Brownell v. Chase National Bank of New York

PETITIONER:Brownell
RESPONDENT:Chase National Bank of New York
LOCATION:The United States District Court for the Western District of Texas

DOCKET NO.: 24
DECIDED BY: Warren Court (1956-1957)
LOWER COURT:

CITATION: 352 US 36 (1956)
ARGUED: Oct 16, 1956 / Oct 17, 1956
DECIDED: Nov 19, 1956

Facts of the case

Question

  • Oral Argument – October 17, 1956
  • Audio Transcription for Oral Argument – October 17, 1956 in Brownell v. Chase National Bank of New York

    Audio Transcription for Oral Argument – October 16, 1956 in Brownell v. Chase National Bank of New York

    Earl Warren:

    Number 24, Herbert Brownell, Jr., Attorney General, versus The Chase National Bank of the City of New York.

    Mr. Searls.

    You may proceed, Mr. Searls.

    George B. Searls:

    May it please the Court.

    This case results from the refusal of the Supreme Court of the State of New York to order delivery to the Attorney General of property which the Attorney General, as successor to the Alien Property Custodian, had vested under the Trading with the Enemy Act.

    The questions presented turn on the provisions of a trust indenture.

    On the provisions of a judgment entered in an earlier suit in 1948, as well as upon the judgment which is under review here.

    The property is held by the respondent Chase Bank under an indenture which was executed in 1928.

    The real settlor on the trust was the respondent Bruno Reinicke, although one Cobb was the nominal settlor.

    The trust is spendthrift trust for the primary benefit of Reinicke’s children.

    And after the death of Reinicke and his wife, the property is to be divided equally among the children as they reach certain ages with provision for their children taking the share of any child who dies before the time of distribution.

    Except as otherwise directed, the trustee is to accumulate the income for the lives of Reinicke and his wife.

    But the indenture gave Reinicke authority to direct the payment of the income either to the children or to himself or to someone else for the benefit of the children.

    Also, if he notified the respondent, the bank that he had returned to the United States and was intended to become a resident, then he could direct the trustee to pay him personally half of the income.

    In addition, he had extensive powers of supervision over the management of the trust and over trust policy.

    Now, in 1945, the then Alien Property Custodian issued a vesting order number 4551 which is in the record at pages 67 to 72, in which he found that Reinicke, his wife and his children and a number of other people names were nationals of a designated enemy country, Germany.

    And by that order, he vested, “All right, title, interest or claim — and claim of each of the persons named and into the trust.”

    Acting on that vesting order, the Alien Property Custodian and later the Attorney General as his successor intervened in a suit for instructions which the trustee had brought in the Supreme Court of the State of New York.

    And on the basis of the vesting order, the Government asked that the state court order the trustee to pay over the income to the Attorney General that an order also be made that the trustee deliver on the termination of the trust, the shares of the persons whose interest had been vested and also for a determination that by reason of the vesting order, he had succeeded to certain powers.

    The Attorney General had succeeded the certain powers over the trust.

    The judgment went against the Attorney General.

    It was entered on January 30th, 1948 and is in the record beginning at page 211.

    The court held that the Attorney General had not succeeded to Reinicke’s powers over the management of the trust or to his powers to direct the payment of income.

    And that he was not entitled to receive the income.

    As to those powers which had been subject to — as to the powers which Reinicke had had to control the management and conduct of the trust, the court held that the trustee was authorized to administer the trust in his discretion for such period as Reinicke’s powers should be subject to governmental control in the form of barking or other controls either in this country or in Germany.

    On appeal, the Appellate Division affirmed saying that the vesting order did not indicate an intention to appropriate fiduciary powers.

    The Court of Appeals of the State — one judge dissented.

    The Court of Appeals of the State of New York affirmed without opinion.

    That was in 1950.

    In 1953, April 6, the Attorney General amended vesting order 4551 and the amendment is in the record beginning at page 53.

    George B. Searls:

    The amendment struck out the right, title and interest vesting order and substituted what the case’s term a recent vesting order.

    That is the order stated that there is hereby vested in the Attorney General of the United States the trust property, that is the property which is described in the order as follows.

    “All property in the possession, custody or control of the respondent, Chase Bank, as trustee under the 1928 indenture.”

    Now again, that amendment in that order of April 1953, the Attorney General made findings, he found that Reinicke, his wife, the children and other persons named in the order were and had been prior to January 1, 1947 nationals of a designated enemy country, Germany.

    And he also found that the trust property was property, which is and prior to January 1, 1947 was owned or controlled by and held on behalf of or on account of those enemy nationals.

    The respondent, the Chase Bank, brought another suit for instructions in the Supreme Court of the State of New York in which it named as defendants the Attorney General, Reinicke, his wife, his children and other people who might be supposed to have some interest.

    The complaint set up the 1948 judgment and alleged that the vesting of the trust fund, that is the 1953 vesting, was illegal.

    The Attorney General answered that by the amendment, he had become entitled to the immediate possession of the property and he prayed judgment accordingly.

    His answer also stated that the only relief that could be granted against the amendment was under the Trading with the Enemy Act in a District Court of the United States.

    The relief requested by the Attorney General was denied.

    The Court wrote a rather extensive decision, which is in the record beginning I think at page 150 and the short opinion.

    The Court held that the trustee was entitled to continue, to hold and administer the property.

    It made findings that in the prior suit, the Attorney General had requested an order for delivery of the shares, which he had vested upon determination of the trust and that for a determination that he had succeeded to Reinicke’s powers.

    The Court also said that in the prior suit, the Attorney General had requested an order for the transfer of the principle on the ground that all interest in the trust had vested in him by reason of vesting order 4551.

    The Court found, and I am speaking now still of the findings from the present suit, that the 1948 judgment decided that the powers claimed by the Attorney General were not vested in him.

    It also made a finding that the respondent, infant-respondent, Hans Dietrich Schaefer is an American citizen born in 1953 and that he has a contingent interest in the trust and may become entitled to the entire fund upon its termination.

    That judgment was affirmed by the Appellate Division and the Court of Appeals of the State of New York, denied leave to appeal.

    Our position —

    Stanley Reed:

    What — what was the basis to the objection of the trustee to this second suit in 1953?

    George B. Searls:

    It’s not very clear, Your Honor.

    In the complaint, they alleged — set up a number of paragraphs to the 1948 judgment and then they say that the vesting was illegal, but they do not draw any distinct connection between the two.

    Stanley Reed:

    Did they set up the fact of the American citizen be one of the beneficiaries?

    George B. Searls:

    Yes, they alleged that also.

    They — there as they alleged that Schaefer exists and has a claim to the trust.

    Stanley Reed:

    And is it — is it the Government’s position that because it’s a trust, you can take the part of the American citizen also with the alien property control?

    George B. Searls:

    We think, Your Honor, that by the 1953 order, we took the property itself regardless of what claims there may be to it.

    Stanley Reed:

    Now, the trustee was not a German, not an — an enemy.

    George B. Searls:

    The trustee, what, Your Honor?

    Stanley Reed:

    Was not an enemy.

    George B. Searls:

    No, that’s correct.

    Stanley Reed:

    At some of the beneficiary’s word.

    George B. Searls:

    We found that frankly all of the beneficiary, there is in the order —

    Stanley Reed:

    Yes.(Voice Overlap) —

    George B. Searls:

    — where nationals are designated enemy country.

    Stanley Reed:

    It wasn’t or not?

    George B. Searls:

    Yes, or it were.

    Stanley Reed:

    It was one that was not an enemy.

    George B. Searls:

    Were enemy nationals.

    Stanley Reed:

    I know but I understood you to say that there was one beneficiary who was American citizen.

