Guessefeldt v. McGrath
Guessefeldt v. McGrath
Opinion of the Court
delivered the opinion of the Court.
This is a case brought under § 9 (a) of the Trading with the Enemy Act, 40 Stat. 411, as amended, 50 U. S. C. App. § 1 et seq.,
Accepting the allegations' as true for the purpose of dealing with the legal issues raised by the motions to dismiss, the situation before-us may be briefly stated. Guessefeldt, a German citizen, lived continuously in
The first question to be decided is whether the claimant was “resident within” the territory of a nation with which this country was at war within the meaning of §§ 2 and 9 (a) of the Trading with the Enemy Act. He was physically within the enemy’s territory. He contends, however, that the meaning conveyed by “resident within” ■is something more than mere presence; at the least a. domiciliary connotation, if not domicile, is implied. '
Legislative history leaves the meaning shrouded. Some use of the term “domicile” as the touchstone of enemy status is to be found in the Congressional hearings and reports.
Guessefeldt retained his American domicile. Moreover, if anything more than mere physical presence in enemy territory is required, it would seem clear that he was not an “enemy” within the meaning of § 2. His stay before the war, as a matter of choice, was short. The circumstances negative any desire for a permanent or long-term connection with Germany. He intended, and indeed attempted, to leave there before this country en~, tered the war. Being there under physical constraint, he is almost literally within the excepted class as authoritatively indicated by Mr. Montague. To hold that “resident within” enemy territory implies something more than mere physical presence and something less than domicile is consistent with the emanations of Congressional purpose manifested in the entire Act, and the relevant extrinsic light, including the decisions of lower' courts on this issue, which we note without specifically approving any of them. See McGrath v. Zander, 85 U. S. App. D. C. 334, 177 F. 2d 649; Josephberg v. Markham, 152 F. 2d 644; Stadtmuller v. Miller, 11 F. 2d 732; Vowinckel v. First Federal Trust Co., 10 F. 2d 19; Sarthou v. Clark, 78 F. Supp. 139.
Guessefeldt has the further obstacle of § 39 to clear before he can succeed. Congress in 1948, so the Govern-
It is clear that the Custodian can lawfully vest under § 5 a good deal more than he can hold against a § 9 (a) action. Central Union Trust Co. v. Garvan, 254 U. S. 554; Clark v. Uebersee Finanz-Korp., 332 U. S. 480. Thus Congress had to make provision for the disposal of two classes of vested property. Nonenemy property, lawfully vested under § 5, was recoverable in a suit against the Custodian. § 9 (a); see Becker Steel Co. v. Cummings, 296 U. S. 74. The second class, property owned by “enemies” and therefore not subject to recovery under § 9 (a), was reserved for disposition “[a]fter the end of the war ... as Congress shall direct.” 40 Stat. 411, 423, 50 U. S. C. App. § 12.
After both wars, Congress did adopt measures to dispose of this property. The Treaty of Berlin, 42 Stat. 1939, 1940, at the end of World War I, confirmed the possession of vested enemy property by the United States. Junkers v. Chemical Foundation, Inc., 287 F. 597; Lange v. Wingrave, 295 F. 565; Klein v. Palmer, 18 F. 2d 932. For
Section 39 was passed as part of a measure establishing a commission on the problem of compensating American prisoners of war, internees and others who suffered personal injury or property damage at the hands of World War II enemies. Congressional attention was focused on the nature and extent of these claims and methods of adjudicáting them. -The issues involved in § 39 were of peripheral concern. Réading the legislative history in this light, it lends support to the view that § 39 was conceived as dealing with property not otherwise subject to return. Senate hearings opened with detailed testimony analyzing the value of assets which would be left after payments for administration and liquidation, returns under § 32, and disbursements in satisfaction of judgments in suits brought under § 9 (a). Hearings before a Subcommittee of the Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 12-21. See also id., at 44, and Hearings before the House Committee bn Interstate and Foreign Commerce on H. R. 873, 80th Cong., 1st Sess. 264. It seems clear that the legislation looks to the disposition of this fund, and the conclusion is reinforced by the provision of the section that “The net' proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest
Thé tenor of the hearings demonstrates no purpose to change the existing scope of § 9 (a). The only reason a proviso to that effect was not included in § 39 as passed. seems to be an assumption — unwarranted in the light of other .evidence before the committees discussed below — that a national of any enemy nation had no rights under § 9 (a) in any case.
