Holders of awards by the Mixed Claims Commission, United States
and Germany, which were certified by the Secretary of State under
the Settlement of War Claims Act of 1928 and were payable by the
Secretary of the Treasury from the special fund established by that
Act, sued to restrain the Secretary of State from certifying and
the Secretary of the Treasury from paying later awards to other
claimants, alleging that, because the German Commissioner had
withdrawn, and for other reasons relative to the power and
procedure of the Commission, the later awards were null and void,
and that, if allowed to participate in the fund, they would so
deplete it that the awards of the plaintiffs could not be
satisfied. After the filing of the bill, and before service, the
awards complained of were certified by the Secretary of State.
Held:
1. That the petitioners were entitled to sue to protect such
interest as they might have under the Act, but as their standing
rested solely upon the provisions of the Act, they could not escape
its terms or avoid payments for which the Act is found to provide.
P.
311 U. S.
485.
2. The certification by the Secretary of State which the Act
requires as a condition to payment of an award is not a ministerial
act meaning merely that the award certified is a genuine document,
but is assurance by the Secretary that the proceedings leading to
the award were such as duly to qualify it for payment from the
special fund. P.
311 U. S.
486.
Congress had constitutional power to lodge with the Secretary of
State the authority to consider and pass upon the regularity and
validity of the awards made by the Mixed Claims Commission for the
statutory purpose of qualifying them for payment out of the account
in the Treasury, and, in view of the functions
Page 311 U. S. 471
of the Secretary of State, the nature of the claims, and the
contentions to which they might give rise between the two
governments concerned, Congress naturally required his news, with
respect to the propriety of paying awards from that fund.
3. There is no basis in this case for concluding that the
Secretary of State, in certifying the questioned awards, acted
without due deliberation or failed to express his considerate
judgment, as the statute contemplated. P.
311 U. S.
488.
4. For the purpose of payment under the statute, the
certification of the Secretary of State is conclusive. P.
311 U. S.
489.
It is unnecessary to consider in this case whether Congress
could commit to the judiciary the determination of the validity of
the challenged claims.
5. In view of the statutory provisions governing the case, there
is no occasion to consider the circumstances in which an
international agreement or action thereunder may be deemed to vest
rights in private persons, or the scope of such rights in
particular cases. P.
311 U. S.
489.
114 F.2d 464, affirmed.
Certiorari,
post, p. 32, to review the affirmance of a
decree dismissing the bills in suits to restrain action by the
Secretaries of State and of the Treasury.
Page 311 U. S. 480
MR. CHIEF JUSTICE HUGHES, delivered the opinion of the
Court.
Petitioners, Z. & F. Assets Realization Corporation and
American-Hawaiian Steamship Company, are holders of awards of the
Mixed Claims Commission, United States and Germany. These awards
have been certified by the Secretary of State, and are thus payable
out of the fund established by the Settlement of War Claims Act of
1928. [
Footnote 1] Petitioners
seek a judgment declaring that later awards purporting to be made
by the Mixed Claims Commission in favor of the Lehigh Valley
Railroad Company, the Agency of Canadian Car and Foundry Company,
Limited, the Bethlehem Steel Company, and others are null and void,
and restraining the certification of these awards by the Secretary
of State and their payment by the Secretary of the Treasury. The
Lehigh Valley Railroad Company intervened as a defendant.
Defendants, the Secretary of State and the Secretary of the
Treasury, moved to dismiss petitioners' bills for want of
jurisdiction and for failure to state a claim upon which relief
could be granted. The intervener defendant filed an answer and
moved for summary judgment. The District Court dismissed the bills
(31 F.Supp. 371) and its judgment was affirmed by the Court of
Appeals. 114 F.2d 464. We granted certiorari. October 14, 1940, 311
U.S. 632.
The Mixed Claims Commission, United States and Germany, was set
up pursuant to an agreement of August 10, 1922, [
Footnote 2] to determine the amount to be
paid by Germany in satisfaction of her financial obligations under
the Treaty of Berlin of August 25, 1921. [
Footnote 3] The Commission consisted of three members,
one appointed by the United States, another by Germany, and an
Umpire selected
Page 311 U. S. 481
by the two Governments. The Umpire was
"to decide upon any cases concerning which the Commissioners may
disagree, or upon any points of difference that may arise in the
course of their proceedings."
