# Brief for the Respondent in Opposition — Cities Service Co. v. McGrath > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386407_0095%3A6 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Respondent in Opposition - **Published:** January 1, 1952 - **Citation:** 342 U.S. 330 ## Text e -e: a “5 ' - y iz R ‘ t v . 6 . . bs (od : : . - ; . ! ‘ = : ; ¢ ; : : ; a” 7 7 « = is roe 0 - * ; ye . . 7 . » . ” ; . PY . y : . e +7 3 ; ark * 2 as - Pe. ; 7 ">? : va) & . : = a . és ; . : Seg % * : 2 pe pe a = Pa. 2 : g Px si qq : ee ey: FN wie oat 3 eo . ¥ ‘ « . Parts , : x . “ e 5 ; ' Es Bs - i p ~ : of : 4 5 - oy ‘ ; - a ; “ & i iB : n- 2 “ . : Bie rf te . : i & » * . ' ° i ‘ s ‘ x ’ o » . La e £5 é ec. pe : ‘ . . ¢ % Z . ed x #8 vi °° oe prenatal Columbia Brewing C iller, 28 rin iT 0 : vs. nie 12 0. v. Miller, 281 Fed. 289°... : ONY eased de Inver. Int. v, Inlustric! Bige Bank, 269 _ Cun gs 98 N.E. he ia tee wpa Sateedes 16° Curry v. anless, 307 U.S. 857: Se Disconte-Gesellachaft. v. United States Sag) Seen | 300 Fed. 741, affirmed, a U.S. 22 16 Finn at. Bank hg aine, 284 U.S . 812. G1 Great Northern "4 v. Sutherland, 278, U. S$. 182 12, 18 Harris v. Batk, 198 US. 216 MOTT ER SN a Er ee g Hartmann v. United States, 106 a Cl. 686, 65 | ee Supp. 397, certiofafi denied, 330 US. 842 86 Ae Palmer, 18 F. 2d 932’. Mes atstes 14 Kohn \ v. Jacob & Josef ont 264 Fed. 268° a Beaks Manufacturers bo aa 388 U8; O41 oe te 826 U it ie | RS Rouse, 276 F tie Bday Se ke. 6 v. United States, 1 Wall. 2ne % : ° \ ° Ps » ° A aN ‘, @ x _ Seber ect te Ss Ocronen TERM, 1951 ‘ : 2 Me 305 . Ne ee 3 Sg ph. ms 6 De. We or Rare Crrtes Ranwecss Comteany, AND Tue CHASE Na ATIONAL. _ BANK.oF THE City or New York, PETITIONERS “ar | EP f Hives McGratu, ATTORNEY Guwenar, AS Successor TO THE ALIEN PROPERTY CusTopIAN : @ 2 —_ ¢ YON PETITION FOR A’ WRIT OF ‘certiorari TO THE . UNITED STATES COURT OF APPEALS FOR THE : SECOND ciRcuIT | eo. BRIEF FOR rm nEePONDENT IN OPPOSITION’ ‘oD | z “OPENIONS' BELOW ae | The opinion. of the United States District Court ane for the Southern District of New York, ,CR. 43) ‘is reported at 93 F. Supp. 408. The opinion of the. ‘United States Court of. Appeals for the Second Cireuit (R. 55) is reported at 189 F 2a 744, JURISDICTION o° The is of the Court of Appeals was | entered on June 13, 1951 (R- (it.-62). The petition for a writ of’ certiorari was filed on September 8, 1951. The jurisdiction -of this Court ‘is # Invoked | _iinder 28 U.S.C. rispae eg fA coe ah ee f5 1 : ‘D : eA ° » o Js 9 5 & : ¢ ° o 5 : \ * e ‘ & ee pee ae STATUTE INVOLVED _ a ‘ithe’ statute here involved is the Trading with | ‘te Enemy Act, 40 Stat. 411, as amended, 50 U‘S.C. App. §§1-40. Petitioners have set forth in the Appendix to their Petition, Sections 5(b), .7(e) | ‘and 9(a) of the Act. Otherertinent provisions — = care Section’ 7(a), (b), (e), 9(n) and 40, which. are set forth in the Appendix hereto, at pp. 18-21. | QUESTIONS PRI , an 1, Whether the. provisions of the Trading with the Enemy Act which authorize the vesting of ‘‘any : property or interest’, including ‘‘choses iri action and rights and claims of denen Y and de- scription’’, confer the right to enforc@an obliga- : tion of a domestic corporation evidenced by a nego- tiable bearer bond not itself seized. yea "2, Where the Custodian has vested an obligation. _- determined to be enemy owned, is the certain avail- - ability of a remedy to protect the American obligor — - . from the’ consequence of a foreign ¢ourt’s possible _ _ refusal to recognize. the’ seizure necessary to the. : constitutional validity of the Custodian’s action. _ = On March 11, 1949, the respondent, ‘as successor to the Alien Property -Custodian,’ issued Vesting * Order No. 12960, 14 FR. 1405 (R. 8-10). ' By that: ____* By Exeeutive Order No. 9788 (11 F:R- 11981, October 14, _.., 1946), thes Attorney General succeeded to the powers and * duties of the ‘Alien Property >Custodian. In this brief, the - ~ term ‘‘Custodian’’ wilt be used, as the context may require, . to refer either to the Alien Property Custodian or to the _ + Attorney General as his successor. 