1. A suit in equity brought under § 9 of the Trading with the
Enemy Act, against the Alien Property Custodian, the Treasurer of
the United States and a foreign corporation, to establish a debt of
the corporation to the plaintiff, as a claim against its property
seized under the act and held by the Custodian and the Treasurer,
is in effect a suit against the United States, and can therefore be
maintained only under the conditions laid down in the act. P.
263 U. S. 603.
2. Where money was lent by liquidators of a Mexican bank at New
York to a German bank, and deposited by the borrower to its general
credit with a trust company in that city, and, after the outbreak
of the late war, before the loan fell due, the deposit with other
assets of the borrower was taken over by the Alien Property
Custodian,
held that suit to collect the loan could not be
maintained by the Mexican bank under the above statute, since the
debt was not one that "arose with reference to the money or other
property held." P.
263 U. S.
599.
3. The fact that, under the law of New York, the debt, when due,
might have been collected by attachment of the property, had this
not been seized under the statute, did not alter the case. P.
263 U. S.
602.
4. Legislative history of this statute, including remarks of a
congressman explaining the bill,
held not to determine its
construction. P.
263 U. S.
601.
289 F. 924 affirmed.
Appeal from a decree of the Court of Appeals of the District of
Columbia affirming a decree of the Supreme Court of the District
which, on motion, dismissed the bill in a suit to enforce a claim
under the Trading with the Enemy Act.
Page 263 U. S. 595
MR. JUSTICE McKENNA delivered the opinion of the court.
Appeal from the decree of the Court of appeals, affirming the
decree of the Supreme Court of the District of Columbia, which
dismissed the suit of appellants, brought in the latter court by
them under the Act of Congress of October 6, 1917, entitled "An act
to define, regulate, and punish trading with the enemy, and for
other purposes," as amended June 5, 1920. 40 Stat. 411; 41 Stat.
977.
The Deutsche Bank of Berlin was duly appointed liquidator of the
Banco Mexicano, a banking corporation
Page 263 U. S. 596
organized under the laws of Mexico, and authorized to act in the
process of liquidation through Elias S.A. De Lima and Carlos
Schulze as the representatives of the Banco Mexicano. Upon their
appointment, they proceeded with the liquidation of the affairs of
the bank.
By virtue of their appointment and during the period they were
acting as such liquidators, they were authorized to make loans of
the assets of the bank for its account, and to collect, and, if
necessary, to sue for and collect, upon the claim which is the
subject of this action.
They, as liquidators for and on behalf of the Banco Mexicano,
made a loan of 500,000 gold dollars in New York City on December
15, 1916, to the Deutsche Bank of Berlin, a banking corporation
existing under the laws of the German Empire, for six months, with
interest at the rate of 5 percent per annum.
The amount was paid to Hugo Schmidt, the agent of the latter
bank at its place of business in the United States, and the bank
agreed to repay the same in that city on June 15, 1917, with
interest at the rate above mentioned.
Upon receiving that amount, represented by check, the bank
forthwith deposited the same with the Guaranty Trust Company of New
York to the credit of its general bank account, which it then had
with that institution.
On April 6, 1917, war was declared between the United States and
Germany. Thereafter, as the appellants are informed and believe,
under the provisions of the Trading with the Enemy Act and other
statutes in such case made and provided, all moneys, securities,
and property owned by the Deutsche Bank in the United States, or
held for it by others, were turned over to or seized by the Alien
Property Custodian of the United States, and have ever since been
held by him.
It is averred, on information and belief, that the money so
loaned was never transferred from the United States physically or
otherwise, but constituted a part of the balance
Page 263 U. S. 597
of the general deposits and securities and other property in the
United States of the bank, which were taken over and seized by the
Alien Property Custodian. The total amount of such balance, and the
total value of the securities and property, are unknown to
appellants, but are sufficient, as they are informed and believe,
after the payment and satisfaction of all other claims and demands,
fully to pay, satisfy, and discharge the claim and demand of the
appellants arising upon the loan.
After the loan was made, and until its balance, securities, and
other property were turned over to the Alien Property Custodian,
the Deutsche Bank continuously kept in the United States sufficient
funds and property over and above what was necessary to pay and
discharge all other claims and demands of every kind, to repay the
loan, with interest, and the funds and securities were kept in the
United States for the express purpose and with the intention by the
use thereof of repaying the loan when it fell due, and the bank
would have, in the ordinary and usual course of business, repaid
the same when the debt fell due, if war had not intervened between
the United States and Germany.