It was further provided that, should the Umpire or any of the
Commissioners die or retire, or be unable for any reason to
discharge his functions, the vacancy should be filled in the same
manner as the original appointment. It was agreed that the
decisions of the Commission and those of the Umpire should be
accepted as final and binding upon the two Governments.
The Settlement of War Claims Act of 1928 created in the Treasury
a "German special deposit account." Section 2 provided that the
Secretary of State should certify from time to time to the
Secretary of the Treasury the awards of the Mixed Claims
Commission, and the Secretary of the Treasury was directed to pay
out of the amounts placed in the account the principal of each
award so certified, with interest as stated.
The claims covered by the awards attacked by petitioners arose
out of the destruction of property caused by explosions at Black
Tom and Kingsland, New Jersey, in 1916 and 1917. These claims were
dismissed by the Commission in 1930, and petitions for rehearing
were denied in 1931 and 1932. In the following year, the American
agent sought to reopen the cases upon the ground that, in its
decision of 1930, the Commission had been misled by "fraudulent,
incomplete, collusive, and false evidence" on the part of witnesses
for Germany. The German Government denied the power of the
Commission to reopen, and the Umpire, Mr. Justice Roberts, finding
that there was a disagreement upon the question between the
Commissioners, decided, in December, 1933, that the Commission was
competent to determine its own jurisdiction by the interpretation
of the Agreement creating it. The Umpire further decided that,
while the Commission
Page 311 U. S. 482
was without power to reopen a case merely for the presentation
of after-discovered evidence, the Commission was still sitting as a
court, and did have power to consider the charge that it had been
misled by fraud and collusion, and for that purpose to reopen the
cases in order that it might consider the further evidence tendered
by the American agent, and that offered in reply on behalf of
Germany, and either confirm the decisions theretofore made or alter
them as justice and right might demand.
Thereafter, the German agent filed an answer denying the
allegations of fraud, and evidence was presented. After argument,
the Commission, in June, 1936, rendered a decision, the German
Commissioner concurring, by which the ruling of 1932 denying a
rehearing was set aside, and the question whether there should be a
rehearing was reserved for a hearing which should be separate and
distinct from an argument on the merits unless Germany should
consent to a different course.
Efforts to obtain a settlement of the claims were unsuccessful
and, after much additional evidence had been introduced, the
Commission, in January, 1939, heard extended arguments by the
agents of the respective Governments. The American agent had
requested that the Commission should not only set aside the
original decision of 1930, but should also proceed to a final
decision on the merits, as it was contended that the evidence
presented to support the application for rehearing also established
the responsibility of Germany for the destruction of the property
as claimed. It also appears that the German Commissioner insisted
that, before the motion for rehearing should be granted, the
Commission should examine the proofs tendered by the United States
to determine whether the claims had been made good. This, as stated
by the Umpire, was upon the ground that, even though the Commission
had been misled by false and
Page 311 U. S. 483
fraudulent testimony, that would be immaterial if, upon an
independent consideration, the United States, in its own cases, had
failed to sustain its burden of proof. The American Commissioner
and the Umpire thereupon had agreed to go beyond what they thought
the necessary function of the Commission in the circumstances, and
had proceeded to canvass with the German Commissioner the cases as
made by the United States.
During the course of that investigation, on March 1, 1939, the
German Commissioner withdrew from the Commission. At the time of
his withdrawal, to two Commissioners, according to the contention
of the American Commissioner and as found by the Umpire, were in
disagreement upon the points in issue. On receiving notice of a
meeting of the Commission to be held on June 15, 1939, the German
agent said that he would not appear, and the German Embassy advised
the Secretary of State that, since the withdrawal of the German
Commissioner, the Commission was incompetent to make decisions.