3 . o. ¢ . | oe e % : Order, he vested in himself the debts or“obligations _ evidenced by three Cities Service Company 5% * - Gold Debenture Bearer Bonds of $1,000 face value pach, upon findings that the obligations were owned - hy, or owing to, a named resident of Germany and | national of a designated enemy country. The Order ' further identified the bonds. as bearing serial num- . - bers.M 23293, M 23318 and M 7029 (R. 8-9). -A_ copy of the Order was served on the Company ~ (R. 11) and, by subsequent letters, the Company | » Was directed to caneel two of the bonds which had: ' been called for redemption, and_to issue in lien : - thereof its check representing the proceeds~f re- demption with accrued. interest. The Company _. "Was also directed to cancel the third bond ‘and to . issu®in lieu thereof a new] ond and to have affixed > * thereto.the number of coupons which had not been.” presented for payment. (R, 13-20, ) ‘y Orie of the bonds (M 23293) had been paid prior to the issuance of the vesting order, and, with _re- spect to this one, the Custodian withdrew,his claim. (R. 32). Neither of the two bonds remaining if issue -s, is i the ‘possession:or contiol of the Custodian. "tie (M 7029) is apparently in possession of Domi-- . nick & Dominick, a brokerage firm in New York - - City.. The presént location of the other (M 23318) * is unknown. The bonds were ‘reported to have ~ been-in Berlin prior to the issuance of the vesting | order.: (R. 32-33) ~ The ‘indentures under which 3 the bonds weye 9 . issued designated tlie Chase. National Bank of the City of New York as trustée and paying agent (R., 9 , v es 4 ~. Ror ’ . fe ES 25). Upon the Company’s failure to comply with. the Custodian’s demand, the Custodian instituted the present action under Section 17 of the Trading with the Enémy Act (40 Stat. 425, 50 U.S.C. App. 17), in’which the Bank was joined as defendant, - seeking payment of the obligations or the issuance — of new bonds (R. 3-7). Each party moved for. summary judgment (R. 37, 39, 41). The District ~ Court held that the location of the bonds outside — the United States placed the obligations they rep- ge resented beyond the reach of the Custodian’s au- __ thority on the ground that the obligations have no ‘ existence apart from the bonds (R. 47-48). Ace cordingly, it granted the petitioners’ motions for summary judgment (R. 49-50). os ea Noe es _. . The Court. of Appeals . reversed-and directed o ‘summary judgment: for the respondent (R. 62). _ The court held that the Trading with the Enemy | Act granted the power to reach obligations of an 3 American debtor evidenced ‘‘by bonds outside the — country, as well ds any of other alien held choses in _ action” (R. 58). It further held that the power of the United States to do.so is not affected by the physical location. outside the United States of __ the bond, so long as the obligor is present in this - -. Country. The Court ‘of Appeals also indicated _ that the petitioners will have a claim against the _ government in the event that a foreign court refuses - . _ to recognize payment to the respondent asadefense — and enters judgment against them in a suit, by. the bondholder. The court assumed “for argument _ | that, if it were true that [petitioners] remain ex- 5 posed to such a recovery, and will have no conse- _ quent ciaim against the Treasury for-recoupment, a judgment against them will ‘take’ their property without-compensation in. violation of the Fifth _ Amendment’’ (R.59). Since the court was satis- fied that petitioners would have a claim, it did not - reach the constitutional question which it assumed ~ the absence of a claim would raise. oe lL. The court