Uebersee Finanz-Korporation v. Markham, 9187.

Decision Date21 October 1946
Docket NumberNo. 9187.,9187.
Citation81 US App. DC 284,158 F.2d 313
PartiesUEBERSEE FINANZ-KORPORATION, A. G., v. MARKHAM, Alien Property Custodian.
CourtU.S. Court of Appeals — District of Columbia Circuit

Mr. Richard J. Connor, of Washington, D. C., with whom Mr. Bart W. Butler, of Washington, D. C., was on the brief, for appellant.

Mr. Herbert Wechsler, Special Assistant to the Attorney General, of New York City, with whom Mr. Harry LeRoy Jones, Special Assistant to the Attorney General, of Washington, D. C., was on the brief, for appellee. Mr. Wallace H. Walker, of Washington, D. C., Department of Justice, also entered an appearance for appellee.

Before GRONER, Chief Justice, and EDGERTON and PRETTYMAN, Associate Justices.

Writ of Certiorari Granted February 17, 1947. See 67 S.Ct. 772.


The decision in this case turns upon the question whether the amendment of § 5(b) of the Trading with the Enemy Act by Title III of the First War Powers Act of 1941 has, by necessary implication, the effect of nullifying and rendering impotent § 9(a) of the original Act.1 Or, stated more concisely, whether the amendment of § 5(b) in 1941, of itself and without more, renders inoperative the rights conferred under § 9(a) of the original Act.

Appellant is a corporate national of Switzerland and at the outbreak of World War II was the owner of certificates of stock in sundry American corporations. The Alien Property Custodian, under authority of amended § 5(b) and under Executive Orders 9095 and 9193, 50 U.S.C.A. Appendix, § 6 note, seized appellant's property as the property of a "foreign country or a national thereof" and vested the same in himself. Since precisely this procedure is authorized under that section, obviously no exception can be had to this. But at that point appellant, claiming the right to recover the vested property under the provisions of § 9(a) of the Act, brought this suit, alleging, among other things, that before and at the time of the seizure it was a citizen of Switzerland; that it was not an enemy or ally of enemy; that it was not a "national of a designated enemy country"; and that the property was not then nor at any other time held for the benefit of an enemy or ally of enemy, nor for the benefit of a "national of a designated enemy country."

The Custodian filed a motion to dismiss on the ground that the complaint failed to state a valid cause of action, and the District Court, without opinion, granted the motion. From that action this appeal is taken.

The basis of the motion to dismiss is that it appears on the face of the complaint that appellant is a national of a foreign country and, this being conceded, the Custodian insisted and now insists that under the amended § 5(b) the vesting is absolute and not subject to attack.1a To avoid conflict with the constitutional prohibition against the taking of property of friendly aliens without just compensation, which such a construction would raise, the Custodian suggests that appellant may obtain just compensation by way of suit against the United States in the Court of Claims. But that suggestion conflicts with § 7(c) of the Act,2 which provides — "The sole relief and remedy of any person having any claim to any money or other property * * * transferred * * * to the Alien Property Custodian * * * shall be that provided by the terms of this Act," i. e., § 9(a). Thus appellant's right of recovery, if it has any, is limited by statutory terms to a suit under § 9(a), for only to that extent and in that manner has the United States consented to be sued. Pflueger v. United States, 73 App.D.C. 364, 121 F.2d 732, certiorari denied 314 U.S. 617, 62 S.Ct. 98, 86 L.Ed. 497; Sigg-Fehr v. White, 52 App.D.C. 215, 285 F. 949.

It will thus be seen that the Custodian's position is not only that the vesting of the property is within the authority delegated to him — which is not denied — but also that § 9(a) of the Act, which specifically confers jurisdiction on the several district courts to entertain a proceeding to inquire into the question whether the seized property is owned by "an enemy or ally of enemy," and if not so owned, to order its return, is, since the passage of the amendment to § 5(b), inapplicable in the case of property owned by any foreign national which has been seized by the Custodian.

