1. An award of a District Court under the Trading with the Enemy
Act cannot be attacked for alleged fraudulent collusion by a motion
on affidavits made to that court after payment has been made and
the time for appeal has expired. Semble
that the remedy
would be by bill of review. P. 311 U. S.
2. Years after the rendition and payment of an award under §
9(a) of the Trading with the Enemy Act, from which no appeal was
taken, the Attorney General, on behalf of the United States and as
successor to the Alien Property Custodian, by a motion to the
District Court supported by affidavits, sought to have the judgment
set aside for want of jurisdiction on the ground that the
beneficial owner of the claim was an "enemy" as defined by that
Act, and that therefore the suit was not authorized by the Act, but
was a suit against the United States without its consent.
(1) That the complaint in the suit stated a case within the
terms of the Act, and the District Court had jurisdiction to
determine every issue necessary to the establishment of the claim.
P. 311 U. S.
(2) That the status, enemy or nonenemy, of the alleged
beneficial owner, upon which was based the "jurisdictional"
question of the motion, having been an issue raised by the
pleadings and proceedings in the case, was determinable by the
District Court, however labeled. P. 311 U. S.
(3) Whether the particular issue was actually litigated is
immaterial in view of the necessary conclusion that there was full
opportunity to litigate it and that it was adjudicated by the
decree. P. 311 U. S.
(4) If the District Court had erred in dealing or in failing to
deal with any issue involved, the remedy was by appeal. P.
311 U. S.
109 F.2d 714 affirmed.
Page 311 U. S. 495
Certiorari, 310 U.S. 621, to review the reversal of a decree of
the District Court, 27 F. Supp. 44, setting aside, on motion, for
want of jurisdiction, a former decree which had been rendered under
§ 9(a) of the Trading with the Enemy Act.
Page 311 U. S. 496
MR. CHIEF JUSTICE HUGHES delivered the opinion of the Court.
In a suit brought in the District Court of the United States for
the Southern District of New York under
Page 311 U. S. 497
Section 9(a) of the Trading with the Enemy Act, [Footnote 1
] a decree was entered on December
30, 1929, directing payment to the plaintiffs of a stated amount
out of the property of a German corporation which had been seized
by the Alien Property Custodian. There was no appeal, and the
amount awarded was paid.
In 1938, the United States moved upon affidavits to set aside
the decree, contending that the court had been without
jurisdiction. The District Court granted the motion upon that
ground. Soreason v. Sutherland,
27 F. Supp. 44. The
Circuit Court of Appeals reversed, and reinstated the original
decree. 109 F.2d 714. Certiorari was granted. Jackson v. Irving
310 U.S. 621.
It appears that the suit had been brought in 1927 by John S.
Soreason and Thorlief S.B. Nielsen, as surviving partners of the
firm of Crossman & Sielcken. The bill of complaint alleged that
plaintiffs and Hermann Sielcken, the deceased partner, were
citizens and residents of the United States; that the partnership
had its principal place of business in New York City, and had not
at any time been a "resident" in enemy territory and had not been
an enemy or ally of enemy within the meaning of the Trading with
the Enemy Act; that Zentral-Einkaufs-Gesellschaft, m.b.H., a German
corporation described as Z.E.G., was indebted to Crossman &
Sielcken for cargoes purchased by the latter for Z.E.G. during 1915
and consigned to neutral ports where they had been seized and
condemned by the British Government, and that the Alien Property
Custodian had assets of Z.E.G. which had been seized under the
Trading with the Enemy Act. The bill prayed for a decree
establishing the debt claimed by the plaintiffs and ordering its
payment to them out of the property so held. The bill declared that
it was filed pursuant to Section 9(a) of the Trading with
Page 311 U. S. 498
the Enemy Act, and that the court had jurisdiction to entertain
it by virtue of the express terms of that provision.
The defendants, the Alien Property Custodian and the Treasurer
of the United States appeared generally. They moved to dismiss the
bill on the grounds (1) that it appeared affirmatively therefrom
that no debt was owing to the plaintiffs from any enemy whose
property had been seized and was then held, (2) that it appeared
affirmatively that no debt was owing to the plaintiffs by Z.E.G.,
and (3) that the plaintiffs had not stated facts sufficient to
entitle them to equitable relief under the provisions of the Act.
