Holzer v. Deutsche Reichsbahn-Gesellschaft

Facts

Plaintiff, Holzer, was a Jewish German national. He was contracted by the Defendants, Schenker & Co. G.m.b.H. (Schenker) and Deutsche Reichsbahn-Gesellschaft (DRG), both German corporations, to perform services for a period of three years beginning on January 1, 1932 in Germany and in other locations outside of the state of New York. The contract provided that in the event Holzer died or became unable “without fault on his part” to serve during the contract period, the Defendant corporations would pay him or his heirs 120,000 marks “in discharge of their obligations under the hiring.” In June 1933, the Defendant corporations terminated Holzer from his employment, effective October 31, 1933.

Holzer sued the Defendant corporations in New York state court claiming damages for two separate causes of action for breach of contract. The first cause of action alleged that on June 21, 1933, the Defendant corporations discharged Holzer upon the sole ground that he was Jewish. The lower court found in favor of Holzer, and he was awarded $50,000.00 in damages. The second cause of action alleged that in April 1933, Plaintiff was unable, without any fault of his own, to continue his services because he was incarcerated in a prison and in a concentration camp for six months by the German government. The reason for his imprisonment was a new German policy, which required the elimination of all “persons of Jewish blood from leading commercial, industrial, and transportation enterprises.” The lower court found in favor of Holzer, and he was awarded $50,000.00 in damages.

DRG, in a separate defense, alleged that Holzer’s contract was made and to be performed in Germany, was terminated in Germany, and should be governed by the laws of Germany. Subsequent to April 7, 1933, the German government adopted certain laws, decrees, and orders which required persons of non-Aryan descent to be retired. Holzer was of non-Aryan decent, and in compliance with the new German laws, his employment contract was terminated.

The New York Special Term court granted Plaintiff’s motion to strike DRG’s separate defense, and the Appellate Division affirmed but certified two questions to the New York Court of Appeals. First, is DRG’s separate defense sufficient in law on its face? Second, does the complaint state facts sufficient to continue a cause of action?