At the meeting held pursuant to the notice, the American
Commissioner filed a certificate of disagreement with an opinion
sustaining the jurisdiction of the Commission. The Umpire thereupon
decided that there did exist a disagreement between the two
Commissioners -- a disagreement of which he was personally
cognizant and which was also shown by the certificate and opinion
of the American Commissioner; that the jurisdiction of the
Commission was not ousted by the withdrawal of the German
Commissioner
"after submission by the parties, and after the tribunal, having
taken the cases under advisement, pursuant to its rules, was
engaged in the task of deciding the issues presented;"
that the United States "had proved its allegation that fraud in
the evidence presented by Germany misled the Commission and
affected its decision in favor of Germany;" and that, upon
Page 311 U. S. 484
the record as it then stood, the cases for the claims were made
out.
Thereupon, the American agent moved for awards in favor of the
United States on behalf of the sabotage claimants. An order was
entered setting aside the decision of 1930 and determining that the
liability of Germany had been established and that, as it appeared
that Germany did not intend to take part in further proceedings of
the Commission, awards should be made upon the Commission's
findings and opinion.
On October 3, 1939, the German Charge d'Affaires addressed an
elaborate communication to the Secretary of State making a detailed
statement supplementary to a note of July 11, 1939, with respect to
the alleged illegal acts of the Umpire, and protesting against all
further measures by the Umpire, the American Commissioner, and the
American agent, which were aimed at securing awards in the Black
Tom and Kingsland cases. The Secretary of State replied, on October
18, 1939, that it would be highly inappropriate for the Department
to endeavor to determine the course of the proceedings of the
Commission; that the Secretary had entire confidence in the ability
and integrity of the Umpire and the Commissioner appointed by the
United States despite the severe and, as he believed, "entirely
unwarranted criticisms," and that he was constrained to invite
attention to the fact
"that the remarkable action of the Commissioner appointed by
Germany was apparently designed to frustrate or postpone
indefinitely the work of the Commission at a time when, after years
of labor on the particular cases involved, it was expected that its
functions would be brought to a conclusion."
Notice was given of a meeting of the Commission to be held on
October 30, 1939, which the German Commissioner did not attend, and
awards were then made in favor of the claimants. The Umpire stated
that he
Page 311 U. S. 485
had found the awards to be accurately and properly calculated,
and had joined the American Commissioner in signing them.
The awards were certified by the Secretary of State to the
Secretary of the Treasury on October 31, 1939, pursuant to the
Settlement of War Claims Act of 1928. On the same day, this suit
was brought, the complaint being filed before, and process being
served on the Secretary of State after, his certification of the
awards.
The Court of Appeals has held that the question with respect to
the validity of the awards in favor of the sabotage claimants is
political in its nature, and that the District Court was without
jurisdiction to entertain it.
There are, however, certain preliminary questions which are
indubitably appropriate for judicial consideration, and we think
that the proper answer to these questions is determinative of the
whole case.
The first question is whether petitioners have standing to bring
this suit. Except for the situation created by the Settlement of
War Claims Act of 1928, they would have no such standing. They
could not be heard to complain of action upon claims other than
their own. And Congress, with or without awards, could provide for
the payment of the claims in question without let or hindrance by
petitioners. But petitioners contend that the Settlement of War
Claims Act created a fund in the Treasury, known as the "German
special deposit account;" that petitioners, with other earlier
award-holders, are entitled by the Act to payment out of that fund;
that the fund is insufficient to pay petitioners' claims in full if
payments are permitted to be made to the sabotage claimants, and
hence that petitioners have standing to complain of an unlawful
depletion of the fund to their injury by means of such
payments.
We think that, in these circumstances as shown by the bills,
petitioners are entitled to sue to protect such interests
Page 311 U. S. 486
as they may have under the Act.
Compare Houston v.
Ormes, 252 U. S. 469;
Mellon v. Orinoco Iron Co., 266 U.
S. 121. But, as their standing rests solely upon the
provisions of the Act, they may not escape its terms or succeed in
a challenge to payments for which the Act is found to provide.
The next question is with respect to the effect that should be
given under the terms of the statute to the action of the Secretary
of State in certifying the awards. Congress has authorized and
required the Secretary of the Treasury to pay out of the special
account the awards which the Secretary of State has certified.