On June 15, 1917, there became due to appellants from the
Deutsche Bank the amount of the loan, and it is still due, although
they have made demands for the payment thereof upon the bank and
the Alien Property Custodian.
In pursuance of § 9 of the Trading with the Enemy Act, the
appellants, as liquidators and in behalf of the Banco Mexicano, or
on about May 27, 1920, filed with the Alien Property Custodian a
notice of claim, under oath, and in such form and containing such
particulars as was required by that § and as the Custodian had
prescribed, demanding payment of the debt above described, with
interest thereon then accrued, by the Custodian, from the money or
other property belonging to the bank, or held by him, or by the
Treasurer of the United States.
Page 263 U. S. 598
On or about the same day, a similar application was filed with
the President of the United States. Neither the President nor the
Alien Property Custodian has paid the debt or the interest
thereon.
Appellants aver that, since December 15, 1916, the Deutsche Bank
kept in the United States sufficient cash and marketable securities
over and above its obligations to enable it to pay the loan and
interest, and that the Alien Property Custodian and Treasurer of
the United States now hold sufficient cash and securities, formerly
owned by the bank and seized by the Custodian, over and above all
claims against the same, to pay the debt with interest.
Appellants are advised and believe that, under the law of New
York State, and in the event of default by the Deutsche Bank in the
payment of the loan, they would have had, on June 15, 1917, and
ever since, and now have, a cause of action against the bank upon
which they could have sued and can now sue, and could have procured
and can now procure, the issue of a writ of attachment under which
the funds and securities of the bank in New York City could have
been and now can be levied upon and seized and applied in
satisfaction of a judgment obtained.
It is averred that, by reason of the foregoing facts, the debt
of the appellants arose with reference to the money and other
property within the meaning and intention of subdivision (e) of § 9
of the Trading with the Enemy Act.
A motion to dismiss the bill of appellants was made, the grounds
thereof being:
(1) Appellants are claimants other than citizens of the United
States, and that the debt which they are seeking to recover did not
arise with reference to money or any other property held by the
Alien Property Custodian or the Treasurer of the United States
under and pursuant to the terms and provisions of the Trading with
the Enemy Act, as amended.
Page 263 U. S. 599
(2) The appellants have not set forth facts sufficient to
entitle them to equitable relief under § 9 of the Trading with the
Enemy Act, as amended.
The motion was granted, and a decree made and entered dismissing
the bill.
Upon the appeal of appellants, the decree was affirmed by the
Court of Appeals of the District of Columbia, to review which
action this appeal is prosecuted.
The case is in narrow compass. The facts are set forth in the
bill; the law adduced, that is § 9 as amended, it is contended,
constitutes them grounds of recovery prayed for, and demonstrates
the error in the decree appealed from. We quote it, although its
pertinent and determining words are few. As passed October 6, 1917,
it is as follows:
"That any person not an enemy or ally of enemy claiming any
interest, right, or title in any money or other property which may
have been conveyed, transferred, assigned, delivered, or paid to
the Alien Property Custodian or seized by him hereunder and held by
him or by the Treasurer of the United States, or to whom any debt
may be owing from an enemy or ally of enemy whose property or any
part thereof shall have been conveyed, transferred, assigned,
delivered, or paid to the Alien Property Custodian or seized by him
hereunder and held by him or by the Treasurer of the United States
may file with the said custodian a notice of his claim under oath
and in such form and containing such particulars as the said
Custodian shall require, and the President, if application is made
therefor by the claimant, may order the payment, conveyance,
transfer, assignment, or delivery to said claimant of the money or
other property so held by the Alien Property Custodian or by the
Treasurer of the United States, or of the interest therein to which
the President shall determine said claimant is entitled:
Provided,
Page 263 U. S. 600
that no such order by the President shall bar any person from
the prosecution of any suit at law or in equity against the
claimant to establish any right, title, or interest which he may
have in such money or other property. 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
at any time before the expiration of six months after the end of
the war institute a suit in equity in the Supreme Court of the
District of Columbia or in the district court of the United States
for the district in which such claimant resides, . . . to establish
the interest, right, title, or debt so claimed."