By § 39 Congress was manifesting its “firm resolve not to permit the recurrence of events which after the close of World War I led to the return of enemy property to their former owners.” H. R. Rep. No. 976, 80th Cong., 1st Sess. 2. Those events, as we have seen, culminated in the Settlement of War Claims Act of 1928 permitting enemies as defined in § 2 of the Trading with the Enemy
On the other hand, both Senate and House committees had before them testimony calling attention to the very problem now in issue. Hearings before the House Committee on Interstate and Foreign Commerce, supra, at 265; Hearings before a Subcommittee of the Senate Committee on the Judiciary, supra, at 197, 254. And one witness presented a draft substitute for the section,, complex to be sure, which would expressly have saved cases like Guessefeldt’s from the operation of the bill. Id., at 233-236. This suggestion was not acted upon by the committee. Yet taken as a whole, the testimony on this issue was meagre and unimpressive. It was largely in written form, and therefore less likely to have been seen by or to have had impact bn the committee members or to reflect their views. These considerations, taken together with the peripheral character of the problem from the committees’ point pf view, the consistent failure to appreciate the technical significance of the term “enemy, national” in the framework of the Act, and the fact that the matters raised by this testimony were not touched upon in floor debate — all go far to. overcome any presumption that the claimant’s situation was considered by Congress and rejected.
. Moreover, a decision for the Government would require us to decide debatable constitutional questions. In 1
On the other side is Mr.-Justice (then Judge) Cardoza’s careful opinion in Techt v. Hughes, 229 N. Y. 222, 128 N. E. 185, holding that a national of an enemy country, wherever resident, is an enemy alien and that any mitigation of the rigors of that status, as in the right to sue, is a matter of grace. He suggests, however, that “enemy alien” for the purpose of trade with the enemy may be something different than for other purposes, but he had, of course, no occasion to consider whether this difference attained constitutional dimensions. In Klein v. Palmer,
Certáinly, the constitutional problem is not imaginary, and the claim not frivolous which would have to be rejected to decide in the Government’s favor. Considering that confiscation is not easily to be assumed, a construction that avoids it and is not barred by a fair reading of the legislation is invited.
The concern of the Trading with the Enemy Act is with . problems at once; complicated and far-reaching in their * repercussions. Instead of á carefully matured enactment, the legislation was a makeshift patchwork. Such legis- • lation strongly counsels against literalness of application. It favors a wise latitude of construction in enforcing its purposes. Cf. Clark v. Uebersee Fihanz-Korp., 332 U. S. 480; Markham v. Cabell, 326 U. S. 404; Silesian-American Corp. v. Clark, 332 U. S. 469.
The judgment below is
• Reversed.
Sec. 2. “The word 'enemy/ as used herein, shall be deemed to mean, for the purposes of such trading and of this Aet—
“(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 territory.”
Sec. 9. “(a) Any person not an 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, . . . 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; . . . [S]aid claimant may institute a suit in equity in the District Court of the United States for 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
“Sec. 39. No property or interest therein of Germany, Japan, or any national of either such country vested in or transferred to any officer or agency of the Government at any time after December 17, 1941, pursuant to the provisions of this Act, shall be returned to former owners thereof or their successors in interest, and the United States shall not pay compensation for any such property or interest therein. The net proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest therein shall be covered into the Treasury at the earliest practicable date. Nothing in this section shall be construed to repeal or otherwise affect the operation of the provisions of section 32 of this Act or of the Philippine Property Act of 1946.”
See Statement of Hon. Robert Lansing, Secretary, of State, Hearings before the House Committee on Interstate and Foreign Commerce on H. R. 4704, 65th Cong., 1st Sess. 3, 4. But see id., at 9. Assistant Attorney General Charles Warren, principal draftsman of the bill, testified that it had no application to Germans “domiciled” in this country. Id., at 34. And the House Report speaks of enemy status as being determined “not so much ... by the nationality or allegiance of the individual, ... as by his .. . commercial domicile or residence in enemy territory. The enemy domiciled or residing in the United States is not included . . . .” H. R. Rep. No. 85, 65th Cong., 1st Sess. 2.