below held that the obligation : of a domestic. corporation to.an enemy national may ae 7 be vested under the provisions of the Trading with the Enemy Act, notwithstanding that it is evidenced by a negotiable bearer bond not itself seized: This holding is in accordance with the comprehensive language of the Act and its purpose, repeatedly acknowledged-by this and other courts, to reduce to possession all property from which the enemy could — } draw advantage. « raf Rous —— ae _ Seetion 5(b) of the Act, as amended by Title. IIT of the First War Powers Act of 1941, in broad terms confers the authority to vest “any property or interest of any foreign country or national there- _ of * * *.” Section 7(¢) more explicitly provides | that ‘If the President shall so require any money | or other property including * * * choses in action, ' and rights and claims of every character-and de- scription owing or belonging to * * * an enemy eet shall be * * * paid over to the * * * Custodian, or _" * * may be seized’’-by him.? As this Court has ee authority under Section 5(b) is delegated to the Custodian by Executive Order No. 9095, March 11, 1942, ~ ret rade 6 2 ’ Tepeatedly declared, these provisions are designed . _to reduce to possession all enemy property that - -- ean be reachéd so as to prevent enemy use thereof and to permit affirmative use by the United States. Propper v. Clark, 337 U.S. 472, 481, 484; Silesian- American Corp. v. Clark, 332 U.S, 469, 476 ; United States v. Chemical Foundation, 272 U.S. 1, 9-10. Unquestionably, the Aet authorizes the seizure ‘ ar”. “debts.” McGrath v. Manufacturers Trust Co., - 338 U.S, 241, 246; Propper v. Clark, 337 U.S. 472,4- And the comprehensivé statutory language and the 7 FR. 1971; as amended by Executive Order No: 9193, July a6, 1942, 7 F.R..5205, and Executive Order No. 9567, June 8, 1945, 10 F.R. 6917. 1918, id. p. 617; No. 6694, May 1, 1934, 26 C.F.R. (1st. ed. 1939) § 4.1; No, 8136, May 15, 1939, 4 F.R. 2044; No. 9142, April 21, 1942, 7 F.R. 2985; No, 9788, October 14, 1946, 11 F.R. 11981, | Noy LAE wees eee | That the Custodian, ‘‘in taking over the administration of the Trading-with the Enemy Act, is entitled to the full seope ef its permanent provisions whether found in Section 5(b) *.* * or elsewhere” is not open to question. Markham vy, Cabell, 326 U.S. 404, 423-424 (eoneurring opinion). * To the same effect : Mutzenbecher y. Ballard; 16 F. 24 172 (S.D.N.Y.), affirmed, 16 F. 2d 174 (C.A. 2); Rumely v. United ' States, 293 Fed. 532, 548 (C.A. 2), certiorari denied, 263 ‘U.S. 713; American Exch. Nat. Bank. Vv. Garvan, 273 Fed. 43 (C.A. 2), affirmed sub nom. Simon v. American Exchange Nat. - Bank, 260 U.S: 706; Miller vy. Rouse, 276 Fed. 715 “(S.D.N.Y,); Kohn v.. Jacob & Josef Kohn, 264 Fed. 253 Brak (tS 8 oe take bee Wiis: , seheme of Section 7 leave no doubt of a legislative ) purpose to. include all debts, however evidenced. _ Thus, Section 7(a) requires any person ‘indebted In any way” to an.enemy-to report’ the fact to the Custodian. Section 7(b),: which ‘was aimed at transfers to neutrals by enemy obligees, declares ~ that the transferee shall have no right or remedy _ against the. obligor by virtue “of any assignment, — indorsement, or delivery to him of any debt, bill, note, or other obligation or chose in action bye. an enemy.’’ Section 7(c) as already noted, au- thorizes seizure of “any * * * property including - * * * choses in action, and rights and claims of every character and description.” - Section 7 (e), | , dealing with the discharge of the obligation. paid’ over to the Custodian, provides that the Custodian “shall, in case of payment to * * * [him] of any . debt or obligation-owed to an enemy * * * deliver “up any notes, bonds, or other evidences of indebted- _ ness’ or obligation * * * that. may haye eome into _ [his] possession * * *,” _ The -authority. conferred by Section 7 (e) to "reach a bonded indebtedness without seizure of _ the bond itself is explicitly reaffirmed by the pro- - Visions of Section 9(n) of the Act. 45 Stat. 272, t 50 U:S.C. App. $(n). That Section was added ee | 1928 by the Settlement of War Claims Act which ze .. provided in! general for the return of 80% of all seized property. . For the cases where a stocle or bond interest had been seized without actual seizure of the-stock certificate or the bond, Section 9(n) » provided for an 80% yeturn to the current owner oe ; pee ie or 8 of the instrument.