    George B. Searls:

    That is Schaefer.

    He is not mentioned in the amendment because as a matter of fact, he was born some months after the order was issued.

    Stanley Reed:

    I understood that but not before the decision was made.

    He wasn’t — wasn’t born after the decision of New York.

    George B. Searls:

    No, Your Honor.

    Stanley Reed:

    So, he was in the existence then?

    George B. Searls:

    He was in the — the decision of the 1954, he was born in August of 1953.

    Now, our position is that the Court erred in denying the order of question by the Attorney General for delivery of the property.

    In that, the 1953 order was a res vesting as that term is used in the case.

    And that by such an order, the Attorney General becomes entitled to the immediate possession of the property and that in a proceeding involving his claims of possession, his findings of enemy status and enemy ownership are conclusive.

    And that the existence of a claim to the property is no defense to such proceeding.

    That as we read it is what this Court has held in a line of cases most recently in the in Singer case, Brownell against Singer and the second Zittman case and in other cases dating back to 1921.

    And that is based, as we read the decisions, on the language of the statute itself.

    Section 7 (c) provides that if the President shall so require, property which he has determined to be enemy owned shall be transferred to the Alien Property Custodian.

    And Section 5 (b) as amended in 1941, said that any property shall vest when as and upon the terms prescribed by the President.

    As we read the opinion and decision of the New York court, it seems to have gone upon two main grounds.

    The first place, it seems to have held or felt that the 1948 judgment in some way precluded the Attorney General’s assertion of his rights in this proceeding.

    That in some way that made his rights res iudicata.

    And the second reason seems to have been the existence of the contingent claim of Schaefer to the trust.

    As to the first reason, it seems to us clear that this is not a case of res iudicata, cannot be.

    In the primary sense of that term, that is — and that the prior judgment is an absolute bar to this suit.

    George B. Searls:

    And I say that because as we read the record and the cases, a cause of action or the claim in the prior suit and the cause of action and the claim here of the Attorney General are entirely different.

    In the first suit, the Attorney General was proceeding on the basis of a right, title and interest vesting, by which he vested the rights of Bruno Reinicke and the other people mentioned.

    And he claimed that he was entitled to whatever Reinicke was entitled to as a successor in interest.

    In the two Zittman cases, this Court discussed the discussion between rights, title and interest in res vesting orders.

    And in the second Zittman case, the Court said that by a right, title and interest vesting order, the custodian puts himself in the place of the person whose interest he has vested.

    And he leaves open to judicial determination what his rights are.

    Or as Judge Hand put it in Miller against Rau, one of the early cases under the Act, a right, title and interest order substitutes the Alien Property Custodian or the beneficiary.

    And then he has to work out his rights under the will or as here under the trust indenture.

    The present suit however is a suit to enforce a res vesting order.

    The property vested by the amendment of 1953 is not the right, title and interest of Bruno Reinicke or of anyone else.

    It is the property itself, all property in the possession, custody or control of the Chase Bank under the 1928 vesting order.

    And that distinction between the two types of vesting order also goes back to a language of the statute.

    William O. Douglas:

    Isn’t there a contingent remainder here?

    George B. Searls:

    A contention of what, Your Honor?

    William O. Douglas:

    Is there a contingent remainder here that —

    George B. Searls:

    That’s right, Your Honor, Schaefer’s interest.

    William O. Douglas:

    Are you coming to that?

    George B. Searls:

    We have vested Schaefer’s interest.

    William O. Douglas:

    Oh, you have.

    George B. Searls:

    We have issued a vesting of the res itself —

    William O. Douglas:

    I misunderstood you.

    George B. Searls:

    Well, Your Honor, I would have to reconsider.

    We — I am not sure about that because there is some language in the — one of the vesting orders about —

    William O. Douglas:

    Apparently, New York —

    George B. Searls:

    — unborn —

    William O. Douglas:

    Apparently, New York court was —

    George B. Searls:

    What?

    William O. Douglas:

    — was not sure about an heir, tell — tell that you had vested that.

    George B. Searls:

    Well, I have to refer to the language of the amendment.

    What I — what had occurred to me was, there may be some language in there about unborn heirs.

    George B. Searls:

    I don’t know what the effect of that would be.

    Stanley Reed:

    Was there an amendment after the birth of the Schaefer child?

    George B. Searls:

    The only amendment is this one in 1953 which —

    Stanley Reed:

    That is before the birth of the child, as I understand.

    That is before the birth of the American —

    George B. Searls:

    That’s right.

    We have not — the language is on page 54.

    We vest the interest of Johann, Mariah, Margaret, Elizabeth Reinicke, who is Schaefer’s mother.

    His are not her interest rhyming she is named as one of the owners.

    And he would not take unless he survives his mother, otherwise that share would go to her.

    Stanley Reed:

    Is there a provision in these —

    George B. Searls:

    To the vest —

    Stanley Reed:

    — the Alien Property Custodian or has the American citizen come in and claim his rights in the fund after it’s been —

    George B. Searls:

    That’s right, Your Honor.

    That is Section 9 (a) and it was on that ground that the courts have in the past enforced these orders that there is an adequate remedy.

    I had proposed to discuss that little later when I come to Schaefer’s claim.

    William O. Douglas:

    Well, this — you — you vest also the — the interest of the children of Elizabeth, don’t you?

    George B. Searls:

    Is that on page 54, Your Honor?

    William O. Douglas:

    Just down to two lines.

    George B. Searls:

    Child or children of —

    William O. Douglas:

    I don’t think you finished the —

    George B. Searls:

    — of Bruno Reinicke.

    William O. Douglas:

    Do you vest these to their interests?

    George B. Searls:

    Well, by this order, Your Honor, because we don’t vest any person’s interest.

    We vest the property itself.

    These are merely people named as owners.

    William O. Douglas:

    Of that thing.

    Well, what — what do you vest?

    You said you weren’t sure when I asked you.

    George B. Searls:

    I said I wasn’t sure then whether Schaefer was named and I meant I wasn’t sure whether Schaefer was referred in the order because there is sometimes in these orders language about unknown heirs or unborn heirs.

    George B. Searls:

    But I don’t think there’s anything in here that would describe him.

    William J. Brennan, Jr.:

    In a 9 (a) proceeding, would there be a defense the Government could assert against a claim of this in —

    George B. Searls:

    What defense?

    William J. Brennan, Jr.:

    In a 9 (a) proceeding, could the Government assert a defense against the claim of this interest?

    George B. Searls:

    Yes, Your Honor.

    There is a question whether his interest is not so remote that it would not justify a recovery under that section.

    I propose to come to that.

    I want to created a — this claim at one point in the argument.

    Now, their res vesting order which is based on the language of the statute that the custodian may seize property or he may seize rights and — or claims.

    And that likewise, he may vest property or he may vest interest.

    And by a res vesting, as we have — as I read the decisions of the Court as I have mentioned.

    The Attorney General becomes entitled to immediate possession regardless of the validity or the quantum of the interest or rights of the person who is named as an owner.

    As the Court — this Court put it in the second Zittman case by such an order, the custodian steps into the shoes of the possessor of the property, that is with respect to the right to possession and not rather into the shoes of the beneficiaries.

    Now, by a right, title and interest vesting order, we may not be entitled possession if the person whose rights we have vested is not entitled the possession.

    I think the — another difference between the two types of order can be illustrated by the proof required in suits to enforce them.

    In a res vesting order as the courts have held, all that the custodian or the Attorney General has to show is to produce the order and possibly to identify the property or show that it’s in existence, that that’s contested.

    In a right, title and interest vesting order however, he has to prove whatever the person whose interest he has vested would have had to prove.