The Custodian attempts to avoid the stark obliteration from § 9(a) of the words "Any person not an enemy or ally of enemy," by saying that that section limits recovery to "the interest therein" of the claimant, and accordingly the Custodian insists there may be no recovery here because seizure under amended § 5(b) destroys all interests of all aliens in seized property. But there is nothing in § 5(b) to sustain this view and to adopt it would read into that section words that are not there and at the same time, and with just as little warrant, read out the quoted words from § 9(a). This assumes, we think, too much. In any event, to sustain the Custodian's position not only would require a major job of statutory reconstruction, but would also — as to the property of friendly aliens — raise grave doubts as to the constitutionality of the law. And this, of course, it is not permissible to do. See Becker Steel Co. v. Cummings, 296 U.S. 74, 56 S.Ct. 15, 80 L.Ed. 54; Stoehr v. Wallace, 255 U.S. 239, 41 S.Ct. 293, 65 L.Ed. 604; Central Union Trust Co. v. Garvan, 254 U.S. 554, 41 S.Ct. 214, 65 L.Ed. 403. In our view, what was said by the Supreme Court in the recent case of Markham v. Cabell, 326 U.S. 404, 66 S.Ct. 193, is conclusive against such action. In that case, as in this, the Custodian contended that the amendment to § 5(b) armed the Executive with far more comprehensive powers over enemy property and the property of other foreign interests, including friendly and allied interests, than in World War I, and that the effect of this was to withdraw the right to sue explicitly granted by § 9(a) of the Act. But the Court rejected this claim, and expressly held that the right to sue granted by § 9(a) should not be read out of the law. The Supreme Court said:3 "We can find no indication in the 1941 legislation that Congress by amending § 5 (b) desired to delete or wholly nullify § 9(a). On the contrary, the normal assumption is that where Congress amends only one section of a law, leaving another untouched, the two were designed to function as parts of an integrated whole."

Read as we read them, § 5(b) as amended and § 9(a) do not conflict, but rather constitute a reasonable program to meet the emergency of war. Under the Act as it was in World War I, the seizure of alien property was limited to that of enemies, and the seizure was "after investigation." Thus, a determination of enemy ownership was a prerequisite to seizure.4 A more expeditious procedure to assure quick protection of our economy against enemy influence was to seize initially all alien property, and then upon investigation and with the burden of producing the facts placed upon the claimant rather than upon the Custodian, to return the property of aliens not enemies. Amended § 5(b) and § 9(a), when read together, prescribe exactly that procedure. The amendment of § 5(b) did not nullify § 9(a), nor was it inconsistent therewith. Indeed, it seems to us that the haste imposed by war required additional assurance against unwarranted seizure.

We have found nothing and reason suggests nothing to indicate that the dominant purpose of the Act — the elimination of enemy influence in our economy — has been changed, or that the calamity of war was to be used to eliminate and destroy all alien investment in the United States. Certainly, it cannot be urged that Congress intended to jeopardize, without adequate remedy, the billions of dollars of allied and friendly nations' property merely because of its temporary presence in this country in time of war, and the purpose in the enlargement of § 5(b) must necessarily have been to reach with confiscation only that portion tainted with an enemy interest. And that this is true is definitely shown, we think, in the fact that Congress has twice refused to write the Custodian's present construction into the law.5 But even if that conjecture be dismissed, there is nothing to support the theory of the Custodian that the new legislation eliminated all remedy as to all foreign rights. For obviously, such a purpose would run headlong into constitutional objections.

Accordingly, it seems to us quite clear that neither the language of the amendments nor the policy of Congress, as shown by the revised legislation, contemplated the position taken by the Custodian here. It follows, therefore, that the judgment below must be reversed and the case remanded for trial in accordance with the views expressed in this opinion.

Reversed and remanded.

EDGERTON, Associate Justice (dissenting).

Section 9(a) still gives a remedy, as it always did, against unauthorized takings of property. But taking the property of a friendly alien is now expressly authorized by § 5(b...

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