Z. & F. Assets Realization Corporation v. Hull

• Citation: 114 F.2d 464
• Decision Date: 03 June 1940
• Docket Number: No. 7596.,7596.
• Parties: Z. & F. ASSETS REALIZATION CORPORATION et al. v. HULL, Secretary of State, (LEHIGH VALLEY R. CO. et al., Interveners).
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

114 F.2d 464 (1940)

Z. & F. ASSETS REALIZATION CORPORATION et al. v. HULL, Secretary of State, (LEHIGH VALLEY R. CO. et al., Interveners).

No. 7596.

United States Court of Appeals for the District of Columbia.

Decided June 3, 1940.

Writ of Certiorari Granted October 14, 1940.

Fred K. Nielsen and Frank Roberson, both of Washington, D. C., and Joseph M. Proskauer, of New York City, pro hac vice, by special leave of Court, (John Bassett Moore, of New York City, on the brief), for appellants.

Francis M. Shea, Francis J. McNamara, and Frank C. Sterck, all of Washington, D. C., for appellees.

Richard H. Wilmer and Douglas L. Hatch, both of Washington, D. C., and William D. Mitchell, of New York City, for intervener.

Before MILLER, VINSON and RUTLEDGE, Associate Justices.

Writ of Certiorari Granted October 14, 1940. See 61 S.Ct. 51, 85 L.Ed. ___.

MILLER, Associate Justice.

The war between the United States and Germany was ended by a Joint Resolution of Congress on July 2, 1921;¹ which reserved to the United States and to its nationals all rights, privileges, indemnities, reparations, and advantages to which they became entitled by the Treaty of Versailles.² The resolution specified that all property of the Imperial German Government, or its successor, and of all German nationals, which was under the control of the United States, should be retained by the latter until suitable provision had been made for the satisfaction of all claims of United States citizens against Germany arising out of, or in consequence of, the war, or otherwise. Thereafter, on August 25, 1921, a treaty of peace was entered into, at Berlin, between the United States and Germany,³ securing to the United States the rights reserved to them in the Joint Resolution of July 2d, including all rights and advantages stipulated for the benefit of the United States in the Treaty of Versailles. This treaty was proclaimed by the President on November 14, 1921.⁴ On August 10, 1922, an executive agreement was signed at Berlin,⁵ which provided for the creation of a Mixed Commission⁶ "to Determine the Amount to be Paid by Germany in Satisfaction of Germany's Financial Obligations Under the Treaty" of August 25, 1921. The executive agreement provides for a commission of three members, one commissioner to be appointed by each of the two governments, and an umpire to be selected by agreement of the two governments, who is charged with the duty of deciding "upon any cases concerning which the commissioners may disagree, or upon any points of difference that may arise in the course of their proceedings." The executive agreement provides further, in Article II, that in case the umpire or any of the commissioners shall die or retire, or be unable for any reason to discharge his duties, the same procedure shall be followed in filling the vacancy "as was followed in appointing him;" in Article IV, that the Commission may appoint and employ other necessary officers; that the commissioners shall keep minutes of their proceedings and an accurate record of the questions and cases submitted to them; in Article VI, that "The two Governments may designate agents and counsel who may present oral or written arguments to the commission;" that the Commission shall receive and consider all written statements or documents which may be presented to it by or on behalf of the respective governments in support of or in answer to any claim; and that "The decisions of the commission and those of the umpire (in case there may be any) shall be accepted as final and binding upon the two Governments."

On March 10, 1928, Congress enacted the Settlement of War Claims Act,⁷ which directed the Secretary of State to certify the awards of the Mixed Claims Commission to the Secretary of the Treasury, who, in turn, was required to pay the awards so certified, according to specified priorities, out of a German special deposit account thereby created.^7a

Pursuant to the executive agreement, the Commission was created, and an American Commissioner, a German Commissioner, and an Umpire were appointed. In 1927, there were filed with the Commission, by the agent for the United States, claims arising out of the destruction of property by reason of explosions, in 1916, at Black Tom, in New York Harbor, and at Kingsland, New Jersey, in 1917. On October 16, 1930, the Commission found that Germany was not responsible for the explosions and refused to allow the claims.