The validity of this construction is additionally suggested by, the explanation in the Senate report of the parallel term of § 2, “doing business within such territory.”' According to the report that meant “having a branch or agency actively conducting business within that country.” S. Rep. No. 111, 65th Cong., 1st Sess. 4. That is to say, hot “domiciled” in enemy territory by American corporation law standards, but having a substantial, not casual or transitory connection with it. See also Hearings before a Subcommittee of the Senate Committee on Commerce on H. R. 4960, 65th Cong., 1st Sess. 136-137.
H. R. Rep. No. 976, 80th Cong., 1st Sess. 2.
The Resolution of July 2, 1921, terminating the state of war .with Germany, provided that “All property of the Imperial German Government . . . and of all German nationals which . . . has . . . come into the possession or.under control of . . the United States . . . shall be retained ■. . . and no disposition thereof made, except as shall have been heretofore or specifically heteafter shall be' provided by law.” 42 Stat. 105, 106. By the Treaty bf Versailles, art. 297 (d), “all the exceptional war measures, or measures of transfer . ... shall - be considered as final and binding upon all persons.” In art. 297 (i)., Germany undertook “to compensate her nationals in respect of the, sale or retention of their property, rights or interests in Allied’or Associated States.” The Treaty of Berlin, 42 Stat. 1939, 1940, incorporated these provisions of the Versailles Treaty, together with appendices' defining “exceptional war measures” and cutting off the right of suit by German nationals against American officials on account’ of wartime action. An agreement of August 10, 1922, 42 Stat. 2200, established a- Mixed tílaims Commission to adjudicate claims of American nationals against Germany. Provisions for the return of ■ vested property were made by successive amendments to § 9. Finally, in the Settlement of War Claims Act, 45 Stat. 254, 270, Congress provided for the return of 80% of their vested property to German enemies who would waive their claims to the remaining 20%. Germany in a debt funding agreement of June 23, 1930, deposited bonds with the United States, payments on which were to. be applied to the settlement of awards of the Mixed Claims Commission. When Germany defaulted on these payments, Congress, by Public Resolution No. 53 of June 27, 1934; 48 Stat. 1267, suspended all deliveries of property under the Settlement of War Claims Act to German nationals until Germany should clear up the arrears.
As it passed the House, the bill contained a provision suspending the payment out of vested assets of debts owed by enemies to citizens. In the Senate hearings, Representative Beckworth, who had sponsored that provision, urged the Senate to go further and suspend the payment of so-called “title claims” as well. He presented a draft amendment for the Senate committee’s consideration which provided that “no property . . . shall be returned to former owners- -. . . except as directed by a court under § 9 (a) of the act.” This was to be an addition to the provision which became § 30. Hearings before a Subcommittee of the Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 124. Both of these provisions were ■ omitted from’ the bill reported by the Senate. Although this bit of legislative history reveals a certain amount of confusion about the operation of the Act, it is tolerably clear from it that the operation of § 9 (a) was not intended to be affected by the legislation.
Other than those, here for review, six district court cases have in volved construction of § 39. The Government contends that five of • these' have accepted' the position it urges in- this case. Schill v. McGrath, 89 F. Supp. 339; Lippmann v. McGrath, 94 F. Supp. 1016; Bellman v. Clark, Civ. No. 47-229 (S. D. N. Y. Nov. 8, 1948); Mittler v. McGrath, Civ. No. 3276-48 (D. D. C. Mar. 31, 1950); Janner v. McGrath, Civ. No. 3685-49 (D. D. C. Mar. 31, 1950). Even if this were true, it .would present no such-settled'liffe of adjudication^ -to give pause to this'Court in upsetting it. But at least three of these cases present no conflict with a decision .in favor: of theclaimant here. In Mittler, Janner and Lippman, plaintiffs are enemies within § 2,
Dissenting Opinion
with whom Mr. Justice Reed and Mr. Justice Minton join, dissenting.
I dissent because I would read Section 39 as it is written. That Section plainly forbids return of vested property to “any national” of Germany or Japan.
