McGrath v. Zander, 10107.

• Citation: 85 US App. DC 334,177 F.2d 649
• Decision Date: 10 October 1949
• Docket Number: No. 10107.,10107.
• Parties: McGRATH, Attorney General, et al. v. ZANDER.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

85 US App. DC 334, 177 F.2d 649 (1949)

McGRATH, Attorney General, et al. v. ZANDER.

No. 10107.

United States Court of Appeals District of Columbia Circuit.

Argued April 15, 1949.

Decided October 10, 1949.

Mr. J. Roger Wollenberg, Washington, D. C., pro hac vice, by special leave of Court, with whom Mr. James L. Morrisson, Attorney, Department of Justice, Washington, D. C., was on the brief, for appellants.

Mr. Joseph W. Bishop, Jr., Attorney, Department of Justice, Washington, D. C., also entered an appearance for appellants.

Mr. Michael J. Keane, Jr., Washington, D. C., with whom Mr. Karl Michelet, Washington, D. C., was on the brief, for appellee.

Messrs. Donald Hiss and Clifton J. Stratton, Jr., Washington, D. C., filed a brief for Emily Pavenstedt Fritze and Ellen Biddle Stackelberg as amici curiae, urging affirmance.

Before CLARK and PROCTOR, Circuit Judges, and ARTHUR F. LEDERLE, District Judge, sitting by designation.

PROCTOR, Circuit Judge.

Appellee, a native born adult citizen of the United States, with home and domicile in New Orleans, went to Germany in June, 1939, for a visit, with her return passage booked for September 9, 1939. A train of fortuitous circumstances, starting with the sudden invasion of Poland, delayed and finally prevented her return. While so detained, she fell in love with and married Dieter Zander, a German citizen. According to German law the marriage "bestowed" upon her the citizenship of her husband. Yet, she rejected all theories of German citizenship as an incident of her marriage, which was planned with Zander upon the condition and understanding that their matrimonial domicile should be established permanently in New Orleans, where she had lived for many years, and that the marriage would in no way affect her status as an American citizen. Upon announcing their engagement Zander was drafted into the German Army, but while on a leave of absence they were married. It was understood that she should return to New Orleans whenever possible, and the fortunes of war permitting — he would join her there. During hostilities between Germany and the United States, Mrs. Zander was registered and treated as an alien by German authorities and kept under constant surveillance. She avoided all acts in aid of the German war effort, even resorting to connivance with a friendly German physician to simulate physical illness when examined for such work. She did nothing inconsistent with loyalty to the United States and did all things within her power to maintain American citizenship and allegiance. In the spring of 1945, disguised as a refugee, she fled some two hundred miles to the American Army, to which she rendered service for many months. Finally, in May, 1946, with assistance of American officials, she returned to the United States. Finding that her Aunt, with whom she lived in New Orleans, had died, she settled in New Jersey with her cousin, a daughter of the Aunt, bringing all her belongings from the home in New Orleans.

While serving with the German Army in Africa, Zander was taken prisoner and sent to the United States. There he ingratiated himself with American authorities by assisting in indoctrinating his fellow prisoners with the principles of democracy. Finally in 1947 he was sent to Germany and discharged; whereupon he returned to the United States upon an immigration visa and joined his wife at her home in New Jersey, where they now live "as American citizens." We infer, therefore, that he is permanently settled there and seeking American citizenship.

When Mrs. Zander, appellee, departed for Europe she held a remainder interest in a trust estate created by her grandfather, an American citizen. This interest matured while she was in Germany. The estate was held by a national bank in Kansas, as Trustee, subject to the supervision of a Kansas Court. None of the principal or income was ever paid to Mrs. Zander. In fact, while in Germany, she was dependent upon funds coming from German sources. The foregoing facts are gathered from a lengthy stipulation, upon which by agreement the case was heard by the trial court. The stipulation was also adopted by the Judge for his findings of fact.

The interest of appellee in said estate, $112,391.40 in cash, was seized and vested in the Alien Property Custodian under authority of the Trading With the Enemy Act, as amended, 50 U.S.C.A. War Appendix, § 1 et seq., hereafter sometimes referred to as the Act. The present controversy arises out of Mrs. Zander's suit in the District Court to recover that fund.