‘ By. this provision, Congress — _ In terms affirnied the Custodian’s power to seize’ - an intere.i represented by a bond irrespective of whether he had taken the actual instrument.* | There*is not a word,in any of these statutory , Provisions which would warrant attributing to ° Congress a purpose to except from the broad au- | thority thus conferred the power of the Custodian. | to seize an interest because it is represented by a . negotiable bond or because the holder of the bond. _ is not within the United States. Indeed, to impute such a purpose to Congress would be, pro tanto, * Section 9(n) provides: ; ea sae 2 . : ety ‘In the case of property consisting of stock or other interest in any corporation * * * or of bonded or other indebtedness « thereof, evidenced by certificates of stock or by bonds * * *.- where. the right, title, and interest in the property (but not | the actual certificate or bond * * *) was * * * seized by {the Custodian],’’ the current owner would be entitled to.an 80 ~~ per cent return as provided in Section 9(b). ee Sep ee _ . ‘Congressional awareness of the authority to seize stock - and bond -interests without seizure of the actual instrument is shown by Report No. 273 of the Senate Committee on Finance on H.R. 7201, 70th Cong.,, Ist Sess., p. 30, whieh ‘Subsection (n) meets the situation which -has arisen by reason of the fact. that certain corporate interests were seized ° without obtaining custody of the certificate evidencing those interests. - As @ result the certificate has been sold’ in Germany and is being dealt in daily on the German exchanges, Although » _ the committee-was convinced that it could not adopt a policy, of general recognition of assignments, it seemed imperative sot that this situation be met. Accordingly, subsection (n) pro- |. vides for the recognition of the various assignments and for payment to the present owner of the certificate. In order to prevent evasion, however, ‘it is ‘heeessary to limit the return. . irtespective of the citizenship of. the present owner, to the 80 percent. © 97 = : etgeas ~ ey s : ee = : to frustrate its eRe: aim in enacting’ t the Trad- Ss ing with the Enemy’ Act: to permit of. reduction . ““to possession by the United States in furtherance of the war effort’’ of - “any property i in this coun- 2 .try. of any alien.” ‘Silesian- American Corp. ¥ & | Clark, 332 U.S» 469, 475-476. | ee * It is, of course, true that the property of the . alien must be “‘in this.country.” ’ Ibid. -And it is ' _. submitted that the court below properly held that that. requirement was met in this: case... Of course, _° an intangible obligation to pay, whether’ evidenced . sg a bond or negotiable instrument or not, has no “‘situs”’ in the sense of location in space. See First ‘Nat. Bank v. Maine, 284 U.S. 312, 328, 332; Powell, . - The Business Situs of Credits, 98 W. Va. LQ. 89. What matters for purposes of ‘‘jurisdiction”’, as the decisions of this Court have established, is that the obligor i is here: and can be made to pay. Stand- ~ ard Oil Co. v. New Jersey/341 U.S. 428; Curry v. “ McCanless, 307 U.S. 357, 365-367; “State Taw - Oomm’n v. Aldrich, 316 U.S. 174 iuverviline First - Nat. Bank v. Maine, supra, on other grounds). In > @ real sensé, there is property here which can be effectually dealt with ‘when an obligor is here. * Harris vy. ‘Balk, 198: U.S. 215° 222-223; Chicago, _ Rock Island ete. Ry. v. Sturm, 174 US. 710,.715- . 