    He may have to prove that that person is an heir or that he’s a legatee or a beneficiary or what his rights are under a contract.

    And he show the nature and extent of the rights that he has taken.

    The Attorney General’s cause of action when he sues to enforce an order depends upon the forum of the order he has issued.

    In the absence of a vesting order, he has no right in any property, whether enemy owned or not.

    And the rights for his claim, he defines in his order.

    William O. Douglas:

    Well, I suppose if there was a trust, setting up two life estates, one to an American — to a national of this country, one to an alien enemy.

    Under your argument, would the Attorney General to have the power to take over the whole trust?

    George B. Searls:

    He would have power, Your Honor, but I — my point of that in — that has been the usual practice in a State’s matters particularly where it was claimed to be an intermixture of enemy and none in this property to issue a right, title and interest vesting order at least initially.

    And it is only in cases like the present one where that order proves fruitless or is not complied with or other action was taken.

    We only vested initially the right, title and interest to the various people named.

    And under that order, we would not have been entitled to any of the principle until after the death of Reinicke and his wife and becoming of the children to the various ages.

    But the Court in the former suit didn’t even find we’re entitled to that.

    William O. Douglas:

    Well, our — our national interest would be protected to that kind of order, would it?

    George B. Searls:

    I’m sorry, Your Honor.

    William O. Douglas:

    The — the national interest of the — this country would be protected to that kind of order, wouldn’t it?

    George B. Searls:

    Well the custodian tries to —

    William O. Douglas:

    The Germans wouldn’t get the property.

    No alien, no enemy would get the property.

    George B. Searls:

    The former owner, Your Honor doesn’t say that we get anything.

    It leaves it entirely up in the air.

    It says, “What we don’t get.”

    It does not say if we got anything as I read it.

    William O. Douglas:

    Why doesn’t the order of this New York court protect you fully?

    George B. Searls:

    Does it?

    William O. Douglas:

    I said, why doesn’t it.

    George B. Searls:

    Because, Your Honor, it doesn’t say that we got anything.

    William O. Douglas:

    Well, they (Voice Overlap) —

    George B. Searls:

    Are you referring — I’m not sure whether appointed.

    William O. Douglas:

    The one that you — that presently —

    George B. Searls:

    The present order?

    William O. Douglas:

    Yes.

    George B. Searls:

    No, all the present order provides us that we’re to get 60 days notice of any distribution.It doesn’t say what will happen then.

    All we get is a notice.

    William O. Douglas:

    Well, it cuts it off from payment to the alien enemies.

    George B. Searls:

    Except after 60 days, notice does.

    It doesn’t — except in that — except for that, it doesn’t cut it off.

    Harold Burton:

    Well, if you win, what you get possession, that’s all?

    George B. Searls:

    That’s all we get.

    And then they can sue and determine their rights under Section 9 (a).

    Harold Burton:

    So, the issue here is solely possession under —

    George B. Searls:

    That’s correct, Your Honor.

    Now, as of 1948, the Attorney General had not exercised his authority to vest the res.

    He didn’t have to.

    George B. Searls:

    The two types of order are separate and distinct and sometimes one is used and sometimes the other.

    The — he doesn’t have to issue a right, title and interest vesting order in order to issue a res vesting order later.

    The two are entirely separate.

    We think it’s clear, as a matter of interpretation of the Act and it’s a matter of general law, this isn’t a case of res judicata in the primary sense of that word.

    The New York court seems to have felt however that there might be some kind of a collateral estoppel.

    And that perhaps the Attorney General had actually put in issue in the prior suit his authority to vest the res.

    And the — the decision had been against him, although his claim did not depend in that suit upon any such authority.

    The Court found this on page 159 of the record and in the prior suit, it had been determined that the powers claimed by the Attorney General over the trust were not vested in him.

    But I think if the Court will look at the prior pages, 157 and 158, it will find that what that sentence I have just referred to means is that the custodian had not taken over by the right, title and interest vesting order, the powers of Bruno Reinicke over the management of the trust or his power to direct the payment of income.

    Those are the powers with respect to which the Court in the 1948 suit made specific reference.

    And there is no reference in the 1948 judgment to any claim of the right of the Attorney General to the res or to any claim of power to vest the res.

    Hugo L. Black:

    If any factual issue was determined at first against the government —

    George B. Searls:

    There was a which, Your Honor?

    Hugo L. Black:

    If a factual issue was determined against the Government as they claimed, that you would agree, would you not, that it could not be (Voice Overlap) —

    George B. Searls:

    I don’t know, Your Honor.

    That question has never arisen and I wouldn’t go so far as to concede that if we get dragged off into some collateral issue in an earlier suit in it’s discover — decided against us, that might later be binding.

    But my point is that —

    Hugo L. Black:

    Well, I’m talking about an issue — if there’s an issue crucial to the decision in first case, an issue of fact.

    George B. Searls:

    Oh, it —

    Hugo L. Black:

    It was decided against you —

    George B. Searls:

    That would —

    Hugo L. Black:

    — you wouldn’t deny (Voice Overlap) —

    George B. Searls:

    I — I think that would be binding.

    Hugo L. Black:

    Yes.

    George B. Searls:

    But — well, I was thinking it was some of the decisions of Judge Crowley and Knowlton about — that a man isn’t bound by every allegation that may be made in an earlier suit against him which he didn’t choose to contradict for some reason.

    So, I think it’s clear that when the Court said that the earlier judgment determined — the custodian did not have the powers he claimed, what they were referring to — what he was referring to was the powers under the trust indenture which the Attorney General claimed that he had taken over when he vested Reinicke’s right, title and interest and which are of course entirely different and distinct from his powers under the Trading with the Enemy Act.

    Now, the Court also made a finding — this is at pages 155 and 166, that the Attorney General in the earlier suit had requested an order for delivery of the principle to him.

    But as the language of the finding shows, what the Court is saying is that the Attorney General had requested an order for the delivery of the principle on the ground all the interest in the trust had vested in him by the vesting order, not on the ground that he had attempted to vest the res itself.

    In our reply brief, we have set out some of the material which we think bears on that finding.

    Stanley Reed:

    Was vesting order number 4551 the 1945 or 1953 order?

    Hugo L. Black:

    It’s 4551.

    The original order is — begins at page 67 in the amended —

    Stanley Reed:

    Was the 1945 order?

    George B. Searls:

    Yes, Your Honor.

    And the amendment begins at page 53.

    Now, I’d like to at this time correct with permission of Court, one error in our replay brief in the bottom — at the bottom of page 3.

    In the last line, the word true should be trust.

    The sentence is — what that brief discloses is that in the Court of Appeals, the Attorney General stated that under the Act, he could have vested the res but that he had not done so.

    As we read the record, there is nothing in it at all to show there was any attempt to assert or set up in the prior suit, the Attorney General’s right to res vest.

    So that that right was not determined against him by any court.

    William O. Douglas:

    On page 3 of you reply brief, it — you refer — the court refers to the claim for the entire principles.

    That would indicate the opposite of what you’ve just said.

    George B. Searls:

    Where is that in the — on page 3, Your Honor?

    William O. Douglas:

    Your reply brief, seven lines from the — six lines from the top of the page.

    George B. Searls:

    That’s the — that’s the court — finding of the court that I’m discussing.

    William O. Douglas:

    Yes.

    That seems to be talking in terms of the res.

    George B. Searls:

    No, Your Honor.

    It’s — I think —

    William O. Douglas:

    The entire principle would seem to be —

    George B. Searls:

    Well, by — it seems to be — it is on the ground, if the trust had vested in that — all interest in the trust had vested in the Attorney General.

    There might be a case in which there was a trust and we vested all the interest.