The amendment of June 5, 1920, is as follows:
"No money or other property shall be returned nor any debt
allowed under this section to any person who is a citizen or
subject of any nation which was associated with the United States
in the prosecution of the war unless such nation in like case
extends reciprocal rights to citizens of the United States; nor, in
any event, shall a debt be allowed under this section unless it was
owing to and owned by the claimant prior to October 6, 1917, and as
to claimants other than citizens of the United States unless it
arose with reference to the money or other property held by the
Alien Property Custodian or Treasurer of the United States
hereunder. [§ 9(e).]"
The amendment provides that:
"Nor, in any event, shall a debt be allowed under this section
unless it was owing to and owned by the claimant prior to October
6, 1917, and,
as to claimants other than citizens of the United
States unless, it arose with reference to the money or other
property held by the Alien Property Custodian or Treasurer of the
United States hereunder."
The italics are ours, and mark the words which make the
controversy. The Court of Appeals regarded them a limitation upon
the generality of the section as originally enacted -- an
Page 263 U. S. 601
exception from its indulgence of claimants other than citizens
of the United States unless the debt arose with reference to the
money or other property held by the Alien Property Custodian or
Treasurer of the United States under the act.
We concur. The condition did not exist in the claimant. The debt
did not arise with reference to the money or property held. The
transaction was an ordinary business one, money borrowed to be
repaid at a specified distant date; a deposit of it in the ordinary
way and with the legal result and relation, the creation of debtor
and creditor, not a word or act else -- not a word or act else
giving the transaction other character or quality. No distinction,
indeed, from any other transaction, nothing to give specification
to it or particular remedy.
But particularity is not necessary, is the contention. Mere
trace of relation seems, in counsel's view, to satisfy the
requirement of § 9. The definition of the Standard Dictionary is
adduced, and from it, it is said, it is reasonable to look upon
"with reference to" as equivalent to "with an eye toward." To give
this pertinence, necessarily, the eye must see what the statute
requires to be seen -- a debt that had fixed some right or title or
equity to the money or other property held by the Alien Property
Custodian or by the Treasurer of the United States.
In support of counsel's view, the explanation of the amendment
by the congressman in charge of it is quoted as giving a remedy to
a just "debt owed to a citizen of a friendly nation, that
originated with reference to the property which is over here." And
further:
"there would seem to be no reason in justice or good morals why
that property here should not pay it subject to the limitation that
it must have been a debt that accrued prior to the enactment of the
Trading with the Enemy Act."
This is given emphasis of meaning by the contrast of "enemy
Page 263 U. S. 602
creditors" which it was declared "should be collected by other
means than out of this property here." The views of the Attorney
General were also referred to and the absence of any recommendation
by the Committee on Interstate and Foreign Commerce of an intention
"to make radical changes in the rights and remedies of friendly
aliens as they had been created by the act previously in
force."
It may be conceded that there is some suggestive strength in
this history, but it is to be remembered that an act of legislation
is not the act of one legislator, and its meaning and purpose must
be expressed in words. If there be ambiguity in them, it is the
office of construction to resolve it. This we think the Court of
Appeals exercised, and to a right conclusion.
A contention, or rather the support of the main contention, is
made by appellants by reference to the New York statutory law which
authorized, it is said, an action against a foreign corporation --
in this case, by the Banco Mexicano against the Deutsche Bank --
for the collection of its note, a writ of attachment and a judgment
that could be satisfied out of the property attached. And the
further contention is that, by § 9, as amended,
"nonresident alien individuals and corporations were accorded
broader rights even than they then enjoyed under the laws of New
York in that they could collect their indebtedness out of the
property of nonresident alien enemies in the hands of the Custodian
wherever and however it arose and whatever its nature."
But this is a conclusion deduced from the construction put upon
§ 9 which we think is untenable.
We repeat, we do not think that the debt arose with reference to
the money or other property held by the Alien Property
Custodian.
Therefore, the prayer of the bill of complaint should be denied.
We are constrained to this, because we agree with
Page 263 U. S. 603
the Court of Appeals that this suit is in effect a suit against
the United States, and all of its conditions must obtain.
Decree affirmed.
THE CHIEF JUSTICE took no part in the consideration or decision
of the case.