Cities Service Co. v. McGrath,
342 U.S. 330 (1952)

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U.S. Supreme Court

Cities Service Co. v. McGrath, 342 U.S. 330 (1952)

Cities Service Co. v. McGrath

No. 305

Argued January 2-3, 1952

Decided January 28, 1952

342 U.S. 330


1. The Trading with the Enemy Act authorizes the vesting of obligations evidenced by negotiable debentures payable to bearer, the obligors of which are within the United States, even though the debentures themselves are not in the possession of the Custodian and are outside the United States. Pp. 342 U. S. 331-334.

(a) Such obligations are "within the United States" within the meaning of the Executive Order authorizing, pursuant to the Act, the vesting of property "within the United States." P. 332, n 6, pp. 333-334.

2. It is within the constitutional power of Congress to authorize the Custodian to seize an interest represented by a bond or debenture without seizing the instrument itself where the obligor of the bond or debenture is within the United States. P. 342 U. S. 334.

3. American obligors who are compelled, under the Trading with the Enemy Act, to make payment to the Custodian on negotiable debentures, payable to bearer, located outside the United States, will be entitled under the Fifth Amendment to "just compensation" to the extent of any double liability to which they may be subjected in the event a foreign court holds them liable to a holder in due course, and such cause of action will accrue when, as, and if a foreign court compels them to make payment to a holder in due course. Pp. 342 U. S. 334-336.

189 F.2d 744 affirmed.

Page 342 U. S. 331

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