There is no question that the Secretary of State has given his
certificate in this instance. It is adequate in form and substance
under the terms of the Act.
Petitioners contend that the certification is a mere ministerial
act. It is said to mean merely that the award is a genuine
document, in the same sense that a notary public authenticates the
signature of a grantor in a deed. We think that this construction
of the Act is inadmissible. The notarial conception of the function
of the Secretary of State in this matter ignores his role in the
conduct of foreign affairs as the right hand of the Executive, and,
in particular, his relation to proceedings for the determination of
claims of the United States against foreign governments. There can
be no doubt of the constitutional authority of Congress to lodge
with the Secretary of State the authority to consider and pass upon
the regularity and validity of the awards made by the Mixed Claims
Commission for the statutory purpose of qualifying them for payment
out of the account in the Treasury. Congress had complete power to
decide what payments should be made from that account, and to
attach such conditions as it saw fit. Congress not only had this
power, but it was natural and appropriate that Congress should
entrust to the Secretary of State the decision
Page 311 U. S. 487
of questions that might arise with respect to the propriety of
the payment of awards made by the Commission and to require his
affirmative action through certification before payment. The Mixed
Claims Commission had been created by an executive agreement. The
claims to be considered by the Commission were only those sponsored
and presented by the United States against Germany. They were
presented as claims of the United States, the national claimants
themselves having no standing save as they were represented by the
United States.
See Frelinghuysen v. Key, 110 U. S.
63,
110 U. S. 75-76;
United States ex rel. Boynton v. Blaine, 139 U.
S. 306,
139 U. S.
323-325;
Williams v. Heard, 140 U.
S. 529,
140 U. S.
537-538. The claims so sponsored were presented and
handled by an American agent appointed by the President. It was
obvious, as the present contentions abundantly illustrate, that the
proceedings before such a commission might easily give rise to
questions between the governments concerned, and might involve
diplomatic representations or protests with which it would be the
duty of the Secretary of State to deal. Whatever might be said of
such representations or protests, or the occasion for them, or with
respect to the existence of any international right or obligation
arising from the agreement setting up the Commission, Congress
could, and naturally would, require the views of the Secretary of
State before appropriating money for the payment of awards, and, in
creating a special fund for that purpose, would look to the
Secretary of State for the exercise of his appropriate authority on
behalf of the Executive, and thus for his judgment upon the
question whether the proceedings had been such as duly to qualify
the awards for payment.
See Frelinghuysen v. Key, supra; United
States ex rel. Boynton v. Blaine, supra. We find nothing in
the Settlement of War Claims Act which points to a different
purpose.
Page 311 U. S. 488
It is suggested that the Secretary of State construed his action
in certifying as merely ministerial, because he acted at once on
the presentation of the awards. But the argument overlooks the fact
that the Secretary of State had long been cognizant of the
questions that had arisen in relation to the Commission's authority
to grant a rehearing and make the awards. As early as October,
1933, the German Government had notified the Secretary of State
that it regarded the Commission as without authority to grant a
rehearing on the sabotage claims. The Secretary of State had
informed the American agent that the question of jurisdiction was
one properly to be decided by the Commission itself, and he
directed the American agent to bring the matter to the attention of
the American Commissioner, or the full Commission, for the purpose
of obtaining the decision of the Umpire on that disputed point. In
March, 1939, the American Commissioner informed the Secretary of
the withdrawal of the German Commissioner, and reviewed the
circumstances. In June, 1939, petitioners themselves formally
communicated to the Secretary of State their objections to the
proceedings. In the same month, the German Embassy advised the
Secretary of State that its Government regarded the Commission as
incompetent to make decisions because of the German Commissioner's
withdrawal. This was followed by a further protest delivered to the
Secretary of State in July and a detailed statement by the German
Government of its grounds in its communication of October 3, 1939,
to which the Secretary of State replied on October 18, 1939, in the
note from which we have quoted. Thus, when the actual awards were
presented, the Secretary of State had before him these diplomatic
representations, and was fully conversant with all the proceedings
of the Commission, with the action of the German Commissioner and
the attitude of his Government, and with the contentions of
petitioners.
