Public-domain · open source
OpenJurist

18 F.2d 932

Docket Nos. 159, 160.

Klein v. Palmer

Second Circuit Court of Appeals

Decided April 4, 1927.

Second Circuit Court of Appeals · decided 1927-04-04

Cited by 5 later decisions (1 by the Supreme Court) — most recently February 1957

2 federal appellate · 2 district ·

4 counsel of record

Relies on United States v. Chemical Foundation, Inc. · Miller v. United States · Munich Reinsurance Co. v. First Reinsurance Co. of Hartford

Good law ✅— No negative treatment on recordhow we know

Decided 1927-04-04

View the full empirical analysis of this case →

¶11. War <$=>12 — Any suit to redress alleged wrongful disposition of seized alien property must be brought by United States (Trading with the Enemy Act [Comp. St. §§ 3ll5i/2a-3H5i/2j]).

¶2Under Trading with the Enemy Act (Comp. St. §§ 3115%a-3115% j), any suit to redress wrongful disposition of seized property must be brought by the United States, since title to seized property was vested in the United States, and any claim to property or proceeds must be made in accordance with provisions of act.

¶32. War <$=>12 — Equity will not permit recovery of property seized by Alien Property Custodian, in view of treaty.

¶4Treaty of Versailles, art. 297 (d), (i), and annex 1, incorporated in Treaty of Berlin (42 Stat. 1939) by article 1, and article 2, subd. 1 of latter treaty, held to justify denial of relief in equity for recovery of property seized by Alien Property Custodian.

¶53. War <$=>12 — Action cannot be maintained for damage from seizure of property by Alien Property Custodian, whether acts were lawful or merely colorable.

¶6Under Treaty of Versailles, art. 298, annexes 2-and 3, incorporated in Treaty of Berlin (42 Stat. 1939) by article 1 and article 2, subd. 1, action is not maintainable for damage resulting from seizure of property by Alien Property Custodian, whether acts of agents in making seizure were lawful or merely colorable, since under the treaty German nationals were remitted to their own country for indemnity for any wrongs for acts done by United States officials for whatsoever motives. .

¶74. War <$=>12 — German national held subject to exercise of government’s war powers, and property could be confiscated, whether resident or nonresident (Trading with the Enemy Act [Comp. St. §§ 3H5i/2a-3ll5i/2j]; Const. Amends. 5, 6).

¶8A German national as such is subject to exercise of government’s war powers in accordance with Trading with the Enemy Act (Comp. St. §§ 3115%a-3115%j), and confiscation of property thereunder by government, whether resident or nonresident, did not constitute violation of Const. Amends. 5, 6.

¶9Appeal from tbe District Court of tbe United States for tbe Southern District of New York.

¶10Separate suits by Albert B. Klein and by Otto Heins against 'A. Mitchell Palmer and another, removed from the state court. Decree of dismissal, and plaintiffs appeal.

¶11Affirmed.

¶12By these suits, begun in the state court and removed to the District Court, Heins and Klein, respectively, both German subjects residing in the United States during the war, the former not proclaimed and the latter as his father’s heir proclaimed as an alien enemy, seek to set aside the sale by the Alien Property Custodian, defendant Palmer, and Ms managing director, defendant Garvan, to defendant Kern of stock in_ the Bosch Magneto Company, seized as the property of alien enemies, stock that eventually became the property of defendant American Bosch Magneto Corporation, organized by defendant Kern.

¶13The bills allege that defendant Garvan, acting under instructions of defendant Palmer, unlawfully threatened plaintiff Heins that he would cause Mm to be indicted on some criminal charge and to be interned, and in other wrongful ways specified intimidated Mm, and to save himself, and in the belief in Garvan’s promise to return his property after the war, Heins signed a document that the stock belonged to an alien enemy, whereas it was his own.

¶14The bills further charge wrongful conduct in the sale itself and the eventual purchase of the assets by the newly formed defendant corporation. In view of our conclusions, it is unnecessary to set forth the details.

¶15The equitable relief sought was the surrender of the original stock in the Bosch *933Magneto Company, a following up of the proceeds thereof, and a recovery from the defendants and each of them of $5,000,000.

¶16Motions to dismiss were granted; leave to file amended hills was denied.

