DEUTSCHE BANK UND DISCONTO-GESELLSCHAFT v. Cummings

• Decision Date: 17 February 1936
• Docket Number: No. 6471.,6471.
• Citation: 83 F.2d 554,65 App. DC 297
• Parties: DEUTSCHE BANK UND DISCONTO-GESELLSCHAFT v. CUMMINGS, Atty. Gen., et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

65 App. DC 297, 83 F.2d 554 (1936)

DEUTSCHE BANK UND DISCONTO-GESELLSCHAFT v. CUMMINGS, Atty. Gen., et al.

No. 6471.

United States Court of Appeals for the District of Columbia.

Argued December 5, 1935.

Decided February 17, 1936.

On Rehearing May 4, 1936.

Thos. H. Creighton, Jr., and James J. Lenihan, both of Washington, D. C., and Otto C. Sommerich, of New York City, for appellant.

Leslie C. Garnett, U. S. Atty., and Harry Le Roy Jones, Frank C. Sterck, and Edward First, all of Washington, D. C., for appellees.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, GRONER, and STEPHENS, Associate Justices.

GRONER, Associate Justice.

Appellant is a consolidated corporation of Germany with its principal place of business in Berlin. Its predecessor company, Direction der Disconto-Gesellschaft, was an enemy alien whose property was seized by the Alien Property Custodian and subsequently converted into money and other property and deposited by him in the Treasury of the United States to his credit in a single trust known as trust number 49,851. The bill alleges: "that prior to the 16th day of February, 1933, and pursuant to the provisions of the Trading with the Enemy Act as amended and the Settlement of War Claims Act, the plaintiff herein and/or its predecessor filed its notice of claim under oath with the Alien Property Custodian containing such particulars as required by law and by the rules and regulations of the Alien Property Custodian and made application to the President of the United States for the return to it of said property. * * * That prior to the commencement of this action the * * * Alien Property Custodian determined that the plaintiff herein was the owner of said property and entitled to the return of said property as provided for by the Trading with the Enemy Act as amended by the Settlement of War Claims Act of 1928."

The bill then alleges that, before delivery of the property to appellant, one Sprunt and others brought an attachment proceeding against appellant, claiming rights in the property in question; that this proceeding was dismissed by final decree the 24th of May, 1934; and that thereafter appellant made due demand for the property, and that demand was refused, because of the provisions of Public Resolution No. 53.¹

The suit below was for a hearing and decree directing the return of the property. The lower court dismissed the bill for lack of jurisdiction.

The history of our war-time legislation with reference to enemy property found in the United States has been detailed and discussed so many times over the past fifteen years by the Supreme Court and this court, that little can be said here that would not be repetition. For our present purposes, it is enough to say that shortly after the entry of the United States into the World War, Congress passed the Trading with the Enemy Act,² under the provisions of which the United States took possession of all enemy property and held and used it for the period of the war and for sometime thereafter. The purpose of Congress with relation to property seized is shown by the reports of the committees of Congress, and by the act itself, to have been in whole-hearted accord with the modern usage and practice of nations — usage and practice which disclaims the right of confiscation. For instance, while the bill was under consideration, Secretary Redfield, explaining on behalf of the administration its objects to the committee on commerce, said that the creation of the office of Alien Property Custodian was in line with the desire of the administration to show that the policy to be pursued by the United States with relation to property of enemy nations was the opposite of confiscation (Hearings, May 29, 1917, p. 13). Likewise the committee, in reporting the bill, stated: "A more enlightened opinion prevails at the present time, and it is now thought to be entirely proper to use the property of enemies without confiscating it" (Report No. 113, Committee on Commerce, 65th Cong., 1st Session).