    And in that case, we would be entitled to the principle and perhaps on some kind of theory of merger.

    But we would have to go in to court and prove what those interests were and prove that there was a merger.

    We couldn’t go into court just on the basis of our order and say, “Give us possession.”

    So, it seems to us that there is no — what has been called collateral estoppel by judgment that binds us here.

    I want to treat now briefly of the matter of Schaefer’s claim.

    The respondents argue and the Court seems to have found that Schaefer’s claim of a contigent interest in some way bars the Attorney General from being entitled to possession.

    William O. Douglas:

    Thank you.

    George B. Searls:

    Now, I referred to the Zittman cases, to earlier cases along the same line.

    George B. Searls:

    All those seem to say that where there is an assertion of the power to vest the res that the existence of a claim, even of a claim of a present interest to a property, is no defense.

    That that has to be postponed to subsequent litigation under 9 (a).

    And it is difficult for me to see why a contigent claim should stand any better.

    The reason of course is that Section 7 (c) of the Act says that the sole relief and remedy of any claimant shall be there provided by this Act.

    And that means a suit in equity under Section 9 (a) after the property has been turned over.

    The respondents argue however that a contigent remainderman’s case is different that he doesn’t have any effectual remedy under Section 9 (a).

    They say that is so for two reasons that the trustee may not maintain a suit under 9 (a) or at least may not recover because he has no beneficial interest.

    And that the remainderman, the contigent remainderman, may not sue or at least recover under 9 (a) because of — and his contigent interest can’t be adjudicated or as one of the briefs puts it, he doesn’t have ownership at the time of vesting.

    The language of Section 9 (a) however, is about as broad as it could be.

    And we think it provides for the assertion of even a claim like Schaefer’s.

    As I said in response to, I think it was Mr. Justice Douglas, I don’t — not in the position to — say now whether he has a valid claim under 9 (a) or not because the — the cases indicate that as — he may or he may not have.

    But at any rate, what Section 9 (a) says is, “Any person claiming any interest, right or title.”

    Hugo L. Black:

    The — I’m — well, you mean to please — you mean by saying you do not say definitely that he has a claim, valid claim of it.

    Do you mean that you do not concede that he could try to protect his rights?

    George B. Searls:

    Oh, no.

    He could sue, all right.

    I’m just saying that I won’t try to predict what the result of the suit would be.

    Hugo L. Black:

    On the merits.

    George B. Searls:

    Yes, Your Honor.

    I don’t think there’s anything to indicate that he is an enemy and therefore, he would have status to bring the suit.

    Now, the words of 9 (a), “Any interest, right or title,” seemed to us to be about as broad as they could be.

    And they seem to us to encompass any interest — anything which is properly termed a property right.

    This Court had said the Section 9 (a) being remedial as to be broadly construed.

    It has also said in several occasions that Section 9 (a) meets all constitutional requirements.

    We read those decisions to mean that if you have a property interest that is within the protection of the Constitution on the deprivation of property without due process of law or without just compensation.

    That if you have such an interest no matter what it is, present or contingent, you can set it up in a suit under Section 9 (a).

    Now, when I was indicating a little while ago some doubt as to Schaefer’s claim, what I had in mind was that in the analogous field of a taking by way of eminent domain, the cases have indicated that some reminders may be too remote, too contingent to be entitled to compensation.

    We’ve cited some of the cases on page 27 of our brief.

    It seems to turn upon the question of remoteness.

    I’m just — does the remainder have any real chance of ever amounting banking.

    George B. Searls:

    What —

    Felix Frankfurter:

    By what law is that to be determined?

    Is that a —

    George B. Searls:

    I — you mean —

    Felix Frankfurter:

    — posing all questions?

    George B. Searls:

    — interest, right or title?

    Felix Frankfurter:

    No, whether the contigent remainder —

    George B. Searls:

    I suppose that would have to be determined in terms of —

    Felix Frankfurter:

    — that were involved.

    George B. Searls:

    — under the federal law, thus the federal statute.

    Felix Frankfurter:

    But it doesn’t —

    George B. Searls:

    You —

    Felix Frankfurter:

    So therefore the determinable property interest of —

    George B. Searls:

    Well, I think you’d look perhaps to state law to see what rights that gives him and then decide whether those rights fit within the federal statute.

    Felix Frankfurter:

    As I remember, I — I would draw the (Inaudible) under this — New York has held that no matter remote a contigent remainder is, you can’t destroy it as a property value.

    George B. Searls:

    I think that is so, Your Honor, although there is a — I’ve read or seen recently a reference to a decision of the Second Circuit, in which they said there might be a remainder that was too remote to be compensable.

    But my point is of course here that that question has to be determined under Section 9 (a).

    It is not a question for a decision here.

    Now, the cases, there haven’t been many under the Act involving future interest.

    One of them, about the only case, 9 (a) case involving future interests, the Coler case which several of the respondents cite, decided by the Ninth Circuit.

    In that case, the decision went against the remainderman on the ground that his interest was remote and was only on expectancy.

    However, the Court also said that the trustee could sue under Section 9 (a) to determine the validity and scope of existing claims and interests in the vested property.

    And the Ninth Circuit had indicated a similar view earlier in the Eisenberg case which is decided in the Bank’s brief.

    Felix Frankfurter:

    You say it’s — results of Ninth Circuit case.

    Did they look to — where they come from California?

    Did they look —

    George B. Searls:

    The Coler case, I think, came from Oregon, You Honor.

    Felix Frankfurter:

    They look to the Oregon law or did they — well, you might get a difference then according to the state law.

    George B. Searls:

    That’s true.

    I couldn’t say, Your Honor, because the– I think the Ninth Circuit gave one citation and I think it was to — an Oregon case.

    George B. Searls:

    For the proposition that remote remainders are not favored in the law, something like — but our point is that —

    Felix Frankfurter:

    In another words if — if New York protects this kind of an instance, that would be too remote under a federal, then you might have a real problem.

    George B. Searls:

    That’s true or if the trust here provides as to be construed by Illinois laws, the New York trustee if Illinois law and the New York law were different.

    Felix Frankfurter:

    Yes.

    George B. Searls:

    But it’s our point that certainly, a contingent remainder which has been known to the law for a long time, would a least on the face of it, come within the terms interest, right or title.

    And that it is plain under the decisions that the only place where that can be asserted is under Section 9 (a).

    Now, I want to speak very briefly, one other point that the respondents urge.

    They say that the 1953 amendment was not a constitutional exercise of power under the Act because it was issued after the termination of the war.

    However, the Joint Resolution of October 119, 1951 which —

    Earl Warren:

    Would you mind stating that position again.

    Just go back couple of (Voice Overlap) —

    George B. Searls:

    You mean the respondent’s position, Your Honor?

    Earl Warren:

    Yes, if you please.

    George B. Searls:

    They say that the amendment — the order of 1953, the 1953 vesting, was not a constitutional exercise of power under the statute, of authority under the statute, because it was issued after the end of the war, which was October 19, 1951.

    However, the Joint Resolution which we’ve set up in our brief at page 33 of that date, which terminated the state of war, provided that any property which prior to January 1, 1947 was subject to vesting.

    That is, which could have been vested prior the January 1, 1947 and had not been, and I say that because the resolution also refers expressly to property already vested, that any search property should continue to be subject to the Act.

    Stanley Reed:

    Where — where is that?

    George B. Searls:

    That’s on Page 33, Your Honor, of our brief.

    It’s the proviso which begins just a little above the middle of the page, provided however that not withstanding this resolution.

    Now, it’s true, the amendment was issued in 1953, about a year and half after the Joint Resolution, but it was authorized by the Joint Resolution.

