Honda v. Clark

Citation18 L.Ed.2d 244,87 S.Ct. 1188,386 U.S. 484
Decision Date10 April 1967
Docket NumberNo. 164,164
PartiesAyako HONDA et al., Petitioners, v. Ramsey CLARK, Attorney General of the United States
CourtUnited States Supreme Court

Joseph L. Rauh, Jr., Washington, D.C., for petitioners.

Richard A. Posner, Washington, D.C., for respondent.

Mr. Justice HARLAN delivered the opinion of the Court.

Petitioners are 4,100 United States citizens or residents of Japanese descent seeking to recover funds vested under the Trading with the Enemy Act, 40 Stat. 411, 50 U.S.C. App. § 1 et seq. The District Court dismissed their suit against the Attorney General1 as barred by limitations, and the Court of Appeals affirmed by a divided vote. 123 U.S.App.D.C. 12, 356 F.2d 351. We granted certiorari because of the importance and unusual character of the questions involved, affecting the proper application of this wartime statute. 385 U.S. 917, 87 S.Ct. 226, 17 L.Ed.2d 142.

Both as the case was treated by the lower courts and as it was largely argued here, the limitations issue has been thought to turn on whether the Government is estopped from asserting the 60-day time bar provided for actions of this kind by § 34(f) of the Trading with the Enemy Act. We conclude, however, that 'estoppel' is not the controlling issue, but that for reasons discussed in this opinion the period of limitations was tolled, requiring reversal of the judgment below.


Upon the outbreak of hostilities with Japan, the United States, on December 7, 1941, acting under the Trading with the Enemy Act, seized the American assets of businesses owned by Japanese nationals, among such property being the assets of the Yokohama Specie Bank, Ltd. The assets of the bank were liquidated, and in 1943 were vested in the Alien Property Custodian; see Paramount Pictures, Inc. v. Sparling, 93 Cal.App.2d 768, 770—771, 209 P.2d 968, 969—970. Petitioners were among the approximately 7,500 depositors of the bank holding 'yen certificates,'2 who submitted timely claims, many being filed as early as 1946, under § 34 of the Act seeking recovery of their deposits.

Section 34 of the Act was enacted in 1946 as a legislative response to this Court's decision in Markham v. Cabell, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165 which allowed nonenemy creditors of former owners of vested property to bring suit under a World War I statute,3 and recover directly out of vested assets. The Alien Property Custodian feared that allowance of such suits might lead to inequitable results, in that creditors who brought suit immediately might exhaust the assets at the expense of other, equally valid, claims. The Custodian urged, and the Congress agreed, that an approach on the lines of the Bankruptcy Act was a fairer method of distributing such assets.4 See H.R.Rep. No. 2398, 79th Cong., 2d Sess., 10, 14 (1946); S.Rep. No. 1839, 79th Cong., 2d Sess., 4, 8 (1946). As in bankruptcy law, the new Act required the filing of a debt claim with the Custodian within a specified period, § 34(b).

Approximately 7,500 yen certificate holders, including petitioners, immediately complied with this provision and submitted photostatic copies of their respective certificates. In the course of processing the claims pursuant to § 34(f) a question arose as to the redemption value of the certificates both for depositors of the Yokohama Specie Bank and for those of another bank, the Sumitomo Bank, holding similar certificates. An administrative determination was sought in a proceeding brought in the name of one of the Yokohama Bank depositors, Kunio Abe, Claim No. 55507. Abe, acting for all yen certificate holders, took the view that since these deposits had been made in American dollars, and the certificates were allegedly redeemable in dollars at any time upon demand at American branches of the bank, they should be treated as dollar debts at the amount of their value when seized in 1941, at a rate of about 4.3 yen to the dollar. The Attorney General,5 however, characterized the debts as yen debts, and following the rule of Die Deutsche Bank, etc. v. Humphrey, 272 U.S. 517, 47 S.Ct. 166, 71 L.Ed. 383, and Zimmermann v. Sutherland, 274 U.S. 253, 47 S.Ct. 625, 71 L.Ed. 1034, held that the proper measure of recovery would be at the postwar conversion rate of 361.55 yen to the dollar, or less than 2% of the prewar rate. It is noteworthy that throughout this period the Yokohama Bank's successor in Japan, the Bank of Tokyo, Ltd., was willing to redeem these certificates at the postwar rate. Petitioners, at any time, could therefore have received from the Japanese bank the amount the Government asserted would eventually be obtained from the vested assets.