The defendants also answered denying knowledge as to the averments
of the bill which set forth the citizenship and residence of the
plaintiffs and Sielcken and the locus of the partnership, and those
concerning the transactions said to have given rise to the debt. As
an affirmative defense, it was alleged that there were prior claims
to the seized property of Z.E.G. The latter, being joined as
defendant, also answered putting in issue allegations relating to
the claim and setting up various affirmative defenses. One of these
asserted that plaintiffs did not have title to the cause of action,
since the Alien Property Custodian was alleged to have seized the
assets of Crossman & Sielcken as an enemy firm because Sielcken
resided in Germany and became an enemy. Other defenses of Z.E.G.
averred that the partnership of Crossman & Sielcken had been
dissolved through the outbreak of the war, and that the claim
thereupon had passed to Sielcken, and, upon his death, to his
German executors, who had entered into an arbitration agreement
with Z.E.G., and that the arbitrators had found no liability on its
On the trial at the close of the evidence on both sides,
defendants moved to dismiss upon the ground that plaintiffs had
failed to prove their case. The District Court denied the motions,
and held that the partnership had
Page 311 U. S. 499
not been dissolved by the outbreak of the war, and that Z.E.G.
was indebted as claimed; that the executors of Sielcken in Germany
had no authority to dispose of a partnership asset which had come
into existence long prior to our entering the war, and that
plaintiffs were entitled to a decree for the relief prayed for.
Decree was entered accordingly.
While the present motion to vacate the decree was upon the sole
ground that the court had no jurisdiction to enter it, there was
some attempt in the affidavits on the motion to show that the
decree was collusive. But, as the Circuit Court of Appeals
observed, there was no bill of review presenting such a question
and no justification for setting aside a decree upon that ground
merely upon affidavits. The Government expressly disclaims any
challenge to that ruling. As to the question of jurisdiction, the
Circuit Court of Appeals held that the District Court, upon the
trial of the suit, was obliged to resolve disputed questions of
fact, and that its decision that the jurisdictional facts were
established could not be attacked collaterally. Stoll v.
Gottlieb, 305 U. S. 165
Chicot County Drainage District v. Baxter State Bank,
308 U. S. 371
Petitioner thus states the question upon which review is asked
in this Court:
"Whether an unappealed judgment against the Alien Property
Custodian under Section 9(a) of the Trading with the Enemy Act, on
a claim to recover for a debt, may be set aside for want of
jurisdiction on the ground that the beneficial owner of the claim
sued on was an 'enemy' as defined by that Act."
Petitioner argues that the judgment was void, since it was not
authorized by the Trading with the Enemy Act, and thus the suit was
a suit against the United States to which the United States had not
consented, and over which, therefore, the District Court had no
Page 311 U. S. 500
We hold the argument untenable. There is no question here of the
sort presented in United States v. United States Fidelity &
Guaranty Co., 309 U. S. 506
want of consent to be sued or of an attempt on the part of
officials to waive the sovereign immunity. The United States had
expressly consented in Section 9(a) of the Trading with the Enemy
Act that suits might be brought by a nonenemy claimant to have his
claim against an enemy debtor satisfied out of the latter's
property held by the Alien Property Custodian. The pertinent parts
of the section are set forth in the margin. [Footnote 2
Page 311 U. S. 501
The statute provides that any person not an enemy or ally of
enemy [Footnote 3
any interest or right in the property seized or to whom any debt
may be owing by the alien enemy may sue the Custodian and
Treasurer. He may sue "to establish the interest, right, title, or
debt so claimed." The court is to determine whether his claim is
established. If the claim is "so established," the court is to
order the delivery of property or payment "to which the court shall
determine said claimant is entitled." Nothing could be clearer than
that in a suit so brought the court is to determine every issue
necessary to the establishment of the claim.
The suit in question was precisely within the terms of the Act.
