1. Certificates of shares in a New Jersey corporation, endorsed
in blank and owned and held by German corporations, were seized
Page 267 U. S. 23
in London during the late war by the Public Trustee, a
corporation sole appointed under the English law to be custodian of
enemy property.
Held that the ownership of the paper was
dependent upon the law of the place where it was at the time,
viz., England, and, as the things done in England
transferred the title to the certificates to the Public Trustee by
English law and as, by the law of New Jersey and the law of
England, the owner of such certificates may write a name in the
blank endorsement and thus entitle the nominee to obtain
registration on the books of the corporation and issuance of new
certificates to himself, the Trustee was entitled to pursue this
cause as against the German corporations, there being no assertion
of power by the United States to the contrary. P.
267 U. S.
28.
2. Consequently, a decree of the district court recognizing this
right and directing the New Jersey corporation to issue new
certificates to such nominee on surrender of the old ones properly
endorsed did not deprive the German corporations of property
without due process of law.
Id.
300 F. 741 affirmed.
Appeals from two decrees of the district court in suits brought
by the appellant German corporations to establish their titles to
shares of stock of the steel corporation the certificates for
which, endorsed in blank, were seized at London during the war and
passed to the Public Trustee of England, as custodian of alien
property. The defendants were the steel corporation, the Public
Trustee, and stockholders of record who disclaimed interest. The
title to the shares, with the right to registration and accrued
dividends, was adjudged to be in the Public Trustee.
Page 267 U. S. 27
MR. JUSTICE HOLMES delivered the opinion of the Court.
These are bills in equity in similar form each raising the same
question. In each, the plaintiff is a German corporation and the
interested defendants are the Public Trustee, an English
corporation sole appointed to be custodian of enemy property during
the late war, and the United States Steel Corporation. Each
plaintiff claims one hundred identified shares in the steel
corporation and seeks to be declared owner of the same, to have new
certificates issued to it and the outstanding certificates
cancelled on the books of the corporation, and to recover past
dividends declared but unpaid. The cases were submitted by them
upon an agreed statement of facts, and the district court, after a
discussion that leaves nothing to be added, dismissed the bills.
The decree declared the Public Trustee to be entitled to the shares
and directed the steel corporation to issue new certificates to his
nominee on surrender of the old ones properly endorsed. 300 F.
741.
As is usual with shares which it is desired to deal in abroad,
these shares were registered by tens on the steel corporation's
books in the name of some well known broker or the like domiciled
in England, and the assignment and power of attorney to transfer
the shares printed on the back of the certificate was signed by the
broker in blank, so that the certificate passed from hand to hand.
The Disconto-Gesellschaft had bought a hundred shares, and held the
certificates thus indorsed in its London branch. The Bank fur
Handel had bought the same number and pledged them with an English
banking house in a running account. On March 27, 1918, an order of
the Board of Trade in pursuance of statutory powers purported to
vest in the Public Trustee the rights of the
Page 267 U. S. 28
Disconto-Gesellschaft to the shares and the right to take
possession of the documents of title. On April 30, 1917, a similar
order had been made as to the Bank fur Handel's stock. The Public
Trustee thereupon seized the certificates in London, as was regular
and lawful under the laws of England while the war was going on,
and freed the pledged securities from the lien upon them by a sale
of other stocks. He claims a title confirmed by the Treaty of
Berlin and the Treaty of Versailles. The plaintiffs set up that a
decree recognizing his title would deprive them of their property
without due process of law.
The appellants, starting from the sound proposition that
jurisdiction is founded upon power, overwork the argument drawn
from the power of the United States over the steel corporation.
Taking the United States in this connection to mean the total
powers of the central and the state governments, no doubt
theoretically it could draw a line of fire around its boundaries
and recognize nothing concerning the corporation or any interest in
it that happened outside. But it prefers to consider itself
civilized, and to act accordingly. Therefore, New Jersey having
authorized this corporation, like others, to issue certificates
that so far represent the stock that, ordinarily, at least, no one
can get the benefits of ownership except through and by means of
the paper, it recognizes as owner anyone to whom the person
declared by the paper to be owner has transferred it by the
indorsement provided for wherever it takes place. It allows an
indorsement in blank, and, by its law as well as by the law of
England, an indorsement in blank authorizes anyone who is the
lawful owner of the paper to write in a name, and thereby entitle
the person so named to demand registration as owner in his turn
upon the corporation's books. But the question who is the owner of
the paper depends upon the law of the place where the paper is. It
does not depend upon the holder's having given value or taking
without notice of
Page 267 U. S. 29
outstanding claims, but upon the things done being sufficient by
the law of the place to transfer the title. An execution locally
valid is as effectual as an ordinary purchase.
Yazoo &
Mississippi Valley R. Co. v. Clarksdale, 257 U. S.
10. The things done in England transferred the title to
the Public Trustee by English law.
If the United States had taken steps to assert its paramount
power, as in
Miller v. Kaliwerke Aschersleben
Aktien-Gesellschaft, 283 F. 746, a different question would
arise that we have no occasion to deal with. The United States has
taken no such steps. It therefore stands in its usual attitude of
indifference when title to the certificate is lawfully obtained.
There is no conflict in matter of fact or matter of law between the
United States and England, and therefore
Baker v. Baker, Eccles
& Co., 242 U. S. 394,
does not apply. We deem it so plain that the Public Trustee got a
title good as against the plaintiffs by the original seizure that
we deem it unnecessary to advert to the treaties upon which he also
relies, or to the subsequent dealings between England and Germany
showing that both of those nations have assumed without doubt that
the Trustee could sell the stock. We think it unnecessary also to
repeat what was said below as to the possibility of the United
States making a claim at some future time.
Decree affirmed.