The claim is laid in two alternative counts. The first rests upon Section 9(a) et seq., of the Act and the allegation that Mrs. Zander was not an "enemy or ally of enemy" within the meaning of Section 2(a), not being "resident within the territory" of Germany. The second rests upon the amendment of December 18, 1941, Section 32(a), and allegations that appellee had filed a claim with the Alien Property Custodian for return of the seized funds and although entitled thereto the claim had been refused.

Without passing upon the claim as stated in count one, the court entered judgment in Mrs. Zander's favor upon count two, holding that her status as a citizen of the United States remained unaltered by her marriage to a German citizen. In reaching this conclusion the court assumed jurisdiction under Section 10(a) of the Administrative Procedure Act, 5 U.S.C.A. § 1009 (a), to review the proceedings before the Custodian, and treated the action taken by him as a final determination and refusal of the claim. Accordingly judgment was entered upon count two for return of the funds. This appeal followed.

In attacking the judgment appellants contend: (1) Section 9(a) of the Act provides the only judicial remedy for a return, all others being precluded by Section 7(c); (2) the claim before the Custodian, under Section 32(a), rested within his discretion, especially so in view of the statutory requirement for certain findings by the President, or his representative (the Custodian), including a determination that return is "in the interest of the United States"; (3) assuming authority in the court to review proceedings under Section 32(a), there yet was no final refusal of the claim, no determination thereof, and no findings thereunder, — at most only suspension of action to await anticipated legislation; (4) there was no exhaustion of the administrative remedy. For these reasons appellants insist that the court lacked jurisdiction to grant any relief under Section 32(a), upon which count two is based. We agree with these contentions.

Section 32(a) is an integral par of the Trading With the Enemy Act. Section 7(c) limits the means of reclaiming seized property to the "relief or remedy" provided by the Act itself. Section 9(a) provides the only judicial remedy for reclaiming vested property. Uebersee Finanz-Korporation v. Markham, 1946, 81 U.S. App.D.C. 284, 285, 158 F.2d 313, affirmed 1947, 332 U.S. 480, 68 S.Ct. 174, 92 L.Ed. 88; Cummings v. Hardee, 1939, 70 App. D.C. 18, 23, 102 F.2d 622. Yet, notwithstanding this positive limitation the District Court assumed authority to review the proceedings before the Custodian by virtue of the Administrative Procedure Act, 5 U.S.C.A. §§ 1001-1011. This, we think, was error. Section 10 of that Act, 5 U.S. C.A. 1009, excepts from review administrative rulings where "(1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion." Here both exceptions stand as bars. Section 7 (c) of the Trading With the Enemy Act precludes it. The discretionary nature of the action granted the Custodian by Section 32(a) precludes it. We gather also from the legislative history that judicial review was not intended by Congress. See Hearings before House Committee on the Judiciary (Sub-committee 1) on H.R. 3750, 79th Cong., 1st Sess., pp. 14, 35, 52; H.R.Rep. 1269, 79th Cong., 1st Sess.; S.Rep. 920, 79th Cong., 2d Sess. We may also add, without extending this opinion by any detailed reference to the record, that in our judgment there was no final determination or refusal of the claim by the Custodian, and no action that can properly be so construed. Hence, at all events, there was no exhaustion of the administrative remedy, an essential condition to judicial review. Myers v. Bethlehem Corp., 1938, 303 U.S. 41, 51, 58 S.Ct. 459, 82 L.Ed. 638; Aircraft & Diesel Corp v. Hirsch, 1947, 331 U.S. 752, 757, 67 S.Ct. 1493, 91 L.Ed. 1796.

It follows that we must hold the court was without jurisdiction to review the administrative proceedings or grant any relief under Section 32(a), upon which count two of the complaint is based. The judgment, as it now stands, must be vacated. However, this does not dispose of the matter, for we are of the opinion that the conceded facts stated in the stipulation and adopted as the court's findings, establish a case entitling appellee to recover upon count one, grounded upon section 9 (a) of the Act. That section authorizes suit in the District Court after filing of a notice of claim with the Custodian, where no application has been made to the President. In those circumstances this suit was filed. Count one is grounded upon the allegation that Mrs. Zander was not "an enemy or ally of enemy" of the United States. Although the allegation is denied, conceded facts leave only the legal question whether she was "resident within" Germany. Citizenship is not directly involved. True it is that mere presence within enemy territory of an enemy national during hostilities is usually a prohibitive factor against the discretionary power of return granted the President or his delegate by Section 32(a). However, a court is required to...