APPEAL
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
RHODE ISLAND [Hon. John J. McConnell, Jr., U.S. District
Judge]
Louis
M. Solomon, with whom Colin A. Underwood, Nancy L. Savitt,
John F. Farraher, Jr., Greenberg Traurig, LLP, Deming E.
Sherman, and Locke Lord LLP were on brief, for appellant.
Gary
P. Naftalis, with whom Jonathan M. Wagner, Tobias B. Jacoby,
Daniel P. Schumeister, Kramer Levin Naftalis & Frankel
LLP, Steven E. Snow, and Partridge Snow & Hahn LLP were
on brief, for appellee.
Before
Lynch, Circuit Judge, Souter, Associate Justice, [*] and Baldock,
Circuit Judge. [**]
SOUTER, Associate Justice.
This
case began as an action for declaratory judgment brought by
Congregation Jeshuat Israel ("CJI"), which was
followed by counterclaims on behalf of the defendant,
Congregation Shearith Israel ("CSI"). The district
court held that CJI was owner of rimonim used in its worship
in the Touro Synagogue and that CSI was owner of the building
and real estate subject to a trust for CJI as representing
the practitioners of Judaism in Newport, Rhode Island. We
reverse on the basis of the parties' own agreements
determining property rights by instruments customarily
considered by civil courts. We hold that the only reasonable
conclusions to be drawn from them are that CSI owns both the
rimonim and the real property free of any civilly cognizable
trust obligations to CJI.
I.
The
district court made extensive findings of fact, of which the
following, limited synopsis presents the background of this
litigation. In the latter part of the 17th century, the
Jewish population of Newport, Rhode Island, made up
principally of immigrants from Europe, associated for
religious observances and in the course of the following
century became known as Congregation Yeshuat Israel, which
worshiped largely according to the Sephardic (Spanish and
Portuguese) Jewish tradition. In the mid-18th century, these
observant Jews acquired land in Newport on which the building
now known as Touro Synagogue was built. Self- assessments on
the congregants funded the land acquisition, and the
Synagogue was erected through donations. The members chose
three men to serve in a trusteeship capacity over the
Synagogue and its lands, though it is not clear that these
individuals would have been recognized as trustees by the
civil law in the mid-18th century.
Close
in time to the construction of the Synagogue, silversmith
Myer Myers created the rimonim at issue here, a pair of
finials with attached bells made of silver and gold and
designed to surmount the shafts around which the Torah
scrolls were rolled. The rimonim were used in worship by
Congregation Yeshuat Israel in Touro Synagogue.
In the
course of the period running from the Revolutionary War
through the War of 1812, the Jewish population in Newport
virtually vanished. As it dwindled, movable personal
property, including the rimonim, was transferred to CSI, a
Sephardic congregation in New York. In the ensuing years, and
for the better part of the 19th century, various individuals
took it upon themselves to maintain the fabric of the Newport
Synagogue, and CSI, too, helped care for the building, which
it controlled and made available for occasional funerals. In
the latter part of the 19th century, out of a new infusion of
immigrants, a Jewish population grew again in Newport. To a
significant degree, its religious character was of the
Ashkenazic (central and eastern European) tradition, and its
worshippers became known as Congregation Jeshuat Israel,
though its name represented no formal connection with its
predecessor. When the community was large enough to support a
rabbi, Touro Synagogue was reopened, and CSI returned the
rimonim to Newport.
Around
the turn of the 20th century, the relationship between CJI
and CSI soured to a point in 1901 when CSI closed the
Synagogue. After a year of closure, a group of the Newport
Jews broke in and engaged in a limited occupation that lasted
for another year, whereupon CJI and several individuals
brought suit in equity against CSI in a Rhode Island court,
claiming a right to the Synagogue and its lands. CSI removed
the case to federal district court, which in January 1903
sustained CSI's demurrer and dismissed the case. See
David v. Levy, 119 F. 799 (D.R.I.
1903).
The
effect that the judgment standing alone might have today, if
any, is not a matter of concern to us, owing to a series of
contracts that we mention here and describe in greater detail
below. In 1903, CJI and CSI made an agreement to settle their
competing claims of interest in the real property, followed
in the same year by a five-year lease of the Synagogue from
CSI to CJI, which dealt with personal property as well as the
real estate. The lease was renewed for another five years in
1908. Thereafter CJI continued to hold services in the
building and in 1945 recognized its own status as lessee when
it joined an agreement that the two congregations made with
the Department of the Interior, and it again recited its
lessee status in a further contract made in 2001 by CJI and a
supporting organization with the National Trust for Historic
Preservation. Although the leasehold relationship was thus
acknowledged, CJI was a holdover tenant under the 1908 lease,
and for much of the parties' recent history each took a
relaxed view of CJI's nominal rent obligation, the
district court having found only one annual payment since
1987.
In the
recent period of their relationship, a want of cordiality, if
not acrimony, was brought to a pitch in 2011 by CJI's
efforts to raise an endowment to provide reliable income to
support its activity at the Synagogue. In that year it
received an offer from the Museum of Fine Arts in Boston to
purchase the rimonim for over seven million dollars, and it
prepared to sell them. CSI objected, claiming ownership of
the objects, and charging CSI with violation of the lease
obligation to conform to CSI's version of Sephardic
practice, which forbade disposition of such ritual objects.
The
standoff between the two congregations precipitated the
present litigation, begun by CJI, which filed suit against
CSI in Rhode Island Superior Court in 2012. It sought an
order declaring it to be the lawful owner of the rimonim and
restraining CSI from interfering with the proposed sale to
the museum. As a fallback, CJI asked for a judgment declaring
that CSI owned the rimonim in trust for the benefit of CJI
and authorizing the sale as being in CJI's best
interests. CJI further requested that CSI be removed as
trustee, to be replaced in a trust capacity by CJI's own
board of trustees.
CSI
promptly removed the action to federal court, based on
diversity of citizenship, 28 U.S.C. § 1332(a), and then
answered the complaint and counterclaimed. The counterclaims
asked the district court to declare that CSI owns and has
full legal and equitable rights to the rimonim. CSI sought a
declaration that the sale of the rimonim would be contrary to
the Sephardic tradition as maintained by CSI and thus
unlawful under the governing instruments, and requested an
injunction barring the sale to the Museum and ordering
physical transfer of the rimonim to CSI, unless CSI should
agree otherwise.[1] As to the real property, CSI requested a
declaration that CSI owned and had full legal and equitable
rights to the Synagogue and its lands. CSI also asked for a
declaration that CJI had breached the terms of the lease with
CSI and the 1945 agreement with the Department of the
Interior by, among other things, attempting to sell CSI's
property and attempting to treat the Synagogue as its own by
installing an unauthorized plaque. CSI requested that CJI
therefore be removed as lessee of the Synagogue and the
related real and personal property. CSI went on to request
...