Allen v. Markham

• Decision Date: 17 July 1946
• Docket Number: No. 10760.,10760.
• Citation: 156 F.2d 653
• Parties: ALLEN et al. v. MARKHAM, Allen Property Custodian.
• Court: U.S. Court of Appeals — Ninth Circuit

156 F.2d 653 (1946)

ALLEN et al. v. MARKHAM, Allen Property Custodian.

No. 10760.

Circuit Court of Appeals, Ninth Circuit.

May 22, 1946.

Rehearing Denied July 17, 1946.

COPYRIGHT MATERIAL OMITTED

S. C. Masterson, of Richmond, Cal. (Matt Wahrhaftig, of Oakland, Cal., and Joseph Genser, of Richmond, Cal., of counsel), for appellants.

John F. Sonnett, Asst. Atty. Gen., Frank J. Hennessy, U. S. Atty., of San Francisco, Cal., Harry LeRoy Jones and M. S. Isenbergh, Sp. Assts. to Atty. Gen., and David Schwartz, Chief Trial Atty., Dept. of Justice, and Wallace H. Walker, Atty., Alien Property Unit, War Div., Dept. of Justice, both of Washington, D. C., and Arthur J. DeLorimier, Asst. U. S. Atty., of San Francisco, Cal. (Raoul Berger, Gen. Counsel to Alien Property Custodian, of Washington, D. C., of counsel), for appellee.

Robert W. Kenny, Atty. Gen., of California, and Everett W. Mattoon, Deputy Atty. Gen., for Attorney General of California, as amicus curiae.

Before GARRECHT, STEPHENS, and WILBUR, Circuit Judges.

WILBUR, Circuit Judge.

This is an appeal from a judgment of the United States District Court of the Northern District, Southern Division of California, entered upon the pleadings. The action was brought by the Alien Property Custodian against six American heirs at law of Alvina Wagner, deceased, residents of California, who are appealing from the judgment against them. The controversy is over the right to the property left by Alvina Wagner, a resident of San Francisco, California, citizenship not alleged, who died June 6, 1942 in San Francisco, leaving real and personal property in California, which she devised and bequeathed, share and share alike, to her four relatives, who were residents and citizens of Germany, consisting of two brothers, a sister and a niece. The American heir claimants who were disinherited consisted of three nephews and three nieces. The will had no residuary disposal. The Alien Property Custodian claims that the will of the testatrix upon her death vested the property of the deceased in the German devisees and legatees named in the will, while the disinherited heirs claim that the will is ineffective because of the alienage of the nonresident devisees and legatees. In short the appellants claim the property under the laws of succession of the State of California wherein the property is located, while the Alien Property Custodian claims that under the laws of the United States the property has vested in him. The Alien Property Custodian contends that the California Statute, Chapter 895, California Statutes of 1941, Probate Code, §§ 259, 259.1, 259.2, which the California heirs rely upon, is void because in conflict with the Constitution of the United States in that it invades the field of foreign relations and war powers of the United States. The appellants on the other hand contend that Article IV of the German American Treaty of 1925 upon which the Alien Property Custodian relies was abrogated or suspended by the war with Germany, and also by the very same laws and proclamations upon which the Alien Property Custodian relies for his title.

The estate of the deceased herein involved is in due course under probate in the Superior Court in and for the City and County of San Francisco, California, wherein the will of the decedent has been probated and a proceeding in rem has been instituted by the California heirs to determine "who are entitled to distribution of the estate" in which "any person may appear and file a written statement setting forth his interest in the estate." When this suit was instituted in the District Court, the California heirs claims that the California court sitting in probate had exclusive jurisdiction of the matter. The District Court sustained its jurisdiction, Crowley v. Allen 52 F.Supp. 850, and without consideration of the merits of the case we reversed the District Court. 147 F.2d 136. On certiorari, the Supreme Court sustained the jurisdiction of the District Court, 66 S. Ct. 296, on the ground that the action was one of a kind within the equity jurisdiction of the English Court of Chancery in 1789, and hence was vested in the District Court by the Judiciary Act of 1789, now Judicial Code, § 24(1) thereof, 28 U.S.C.A. § 41(1), giving equity jurisdiction to the District Courts, and also by a special provision in the Trading with the Enemy Act, § 17, 50 U.S.C.A.Appendix, § 17, giving such jurisdiction in matters arising under that Act.