    And it seems to us that Congress, while it was exercising the war power, while it — unquestionably had the war power and it was exercising it in the Joint Resolution, could act with respect to existing property, property which was in existence before the January 1, 1947 and with respect, and with property, respective property which could be identified.

    I believe the Congress, in the exercise of the war power, could have issued a statute vesting in some agency of the United States, any time before the termination of the war, all enemy property or such part of enemy property by description as it chose.

    Now in this case, Congress acted before the end of the war, that is — or simultaneously to the end of the war with respect to existing property.

    And it seems to us that that was within its authority.

    Felix Frankfurter:

    By April 6, 1953, had we changed our relation toward Western — Germany, our political relation?

    George B. Searls:

    I don’t recall, Your Honor.

    There was a so-called contractual arrangement that came into effect but I think that was in 1954, I am not positive.

    That was, I think, preceded the recognition of the present Government of Germany.

    Earl Warren:

    You may proceed —

    Thomas A. Ryan:

    If the Court please.

    Earl Warren:

    — Mr. Ryan.

    Thomas A. Ryan:

    I represent the trustee.

    And I would like to get it clear as to what that trust agreement provided.

    The trust agreement provided under Illinois law that the income should be accumulated for the lifetime of Bruno Reinicke and the lifetime of his wife.

    And that during that period, it might be used for the benefit of their children.

    So that when you say or when the alien — Office of Alien Property says that this trust was owned by Germans or held for Germans, it is not true because the owners of that property cannot be ascertained until the termination of the trust upon the death of the survivor, of Mr. and Mrs. Reinicke.

    So that we claim that when the Office of Alien Property made the new vesting order and found that the property was held for Germany, it was deciding something, it was contrary to fact.

    It was deciding something that had already being determined in the previous action where the Court had said, “At present, we cannot determine who owns, who will own this property.

    We must wait until the termination of the trust until we do that.”

    So that when counsel for the Attorney General says, “This property was held by Germans,” he’s not — he’s speaking loosely.

    He’s not at hearing to the terms of the trust agreement, nor is he adhering to the determination that was made by the Supreme Court of New York in the previous action.

    Stanley Reed:

    Did the Supreme Court of New York deal with the — with the beneficiary of the — the then beneficiary of the trust?

    Thomas A. Ryan:

    Well, the Supreme Court has jurisdiction of this trust.

    Stanley Reed:

    Yes.

    Thomas A. Ryan:

    It took jurisdiction somewhere in the middle of 1930s and made certain determinations and it continued its jurisdiction in the other suit that was brought in the 1940s for instructions and which has just been mentioned by counsel for the Attorney General.

    Stanley Reed:

    I suppose it took jurisdiction because of jurisdiction over the trustee.

    Thomas A. Ryan:

    That is so, and over the trustees.

    All of the property was in New York.

    Stanley Reed:

    Well, my query was that in the court — in the first decision of New York Court of Appeals, determined, who was the beneficiary of the trust?

    Thomas A. Ryan:

    The Court did not.

    The Court in that — at that time said the beneficiary —

    Stanley Reed:

    (Voice Overlap) would take, who —

    Thomas A. Ryan:

    The — well, the beneficiaries cannot be determined at this time.

    Stanley Reed:

    Well, is that the ultimate taker or the beneficiary is the —

    Thomas A. Ryan:

    The ultimate takers because the present beneficiaries could not be determined.

    It was a trust to accumulate.

    Stanley Reed:

    No — no one received the income?

    Thomas A. Ryan:

    No one would receive the income unless Bruno Reinicke directed it and he had no power to direct anymore.

    William O. Douglas:

    Because it was an alien.

    Thomas A. Ryan:

    Yes, sir.

    Thomas A. Ryan:

    And it was that power to direct —

    William O. Douglas:

    (Voice Overlap) — excuse me, go ahead.

    Thomas A. Ryan:

    — the disposition of the income that the Attorney General wanted and which he sought in the previous action.

    And the Court in that action determined that it was not the kind of power that could pass to the Attorney General as successor to the Alien Property Custodian.

    William O. Douglas:

    Well then, what new or different property interest did he try to vest in the second order?

    Thomas A. Ryan:

    Well he claims that in the second action or rather in the second vesting order, he invested the res, the securities.

    William O. Douglas:

    Legal type.

    Thomas A. Ryan:

    Well, they don’t say legal type, no.

    They just, in the order, they refer to the property.

    Now, if the trustee had a legal type into that trust fund and the trustees in America — and here, we have the Attorney General coming in and determining that a certain trust fund is held for Germans, although it may go to Americans one day and it’s held all the time by an American trustee.

    So that, feeling as we did that there was a determination which was contrary to fact and contrary to law, the trustee felt that it must resist decision.

    And then a suit was — and of course at the same time, the Attorney General demanded an account.

    So a suit was brought in the New York Supreme Court for an accounting and for instructions as to what should be done with trust fund.

    As to what should be done with the trust fund?

    The Court has already heard.

    The Supreme Court of New York County determined that the trust fund should be — should continue in the hands of the Chase — Chase National Bank.

    He invested and reinvested but that no payment might be made to any Alien without 60 days notice to the Alien Property Office.

    Stanley Reed:

    I’ve looked on — on the certain but I — I didn’t understand your statement in regard to the — the right to the income.

    I understood that Mr. Brownell began at the authority to designate the taker of that income.

    Thomas A. Ryan:

    He had the authority for — it was determined in the previous — in one of the — in the previous action that he no longer has that authority.

    It’s subject to blocking and licenses and so forth.

    Stanley Reed:

    So, he could only designate it to — make a designation by a license.

    Thomas A. Ryan:

    I believe that is so.

    Stanley Reed:

    Therefore, the property was under the control and came under the force of the Alien Property Act, is that it?

    Thomas A. Ryan:

    No, it was determined that the office of — that the Alien Property Custodian or the Attorney General as its successor, had no right to exercise that power on behalf of Mr. Reinicke.

    Stanley Reed:

    Yes, I understood that.

    Thomas A. Ryan:

    Yes.

    Stanley Reed:

    But Mr. Reinicke was restricted —

    Thomas A. Ryan:

    He was restricted.

    Stanley Reed:

    — by virtue of the Alien Property Act.

    Thomas A. Ryan:

    That is so.

    He cannot move.

    Stanley Reed:

    So, he — he did have a power that was derived from — or rather that — that he had a power which was cancelled by the Alien Property Act.

    Thomas A. Ryan:

    That’s what it amounts to in the facts.

    William O. Douglas:

    Your claim is that cutting of that — the exercise of that power which protects public liens.

    Thomas A. Ryan:

    Yes, we think so.

    Felix Frankfurter:

    What is — what is the significance of the 60-day notice which you referred?

    Thomas A. Ryan:

    Well, neither sides —

    Felix Frankfurter:

    60-day notice — 60-day notice for what, in relation to what?

    Thomas A. Ryan:

    Neither side asked the Court to do that but if the Court apparently felt that the alien — Office of Alien Property would have sufficient protection, if it got 60 days notice of any proposed things.

    Felix Frankfurter:

    That is that the 60-day notice is with a view to assert by the Alien Property Custodian indicating of whatever right he may have if he’s now sitting here.

    Is that right?

    Thomas A. Ryan:

    I think that that is what the Court has in mind.

    What the Court had in mind was the protection of the Office of Alien Property.

    That was the real —

    Felix Frankfurter:

    And your chief fact into this suit is, there’s no need — what it asked.

    Is that right?

    This — this policy.

    Felix Frankfurter:

    But it’s sufficiently protected by the 60-day notice?

