Central Union Trust Co of New York v. Garvan Merrill v. Same Marshall v. Same Metropolitan Trust Co of the City of New York v. Same, s. 392-396

Decision Date24 January 1921
Docket NumberNos. 392-396,s. 392-396
CourtU.S. Supreme Court

Mr. Perry D. Trafford, of New York City, for plaintiffs in error Central Union Trust Co., Merrill, Speyer, and Vanderlip.

[Argument of Counsel from pages 555-557 intentionally omitted] Mr. Emory R. Buckner, of New York City, for plaintiffs in error Marshall, Rosen, and Metz.

[Argument of Counsel from pages 557-562 intentionally omitted] Mr. Walter F. Taylor, of New York City, for plaintiffs in error Metropolitan Trust Co.

Mr. Lucien H. Boggs, of Jacksonville, Fla., and Assistant Attorney General Spellacy, for defendant in error.

[Argument of Counsel from pages 562-565 intentionally omitted] Mr. Justice HOLMES delivered the opinion of the Court.

These are libels brought by the Alien Property Custodian under the Trading with the Enemy Act October 6, 1917, c. 106, § 17, 40 Stat. 411, 425 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115 1/2 i), to obtain possession of securities in the hands of the plaintiffs in error respectively as trustees. The libel in each case alleges that the Alien Property Custodian after investigation determined that a German insurance company named was an enemy not holding a license from the President, etc.; that certain specified securities belonged to it or were held for its benefit by the party now appearing as a plaintiff in error in that case; and that a demand for the property had been made but not complied with. The libellant prayed an order directing the marshal to seize the property and citing claimants of a right to possession to show cause why the same should not be delivered to him. The plaintiffs in error appeared as claimants in their several cases, denied that the funds were held for the benefit of an enemy, and set up the trust under which they held them as required by the laws of Massachusetts or Connecticut for the security of American policyholders and creditors, with reasons for their right to retain the funds alleged in detail. The libellant moved for decrees for possession upon the pleadings which were granted by the District Court. The decrees were affirmed by the Circuit Court of Appeals, Garvan v. $20,000 Bonds, 265 Fed. 477; Garvan v. $6,000 Bonds, 481. As the decision of the latter Court is not made final by the statute the cases have been brought on writ of error to this Court.

As is obvious from the statement of the pleadings the libels are brought upon the theory that these are purely possessory actions and that for the purposes of immediate possession the determination of the Enemy Property Custodian is conclusive, whether right or wrong. The claimants on the other hand set up substantive rights and seek to have it decided in these suits whether the funds are enemy property in fact and whether they have not the right to detain them. Strictly possessory actions still survive in the laws of some States and have been upheld, leaving the party claiming title to a subsequent suit. Grant Timber & Manufacturing Co. v. Gray, 236 U. S. 133, 35 Sup. Ct. 279, 59 L. Ed. 501. There can be no doubt that Congress has power to provide for an immediate seizure in war times of property supposed to belong to the enemy, as it could provide for an attachment or distraint, if adequate provision is made for a return in case of mistake. As it can authorize a seizure in pais it can authorize one through the help of a Court. The only questions are whether it has done so as supposed by the libellant and if so whether the conditions imposed by the Act have been performed.

If the Custodian was entitled to demand the delivery of the property in question it does not seem to need argument to show that the demand could be enforced by the District Courts under section 17 of the Act, giving to those Courts Jurisdiction to make all such orders and decrees as may be necessary and proper to enforce the provisions of the Act. The first question then is whether the Custodian had the right to make the demand. By section 5 (section 3115 1/2 c) the President may exercise any power or authority conferred by the Act through such officers as he may direct. It is admitted that he has exercised the powers material to these cases through the Enemy Property Custodian and by the Act of November 4, 1918, c. 201, 40 Stat. 1020, the Custodian is given the right to seize. By section 7(c) section 3115 1/2 d—as originally enacted:

'If the President shall so require, any money or other property owing or belonging to or held for, by, on account of, or on behalf of, or for the benefit of an enemy or ally of enemy not holding a license granted by the President hereunder, which the President after investigation shall determine is so owing or so belongs or is so held, shall be conveyed, transferred, assigned, delivered, or paid over to the Alien Property Custodian.'

We are to take it therefore that the President has 'so required,' and that a case is made out under section 17 unless we are to consider the defences interposed.

If we look no further than section 7(c), it is plain that obedience to the statute requires an immediate transfer in any case within its terms without...

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