716. Cf. Canada Southern Ry. Co. v. Gebhard, - - 109 U.S. 527. The bond itself would be substan- _ tially worthless if the United States would not | . -enforce ‘its ‘Tecognition by the obligor.* 6 The presence of the obligor has been held a sufficient basis for the attachment of a debt represented by a: siegotiable * od ie ¢ xe 6 e ° a. eee The seizure during time of ‘war of a debt evi- denced by a bond not itself. taken represents no _ new policy." It was sanctioned in the days of this . -countgy’s struggle for independence (See Ware v. Hylton, 3 Dall. 199,. 264-265) as well as by the — "Confiscation ‘Acts of 1861 and 1862 (Act of August , 6, 1861, 12 Stat..319; Act of July 17, 1862, :idem. o If the Aet confers upon the Custodian the authority ~ vest the obligations in suit, there can be ng question of his rs :power to requite cancellation of the outstanding bonds:and the aN issuance of new ones. Silesian-American Corp. vy. Clark, 332 Bec) = ~ i ean the provisions of the indentures under | Which the bonds were issued or those of the Negotiable Instra: ments Law justify the failufe to,comply with that requirement. ' “Federal officers and Federal courts are not dependént upon State legislation for power to lay hold of property.’’ Miller v. tTnited*’States, 11 Wall. 268, 297; Columbia Brewing Co. ¥, Miller, 281 Fed. 289, 291-(C.A. 5). Any ineonsistent pro- oF '___ vision of state law, such as the Negotiable Instruments Law or - ‘.- the’ Stock Transfer Act, must yield. Silesian-American Corp: _« 4v. Clark, supra; Gt. Northern Ry. v. Sutherland, 273 U.S. 182: Central Hanover Bk: & Trust Co. v. Markham, 68 F. Supp. ~. > Congress has ‘done everything within its me - 829, 831-882 (S.D.NY.), | ne > ‘tiable inggrument - 3 - as" es : c . . . é o : id ~) . . ogy to immunize ‘petitioners from’ the risk of £ being held liable a second time.- - Sections 5(b) (2) and. 7( e) of the Trading with the Enemy Act exonerate “, frori liabitity anf person turning over property’ or otherwise’ acting in compliance with .any ‘re- -quirement made ‘pursuant to the Act. Under sueh circumstances, it ‘is submitted that euforcement of . - petitioners’ obligations is’ not to. be frustrated Bees their fears that a foreign court may deny effect ee ve these exculpatory provisions,’° ” Sy - ee ~The very reach of. petitioners” constitutional ca argument suggests its infirmity. For possibilities of. double liability such as petitioners envisage are not peculiar to eal this, ihvolving a nego- : tendered ag, reason for holding . the Trading with the Enemy Act invalid in every instance in which suit ig brought to Rergsaake bailee, trustee, agent or obligor to comply awit? a vesting order, if the — defendant or his property might come within the — = jurisdiction of a foreign court.. If an ‘assurance _of non-liability abroad—an. assurance Congress cannot grant—were ° essential to the validity of seizures under the Act, one would suppose that in the course of the long history of alien property e 10 There i is no question but. That these provisions edeitaty "protec. the petitioners against suit in any court of the United . States hy’a holder of these bends. Silesian-American Corp. v. Clark, 332 U.S. 469 ;-Gt. Northern Ry: v. Sutherland, 273_U.8.. 182; American Bach. Natl.’ Bank. v. Garvan, 273 Fed. 43, 47 (CLA. 2), affirmed sub nom: Gunes v. American Exch. Nat. Bank, 260 U.S. 106 y held abroad. . No reason’ is #pparent why sueh possibilities could not be a rag ee 14, _ seizures, that point would have been made and « Congress put to the choice of providing. recourse a _ for-one who might twiee be'held liable or foregoing + ‘seizures as a’ weapon of economic warfare. arene b * The Constitution forced no such choice upon the —- Congress. This Court has held, in very:similar —_; circumstances, that whethey provision should. be. _ ‘made fer relief against foxeign liability is a ques- tion for decision by Congress, and that the absence. . Of such provision is no bar to enforcement: of;a 7 -: fedeyal statute. In Railroad Co. v. Collector, 100- -, _ "U.S. 595, an early farm of “withholding tax” on _ interest or dividends was upheld again’t the objec: — tion that the “company might not -be protected abroad, The Court, in an opinion by. Mr. Justice . Miller, said (100 U.S. at 598-599): SATE | Whether, as a question of international. coud ee this declaration would relieve the corporation. . froy the obligation to pay its foreign bond- holder the full sum for whieh it contracted, | _ We‘need not discuss ;-for this court, on all such. _ Subjects, is bound by the legislative and politi- cal departments of its own government. .* * *> - being lawfully assessed and paid, it gannot be — recovered back by reason of any inefficiency or at ethical objection to the remedy over against. thebondhoMder, = = 2 7 i _. The fact that, following ‘World - War I,*suits: “by former enemy nationals in the courts of their own country or elsewhere for seizures by the-Cus- - todian were outlawed by the Treaty-of- Berlin,” a, ‘142 Stat. 1939, 1948.5 See United States v. Chemical =. Foundation, 272 U.S. 1, 11; Klein v. Palmer, #8 F. 2d 932 — ~ (CA. 8). — : Beene ea vat wT 4. . ys e @ > 5 s . 4 + : : ~ be 2 a ae Soe 2 15° . aks to confirm, this Court’ s apparent belief, ex- pressed in Ratlroad Co. v. Collector, supra, that: athe problem of potential foreign liability should be - ‘resolved in the diplomatic sphere and-not in terms of constitufional law. , This view would seem to be . Implicit also in Section 40 of the Trading with the - _ | 7 : Enemy Act (Act of Sept. 28, 1950, c. 1094, 64 Stat. 1079, 50 U.S. C. App., Supp. IV 40 infra, p: 21), which, authorizes the negotiation: of agreements to settle ‘‘inter sttstodial conflicts’? concerning enemy: > property. The Brussels Agreemefit, to which the . United States. ahd five other countries are parties and the signing of which was aiithorized by Section ‘40, attempts to resolve such questions as may arise” when, for example, the United States vests_ the obligation evidenced by a bond of American i issue -and France seizes the bond itself. “Article 1 of | the Annex to the Agreement relates to securities, — : including bonds, and provides that the country in which the security was issued. shall be entitled to ‘retain the underlyipg obligation as against the st i sountry in which the paper is-focated.” It should be noted, moreover, that the foreign ae diability of the petitioners is hypothétical and may never inaterialize.. The bonds in question are pay- 4 able i in the United States: (see p. 2" of each inden- ture), and foreign courts may hold. that. the. bonds were intended to be governed by our law. See the — ae 12 The’ text of. the iat is set ‘forth | in State Dépt. Bull., Jan. 4, 1948, Vol. 18, No. 444, p. 6; Arti@e I of ‘the ~ Annex appears on page 7. For ‘announcement of the going . ‘into effect of the Agreement, see State Dept. Bull., Feb. 19, 1951, Vol. 24, No. 607, p. oct . ° e « > j-* ‘am Oak Fie Cie é foreign “gold clause” soo a ‘ . £4 pania de Inver. Int. vy. In dpeisone discussed in Com- dustrial Mtge. Bank, 269, , _ N.Y."22, 198 N-E. 617; to the samé effect, Hart- xe mann VB nited States, 106 Ct. CL 686,65 F; Supp. ~ 397, certiorari denied,.330-U.S, 842, The courts of the ‘United States,. at least; have -regarded. it as - a well-settled rule of international law that the’ . courts of one country will not sit in judgment on _ the acts of the government of ano NE 3 its own territory. (Oetjen vy. Ken Fal Leather Co,, - 246 U.S. 297, 303-304; United States v.. Pink, 315 US. 208, 233; Bernstein v. Van Heyghen Freres, 163 F.2d 246 ( C.A. 22, certiorari denied, 332 U8. : ’ mines ‘sion. et Ee _ #172), and have