The term “national” has also been given legislative definition. “National” is defined as including “a subject, citizen or resident of a foreign country” in Executive Order No. 8389,
Just the other day, we held that “[w]e are not free, under the guise of construction, to amend [a] statute” by reading “carefully distinguished and separately defined ; terms to mean the same thing.” Pillsbury v. United Engineering Co., 342 U. S. 197, 199-200 (1952). In departing from that standard in this case, the Court rewrites Section 39 so that the Trading with the Enemy Act of 1917, as amended, will conform more closely to its own notions of statutory symmetry. Condemning that Act as
In my view, this case should be decided on the basis of the legislatively defined language of Section 39. But the Court has broadened the inquiry. • Even on the Court’s own basis, the result in this case cannot be squared with the historyr of the Trading with the Enemy Act, the legislative background of Section 39 or the scope of Congress’ war power over enemy property.
At the outset, it should be clearly understood that when petitioner’s property was vested, he was an alien enemy ,in every ordinary sense of 'that term. So long as his citizenship was German, he became an enemy upon the declaration of war with Germany, wherever his-residence and whatever his personal sentiments. This Court has so held throughout its history.
When, in 1917, Congress defined the term “enemy” solely “for the purposes of” the Trading with the Enemy Act, it was aware that such status was ordinarily deters mined by “nationality or allegiance of the individual” rather than by “domicile or residence.”
World War II legislation over alien property Represented a complete reversal of the soft policy of World War I. In 1941, Congress extended the power of seizure and vesting to all property of “any foreign country or national thereof” in exercising its war power “to affirmatively compel the use and application of foreign property
“The policy of nonreturn and noncompensation is a sound public policy which should be enacted into law. . It does not violate any concepts of international law or international morality. No essential difference exists between private property and public property in the case of Germany and Japan. For several years before World War II while Germany and Japan were preparing to make war upon the United States, property owned in the United States by the citizens of both of these countries was subject to rigid control of their respective governments. While the fiction of private ownership was1 retained, actually, property'.of German and Japanese nationals in the United States was widely used to accomplish the national objectives of those countries.
“The position of Germany and Japan (with respect to war claims against these countries) is somewhat*325 analogous to that of a bankrupt against whom claims are apt to be filed in an amount greatly in excess of the bankrupt’s assets. The legitimate claims of the United States alone, on account of the expense incurred in fighting World War II, will most likely exceed many times the assets available for payment even over a considerable period of years. Under' these circumstances it is therefore not only expedient but just and fair for the United States to marshal all Japanese, and German assets which are available in this country.”12
Under this reversal of World War I policy, the property of German nationals, including petitioner’s, was to be retained to satisfy war claims arising out of German aggression. The policy of non-return of vested property to German nationals restricts the scope of Section 9 (a) as to . returns to German'nationals such as petitioner who are not “enemies” as defined in Section .2 (a). The primary purpose of Section 9 (a) — to provide for judicial return of property mistakenly seized from American citizens or nationals of friendly countries — is preserved.
The Court closes with the statement that its construction of Section 39 avoids a constitutional problem which, it says, “is not imaginary.” As discussed above, it is settled that petitioner is an alien enemy in every sense of the word but the purposely restrictive definition of Section 2 (a) of the Trading with the Enemy Act. “There is no constitutional prohibition against confiscation of enemy properties.” United States v. Chemical Foundation, Inc., 272 U. S. 1, 11 (1926), and cases cited therein. The suggestion that the relaxed legislative definition of “enemy” in 1917 could limit the constitutional war power of Congress over enemy property finds no support in decisions of this Court.
“War' gives an equal right over persons and property: and if its declaration is not considered, as prescribing a law respecting the person 6f an enemy found in our country, neither does it prescribe a law for his property. The act concerning alien enemies, which confers on the president very great discretionary powers respecting their persons, affords a strong implication that he did not possess those powers by virtue of the declaration of war.”
Any doubts as to Congress’ “equal right over persons and property” of enemy, aliens should have vanished with the Ludecke decision. The Just Compensation Clause, like the Due Process Clause, is found in the Bill of Rights. As we said in our Ludecke decision, “it would savor of doctrinaire audacity now to find the statute offensive to some emanation of the Bill of Rights.” 335 U. S. at 171. In addition to what was said in Ludecke, the admonition of Chief Justice Marshall in Brown v. United States, supra, is appropriate in this case:
“Respecting the power of government no doubt is entertained. That war gives to the sovereign full right to take the persons and confiscate the property of the enemy wherever found, is conceded. The mitigations of this rigid rule, which the humane and*329 wise policy of modern times has introduced into practice, will more or less affect the exercise of this right, but cannot impair the right itself. That remains undiminished, and when the sovereign authority shall chuse to bring it into operation, the judicial department must give effect to its will. But until that will . shall be expressed, no power- of condemnation can exist in the Court.” 8 Cranch at 122-123.
