (1944), whether or not the false document was the primary basis for the Commission's final decisions, it did impress the Commission as is evident from those decisions. Plaintiffs thought the false document material or it would not have been presented to the Commission. "They are now in no position to dispute its effectiveness." Id. at 247, 64 S. Ct. at 1002. The false Croatian Supreme Court decision was used here for the same fraudulent purpose as the spurious publication in Hazel-Atlas. But as said in the latter case: "The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud." Id. at 246, 64 S. Ct. at 1001.
While there is no evidence that plaintiffs Elizabeth De Gaster and Joseph Philips participated in or were informed of or otherwise knew of the fraud worked upon the Commission by their co-plaintiff and brother, George Philips, they, nevertheless, may not benefit from such fraud. At the time the December 30, 1954 final decisions were made by the Foreign Claims Settlement Commission, Barbara Philips was the executrix of the estates of Philip Philips and Adolph Philips. It was while Barbara Philips as executrix was asserting the claims of the estates of Philip Philips and Adolph Philips that George Philips, acting for the estates, perpetrated the fraud on the Commission. After the final decisions were made by the Commission, the executrix of the estate died and the plaintiffs here, as successors in interest, stand in the same relationship as the executrix to the claims and the equities with respect to them. Lamb v. Cramer, 285 U.S. 217, 219, 52 S. Ct. 315, 76 L. Ed. 715 (1932). Thus the fraud that induced the final decision continues to taint the awards. Apposite here is the statement of the Court in Ford v. Buffalo Eagle Colliery Co., 122 F.2d 555, 563 (C.A.4, 1941):
True it is that all the appellants have not been found guilty of fraud in the sale of their stock to the Colliery Company. But the bar of the clean-hands maxim is not employed for the punishment of wrongdoers; rather, it is introduced to protect the court of equity and the party defendant from having the powers of the court used in bringing about an inequitable result in the particular litigation before it. * * * Thus, the appellants, though all are not guilty of unconscionable conduct, cannot here claim the benefit of a fraud perpetrated by one or two of their number. * * *