¶17Harvey T. Andrews, of New York City (Hiram C. Todd and E. Raymond Shepard, both of New York City, of counsel), for appellants.

¶18Root, Clark, Howland & Ballantine, of New York City (Elihu Root, Jr., Leo Gottlieb, and Joseph Schreiber, all of New York City, of counsel), for appellee American Bosch Magneto Corporation.

¶19Isidor J. Kresel and George J. Corbett, both of New York City (Frank Davis, Jr., and Seiforde M. Stellwagen, both of Washington, D. C., of counsel), for appellees Palmer, and Garvan.

¶20Rothwell, Harper. & Matthews, of New York City, for appellee Kern.

¶21Before HOUGH, HAND, and MACK, Circuit Judges.

¶22MACK, Circuit Judge

¶23(after stating the facts as above). [1] On the oral argument, the attempt to sustain the claim to equitable relief was practically abandoned. Clearly, title to the seized property was vested in the United States under the Trading with the Enemy Act (Comp. St. §§ 3115%a-3115%j). Amy suit to redress the alleged wrongful disposition of the seized property must be -brought by the United States; any claim to the property so seized or its proceeds must be made in accordance with the provisions of that act.

¶24[2] Moreover, the provisions of the Treaty of Versailles, art. 297 (d), (i), and annex 1, copied in the margin,1 and incorporated in the

¶25Treaty of Berlin (42 Stat. 1939) by article 1, and article 2, subdivision 1, of the latter Treaty, clearly justify the denial of relief in equity for the recovery of the property.

¶26[3] It is contended, however, that, instead of dismissing the bills they should have been transferred to the law side; that an action at law is maintainable for the damage done to the plaintiffs by defendant officials and those conspiring with them purporting to act under color of office bub in fact acting contrary to the obligations thereby imposed upon them and solely for their own private ends. To this contention, too, the provisions of the treaty give a complete answer.

¶27Annexes 2 and 3 to article 298 of the Treaty of Versailles, incorporated in the Treaty of Berlin by article 1 and article 2, subd. 1, of the latter treaty (copied in the margin) .2

¶28*934We emphasize “for whatsoever motive.” ■Clearly by this phrase in the treaty the government aimed! to prevent actions involving a consideration and determination as to whether the acts of its agents were lawful or merely colorable; it deemed it wise to protect its officials and those acting under them, from the ofttimes laborious defense in judicial proceedings of just such claims as are made in these cases; but, that no injustice result to the aliens, it remitted German nationals, wherever resident, to their own country for indemnity for any wrongs that may have been done them not only through the proper exercise of their duties by United States officials, but also for acts done “for whatsoever motive,” including therefore wrongful acts done merely under color of office. The treaty thereby closed the door to judicial investigation of the motives of those so acting.

¶29[4] But plaintiffs contend that, if the treaty be so interpreted, it violates the Fifth Amendment, applicable as this is to residents whether Gitizen or alien; Heins moreover was not by statute or presidential proclamation declared an enemy alien. He was nevertheless, as a German national, an enemy, though friendly. As such, he was subject equally with Klein to the exercise of the government’s war powers. The Trading with the Enemy Act did not aim to exert these powers to the fullest extent; the government was under no constitutional prohibition from confiscating the property of the enemy’s nationals, whether resident or nonresident. And those powers, in the language of Miller v. U. S., 11 Wall. 268, 303, 20 L. Ed. 135, “are not affected by the restrictions imposed by the Fifth and Sixth Amendments.” U. S. v. Chemical Foundation, Oct. 11, 1926, 272 U. S. 1, 47 S. Ct. 1, 71 L. Ed.-; Munich Reinsurance Co. v. First Reinsurance Co. (C. C. A.) 6 F.(2d) 742, and cases cited.

¶30The war powers may be exerted as well by the treaty which aims to end the war as by earlier legislation. The amended bills did not in any way obviate the foregoing objections. For this reason, as well as that in any event there was, no abuse of discretion in refusing leave to amend after so long a delay, the denial involved no error.

¶31Decrees affirmed.

¶32HOUGH, Circuit Judge, concurred in this decision, but had no opportunity to read the opinion.

/18/f2d/932 · .json · Public domain