    Thomas A. Ryan:

    We think so but we also think that the previous activities and the previous action bar —

    Felix Frankfurter:

    But that was —

    Thomas A. Ryan:

    — the alien property —

    Felix Frankfurter:

    That’s a legal practice, that —

    Thomas A. Ryan:

    Yes, bar him from taking advantage of the vesting order he made in 1933.

    Felix Frankfurter:

    One thing to make you say this argument that — paragraph 9, is it, in the — and these are different writers efficient, they have covered and told me this was not in relation to the judgments.

    Thomas A. Ryan:

    You mean on page 157 Section 9 of that decision?

    Felix Frankfurter:

    I mean both.

    The — the one you’re relying on in paragraph 10, volume 476 on page 169, is that right?

    Thomas A. Ryan:

    Well, that’s one of the paragraphs we rely on.

    Felix Frankfurter:

    And that subjects you for purpose of —

    Thomas A. Ryan:

    Yes.

    Felix Frankfurter:

    As I understood Mr. Searls’ observation on that for us that what was determined in the prior suit in paragraph 9 on page 157 — quite right except the one you called my attention to.

    Thomas A. Ryan:

    Right.

    Felix Frankfurter:

    And that the two are different.

    Therefore, what was supposed to be barred by 10, also barred by 9, is that right?

    That’s in —

    Thomas A. Ryan:

    That’s — that’s his contention.

    Felix Frankfurter:

    And I want your thoughts on that.

    Thomas A. Ryan:

    If it were determined five years or six years ago, the alien — Office of Alien Property was not entitled to the income.

    Five —

    Felix Frankfurter:

    What 9 says.

    Thomas A. Ryan:

    That’s what 9 says, and 10 says more about the accumulated income.

    And 11 says something else about the income.

    It says that none of the income which may be collected during the lifetime of Bruno Reinicke may be received by (Inaudible).

    It covers all or already accumulated and the income to be collected.

    Well, isn’t that res judicata?

    Felix Frankfurter:

    As to the fact that he can’t get the income.

    What is — what is cumbent to that is that where it’s eternal vested and not for the income, not where — the service vesting and not the ultimate disposition.

    Is that right?

    The Government here doesn’t say, “We are entitled to this.”

    They simply say they want to get their hopes into it.

    Thomas A. Ryan:

    Well, that’s what they say.

    Felix Frankfurter:

    Yes.

    Thomas A. Ryan:

    But as I said before, we think that they are barred by what went on in the other action and by reason of the fact that the termination of enemy ownership of the properties was erroneous.

    And they knew better.

    Felix Frankfurter:

    Well, does a determination — does an adjudication in — whenever this were and earlier in 1948, that the Government is not entitled, that the custodian is not entitled to the income.

    Is that the equivalent of determining that he can’t order — issue a vesting order to hold.

    Thomas A. Ryan:

    Well, that’s a close question.

    I think may be it is because if he can’t get the income, you can’t get the principle.

    Felix Frankfurter:

    I know but non (Inaudible) that you can’t have a grip on it for future determination of whatever income there may be.

    Felix Frankfurter:

    The Government (Inaudible)

    They just suggest that it’s Government possession.

    Thomas A. Ryan:

    I know but what happens, if the Government gets possession of this trust fund, it will become a sum of money in — on the books of the Treasury to the credit of this trust.

    That’s what will happen.

    Or there will be no more from this trust fund.

    All the securities will be sold.

    It will not be held as an entity anymore.

    And that’s one of the things about —

    Felix Frankfurter:

    Even as the possessor — as the possessor, the Government can affect the disposition of the trust, although not for its own purposes, is that what you mean?

    Thomas A. Ryan:

    The Government can sell — sell immediately and simply credit this particular trust with so many dollars on the books of the Treasury.

    Felix Frankfurter:

    Where, as you say that the trust grid of the Chase Bank not to determine that and not the Attorney General or the Government.

    Thomas A. Ryan:

    I think that that is so.

    It was clearly —

    Felix Frankfurter:

    I beg your pardon.

    Thomas A. Ryan:

    We claim of course that for this trust to be seized by the Government, would result an immediate cessation of any income and no one could bring suit now to get that back because if the trustee brought suit, the Office of Alien Property would say, “Well, you haven’t any real interest here.”

    On the other hand if young Schaefer brought suit, they would say, “Well, your interest can’t be determined until the death of your grandmother and grandfather.”

    So that there is no remedy under 9 (a) in the case of this trust.

    Furthermore, there is no reason for that matter, why a trust should be res vested as they say because the interest of the Germans and they vested, they were already been vested.And when those interest fall in, they can be taken.

    My time is up, I —

    Earl Warren:

    No, you have five minutes more —

    Thomas A. Ryan:

    All right.

    Earl Warren:

    — if you — still five minutes more according to that light.

    William J. Brennan, Jr.:

    (Inaudible)

    Thomas A. Ryan:

    Has been accumulated.

    William J. Brennan, Jr.:

    In other words, being distributed.

    Thomas A. Ryan:

    Not being distributed.

    And none of it will be distributed.

    William J. Brennan, Jr.:

    But it comes from the Court —

    Thomas A. Ryan:

    Of the Court order too.

    I was saying that there was no remedy for anyone.

    Thomas A. Ryan:

    Let us take the case of young Schaefer.

    Let us assume that after the elapse of maybe 30-40 years when his grandparents die, he should be a remainderman of the trust.

    He will then make a claim against the alien — Office of the Alien Property and they will say to him, “Why Mr. Schaefer, you can’t have any of this because only those persons who owns something immediately prior to the vesting, is entitled to recover it.”

    That’s what the law says you see.

    So, “Well, Schaefer won’t own any interest in this trust until his grandmother and grandfather dead, until the trust terminates.

    So that there was no remedy here and consequently I think that the statute insofar as its operation and this trust is concerned is unconstitutional.

    Earl Warren:

    Mr. Lourie.

    Samuel Anatole Lourie:

    Yes, sir, Mr. Chief Justice — may it please the Court.

    I am the guardian ad litem of this little American infant, Schaefer.

    And I must state that already it has been demonstrated here that he must object and defend his interest in this suit because the relegation to any other suit under the Trading with the Enemy Act will not furnish him adequate remedy.

    And I — if I may put it bluntly the relegation, cavalier fashion relegation to a suit under 9 (a) is only called comfort form as for Schaefer because if he comes into Court under a Section 9 (a) proceeding or after having exhausted the administrative remedies which are required and we did sought of merely out of caution.

    I filed the claim although I thought it was superfluous.

    I now — I’m for sure can recon with an objection on behalf of the Office of Alien Property that he does not have ownership of proposed proprietary rights at the present.

    And if — I don’t need even to speculate on that whether they will or they will not refrain or furnish this defense or objection.

    They already state in their brief, I mean the Attorney General’s brief, states on page 27.

    “On the record, Schaefer’s interest is contingent not vested and he has no present possessory interest to assert.”

    In other words, they — infant Schaefer has no adequate remedy and I venture to submit respectfully that that alone makes this amendment as a vesting order unconstitutional and unlawful.

    Now, I would not like to —

    Earl Warren:

    Well, do you contend that he does have a possessory interest at the moment?

    Samuel Anatole Lourie:

    I — under New York and Illinois law, I do content and that is reflected in the decision and opinion of New York courts.

    And the New York court say that at present, the ultimate remainderman or beneficiaries are not ascertainable.

    There were only — they would be ascertainable only upon occurrence of certain events.

    These events will occur sometimes in the future.

    At present, it can not be ascertained who has the ownership and control.

    We know only that much that the legal title is in the New York bank, the Chase National or the Chase Manhattan Bank.

    It’s an American bank and there is no any alien interest under any definition under the Trading with the Enemy Act.

