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Congregation Jeshuat Israel v. Congregation Shearith Israel

United States Court of Appeals, First Circuit

August 2, 2017

CONGREGATION JESHUAT ISRAEL, Plaintiff, Appellee,
v.
CONGREGATION SHEARITH ISRAEL, Defendant, Appellant.

         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 ...


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