Petitions for rehearing of the Commission's order dismissing the claims were denied on March 30, 1931. On July 1st of that year a supplemental petition in the two cases was filed, together with new evidence; this was dismissed on December 3, 1932. A new petition was filed on May 4, 1933, to reopen the cases, for the reason, then for the first time alleged, that the decisions of 1930 and 1932 had been obtained by fraud and collusion. Conflicting opinions were expressed by the two commissioners as to the power of the Commission to entertain and consider petitions for rehearings. On December 15, 1933, the Umpire, Justice Owen D. Roberts, held that it had power to reopen the cases and either confirm the decisions theretofore made, or alter them as justice and right might require. Following that decision additional evidence was filed by the agents of both governments and argument was had before the Commission upon the question of the power of the Commission. On June 3, 1936, the Commission unanimously set aside its decision of December 3, 1932.

After an interval of a year, occasioned by Germany's request for postponement, witnesses were examined; additional evidence was filed by the agents of both governments; and, in January 1939, the cases were again argued at length before the full Commission. The American agent again requested that the cases be reopened and that the Commission render a final decision on the merits in favor of the United States. On January 27th, the hearings and arguments being concluded, the Commission took the case under advisement. In the deliberations of the Commission which followed, the Umpire and the American Commissioner each expressed the view that the Commission's decision of October 16, 1930, had been induced by fraud in the evidence presented by Germany. Thereupon, at the specific request of the German Commissioner, the Commission proceeded to determine whether, upon the whole record, there was sufficient proof of Germany's responsibility to justify setting aside the prior decision. On March 1, 1939, and during the course of the Commission's deliberation upon that question, the German Commissioner retired as a member of the Commission.

Thereafter, personal notice was given to the German agent of a further meeting of the Commission to be held on June 15, 1939. Following this notice, and prior to the date of the meeting, Germany stated, through announcements made both by its agent and its diplomatic representative, that it would ignore the meeting called. These representations and announcements were made a part of the record. On the day of the meeting, the Commission rendered a decision, setting aside its earlier decision of October 16, 1930, and reopening the cases. The American agent again moved that awards be granted in favor of the United States. The motion was granted and the Commission found that the liability of Germany, in both the Black Tom and Kingsland cases, had been established. It was ordered that awards be prepared and submitted to the Commission for its consideration at a further meeting to be held on notice.

Prior to October 30, 1939, personal notice was given to the German agent of a meeting of the Commission to be held on that date. At that time a thorough study was made by the Commission — absent the German Commissioner — of the records and proofs on file, and awards were made in favor of the United States in each of the 153 claims which are involved in this case.

Appellants, who were plaintiff and intervener-plaintiff in the court below, are beneficiaries under prior awards made by the Commission. They sought identical relief, i. e., for a judgment declaring:

(a) That the decision of the Mixed Claims Commission of October 16, 1930, is final and binding and that all proceedings purported to be had by said Commission or the aforesaid alleged Commission thereafter are null and void;

(b) That the said awards granted to the said Lehigh Valley Railroad Company, Agency of Canadian Car & Foundry Company, Limited, Bethlehem Steel Company, and others, be declared null and void;

(c) That the defendant, Cordell Hull, Secretary of State of the United States, be enjoined and restrained from certifying to the Secretary of the Treasury any and all alleged awards to claimants, Lehigh Valley Railroad Company, Agency of Canadian Car & Foundry Company, Limited, Bethlehem Steel Company, and others;

(d) That the Secretary of the Treasury be restrained and enjoined from paying the amount of any awards to the said claimants, Lehigh Valley Railroad Company, Agency of Canadian Car & Foundry Company, Limited, Bethlehem Steel Company, and others;

(e) That the said Cordell Hull and the said Henry Morgenthau be restrained therefrom during the pendency of this action.

(f) That the Secretary of the Treasury be directed to pay to the plaintiff and other holders of awards of the Mixed Claims Commission, other than the said sabotage claimants, the balance remaining in the German Special Deposit Account to the extent provided for in the Settlement of War Claims Act of 1928.

(g) That the plaintiff be awarded the costs and disbursements of this action and such other and further relief in the premises as to the Court may seem proper.

The appellees, Hull and Morgenthau, moved to dismiss both the complaint and the bill of intervention upon the grounds that the lower court was without jurisdiction to review the action of the Mixed Claims Commission; to determine whether or not the Commission had jurisdiction to...