At the conclusion of the administrative process, in 1958 1959, the Chief of the Claims Section wrote to each of the depositors who had filed a claim, including petitioners, advising that 'The Director of this Office decided on November 13, 1957, In the Matter of Kunio Abe et al., Claim No. 55507, Docket No. 55 D 72, which decision the Attorney General has declined to review, that yen certificates of deposit issued by the Yokohama Specie Bank, Ltd. * * * are obligations payable in yen in Japan * * *,' and therefore that the postwar rate of 361.55 yen to the dollar would be used in redeeming certificates from the vested assets. Claimants were told to submit their original certificates within 45 days. However, the letter continued, 'Payment of your claim * * * will not be made immediately.' The letter informed the claimant that a full schedule of claimants would be made, § 34(f), and that after its issuance aggrieved certificate holders might file suit in the United States District Court for the District of Columbia for judicial review. 'Under the circumstances,' the letter continued, 'you may wish to utilize the funds in Japan rather than await settlement by this Office. If this is done, the Notice of Claim filed with this Office should be canceled by signing and mailing the enclosed Notice of Cancellation of Claim card.'

Petitioners characterize this letter as 'confusing' and 'insulting.' We think the opprobrium which is sought to be fastened on the letter is undeserved and consider it more accurate and fairer to say that although its instructions were complex, the letter was written in a manner designed reasonably to apprise a layman of the choices before him. However, on the particular facts of this case and given the empirical evidence available, it is quite understandable that of the 7,500 initial claimants, only 1,817 responded affirmatively by sending in their certificates, and less than 1,600 canceled their claims and sought immediate recovery in Japan. The remainder, a majority of all who had claims, petitioners in this case did nothing.

The reasons for their inaction are quite apparent, and, it can reasonably be argued, should have been so to the Government: the letter indicated that despite as long as 12 years of waiting after the original submission of their claims, supported by copies of their certificates, they could expect to receive less than 2% of their basic deposits measured in prewar dollar terms, and that even this amount would not be forthcoming immediately, but only after issuance of a schedule (an additional interval, it turned out, of three years) plus possible judicial review. Claimants would clearly be better off getting repayment immediately from the Japanese bank itself. This recourse, suggested by the letter itself, was at the same time understandably advantageous to the Government as well: American citizens or residents would obtain relief, but from a foreign source, thus freeing more of the vested assets for distribution to remaining claimants. It is thus understandable that the Government did nothing to ascertain why a majority of the 7,500 claimants had responded in no way to its letter.

In affidavits submitted to the District Court, and not contradicted on the motion to dismiss the complaint, various other reasons were asserted for the failure of these petitioners to respond. Petitioner Jiro Kai asserted:

'I did receive a letter from the Office of Alien Property offering me about 30¢ for my claim. I think I recall being asked to send in my original certificate by registered mail to receive this amount. For me to have done this would have cost more than I was being offered.6 I had heard from others that many more persons had claims similar to mine and I understood that they were all being processed together. I saw in the Japanese newspaper that a court suit was or would be filed seeking to obtain for the yen claimants the proper amount for their claims. I believed, therefore, I would be protected.'

Other affidavits gave similar reasons. These are summarized best in an affidavit of Mr. Katsuma Mukaeda, president of the Japanese Chamber of Commerce of Southern California:

'Many of the Yokohama Specie Bank yen deposit certificate holders were old people who could not read English and could not understand the communications they received from the Office of Alien Property; many of them had to rely upon other persons who themselves were not able to understand the letters; most of the claimants had never talked to a lawyer about their cases and there was a general feeling in the community that all of the claims were going to be treated alike, both the Sumitomo Bank claimants and the Yokohama Specie Bank claimants; there was knowledge in the community that a law suit had been filed in Washington and it was understood and believed that the outcome of that law suit would determine how much money the claimants received and that it would apply to all claim- ants not just some; most of the claimants had had experience with or had heard about the Japanese Evacuation Claims program (50 U.S.C. App. 1981—1987)7 and many of them knew generally that under that program, deadlines had been extended and even that the law itself had been changed to include persons who originally were not...

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