applied that rule in cases of foreign reorganizations of corporations (Canada Southern Ry. Co. v. Gebhard, 109 U.S; 527, 536) and foreign. '. Seizures under a statute equivalent to the Trading -. With‘ the dinemy Act. Disconto-Gesellschaft v. United States Steel’ Corporgtion, 300 Fed, 741 . (S.D.N.Y.), affirmed, 267 U.8.:29, : Thus it appears not only that petitioners have, as - Yet, nof been subjested to a second liability abroad but that they may never be. If there is-no second : liability, * ableif sue _ "In their statement of the questions Sree nied (Pet. 5-6): : petitioners suggest that the vesting of foreign sagen e deprive ‘a non-enemy bondholder of his property’ with y . Notice or opportunity. to be heard. Whatever rights the bond. ~~ = ae holder may have, clearly petitioners Have no’ standing vicar- . lously to assert them, Silesian U.S. 469, 474, eu) -American Corp. v. Clark, 382° - _ EN ae ? ' & x er done within _ s mod aU § . The court bedi correctly eversed the decision of the district court denying\ thé Custodian the relief sought. There is no conflict of decisions. The _ "+ petition should be denied. (Ae pane. SoG _-Respeetfully submitted, | s | Puiup B. PERLMAN, Nisa : ' - Solicitor General. Nes / Harorp I, Baynvon, - oe : Assistant Attorney General. .- o° \ °° +) Sranuey M. SILVERBERG, \ Special Assistant to | - the Attorney’ General. Ri _ Georae B. SEARLS, — ae __ Irwin A. Sepa, = i, ee ae Ce Attorneys. ve OcToBER 1951. -© ' s? i ¢ oes 3 a “© ‘ a + 5 ; A S : \ ee ere 8k - Trading ‘with the Enemy: Act, ¢..166, 40 Stat. - -_ 411,_as amended, 50°U.S.C. App. 1, et eq.: | Se MR res pee RIES oo : We | An} person in the United sie whoholds =: 4 . OY has*6x shall hold 6r have stody.orcon- ~~ a _ trol of any property beneficial or otherwise, - ~~. alon@ or jointly with others, of, for, or on - behalf of an enemy or ally 6f enemy, or of aA any person whom he may. have Yeasonable : | ‘cause to believe to. be ‘an énemy or.ally of , eee ' enemy and any person in the United States | > *..wh6. is or shall be indebted in vp eig a an enemy or ally of enemy, or to any person _% whom he may have reasonable cause tohe- __ - lieve to be an enemy or ally of enemy, shall, °° « y . “with stich exceptions and under such rules. = - _ and regulations as the P?sident shall pre- «. ~ '. ° seribe, and within thirty days after the pas- © 8 ~" sage of this Act, or within thirty. days after ~-- - - Such property. shall come within his eustody _ / .. or control, or after.such debt shall become due, report the fact tg the Alien Property Custodian by written statement under vath containing such particulars as: said cus-_- “Sey todian shall require. * ** ° | Lage Se Dan aay Vera es (b). Nothing in this Act contained shall ' render valid or legal, or be.econstrued to . - Tecognize as valid or legal, any act or trans- , »_-action constituting trade with, to, from, for. ° - or-on account of, or on behalf or for the: _ benefit of an enemy performed or engaged * ~~. in sinee the-beginning of the war and prior _to the passage’ of this Act or any such act or transactién hereafter performed or ‘en- ‘ ah ta ae eT Tk 4, LARD ia 7 money or other property, in violation of _ section three hereof, made after the passage of this Act and not under license as herein _ providéd shall confer or create any right or - : - vdtnedy in gespect thereof; and no. person s 2 shall by virtue of any assignment, indorse- | _ ment, or delivery to him of any debt, bill, ~~~ gneote, or other obligation or. chose ‘Yh action by, from, or on behalf of: or-on account of, or for, the bénefit of an enemy or ally of | y res R : ‘ enemy have any right or remedy: against , .the debtor, obligor, or other person liable to- ‘pay, fulfill, qr perform the same unless said assignment, Indorsement, or delivery was ‘made prior to the beginning of the Kar or _ + Shall be iaade under license as herein ‘pro- vided, or