The case was remanded to this court for decision upon the merits. A further statement of the admitted facts and of the proceedings involved in the controversy is necessary. In 1923, a treaty between the United States and Germany was negotiated and signed which was ratified and made effective on October 14, 1925. This treaty contained an agreement relating to reciprocal rights to inherit or take real and personal property of a decedent. (Treaty Article IV.)¹ These provisions conformed in a general way to the provisions of the Treaty of 1828 with Prussia, 8 Stat. 378, 384, before World War I and to treaties entered into by the United States with other powers.²

The conduct of the parties to the earlier treaty of 1828, during and after World War I is relevant to the interpretation of the similar treaty of 1925 under the conditions of World War II; hence we state additional facts concerning World War I and its aftermath. On July 2, 1921, after the Armistice of November 11, 1918, but while we were still in a state of war with Germany, Congress passed a joint resolution (42 Stat. 105, 106), providing that property of Germany or German Nationals seized or held or demanded by the United States or its officers on or after April 6, 1917 and similarly of Austria-Hungary on and after December 7, 1917, should be retained until disposed of as provided by law.³

This was followed by the Treaty of Berlin of 1921 which expressly ratified and adopted the provisions of the joint resolution of July 2, 1921, supra. The Treaty of Versailles, section 289, also provided for revival of pre-war treaties at the option of the victorious powers. Later, the Supreme Court in the case of Cummings v. Deutsche Bank, 1936, 300 U.S. 115, 57 S.Ct. 359, 81 L.Ed. 545, held that by reason of the first World War and the joint resolution of Congress of 1921, supra, and the Treaty of Berlin ratifying the resolutions and the seizure of enemy property, the United States had become the absolute owner of the seized property of Germany and of German nationals.⁴

On July 28, 1941, the California legislature enacted a statute providing that the right of an alien nonresident to succeed to the property of a deceased person depended upon a reciprocal right in United States citizens.⁵ At that time the German-American Treaty of 1925, Article IV, supra, was in effect, and similar treaties with all the principal powers were also in effect. This language of treaty concerning reciprocal rights was practically universal with only slight difference of phraseology.

Prior to our active participation in the Second World War, Congress and the President under the emergency provision of the Trading with the Enemy Act, had taken action. On May 7, 1940, 54 Stat. 179, Congress by joint resolution gave the President extensive powers "during time of war or during any other period of national emergency" concerning transfer of property (amending subdivision (b) of Section 5 of the Act of October 6, 1917).

On April 10, 1940, the President had issued Executive Order 8389, 12 U.S.C.A. § 95a note which was ratified and confirmed by a joint resolution of May 7, 1940, Section 2, Joint Resolution, 54 Stat. 179. On June 14, 1941, Executive Order 8389, supra, was modified. Executive Order 8785. Further modifications were made after the United States entered the war December 8, 1941. Executive Order 8963, December 9, 1941; Executive Order 8998 of December 26, 1941; The "First War Powers Act," an amendment of the Trading with the Enemy Act, 55 Stat. 838, 839, §§ 301, 302, 303, was enacted December 18, 1941, 50 U.S.C.A. Appendix, §§ 616-618; Executive Order 9095 of March 11, 1942, 50 U.S.C.A.Appendix, § 6 note, providing for the office of Alien Property Custodian and fixing his powers and duties.

This Executive Order 9095 provided in Section 3 as follows:

"3. Any property, or interest therein, of any foreign country or a national thereof shall vest in the Alien Property Custodian whenever the Alien Property Custodian shall so direct * * *."

On January 23, 1943 the Alien Property Custodian issued his so-called Vesting Order No. 762, purporting to vest in said Alien Property Custodian "all the right, title, interest and claim of the four German nationals in and to the estate of Alvina Wagner, deceased, and all the right, title and interest and estate of those German nationals in and to the decedent's real property in San Francisco."

The vesting order was filed with the Division of the Federal Register on January 27, 1943 and was published January 28, 1943 in 8 Fed.Reg. 1252. On April 6, 1943 the Alien Property Custodian filed his complaint in this action, in which he claimed to be the owner of all the estate of Alvina Wagner, deceased, by virtue of said vesting order, and demanding that the Superior Court in and for the City and County of San Francisco, California, sitting in probate to administer the estate of Alvina Wagner, deceased, distribute said property to him as owner thereof, as and when ready for distribution upon the settlement of the final account. This action, in effect an action to quiet title of the Alien Property Custodian, was within the jurisdiction of the District Court Markham v. Allen, 66 S.Ct. 296, supra. The District Court rendered judgment to that effect and the American heirs of Alvina Wagner appeal.

The appellants contend that the California Probate Code Sections 259, 259.1, and 259.2, quoted in full in footnote 5, supra, limit the right of nonresident aliens...