Page 311 U. S. 489
We find no basis for concluding that the Secretary of State, in
certifying the awards, did not act after due deliberation or fail
to express his considerate judgment, as we think the statute
contemplated.
We are of the opinion that, for the purpose of payment under the
statute, the certificate of the Secretary of State must be deemed
to be conclusive. We do not need to consider whether Congress could
commit to the judiciary the determination of the validity of the
challenged claims (
see La Abra Silver Mining Co. v. United
States, 175 U. S. 423),
for Congress has not done so, but has made payment out of the fund
depend upon the Secretary's certificate. The question in this
relation is simply one of the intent of Congress as disclosed by
the Act. Congress has expressly directed payments to be made from
the special account of the awards "so certified." The literal and
natural import of this provision is that finality is to be accorded
to the certificate of the Secretary of State, and we perceive no
ground for limiting the terms of the Act by construction. On the
contrary, the nature of the questions presented and their relation
to the conduct of foreign affairs within the province of the
Secretary of State support the conclusion that the statute should
have effect according to its explicit terms.
In view of the statutory provisions governing this case, we have
no occasion to consider the circumstances in which an international
agreement, or action thereunder, may be deemed to vest rights in
private persons, or the scope of such rights in particular cases.
See Comegys v.
Vasse, 1 Pet.193;
Mellon v. Orinoco Iron Co.,
supra. Petitioners must claim solely by virtue of their
interest in the fund created by the statute, and, under its terms,
they are not entitled to complain of payments out of that fund of
awards which the Secretary of State has certified.
The judgment of the Court of Appeals is
Affirmed.
Page 311 U. S. 490
MR. JUSTICE ROBERTS took no part in the consideration or
decision of this case.
* Together with No. 382,
American-Hawaiian Steamship Co. v.
Hull, Secretary of State, et al., also on writ of certiorari,
post, p. 632, to the Court of Appeals for the District of
Columbia.
[
Footnote 1]
45 Stat. 254.
[
Footnote 2]
42 Stat. 2200.
[
Footnote 3]
42 Stat. 1939.
MR. JUSTICE BLACK, concurring.
MR. JUSTICE DOUGLAS and I concur in the judgment of affirmance,
but on the ground that the petitioners set up no justiciable
controversy which the court had power to determine. The questions
raised by the petitions involve relations between the United States
and Germany, which we believe are constitutionally committed
exclusively to the legislative and executive departments.
The sole ground upon which petitioners prayed relief in the
District Court was that awards made by the Mixed Claims Commission
were "wholly null and void, and without jurisdiction on the part of
the alleged Commission." A declaratory judgment was sought to have
the awards declared null and void, and to enjoin the Secretary of
State from certifying and the Secretary of the Treasury from paying
such awards made by the Commission. In addition, petitioners asked
a mandatory injunction to require the Secretary of the Treasury to
pay petitioners without regard to other awards of the Commission
certified by the Secretary of State.
The Secretary of State and the Secretary of the Treasury moved
to dismiss on the grounds, among others, that the complaint stated
no cause of action, the court had no jurisdiction to review the
action of the Mixed Claims Commission, the court was without power
to pass upon the jurisdiction of the Mixed Claims Commission, and
the court had no jurisdiction to restrain the Secretary of State
from certifying awards of the Commission or to enjoin the Secretary
of the Treasury from paying the claims so certified. The District
Court dismissed, and the Circuit Court of Appeals affirmed on the
ground that the actions of the Mixed Claims Commission in making
awards and the Secretary of State in certifying
Page 311 U. S. 491
them were committed for determination to the political
department of government, and therefore the courts were without
power to review their determination. We agree with their
conclusion. And, in this view, we believe the certifications of the
Secretary of State must be deemed final and conclusive in the
courts not because the conduct of the Secretary and the Commission
preceding certification meets approval of the courts, but because
power to make final determination rests with the political
departments of government alone.
