1. Decrees of the circuit court of appeals affirming decree of
the district court placing the Alien Property Custodian in
possession of property in libel proceedings brought by him under
the Trading with the Enemy Act held
reviewable in this
Court by writ of error. P.
254 U. S. 566
2. Congress has power in war time to provide for immediate
seizure, in pais
or through a court, of property supposed
to belong to the enemy, leaving the question of enemy ownership
to be settled later at the suit of the claimant.
P. 254 U. S.
3. Under § 17 of the Trading with the Enemy Act of October 6,
Page 254 U. S. 555
which confers on the district court jurisdiction to make all
such orders and decrees as may be necessary and proper to enforce
the provisions of the act, those courts have jurisdiction to
enforce the demands of the Alien Property Custodian for the
delivery of property to the possession of which the act entitles
him. P. 254 U. S.
4. The Trading with the Enemy Act, § 7(c), provides that, "[i]f
the President shall so require, any money or other property . . .
held . . . for the benefit of an enemy," without license,
"which the President after investigation shall determine . . .
is so held, shall be conveyed, transferred, assigned, delivered, or
paid over to the alien property custodian."
that, upon a determination after investigation by
the Custodian, exercising the President's power by delegation under
§ 5 of the act, that certain securities were held by trustees for
the benefit of enemy insurance companies, followed by demand, the
duty arose to deliver them to the Custodian; that the question of
enemy property vel non
could not be inquired into in his
suit to compel delivery, but rights in that regard could be
asserted and protected by claim, and, if necessary, suit, for
return of the property, under § 9, as amended. P. 254 U. S.
5. Proceedings of this character are alternative to direct
seizure by the Custodian under § 7(c) of the act as amended by the
Act of November 4, 1918, and involve only the right to possession.
P. 254 U. S. 568
Clinkenbeard v. United
21 Wall. 65, distinguished.
6. Insofar as concerns claimants who proceed as allowed by
amended § 9, a proceeding like the present gives a mere preliminary
custody, although in other respects the Custodian may get a
conveyance under the act, with broad powers of management and
disposition under § 12, as amended. P. 254 U. S.
265 F. 477, id.
The cases are stated in the opinion.
Page 254 U. S. 565
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, 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
Page 254 U. S. 566
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,
F. 477; ibid.,
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.
. 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,
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 § 17
of the act, giving to those courts jurisdiction to make all such
orders and decrees as may
Page 254 U. S. 567
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 § 5, 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 § 7(c),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 § 17 unless we are to
consider the defenses interposed.
If we look no further than § 7(c), it is plain that obedience to
the statute requires an immediate transfer in any case within its
terms, without awaiting a resort to the courts. The occasion of the
duty is a demand after a determination by the President, and it is
hard to give much meaning to the words "which the President after
investigation shall determine is so . . . held" unless the
determination and demand call the duty into being. The condition
"after investigation" additionally points to the intent to make his
act decisive upon the point, as it is in other cases mentioned in §
7(a). But it is said that the subject of the section is enemy
property only, and therefore that the determination cannot be final
in its effect. Day v. Micou,
18 Wall. 156. And it is true that it is not final against the
claimant's rights. Upon surrender, the claimant may at once file a
claim under § 9 if he satisfies the representative
Page 254 U. S. 568
of the President may obtain a return, and, if he does not obtain
it in sixty days after filing his application, or forthwith if he
has given the required notice but filed no application to the
President, may bring a suit to establish his rights in the district
court, in which case the property is to be retained by the
Custodian until final decree. These provisions explain the initial
words of § 7(c) as saving the ultimate rights of the claimant while
the determination of the President still may be given effect to
carry out an immediate seizure for the security of the government
until the final decision upon the right. The reservation implies
that mistakes may be made, and assumes that the transfer will take
place whether right or wrong.
The argument on the original words of the Act in view of the
manifest purpose seems to us to be strong, but it appears to us to
be much strengthened by the amendments of later date. By the Act of
November 4, 1918, c. 201, 40 Stat. 1020, § 7(c), was amended, among
other things, by adding after the requirements of transfer "or the
same may be seized by the Alien Property Custodian, and all
property thus acquired shall be held, administered and disposed of
as elsewhere provided in this Act." This shows clearly enough the
peremptory character of this first step. It cannot be supposed that
a resort to the Courts is to be less immediately effective than a
taking with the strong hand. Clinkenbeard v. United
21 Wall. 65, has no application. That was
debt on a bond for a tax, and turned on the right of the government
to the tax, not on possession. By a later paragraph, "the sole
relief and remedy of any person having any claim to any . . .
property" transferred to the Custodian "or required so to be, or
seized by him shall be that provided by the terms of this Act." The
natural interpretation of this clause is that it refers to the
remedies expressly provided, in this case by § 9; that property
required to be transferred and property seized stand on the same
footing, not that the resort by the Custodian
Page 254 U. S. 569
to the courts instead of to force opens to the person who has
declined to obey the order of the statute or who has prevented a
seizure a right by implication to delay what the statute evidently
means to accomplish at once.
To the conclusion that we reach it is objected that the
Custodian gets a good deal more than bare possession -- that the
property is to be conveyed to him, and that, by the Act of March
28, 1918, c. 28, 40 Stat. 459, 460, enlarging § 12, the
"shall be vested with all of the powers of a common law trustee
in respect of all property, other than money, which has been or
shall be, or which has been or shall be required to be,
etc., to him, and is given the power to sell and manage the same
as though he were absolute owner. All this may be conceded if no
claim is filed. But this act did not repeal § 9, which is amended
by the later Acts of July 11, 1919, c. 6, 41 Stat. 35, and of June
5, 1920, c. 241, 41 Stat. 977, and, as we have said, provides for
immediate claim and suit and requires the property in cases of suit
to be retained in the custody of the Alien Property Custodian or in
the Treasury of the United States to abide the result. The present
proceeding gives nothing but the preliminary custody such as would
have been gained by seizure. It attaches the property to make sure
that it is forthcoming if finally condemned, and does no more.
THE CHIEF JUSTICE took no part in the consideration or decision
of these causes.