Becker Steel Co of America v. Cummings

• Decision Date: 11 November 1935
• Docket Number: No. 13,13
• Citation: 296 U.S. 74,56 S.Ct. 15,80 L.Ed. 54
• Parties: BECKER STEEL CO. OF AMERICA v. CUMMINGS, Attorney General, et al
• Court: U.S. Supreme Court

296 U.S. 74

56 S.Ct. 15

80 L.Ed. 54

BECKER STEEL CO. OF AMERICA

v CUMMINGS, Attorney General, et al.

No. 13.

Argued Oct. 17, 1935.

Decided Nov. 11, 1935.

Mr. E. Crosby Kindleberger, of New York City, for petitioner.

Messrs. Homer S. Cummings, Atty. Gen., and John Dickinson, Asst. Atty. Gen., for respondents. of the District Court (10 F.Supp. 343) of the Court.

This is a suit against the Attorney General as Alien Property Custodian, and the Treasurer of the United States, brought in the District Court for Southern New York under section 9(a) of the Trading with the Enemy Act 40 Stat. 411, 419, as amended 42 Stat. 1511, and section 7(c), as amended, 40 Stat. 1020, 1021,¹ to recover a balance of the proceeds of sale of certain shares of stock seized and sold by the Alien Property Custodian. An earlier suit brought for the same purpose was dismissed on the ground that the attempted reviver against the then Alien Property Custodian and Treasurer was too late. Becker Steel Co. v. Hicks (C.C.A.) 66 F.(2d) 497. Cf. Fix v. Philadelphia Barge Co., 290 U.S. 530, 54 S.Ct. 270, 78 L.Ed. 481.

The complaint alleges, among other things not now material, that the petitioner, owner of the shares seized was not an enemy alien; that the Alien Property Custodian, predecessor in office of the Attorney General now acting in that capacity, sold the stock for $20,000, the balance of which, after paying expenses of the sale amounting to $3,887.84, he turned over to the petitioner. Judgment is demanded for the amount paid out as expenses.

The District Court granted a motion to dismiss the bill of complaint for want of jurisdiction. 10 F.Supp. 343. Its order was affirmed by the Court of Appeals for the Second Circuit on the opinion of the District Court. 75 F.(2d) 1005. This court granted certiorari, 295 U.S. 724, 55 S.Ct. 657, 79 L.Ed. 1677, because of the nature and importance of the question involved and to resolve an alleged conflict of the decision below with that of the Court of Appeals for the Ninth Circuit in Vowinckel v. Sutherland, 24 F.(2d) 196.

The trial court held, as is conceded here, that the suit brought against officers of the government in their official capacities is in substance a suit against the United States authorized, if at all, by section 9(a) of the Trading with the Enemy Act. See Banco Mexicano de Commercio e Industria v. Deutsche Bank, 263 U.S. 591, 44 S.Ct. 209, 68 L.Ed. 465; Henkels v. Sutherland, 271 U.S. 298, 46 S.Ct. 524, 70 L.Ed. 953, 51 A.L.R. 229. That section provides that the nonenemy claimant 'may institute a suit in equity * * * in the district court * * * to establish the interest, right, title * * * so claimed,' and that 'if so established the court shall order the payment, conveyance, transfer, assignment, or delivery to said claimant of the money or other property so held by the Alien Property Custodian or by the Treasurer of the United States.' These provisions the District Court construed as granting the privilege of suit to a nonenemy only when the money or property demanded is 'held' by the Alien Property Custodian or the Treasurer of the United States at the time of suit, and concluded that it lacked jurisdiction to entertain the suit since the money demanded had been disbursed before suit.

The government urges that these clauses must be read with the requirement of section 9(a) that after suit instituted the money or property claimed shall be retained in the custody of the Alien Property Custodian or of the Treasurer of the United States until final judgment and also with the provision in section 7(c) that the remedy given by the act 'in the event of sale or other disposition of such property by the Alien Property Custodian, shall be limited to and enforced against the net proceeds received therefrom and held by the Alien Property Custodian or by the Treasurer.'

The question thus presented is not one of jurisdiction of the district court in the strict sense of its power or authority as a federal court to decide whether the suit would lie. Cf. Sperry Gyroscope Co. v. Arma Engineering Co., 271 U.S. 232, 46 S.Ct. 505, 70 L.Ed. 922; Smyth v. Asphalt Belt Ry. Co., 267 U.S. 326, 45 S.Ct. 242, 69 L.Ed. 629; Timken Roller Bearing Co. v. Pennsylvania R.R. Co., 274 U.S. 181, 185, 47 S.Ct. 550, 71 L.Ed. 989; Binderup v. Pathe Exchange, 263 U.S. 291, 305, 44 S.Ct. 96, 68 L.Ed. 308. It had power to determine whether the suit was one permitted by the statute and the only question presented now is whether its decision is erroneous.

