Guessefeldt v. Grath

• Decision Date: 28 January 1952
• Docket Number: No. 204,204
• Citation: 72 S.Ct. 338,342 U.S. 308,96 L.Ed. 342
• Parties: GUESSEFELDT v. McGRATH, Attorney General as Successor to Alien Property Custodian
• Court: U.S. Supreme Court

342 U.S. 308

72 S.Ct. 338

96 L.Ed. 342

GUESSEFELDT

v McGRATH, Attorney General as Successor to Alien Property Custodian.

No. 204.

Argued Nov. 29, 1951.

Decided Jan. 28, 1952.

Mr. William W. Barron, Washington, D.C., for petitioner.

Mr. James D. Hill, Washington, D.C., for respondent.

Mr. Justice FRANKFURTER delivered the opinion of the Court.

This is a case brought under § 9(a) of the Trading with the Enemy Act, 40 Stat. 411, as amended, 50 U.S.C.A.pp. § 1 et seq., 50 U.S.C.A.Appendix, § 1 et seq.,¹ to recover property vested by the Alien Property Custodian. The District Court granted the Government's motion to dismiss, holding that plaintiff while not 'resident within' Germany within the meaning of § 2 of the Act, and thus 'not an enemy' for the purposes of § 9(a), was precluded from recovering by § 39 which provides that 'No property * * * of Germany, Japan, or any national of either such country vested in * * * the Government * * * pursuant to the provisions of this Act, shall be returned to former owners thereof * * *.' 62 Stat. 1240, 1246, 50 U.S.C.App. (Supp. IV, 1946) § 39, 50 U.S.C.A.Appendix, § 39,² 89 F.Supp. 344. The Court of Appeals for the District of Columbia Circuit affirmed. 88 U.S.App.D.C. 383, 191 F.2d 639. We brought the case here for clarification of the restrictions imposed by and the remedies open under the Trading with the Enemy Act. 342 U.S. 810, 72 S.Ct. 52.

Accepting the allegations as true for the purpose of dealing with the legal issues raised by the motions to dismiss, the situation before us may be briefly stated. Guessefeldt, a German citizen, lived continuously in Hawaii from 1896 to 1938. In April of that year he took his family to Germany for a vacation. After the outbreak of war, he was unable to secure passage home before March, 1940, when his reentry permit expired. When the United States entered the war, he was involuntarily detained in Germany, first by the Germans and after 1945 by the Russians, until July, 1949, when he returned to this country. During that time he did nothing directly or indirectly to aid the war effort of the enemy.

The first question to be decided is whether the claimant was 'resident within' the territory of a nation with which this country was at war within the meaning of §§ 2 and 9(a) of the Trading with the Enemy Act. He was physically within the enemy's territory. He contends, however, that the meaning conveyed by 'resident within' is something more than mere presence; at the least a domiciliary connotation, if not domicile, is implied.

Legislative history leaves the meaning shrouded. Some use of the term 'domicile' as the touchstone of enemy status is to be found in the Congressional hearings and reports.³ But on the floor, Representative Montague, one of the managers of the bill, unequivocally stated under close questioning that the statutory language was intended to cover much more than those domiciled in enemy nations. Yet prisoners of war, expeditionary forces and 'sojourners' were not, he said, intended to be included. 55 Cong.Rec. 4922. ⁴

Guessefeldt retained his American domicile. Moreover, if anything more than mere physical presence in enemy territory is required, it would seem clear that he was not an 'enemy' within the meaning of § 2. His stay before the war, as a matter of choice, was short. The circumstances negative any desire for a permanent or long-term connection with Germany. He intended, and indeed attempted, to leave there before this country entered the war. Being there under physical constraint, he is almost literally within the excepted class as authoritatively indicated by Mr. Montague. To hold that 'resident within' enemy territory implies something more than mere physical presence and something less than domicile is consistent with the emanations of Congressional purpose manifested in the entire Act, and the relevant extrinsic light, including the decisions of lower courts on this issue, which we note without specifically approving any of them. See McGrath v. Zander, 85 U.S.App.D.C. 334, 177 F.2d 649; Josephberg v. Markham, 2 Cir., 152 F.2d 644; Stadtmuller v. Miller, 2 Cir., 11 F.2d 732, 45 A.L.R. 895; Vowinckel v. First Federal Trust Co., 9 Cir., 10 F.2d 19; Sarthou v. Clark, D.C., 78 F.Supp. 139.

Guessefeldt has the further obstacle of § 39 to clear before he can succeed. Congress in 1948, so the Govern- ment's argument runs, adopted a 'policy of nonreturn,'⁵ and prohibited the restoration of vested property to a 'national' of Germany. A citizen is a national, and Guessefeldt is a German citizen. Thus, even though he may, before the enactment of § 39, have been entitled to bring suit as a nonenemy under § 9(a), that privilege has since been cut off. To which Guessefeldt counters that § 39 must be construed harmoniously with § 9(a); the term 'national' in the new section must accordingly be taken to mean only those German and Japanese citizens who could not theretofore have enforced the return of their property as of right. Section 39, in the context of its legislative history and in the light of the scheme and background of the statute, makes the Government's contention unpersuasive.