    That is clear and nothing is going to happen to the trust and I want to preface my further remarks because I like to address myself principle to the question of constitutionality or vesting up to termination of war.

    Which I think is the ultimate and paramount question in connection with this present case before this Honorable Court.

    The interest, national interest of the United States are fully protected by the right, title and interest vesting order.

    Assuming arguendo for the — for the sake of this present, my argument, that the right, title and interest vesting order covered or all interest — all enemy interest in this case.

    Samuel Anatole Lourie:

    Then it follows that nothing can happen to the trust until this right, title and vesting order has been cancelled the notes or the beneficiaries whose right, title and interest was vested, have come in under Section 9 (a) and have adjudicated the rights, title and interest or the right to reclaim the property as American citizens.

    In addition thereto, this trust is subject to Executive Order 8389 as amended.

    In other words, everything is frozen and no penny can be paid out without any license.

    Now, this provision which was put in by Mr. Justice (Inaudible) adds an additional safety for the Attorney General and for the national interest, if you would — if you please.

    It says that prior to any happening when there is an intention or a distribution and there is no other protection available for the United States’ interest, the Attorney General got 60 days notice, and within the 60 days notice, the Attorney General has plenty of remedies available.

    It can go to the court by injunction, enjoin payment or something like that, and this is the 60 days.

    Now, the national interest being protected, what is behind this all res vesting order?

    And I like to paint a little bit about the background to the Honorable Court.

    Well, we all know that war, the hostilities ceased in 1945.

    In 1948, this litigates — the first round of this litigation took place.

    And the Court said that that is a continuing trust.

    It will remain in the hands of the American trustee, Chase Bank, and it will be administered and nobody can get anything.

    Then it went to the Appellate Division and Court of Appeals.

    Five years later, only five years after the first adjudication.

    Meaning in 1953, n April 6, 1953, the Attorney General or rather should I put it a subdivision, an agency, Office of Alien Property decided that now is the time to vest the res.

    Now, whether that is a coincidence or not, I only like to relate to this Honorable Court to the facts.

    On that time, that on or about middle of April, Chancellor Adner was supposed or — and did in fact visit the United States.

    And it was rumored all around that one of the things that will be accomplished in connection with the visit that the United States Government will determine and decide to terminate vesting of German property.

    And indeed, this was proclaimed by the President, April 17, 1953.

    That means, on the eve of this event where the President proclaimed an end to vesting of German property, the Office of Alien Property decided on the eleventh hour of five minutes to 12, decided to res vest.

    Now, I like to ask a rhetoric question.

    Where is the war urgency for such a measure?

    We know all what the purpose of the Trading with the Enemy Act is.

    It like — it is for the purpose of depriving the enemy of resources and means to conduct a successful war and to augment our resources.

    In other words, to augment our war potential and reduce the enemies’ war potential.

    That is the primary purpose of that.

    Now, we have been told that there are some additional purposes, and one of these additional purposes is as they said that, “We have various obligations under international treaties.

    It is said that it should be used for satisfaction of claim of American citizens against Germany and so on.”

    Now, I — I like to answer this very arguments which are presented in the brief of the Attorney General with my own argument supported by an authoritative statement of the Secretary of State who refuted completely this type of argument.

    And although with — I know that the report of Senate Committee on judiciary has no legal significance before this Honorable Court.

    Samuel Anatole Lourie:

    It is not a matter of law.

    But if I may incorporate it into my argument to refute the argument that we have some obligations under international treaty that we must take the German, enemy property and keep, retain it, and properly confiscate.

    With your indulgence, Mr. Chief Justice, may I just read one paragraph from this report.

    Hugo L. Black:

    What — what report is that?

    Samuel Anatole Lourie:

    That is 84th Congress, 2nd Session, Senate Report Number 2089, and that is payment of war damage claims in return of vested assets, the report on the new bill.

    And there was various testimony.

    It is very eliminative report, but I would not take much time if you permit me to read only this passage, Mr. Chief Justice.

    It has been an argument that the full return of the seized assets of former enemy nationals violates the provision of certain international agreements.

    The contention is without any foundation in fact or law.

    Secretary of State, Mr. Dulles, in testifying before this subcommittee of the Congress on July 2nd, 1954, in reference to a full return of seized assets among all the things said.

    The policy adopted after World War II of completely eliminating ownership of enemy private property was a departure from historic American policy after other wars.

    I myself had — have had some experience in the field.

    I worked on this very problem at Paris, in connection with this Treaty of Versailles at the end of the First World War.

    The Secretary of State, in referring to the Paris Reparation Agreement of 1946, that’s what is refereed to, said in testimony before the subcommittee in 1954.

    “Yes, I am familiar with that agreement.

    In my opinion that agreement, whatever its intent may have been as an executive agreement, was without authority whatever to bind the Congress of the United States in this matter.

    The property had been vested by action of Congress.”

    I believe Congress has the right to decide what to do about the matter and completely refutes these arguments which are advanced now for continuation of vesting after termination of state of war.

    Now, we had, after World War I, a similar situation.

    Thereby, two resolutions a) the resolution passed in exactly on July — first resolution was in April and the — the second resolution was on July 2nd, 1921.

    The first resolution terminated war time legislation exempting therefrom from this, the Trading with the Enemy Act.

    And then came the second resolution which terminated the state of war but preserved the right to vest property which has been subject of vesting.

    And the cases after World War I held that if there was a vesting order already served.

    In other words, instead of using the strong hand as it is used in Paris courts, the demand was then already served upon the owner or possessor of the property.

    Then, the property can be retained by the United States.

    If the demand order was served after that, no property can be retained because you can vest only property during time of war, and the war has officially terminated by Presidential Proclamation.

    In this case, in — after World War II, we have a similar situation whereby that is of a resolution, a joint resolution of the Congress.

    And then for the Presidential Proclamation of October, it was — the — the state of war between Germany and the — and the United States was terminated but there was preserved the right of United States, a) to retain the property which had been already vested.

    And then it said, “Property which was subject to vesting on January 1stm 1947.”

    If I may respectfully submit this portion of the joint resolution which says that the United States can retain the property which was already vested.

    Samuel Anatole Lourie:

    This is fully in accord with the constitutional war power.

    If however, the order portion of this Saving Clause saying that you may still vest property which was subject to vesting prior to January 1st, 1947, has some power.

    I maintain that in this portion or the whole resolution to that extent, is unconstitutional because it is not in accord with the war power and it is not in accord with the very definition in the Trading with the Enemy Act.

    Trading with the enemy defines the word end of — the words “end of the war” as used herein, shall be deemed to mean the date of proclamation of exchange of ratification of the of the treaty of peace unless the president shall for proclamation, declare a prior date in which gave the date so proclaimed, shall be deemed to be the end of the ward within the meaning of this Act.

    Now, the President has proclaimed the end of the war.

    It means that the very definition of the Trading with the Enemy Act in Section 2 became operative.

    And if it became operative, that means you cannot any longer vest.

    Felix Frankfurter:

    You say that there were cases under the — after the World War I.

    Samuel Anatole Lourie:

    Yes, sir

    Felix Frankfurter:

    Were those — did those cases go on the construction of the resolution?

    Samuel Anatole Lourie:

    I — I believe —

    Felix Frankfurter:

    Or did they go on constitutionality.

    Samuel Anatole Lourie:

    I would, if I may express my view, that they went on both because there are four or five cause —

    Felix Frankfurter:

    You mean Miller and Rau, on those cases?

    Samuel Anatole Lourie:

    Yes.

    Yes, sir.

    I think that there is a statement to that effect.

    I would not like to push my fingers but they are on that right.