The will of Congress'having been expressed in unmistakable terms in Section 39,1 would enforce, not frustrate, the legislative command.
“No. property or interest therein of Germany, Japan, or any national of either such country vested in or transferred to any officer or agency of -the Government at any time after December 17, 1941, pursuant to the provisions of this Act, shall be returned to former owners the.reof or their succéssors in interest, and the United States
§ 5 (E) (i), 6 Fed. Reg. 2897, 2898 (1941).
55 Stat. 838, 840 (1941).
The Rapid, 8 Cranch 155, 161 (1814); White v. Burnley, 20 How. 235, 249 (1858); The Venice, 2 Wall. 258, 274 (1865); The Benito Estenger, 176 U. S. 568, 571 (1900); Herrera v. United States, 222 U. S. 558, 569 (1912).
Alien Enemy Act of 1798, 11 Stat. 577, now 50 U. S. C. § 21. A Similar definition of “alien enemies” had also been used in the naturalizatión laws. 2 Stat. 153, 154 (1802); R. S. § 2171. In World War I,
H. R. Rep. No. 85, 65th Cong., 1st Sess. 2 (1917).
Ibid.; S. Rep. No. 111, 65th Cong., 1st Sess. 2 (1917); 55 Cong. Rec. 4842 (1917). See Ex parte Kawato, 317 U. S. 69, 76-77 (1942).
45 Stat. 254, 270-274 (1928), 50 U. S. C. App. §§ 9 (b) (12)-(14) and (16), 9 (m). Returns of German property were postponed in 1934 when it appeared that Germany was in default in the payment of war claims. 48 Stat. 1267 (1934).
55 Stat. 838, 839 (1941), 50 U. S. C. App. § 5 (b); S. Rep. No. 911, 77th Cong., 1st Sess. 2 (1941). See Clark v. Uebersee Finanz-Korp., 332 U. S. 480 (1947).
60 Stat. 50 (1946), 50 U. S. C. App. § 32 (a) (2) (D).
H. R. Rep. No. 976, 80th Cong., 1st Sess. 2 (1947).
Id., at 2-3.
Section 9 (a) was originally designed to protect American citizens, S. Rep. No. 111, 65th Cong., 1st Sess. 8 (1917), and apparently the bulk of the claims filed under § 9 (a) are those of American citizens. Hearings before Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 44 (1948).
1946 patent legislation likewise conforms to this pattern. In 1921, Congress barred claims based upon World War I use of patent rights of an “alien enemy.” 41 Stat. 1313, 1314, 35 U. S. C. § 86. In 1946, Congress barred claims for patent infringement during World
Hearings before the Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 197-198, 233-234 (1948). See also id., at 254-255, and 94 Cong. Rec. 551 (1948).
Id., at 235.
Ex parte Kawato, 317 U. S. 69 (1942), in holding that an enemy alien’s right of access to federal courts was not barred by common law or statute, did not touch upon the Constitutional power of Congress over enemy property. The extension of that power to include ' property of an American citizen resident in an enemy country, The Venus, 8 Cranch 253 (1814), hardly supports a restriction of that power in case .of petitioner, ah enemy citizen present in an enemy country.
In Silesian-American Corp. v. Clark, 332 U. S. 469, 475 (1947), the Court stated:
“There is no doubt but that under the war power [Art. I, § 8, cl. 11], as heretofore interpreted by this Court,. the United States, acting under a statute, may vest in itself the property of a .national of an enemy nation. Unquestionably to wage war successfully, the United States’ may confiscate enemy property. United States v. Chemical Foundation, 272 U. S. 1, 11.” (Emphasis added.)
In’ discussing the requirement that just compensation be paid for seizure of property of “friendly aliens,” the Court had obvious reference to the nationals of friendly nations. 332 U. S. at 475-476, 479-480.
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