Section 7 of the Trading with the Enemy Act conferred on the Alien Property Custodian authority summarily to seize property upon his determination that it was enemy owned, and such a seizure was lawful even though the determination were erroneous. Central Trust Co. v. Garvan, 254 U.S. 554, 41 S.Ct. 214, 65 L.Ed. 403; Stoehr v. Wallace, 255 U.S. 239, 41 S.Ct. 293, 65 L.Ed. 604; Commercial Trust Co. v. Miller, 262 U.S. 51, 43 S.Ct. 486, 67 L.Ed. 858. But in thus authorizing the seizure of property as a war measure Congress did not attempt the confiscation of the property of citizens or alien friends. See Henkels v. Sutherland, supra, 271 U.S. 298, 301, 46 S.Ct. 524, 70 L.Ed. 953, 51 A.L.R. 229. Instead by section 9(a) it gave to the nonenemy owner the right to maintain a suit for the recovery of the seized property or its proceeds, and at the same time, by the all-inclusive language of section 7(c) it denied to him any other remedy.

The seizure and detention which the statute commands and the denial of any remedy except that afforded by section 9(a) would be of doubtful constitutionality if the remedy given were inadequate to secure to the nonenemy owner either the return of his property or compensation for it. See Henkels v. Sutherland, supra; Central Union Trust Co. v. Garvan, Supra, 254 U.S. 554, 566, 569, 41 S.Ct. 214, 65 L.Ed. 403; Stoehr v. Wallace, supra, 255 U.S. 239, 246, 41 S.Ct. 293, 65 L.Ed. 604. Plainly inadequate would be a remedy which could be availed of only while the Custodian or Treasurer continued to retain possession of the seized property or its proceeds, and which would be lost whenever he disposed of the property and proceeds, whether lawfully or not. In determining whether the remedy given is thus restricted, it must be presumed that Congress intended that it should be constitutionally sufficient. The implication that by the appropriation of private property to public use the United States undertakes to make just compensation for it, see United States v. Lynah, 188 U.S. 445, 471, 23 S.Ct. 349, 47 L.Ed. 539; Jacobs v. United States, 290 U.S. 13, 54 S.Ct. 26, 78 L.Ed. 142, 96 A.L.R. 1; Perry v. United States, 294 U.S. 330, 55 S.Ct. 432, 79 L.Ed. 912, 95 A.L.R. 1335; Brooks-Scanlon Corp. v. United States, 265 U.S. 106, 44 S.Ct. 471, 68 L.Ed. 934, must likewise enter into the construction of a statute giving to a nonenemy a remedy for the seizure of his property as a war measure. Only compelling language in the congressional enactment will be construed as withdrawing or curtailing the privilege of suit against the government granted in recognition of an obligation imposed by the Constitution. See Lynch v. United States, 292 U.S. 571, 586, 587, 54 S.Ct. 840, 78 L.Ed. 1434; Russian Volunteer Fleet v. United States, 282 U.S. 481, 489, 51 S.Ct. 229, 75 L.Ed. 473. Hence section 9(a) must be broadly construed to give effect to its remedial purpose, see Miller v. Robertson, 266 U.S. 243, 248, 45 S.Ct. 73, 69 L.Ed. 265; Behn, Meyer & Co. v. Miller, 266 U.S. 457, 471, 472, 45 S.Ct. 165, 69 L.Ed. 374.

In the present state of the record it is unnecessary to inquire whether the effect of the act is to sanction in every case the sale of the property of a nonenemy giving him recourse only to the proceeds of sale. See Sielcken-Schwarz v. American Factors (C.C.A.) 60 F.(2d) 43, 44. That question was not raised or considered below. The issue now presented is much narrower, whether the failure of the Custodian to retain possession of the seized property or its proceeds precludes all inquiry as to the propriety of the disposition which he has made of them. Such, we think, is not the effect of the provisions in sections 7 and 9, construed in the light of constitutional obligations which we must assume Congress did not intend to ignore. Section 9(a) is specific in permitting the nonenemy claimant to institute a suit to establish the interest, right, or title claimed. 'If so established' the court in terms is directed to order the satisfaction of the claim from property 'held' by the Custodian or Treasurer. But these words do not deny the right to establish the claim or to enter judgment upon it when established, even though the property is no longer held by the Custodian. Directions that the money or property be retained and used for satisfying the decree in a pending suit are not the equivalent of a command that the suit be dismissed if the property is not so retained. If they were we should be forced to the conclusion, although the court below did not go so far, that the claim could be defeated by the waste or dissipation of the seized property by the Custodian at any time before judgment, after suit brought, as well as before.

Nor does the provision in section 7 that the remedy in the event of sale is to be limited to the net proceeds of sale 'received therefrom and held' by the Custodian preclude inquiry whether amounts expended were lawfully charged against the gross proceeds. Escher v. Woods, 281 U.S. 379, 50 S.Ct. 337, 74 L.Ed. 918. 'Net proceeds of sale' thus means no more than gross proceeds less charges which may be rightly deducted and we think that the direction that the remedy is to be limited to net proceeds 'held' by the Custodian must be taken, not in the narrow and restricted sense as indicating only the proceeds retained by him at the precise moment of entering the decree, but as signifying proceeds held by him at any time and not...