The fundamental questions raised by the petitions as presented
to the District Court, were: who can challenge the propriety of the
Commission's awards? Does the judicial branch of government, rather
than the political, possess the power finally to determine the
propriety of the awards? And the fact that petitioners sought to
challenge the Commission's power by proceedings against the
Secretaries of State and the Treasury, and not by direct suit
against the Commission, is immaterial. If petitioners cannot
directly attack the Commission in the courts, neither can they, in
the absence of Congressional consent, assail the propriety of its
awards through the expedient of suits against others charged with
responsibility for executing the final determination of the
Commission.
The Mixed Claims Commission was set up pursuant to an agreement
between the United States and Germany. The agreement gave the
Commission full power to hold hearings to determine "the amount to
be paid by Germany in satisfaction of Germany's financial
obligations" under two treaties previously made between the two
countries. The agreement further provided that
"the decisions of the Commission and those of the Umpire (in
case there may be any) shall be accepted as final and binding upon
the two governments."
The Commission was set up with an Umpire, and all of the
awards
Page 311 U. S. 492
were reported to the Secretary of State by the Commission.
While petitioners contend that they have the right to challenge
the certification of the Secretary of State, it is to be remembered
that their petitions ultimately rest solely upon the premise that
it is his duty to refuse to carry out the Commission's awards
because of alleged impropriety of the proceedings of the
Commission. They say that the Commission was without jurisdiction
and power to make awards to certain claimants other than
themselves; payment of these awards out of a fund that is limited
in amount will result in diminishing payments to them below the
full amount of their award with interest; since the Commission was
without power -- as they charge -- to make these other awards, the
Secretary of State should not have certified them for payment, and,
for the same reason, the Treasury should not pay them. They assert
a right through court procedure to challenge payment to the other
claimants by reason of an Act of Congress of 1928. [
Footnote 2/1]
But the 1928 Act provides that the Secretary shall from time to
time certify to the Secretary of the Treasury the awards of the
Mixed Claims Commission of the United States, and that the
Secretary of the Treasury is authorized and directed to pay "the
principal of each award so certified, plus the interest thereon, in
accordance with the award. . . ." Nowhere in the Act is there any
language which, either expressly or by fair implication, indicates
a purpose of Congress to permit some claimants to resort to the
courts -- as petitioners here have done -- to determine the
propriety of awards by the Mixed Claims Commission to other
claimants.
The exact challenge made by petitioners against the awards of
the Commission is the subject of a diplomatic
Page 311 U. S. 493
controversy between the United States and Germany. Germany's
contention is the same as petitioners'. And the Secretary of State,
in charge of our foreign affairs, has declined to accede to
Germany's contention that the particular awards here in controversy
were improper, and should not be certified or paid. The immediate
subject matter of petitioners' complaint, upon which rests the
power of the Court to act, if it has any power, has therefore been
repudiated by the political branch of our government. A contrary
conclusion by the courts would bring about a square clash between
the executive and judicial branches of government. And far more
than this. Whoever is entrusted finally to determine what
government must or must not do in a dispute between nations is the
ultimate arbiter of momentous questions of public policies
affecting this nation's relations with the other countries of the
world.
The controversy here bears all the earmarks of that type of
controversies which our Constitution has confided exclusively to
the executive or political departments of government, and
concerning which this Court has many times repeated "that the
action of the political branches of the government, in a matter
that belongs to them, is conclusive." [
Footnote 2/2] Since this clearly appeared from the face
of the pleadings at the very outset, the District Court properly
stayed its hands and renounced power to proceed.
[
Footnote 2/1]
45 Stat. 254.
[
Footnote 2/2]
Williams v. Suffolk Insurance
Co., 13 Pet. 415,
38 U. S. 420;
United States ex rel. Boynton v. Blaine, 139 U.
S. 306,
139 U. S.
320-322,
139 U. S. 326;
Frelinghuysen v. Key, 110 U. S. 63. No
good purpose would be served by setting out the numerous decisions
of this Court to the same effect. For a collection of such cases,
see Digest of the United States Supreme Court Reports,
vol. 4, Courts, ยงยง 49-63.