Sutherland v. Mayer,
Annotate this Case
271 U.S. 272 (1926)
- Syllabus |
U.S. Supreme Court
Sutherland v. Mayer, 271 U.S. 272 (1926)
Sutherland v. Mayer
Nos. 232, 233, 234
Argued April 14, 1926
Decided May 24, 1926
271 U.S. 272
1. The declaration of war, April 6, 1917, immediately effected dissolution of partnerships then existing between citizens of this country and citizens of Germany. P. 271 U. S. 286.
2. During the war all intercourse, correspondence, and traffic between citizens of the two countries which might advantage the enemy was absolutely forbidden. Id.
3. The purpose of this restriction is not arbitrarily and unnecessarily to tie the hands of the individuals concerned, but to preclude the possibility of aid or comfort, direct or indirect, to the
opposing forces, and private rights and duties are affected only so far as they are incompatible with the rights of war. P. 271 U. S. 287.
4. The rule that a liquidating partner must settle the partnership affairs within a reasonable time and, after payment of the partnership liabilities, divide the proceeds among the partners according to their interests, applies to a partnership between citizen and alien dissolved by war. P. 271 U. S. 289.
5. As settlement is legally impossible until the close of the war, it is the right and duty of the respective partners to care for and preserve the assets of the partnership in their possession for their mutual benefit when the war is ended. Id.
6. A post-bellum accounting between such partners is controlled by equitable principles, and the American partner is not entitled, in virtue of his citizenship, to more favorable consideration in the court of equity than is accorded to his alien partner. P. 271 U. S. 290.
7. Where the German assets of a German-American partnership which was dissolved by the war were cared for by the German partners during the period of nonintercourse, but lost much of their value owing solely to the great depreciation of the German currency, while the assets in possession of the American partner, by reason of the more fortunate state of American finances, had preserved their original monetary value, held, upon an accounting:
(1) That the failure of the German partners to liquidate the German assets and their continued use of them in the business during the war were not grounds for holding them as purchasers of the American's interest in such assets as of the date when war was declared, their conduct not having been hostile nor inconsistent with an honest effort to administer the property to the best advantage of all concerned, and no loss having resulted from the continuance of the business. P. 271 U. S. 290.
(2) That whether the accounting were taken upon the basis of what the German partners did with the assets after war was declared or of what they should have done, the loss was an ineluctable consequence of the war, and must be borne by all the partners equally. Clay v. Field, 138 U. S. 464. P. 271 U. S. 292.
(3) That the German partners should be charged with the American's share in the German assets at the exchange value of the German mark on July 14, 1919, the date of the War Trade Board regulation restoring the right of commercial intercourse between citizens of the two countries, when settlement of the partnership first became lawful, rather than at exchange value at the time of accounting. P. 271 U. S. 295.
8. Where a partnership between citizens of two countries was dissolved, and settlement suspended, by war, interest may be allowed to one partner in lieu of unascertainable profits derived from the assets by the other during the period of nonintercourse. P. 271 U. S. 296.
9. Taxes levied by the German government on the share of an American partner in partnership assets in Germany and paid by German partners during the war held chargeable to him in a settlement of the partnership. P. 271 U. S. 297.
10. An authority from an American partner to his German partners to make payments to his relatives from partnership funds was cancelled by the outbreak of war between the two countries. Id.
1 F.2d 419 reversed.
Appeals from a decree of the circuit court of appeals which affirmed in part and reversed in part a decree of the district court in a suit brought by the Alien Property Custodian for an accounting of assets, part in the United States and part in Germany, which appertained to a partnership existing on the declaration of war.