It is clear that the Custodian can lawfully vest under § 5 a good deal more than he can hold against a § 9(a) action. Central Union Trust Co. of New York v. Garvan, 254 U.S. 554, 41 S.Ct. 214, 65 L.Ed. 403; Clark v. Uebersee Finanz-Korp., 332 U.S. 480, 68 S.Ct. 174, 92 L.Ed. 880. Thus Congress had to make provision for the disposal of two classes of vested property. Nonenemy property, lawfully vested under § 5, was recoverable in a suit against the Custodian. § 9(a); see Becker Steel Co. of America v. Cummings, 296 U.S. 74, 56 S.Ct. 15, 80 L.Ed. 54. The second class, property owned by 'enemies' and therefore not subject to recovery under § 9(a), was reserved for disposition '(a)fter the end of the war * * * as Congress shall direct.' 40 Stat. 411, 423, 50 U.S.C.App. § 12, 50 U.S.C.A.Appendix, § 12.

After both wars, Congress did adopt measures to dispose of this property. The Treaty of Berlin, 42 Stat. 1939, 1940, at the end of World War I, confirmed the possession of vested enemy property by the United States. Junkers v. Chemical Foundation, Inc., D.C., 287 F. 597; Lange v. Wingrave, D.C., 295 F. 565; Klein v. Palmer, 2 Cir., 18 F.2d 932. For present purposes it does not matter whether this action was taken simply to secure claims of American citizens against Germany or was regarded as the rightful withholding of spoils of war. In the Settlement of War Claims Act of 1928, 45 Stat. 254, 270, 50 U.S.C.App. §§ 9(b)(12), (13), (14), (16), 9(m), 50 U.S.C.A.Appendix, § 9(b)(12—14, 16), (m), Congress provided for the return to admittedly enemy owners of 80% of their vested property. See Cummings v. Deutsche Bank und Disconto-Gesellschaft, 300 U.S. 115, 57 S.Ct. 359, 81 L.Ed. 545.⁶ Section 32 of the Trading with the Enemy Act, 60 Stat. 50, as amended, 50 U.S.C.App. (Supp. IV, 1946) § 32, 50 U.S.C.A.Appendix, § 32 enacted after World War II, provided for administrative returns of property to certain classes of 'technical' enemies who were ineligible to bring suit under § 9(a). Thus, if § 39 is treated as dealing only with property not otherwise subject to recovery, the consistency of the pattern of enactment is preserved. On the other hand, if the significant language of the section is regarded as requiring the retention of property which would otherwise be recoverable in a suit under § 9(a), it would mark the first departure from what appears to be a heretofore consistent Congressional policy.

Section 39 was passed as part of a measure establishing a commission on the problem of compensating American prisoners of war, internees and others who suffered personal injury or property damage at the hands of World War II enemies. Congressional attention was focused on the nature and extent of these claims and methods of adjudicating them. The issues involved in § 39 were of peripheral concern. Reading the legislative history in this light, it lends support to the view that § 39 was conceived as dealing with property not otherwise subject to return. Senate hearings opened with detailed testimony analyzing the value of assets which would be left after payments for administration and liquidation, returns under § 32, and disbursements in satisfaction of judgments in suits brought under § 9(a). Hearings before a Subcommittee of the Senate Committee on the Judiciary on H.R. 4044, 80th Cong., 2d Sess. 12—21. See also id., at 44, and Hearings before the House Committee on Interstate and Foreign Commerce on H.R. 873, 80th Cong., 1st Sess. 264. It seems clear that the legislation looks to the disposition of this fund, and the conclusion is reinforced by the provision of the section that 'The net proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest therein shall be covered into the Treasury at the earliest practicable date.'

The tenor of the hearings demonstrates no purpose to change the existing scope of § 9(a). The only reason a proviso to that effect was not included in § 39 as passed seems to be an assumption—unwarranted in the light of other evidence before the committees discussed below—that a national of any enemy nation had no rights under § 9(a) in any case.⁷ Indeed, the terms 'enemy,' enemy alien,' 'enemy national,' and 'German or Japanese national' are used interchangeably in the hearings, not only by committee members but by witnesses from the Office of Alien Property, without regard to precise shades of meaning in the context of the Trading with the Enemy Act.

By § 39 Congress was manifesting its 'firm resolve not to permit the recurrence of events which after the close of World War I led to the return of enemy property to their former owners.' H.R.Rep. No. 976, 80th Cong., 1st Sess. 2. Those events, as we have seen,...