    Now, here —

    Felix Frankfurter:

    Did they go on construction —

    Samuel Anatole Lourie:

    On construction as were well —

    Felix Frankfurter:

    Namely the — namely the reservation of was to render collate — what was being collated and not the reserve of power that might have been exercised while war is on, to be exercised —

    Samuel Anatole Lourie:

    Correct.

    Felix Frankfurter:

    — and no to the wars’ authoritative determination.

    Samuel Anatole Lourie:

    Correct.

    Yes, sir.

    That’s my understanding.

    If I —

    Felix Frankfurter:

    (Voice Overlap) if it’s — if it’s a question of construct, made this resolution of 1953.That’s right, isn’t it?

    Samuel Anatole Lourie:

    Correct, yes.

    Felix Frankfurter:

    Does that resolution construable as a matter of construction cannot be mailed, cannot be interpreted, so does not cover the situation?

    All we get is not —

    Samuel Anatole Lourie:

    I respectfully submit that it may be but as there may be difficulties.

    And I admit frankly that there may be difficulties in doing so because — and if I may point out why I say difficulty frankly because the resolution of — after World War I speaks of subject of demand.

    And this resolution says subject to vesting.

    Now, I might parenthetically add that there is no question about that, that demand, the term demand in World War I was the same as the term vesting in World War II.

    Whereas, under World War I provisions, demand have to be served and that during World Ward II, the Trading with the Enemy Act by rulings was amended that you don’t — do not need to serve the vesting order.

    You can’t publish and it becomes effective as the date of publication.

    Then —

    Felix Frankfurter:

    Well, there’s another difficulty of the Court —

    Samuel Anatole Lourie:

    Yes, sir.

    Felix Frankfurter:

    Just look at it, namely that it specify the (Inaudible) for which has heretofore, invested or seized so that —

    Samuel Anatole Lourie:

    The same specification, Mr. Justice Frankfurter was in the resolution after World War I.

    I mean, to that extent, there is no — no (Inaudible)

    Felix Frankfurter:

    What they’re saying is this.

    That although Congress may have postponed the declaration of the termination of war here, October 19 — whatever it was July of 1953.

    Samuel Anatole Lourie:

    Yes, sir.

    Felix Frankfurter:

    There’s no doubt about that.

    Samuel Anatole Lourie:

    Yes.

    Felix Frankfurter:

    Although Congress may have postponed the congressional declaration as the war has terminated as of the date to be attached to the joint resolution of reservation if in fact it doesn’t prove that but terminates the war.

    It can also reserve the exercise of war power —

    Samuel Anatole Lourie:

    Correct.

    Felix Frankfurter:

    — as to termination of war.

    Samuel Anatole Lourie:

    Correct.

    Felix Frankfurter:

    That’s your proposition.

    Samuel Anatole Lourie:

    In — in other words, if I may put it in a language of colloquialism, one can blow hot and cold at the same time.

    One can — and one can say the Germany and our friends and our allies and yet, the same talk and take property which allegedly belongs to a German.

    Now, I like to finish on a — on a more concrete matter in this question.

    There are many questions.

    By the way, if I may answer a question presented to my distinguished colleague, Mr. Ryan, by Mr. Justice Frankfurter before, whether Germany entered into any contractual agreements before.

    Samuel Anatole Lourie:

    I may say, Mr. Justice Frankfurter, if I may, belatedly answer this question.

    That on May 26, there was an — May 26, 1952, there was an additional contractual agreement.

    And if I may quote the State Department about them, “The contractual agreement with the Federal Republic of Germany bring to an end the occupation of Germany and including the Federal Republic as an equal partner in the community of nations, over signed, May 26, 1952.”

    On August 6, 1952, President Truman formally ratified pursuant to the advice and consent of the Senate, the convention on relations between the three powers and the Federal Republic of Germany.

    26 Department have said both and it’s on page 8 of my brief, if I may draw your attention to that.

    Felix Frankfurter:

    I suppose Congress, in its wisdom, may take type of step, may — may make contractual arrangements giving every characteristic or incidents of — of — presently, equal solid relation yet withhold, if I may think should be, we think the war is over for all institutional purposes.

    Samuel Anatole Lourie:

    I — I — my question to that statement, Mr. Justice Frankfurter, is this.

    Can the Congress — does the Congress have unbridled use of war power?

    My answer is no because its country —

    Felix Frankfurter:

    And (Voice Overlap) — I was merely commenting on your —

    Samuel Anatole Lourie:

    Yes, because — because this —

    Felix Frankfurter:

    1952, 1952 is very different from what it is in 53.

    Samuel Anatole Lourie:

    Correct, sir.

    And I — I think that in addition to the constitutional provision, we have provisions of international law, and I think that all although there are two of use, the prevailing view is that private property is not appropriated for war claims after the war is over.

    And —

    Felix Frankfurter:

    Before we come to these — certainly if it goes to the United States.

    While reaching constitutional international law problem, what in your views are the questions that may be settle from your point of view, not in the subject of those statutes.

    Samuel Anatole Lourie:

    One of them is the principle question on which the courts of New York adhered to its decision in prior court.

    That’s res judicata.

    And I think that that is the res judicata here.

    And if I may point out just in few — my time is over.

    Earl Warren:

    You may answer that.

    Samuel Anatole Lourie:

    By your permission if I may, if you —

    Earl Warren:

    Yes.

    Samuel Anatole Lourie:

    My distinguished opponent, Mr. Searls, tries to point out that it cannot be res adjudicata for the simple reason that we have here a different cause of action in the present litigation from the action or the affirmative relief requested by the intervening party, then also Attorney General, in the prior action.

    What is the cause of action if one claims property?

    I think the cause of action is exactly the same as the prior actions.

    The cause of action of the ultmate operate fact underlying the claim or the action or the cause of action.

    These facts are the same.

    And if I may suggest in order to avoid any labor, if you just oppose the specification of names and interest in the 1945 vesting order, with the specification and list of names of any in the interest in the 1953, you will find that the exactly the same names, exactly the same interest, were vested then as here.

    Samuel Anatole Lourie:

    Now, why was there a necessity for amendment, why?

    I must add this that I am fully in accord with the Trading with the Enemy Program.

    I have written about it in publications but I am certainly opposed to administrative excesses.

    And I think that the areas of this belated last minute deal to get the property.

    Now, I’d like to — I’ll answer also this question.

    What is going to happen with the property when the vesting order is really brought into effect?

    The — the result is that that the trust will be destroyed.

    That’s result number one.

    Number two, the very expensive expenses of litigations will be subtracted or paid out of the trust.

    The trust will lose its identity to go in a — in a general account and it will not be more interest bearing or anything of that.

    And yet, when we come to it, who has the present right to reclaim the property.

    Under 9 (a), we will have all the objections which have been advanced heretofore by the Attorney General about this litigation.

    There is one more point I now — that I am imposing upon the Honorable Court’s patience.

    There is one more thing.

    The Attorney General in his brief made a statement which I would ay is an incorrect statement.I wouldn’t use any different qualification for that.

    Here, we have dealings with predominantly prevailing, that is tautology used.

    German interest, that’s not so.

    First of all, the ultimate interest cannot be determined, it can be the American infant Schaefer.

    But I’d like to point out to you that the three children beneficiaries already — the two boys, they’re born here.

    They became American citizens by the — by the fact of birth.

    They were born in Cook County, Illinois.

    And when they were six and seven years, their parent went back to Germany and there is where they remained being infants before the World War II and they came back.

    And what I want to point out, what is the relevance of this.

    The irrelevance is this that at the time of the issuance of the amended vesting order, all these three children were residents of the United States.

    And the residents, at the time of the vesting order is the determining fact.

    I thank you very much for the —