It was a suit by plaintiffs Soreason and Nielsen as surviving
partners, in which they alleged their citizenship and residence in
the United States (and this does not now appear to be questioned),
to recover a debt claimed to be owing to the firm by an enemy
corporation. The allegations of the bill of complaint met the
requirements of the statute in every respect. It
Page 311 U. S. 502
set forth the plaintiffs' claim, their nonenemy status, the
transactions out of which their claim arose, and that they had
given notice of the claim as the statute required. The denials of
the answers and the affirmative defenses presented issues which the
court was competent to try. All these issues were necessarily
before the court in the performance of its statutory duty to
determine whether the plaintiffs had established their claim to the
debt. Thus, the status of the plaintiffs, of the partnership, and
of Sielcken, the deceased partner, the effect of his death, his
interest in the assets under the partnership agreement, the nature
of the transactions with Z.E.G., whether it was indebted to the
firm, and whether the surviving partners were entitled to recover
the debt -- that is, every issue which could be litigated in the
suit -- was, by the very terms of the Act, submitted to the
determination of the court.
Petitioner says that the jurisdictional point was not contested
or adjudicated at the trial. That, while the defendants claimed
that Sielcken was a resident of Germany at the time of the war,
that he owned all the capital of the partnership, and that, upon
his death it was the duty of the surviving partners to pay over to
his executor the capital, property, and business of the firm, it
was not suggested that these facts raised the jurisdictional issue.
Petitioner urges that the District Judge held that, while Sielcken
may have been an "enemy" as defined in the Act, "he did not become
an enemy within the meaning of the dissolution doctrine at least so
far as transactions occurring prior to the war were concerned."
And, to support the argument, petitioner relies upon a colloquy
between the District Judge and counsel in the course of the trial.
Respondent rejoins that, in the same colloquy, the District Judge
observed that "the partnership agreement was between American
citizens," and that it did not follow from the war and the
provisions of the Trading with the Enemy Act that Sielcken was
Page 311 U. S. 503
"an alien enemy in the sense that a national of the country with
which we are at war is an alien enemy." And the District Judge
further observed that the status of the property in question "had
become fixed prior to the war," and that it was not a consequence
of the war that the partnership was so far dissolved "as to change
the rights with respect to that property." From any point of view,
the colloquy affords no adequate basis for petitioner's contention.
We agree with the Circuit Court of Appeals that, when the dismissal
of the suit was asked by counsel for the Government on the ground
that Sielcken was an enemy under the Act, the issues thus raised
were the same as those which pertained to the so-called
"jurisdictional" question of right to sue under the Trading with
the Enemy Act.
By the provisions of that Act, the jurisdiction of the District
Court attached when the suit was brought upon the claim which the
plaintiffs as nonenemy claimants set forth. However the issues were
labeled, the court was authorized to determine them. Texas
& Pacific Ry. Co. v. Gulf, C. & S.F. Ry. Co.,
270 U. S. 266
270 U. S. 274
Stoll v. Gottlieb, supra,
p. 305 U. S. 171
And whether a particular issue was actually litigated is immaterial
in view of the necessary conclusion that there was full opportunity
to litigate it, and that it was adjudicated by the decree.
Cromwell v. County of Sac, 94 U. S.
, 94 U. S. 352
Grubb v. Public Utilities Commission, 281 U.
, 281 U. S. 479
Chicot County Drainage District v. Baxter State Bank, supra;
Sunshine Anthracite Coal Co. v. Adkins, 310 U.
, 310 U. S. 403
If the District Court had erred in dealing, or in failing to deal,
with any issue thus involved, the remedy was by appeal, and no
appeal was taken.
The judgment of the Circuit Court of Appeals is
MR. JUSTICE MURPHY took no part in the consideration and
decision of this case.
40 Stat. 411, 419, as amended, 42 Stat. 1511.
"Sec. 9(a). 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:
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 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, or, if a
corporation, where it has its principal place of business (to which
suit the Alien Property Custodian or the Treasurer of the United
States, as the case may be, shall be made a party defendant), to
establish the interest, right, title, or debt so claimed, and, if
so established, the court shall 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 the interest therein to which the
court shall determine said claimant is entitled. . . ."
Section 2 of the Trading with the Enemy Act provides:
"Sec. 2. The word 'enemy,' as used herein, shall be deemed to
mean, for the purposes of such trading and of this Act --"
"(a) Any individual, partnership, or other body of individuals,
of any nationality, resident within the territory (including that
occupied by the military and naval forces) of any nation with which
the United States is at war, or resident outside the United States
and doing business within such territory, and any corporation
incorporated within such territory of any nation with which the
United States is at war or incorporated within any country other
than the United States and doing business within such