The act, in section 12 (50 U.S.C.A. § 12), declares that "after the end of the war any claim of any enemy or of an ally of enemy to any money or other property received and held by the alien property custodian or deposited in the United States Treasury, shall be settled as Congress shall direct." And Congress shortly after the war adopted a policy of piecemeal return of the property to its former owners. In the recent case of Woodson v. Deutsche Gold, etc., 292 U.S. 449, 54 S.Ct. 804, 805, 78 L.Ed. 1357, the Supreme Court, speaking to this section of the act, said: "Section 12 declares that after the end of the war any claim of any enemy to recover money or property received and held by the Custodian or deposited in the United States Treasury `shall be settled as Congress shall direct.' 40 Stat. 424 see 50 U.S.C.A.Appendix § 12. While this suggests that confiscation was not effected or intended, it plainly shows that Congress reserved to itself full freedom at any time to dispose of the property as might be deemed expedient and to deal with claimants as it should deem to be in accordance with right and justice, having regard to the conditions and circumstances that might arise during and after the war."

In view of this interpretation of the section by the Supreme Court in the above-named case — as well as many others preceding it — it may now be considered as settled law that the seizure of enemy property carried with it the right on the part of the United States, if exercised, to dispose of it. But it may be said to be equally settled by a consistent line of congressional enactments that the purpose of the United States never was confiscation and that confiscation never was resorted to. The effect, therefore, of the legislation was to transfer possession and title to the Custodian for the purpose of conversion into money, etc., while at the same time preserving in the original owner a contingent beneficial interest; that is to say, an interest subject to such conditions as Congress might thereafter affix to its return. This purpose of Congress to which we have referred is shown also by the legislation — which may be described as preliminary legislation — after the conclusion of the war; i. e., the act providing for the return of the property of American wives of Germans;³ for the return of property to citizens of Czechoslovakia and other countries who were at the time of seizure citizens of Austria-Hungary;⁴ the Winslow Act of March 4, 1923, directing the return up to $10,000 to every owner, including German owners, and of income up to $10,000 annually on property held by the Custodian, to every owner, including German owners.⁵

The war was officially declared ended July 2, 1921.⁶ This was followed August 25, 1921, by the Treaty of Berlin⁷ and by the establishment, August 10, 1922, of the Mixed Claims Commission.⁸

The Commission was created to determine the amount of money which Germany should pay to the United States in satisfaction of its financial obligations under the Treaty of Berlin, and was followed by the Debt Funding Agreement of 1930, making a settlement of claims of the United States and of its citizens against the German Government. By its terms Germany agreed to pay forty million odd reichmarks annually from September 1, 1929, to March 31, 1981. But in 1928 — two years before the Debt Funding Agreement — Congress passed the Settlement of War Claims Act,⁹ "To provide for the settlement of certain claims of American nationals against Germany, Austria, and Hungary, and of nationals of Germany, Austria, and Hungary, against the United States, and for the ultimate return of all property held by the Alien Property Custodian."

The plan provided, subject to certain exceptions not material here, that when the person entitled to the property — i. e., the German enemy — had filed written consent to a postponement of the return of an amount equal to 20 per centum of the aggregate value of the money or property, the President might order its payment or delivery; and in the event it was not delivered the former owner might institute suit in equity as provided by subsection (a) of section 9 of the Trading with the Enemy Act, as amended, 50 U.S.C.A.Appendix § 9 (a). Subsection (a) in turn provided: "If the President shall not so order within sixty days after the filing of such application or if the claimant shall have filed the notice as above required and shall have made no application to the President, said claimant may institute a suit in equity in the Supreme Court of the District of Columbia" — and the court may "make and enter * * * all such orders and decrees, and * * * issue such process as may be necessary and proper * * * to enforce the provisions of this Act." Section 17 (50 U.S.C.A.Appendix, § 17).

In short, Congress in the War Claims Act directed the return in part to its German owners of the property seized by the Alien Property Custodian, provided they would consent in writing to the postponement of the delivery of an amount equal to 20 per cent. It also, as we have seen, provided recourse to the courts for the establishment of their claims and for a decree for the return of the property.

The bill in this case alleges that the appellant has filed notice of claim and consent as required by the act, to the postponement of the return of an amount equal to 20 per cent. of the value of its seized property, but that by reason of the passage by Congress of a resolution known as Public Resolution No. 53 of June 27, 1934, the Attorney General, as acting Custodian, has refused to recognize appellant's right or to make delivery of its property.

It is conceded that under the provisions of the act approximately 95 per cent. of the property taken by the Custodian under the Trading with the Enemy Act has been returned to its former owners (of the same class as appellant); and appellant's position on this appeal is that Congress, having in the...