unless, if made after the beginning . of the War and prior to the date of passage of this Act, the person to whom the samé was . - made shall prove lack‘of knowlédge and of | - _ Teasonable cause to believe 6n his part that~, : _ the same was madé.by, from oron behalf of, _ or on account-of, or -for the benefit of an enemy or ally of enemy; and any person who knowingly pays,. discharges; -or satis... fies any such debt, note, bill, or other obliga- ' tion or chose in action shall, on conviction thereof, be deemed to violate section three {MM TR Gira On eA kos ty - Pi? a) * ae Be Shree -{e) No person shall be held liable in any court for or fh respect to anything done or.@ 20 omitted in pursuance of any order, rule, or regulation made by the President ander the authority of this Act. .: me Any. payment, conveyance, transfer, as- _ signment, or delivery of money or property made to the Alien Property Custodian here- under shall be a fvll acquittance and: dis- charge for all purposes of the obligation of the person making the same to the extent of same. The Alien Property Custodian and _ such other persons as the President may . - appoint. shall have. power to execute, ac- __ knowledge, and deliver any such: instrument -or instruments as may be necessary or prop- __/ex to evidence upon the record or ctherwise . / such aquittance and discharge, and shall, in _ case of payment to the Alien. Property Cus- . todian of any debt or obligation owed to an enemy or ally of enemy, deliver up any notes, —/. ‘bonds, or other evidences of indebtedness or- / | obligation, or any security therefor in which such enemy or ally of enemy had any right or interest that may have come into the: possession of the Alien Property Custodian, . with like effect as if he or they, respectively, . were duly appointed by the enemy orally of ; enemy, creditor, or obligee. | / : SEc. 9. ° be if “4 ; ; ‘ * * * . om Sd (n) ‘In the case of property consisting of . ° stock or other interest in any corporation,’ . association, co y, or trust, or of bonded. - . ov other indebtedness thereof, evidenced. by_ certificates of stock or by bonds or by other /eertificates of interest therein or indebted- ~~ ‘ress thereof, dr consisting cf dividends or _ i i OO eh eee NEA 6 RG Menten Peep oc: ae See we: property * We 7 21 _ ‘ interest or other accruals thereon, where the — right, title, and -interest in the property (but not the actual certificate or bond ‘or _ other certtficate of interest'or indebtedness) — - was conveyed, transferred, assigned, de- livered, or paid to the Atien Property Cus- _ todian, or seizéd by him, if the President ‘determines that the owner thereof or of any interest therein has acquired such ‘owner- - ship by assignment, transfer, or sale of such - Certificate or bond or other certificate of in-- terest or indebtedness, (it being the intent’ of this subsection that such assignment, - ‘transfer; or sale shall not be deemed ‘invalid . . hereunder by Yeason of such conveyance, °° transfer, assignment, delivery, or payment to the Alien Property Custodian or seizure by him) and that the written consent pro- vided for in. subsection (m) has been filed, then the President may make in respect of _ .such property an order of the same charac- — ter, upon the same conditions, and with the’ same effect, as in cases provided for in sub- section (b), including the ber ‘fits of sub- . '. section (c). / | Sec. 40 [50 U.S. C. App., Supp TV, 40]. The President, or such officer or agency as he may designate, is authorized to conclude and give effect to agreements to further the . ~ amicable and expeditious settlement of intercustodial conflicts involving enemy - : . - ‘ / y A: ? ° \ : nthe: - %0U/&. ‘Government Printing Omce, 1951 J3960807/280 i /, ea ° —_— F —— . / 7 A ~ --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386407_0095%3A6. Public record. Not legal advice.