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Republic of China v. Mow

Decided: April 5, 1954.

REPUBLIC OF CHINA AND KUO-HWA YU, PLAINTIFFS-RESPONDENTS,
v.
PONG-TSU MOW (ALSO KNOWN AS PANG-TSU MOW), DEFENDANT-APPELLANT



On appeal from the Superior Court, Law Division, Essex County.

For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling and Brennan. For reversal -- None. The opinion of the court was delivered by Oliphant, J.

Oliphant

[15 NJ Page 142] This is an appeal from an order of the Superior Court, Law Division, denying defendant-appellant's motion to quash a writ of attachment and the levy made thereunder, and to set aside two orders directing the issuance

of the writ and substituted process, R.R. 4:77-2 (a)(b). The appeal is apparently taken under R.R. 2:2-3(a)(3) on the theory that a question of jurisdiction is involved, but we prefer to treat the appeal as if it were taken with leave under R.R. 2:2-3(b) since if the appeal was sustained there was a possibility the action would have been terminated. The case has been certified here on our own motion pursuant to R.R. 1:10-1(a).

The plaintiff, Republic of China, is a foreign sovereign government duly recognized by the United States. The defendant, Mow, is a citizen of the Republic of China and was one of the agents of that government for a period from January 1, 1948 to April 30, 1951. It was the practice of that government to entrust to the defendant and others and place under their control large sums of money which the defendant was authorized to spend for governmental purposes.

In May 1949 two checks of the Bank of China, New York agency, in the sum of $985,000 were issued payable to the order of three individuals and in turn endorsed by them to the order of the defendant Mow and the plaintiff Yu, another agent of the Republic of China. These two in turn endorsed the checks and they were deposited in a bank account with the Bank of Montclair (to which the National Newark and Essex Banking Company of Newark is successor). The said deposits were made subject to withdrawal only upon the joint signatures of Mow and Yu. Since that time there have been withdrawals and there now remains to the credit of said account the sum of $675,000.

The affidavits upon which the application for the writ of attachment was based show that the joint depositor, Yu, has at all times been and is now ready and willing to join in the payment of the balance in said bank account to the Republic of China and its regularly recognized officials. The affidavits allege that Mow has failed and refused so to do in defiance of the order of his government and has fled to and remains in Mexico, and that such refusal of Mow deprives the Republic of China of the balance deposited to the credit of the said bank account to which it is lawfully entitled and

constitutes a conversion thereof by Mow for which damages are claimed in favor of the Republic of China.

The appellant's motion in the court below is based in a large part upon the pendency of an action instituted on November 14, 1951, in the United States District Court for the District of Columbia by the Republic of China against one Mow and one Hsiang. The action was one in equity for injunctive relief and to compel an accounting of the funds entrusted to or placed under the control of the defendant. A temporary restraint was issued against the defendants upon the filing of the complaint and Mow subsequently entered an appearance in the action and moved to dismiss it on numerous technical grounds, and actively opposed the issuance of a preliminary injunction against him. The motion to dismiss was denied and an order was entered enjoining Mow from transferring or otherwise disposing of any of the moneys or properties involved. 101 F. Supp. 646 (D.C.D.C. 1951). The action of the District Court was affirmed on appeal, 91 U.S. App. D.C. 324, 201 F.2d 195 (C.A.D.C. 1952), and certiorari was denied on April 6, 1953, 345 U.S. 925, 73 S. Ct. 784, 97 L. Ed. 1356.

The action proceeded on the failure of Mow to appear for depositions. As a result of this refusal all his pleadings were stricken and a default judgment was entered against him, among other things making permanent the preliminary injunction and directing Mow to render an accounting of all moneys and properties entrusted to him by the Republic of China and to pay over to it all the said moneys and properties not properly expended. The cause was referred to an auditor to hold hearings and make a report and the cause is still pending. Mow in the meanwhile had gone to Mexico and is presently imprisoned because of some dispute over an extradition proceeding which is irrelevant insofar as the questions before this court are concerned.

The trial court held that both of the depositors, Mow and Yu, had acquired a legal right in the bank account, including the right of withdrawal, but that they held these rights in trust for the plaintiff, and that Mow's refusal to ...


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