Carr v. Yokohama Specie Bank, 22509-S.
| Citation | 99 F. Supp. 4 |
| Decision Date | 17 August 1951 |
| Docket Number | No. 22509-S.,22509-S. |
| Parties | CARR v. YOKOHAMA SPECIE BANK, Limited, OF SAN FRANCISCO et al. McGRATH, Attorney General, v. CARR. CARR v. McGRATH, Attorney General. |
| Court | U.S. District Court — Northern District of California |
Louis J. Glicksberg, San Francisco, Cal., for plaintiff.
S. M. Saroyan and Harry P. Calvert, San Francisco, Cal., for defendants Yokohama Specie Bank, Limited, of San Francisco, a foreign corporation, and Maurice C. Sparling, Superintendent of Banks of State of California, and Liquidator of Yokohama Specie Bank, Limited, of San Francisco.
Valentine C. Hammack, Sp. Asst. to Atty. Gen., Arthur J. DeLorimier, Atty., Office of Alien Property, Dept. of Justice, San Francisco, Cal., and Percy Barshay, Sp. Asst. to Atty. Gen., for plaintiff in intervention.
This is an action in equity whereby the plaintiff, as Trustee in Bankruptcy of Nippon Yusen Kaisya, a corporation, seeks to have the balance in a bank account in the Yokohama Specie Bank, Ltd., of San Francisco, impressed with a resulting trust in favor of the bankrupt. Nippon Yusen Kaisya, hereinafter referred to as "NYK", is a Japanese shipping company that prior to December 8, 1941, maintained an office in San Francisco. Defendant Yokohama Specie Bank, Ltd., of San Francisco, hereinafter referred to as "YSB San Francisco", is the local office of the Japanese banking company by the same name. Defendant Maurice C. Sparling is the Superintendent of Banks of the State of California and the Liquidator of YSB San Francisco, in Liquidation. He will be hereinafter referred to as the "Superintendent".
Plaintiff in intervention and cross-defendant is J. Howard McGrath, Attorney General of the United States, as successor to James E. Markham, former Alien Property Custodian. Mr. McGrath will be hereinafter referred to as the "Attorney General".
The trial, which was to the Court without a jury, has presented two issues for decision, one of fact and one of law, as follows:
I. Did NYK furnish or provide the consideration out of which the bank account involved arose?
II. Even if it did, was it a transaction to which the courts can give judicial recognition since it was in violation of Federal laws?
These issues arise out of the following set of facts, as disclosed by the record.
In the period immediately preceding the outbreak of war between the United States and Japan, various vessels owned by NYK operated between the two countries, carrying passengers and cargo. Among these was the M. S. Tatuta Maru. During that period NYK incurred various obligations to American creditors arising out of the operation of its vessels. When, on July 26, 1941, the President of the United States issued Executive Order No. 8832, 12 U.S. C.A. § 95a note, extending to Japan and Japanese Nationals the freezing controls imposed upon other countries by Executive Order No. 8389, 12 U.S.C.A. § 95a note, NYK became greatly concerned lest its American creditors attach its vessels in order to satisfy their claims and the Japanese Government became concerned lest it be unable to return its nationals from the United States to Japan. Efforts by the Japanese Government to have NYK exempted from the freezing order were unsuccessful and it was then decided that the same result could be accomplished if the Japanese Government requisitioned NYK's ships and operated them as Japanese Government requisitioned vessels. Accordingly, in October, 1941, the Tatuta Maru was requisitioned by the Japanese Government and in that capacity it made its final voyage between the United States and Japan prior to the outbreak of war on December 7, 1941.
The freezing order which gave rise to the foregoing transaction was, so far as pertinent, as follows:
Sec. 1. All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury by means of regulations, rulings, instructions, licenses or otherwise, if (i) such transactions are by, or on behalf of, or pursuant to the directions of any foreign country designated in this Order, or any national thereof, if (ii) such transactions involve property in which any foreign country designated in this Order, or any national thereof, has at any time on or since the effective date of this Order had any interest of any nature whatsoever, direct or indirect:
* * * * * *
Thus the Japanese Government, the Yokohama Specie Bank, and NYK were prohibited from transferring any credit from a bank in Japan to a bank in the United States, and from making any payment to a bank in the United States if the Japanese Government or a Japanese national had any interest, direct or indirect, in such credit or payment, unless such transfer or payment was licensed by the Secretary of the Treasury.
It was stipulated between the parties that the opening of the bank account involved and all transactions pursuant thereto were subject to this freezing order.
Pursuant to the provisions of the Order, the Secretary of the Treasury issued General License No. 1 on April 30, 1940. As amended and in effect at the times pertinent to this case, it provided, in relevant part:
"A general license is hereby granted authorizing any payment or transfer of credit to a blocked account in a domestic bank in the name of any blocked country or national thereof providing the following terms and conditions are complied with:
* * * * * *
On October 21, 1941, the Japanese Government through Yoshio Muto, Consul General of Japan at San Francisco, made application to the United States Treasury Department, requesting that YSB San Francisco be allowed to receive a remittance in the sum of $39,000 from the Japanese Government for deposit into a blocked account, in the name of Yoshio Muto, for the purpose of making ship disbursements for the Japanese Government requisitioned ship. It should be noted that in this application, which was made under oath, the Japanese Government expressly represented and warranted that no other than the Japanese Government had any interest, direct or indirect, in the remittance for which a license was applied for therein.
Pursuant to this application the Treasury Department, on October 29, 1941, issued License No. S. F. 11630, authorizing the Consul General of Japan in San Francisco to receive a remittance from the Imperial Japanese Government through the Yokohama Specie Bank, Ltd., Tokyo Office, upon the condition that the money be deposited into a Special Blocked Account in the name of Yoshio Muto, Consul General of Japan, solely for the purpose of ship disbursements pursuant to special licenses authorizing said disbursements.
After the Japanese Government had made its application but before the license had issued, NYK also made an application. In this application No. S. F. 11535, which...
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Carr v. Yokohama Specie Bank, Limited
...Circuit Judge. For an understanding of the material facts and issues before us on this appeal see opinion of the lower court reported in 99 F.Supp. 4. The record shows that in April of 1942 appellant was appointed Trustee in Bankruptcy of the Estate of Nippon Yusen Kaisya, a bankrupt Japane......
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