B-117819, JULY 21, 1954, 34 COMP. GEN. 32

B-117819: Jul 21, 1954

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WHICH WAS VESTED IN THE ALIEN PROPERTY CUSTODIAN PURSUANT TO THE TRADING WITH THE ENEMY ACT OF 1917. 1954: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 16. IT IS REPORTED THAT ON JULY 28. PAYABLE OR DELIVERABLE TO * * * THE HAMBURG AMERICAN LINE" WAS VESTED IN THE ALIEN PROPERTY CUSTODIAN "TO BE HELD. INCLUDING PARTICULARLY BUT NOT LIMITED TO ANY AND ALL MONIES HERETOFORE OR HEREAFTER PAID OR DEPOSITED AS COMPENSATION * * * IS HEREBY VESTED IN THE ATTORNEY GENERAL * * *. AS FOLLOWS: * * * GERMAN NATIONALS * * * SHALL NOT ASSERT AGAINST COUNTRIES WHICH * * * HAVE BEEN AT WAR WITH GERMANY * * * CLAIMS OF ANY DESCRIPTION ARISING OUT OF ACTION TAKEN OR AUTHORIZED BY THE GOVERNMENT OF THESE COUNTRIES BETWEEEN 1 SEPTEMBER 1939 AND 5 JUNE 1945 BECAUSE OF THE EXISTENCE OF A STATE OF WAR IN EUROPE * * *.

B-117819, JULY 21, 1954, 34 COMP. GEN. 32

VESSELS - FOREIGN - JUST COMPENSATION CLAIMS VESTED IN ALIEN PROPERTY CUSTODIAN THE PENDING TREATY WITH THE FEDERAL REPUBLIC OF GERMANY, WHICH WOULD PRECLUDE GERMAN NATIONALS FROM ASSERTING WAR CLAIMS AGAINST THE UNITED STATES, WOULD BE INEFFECTUAL TO PREJUDICE A CLAIM FOR JUST COMPENSATION, ARISING FROM THE REQUISITION OF A GERMAN-OWNED VESSEL, WHICH WAS VESTED IN THE ALIEN PROPERTY CUSTODIAN PURSUANT TO THE TRADING WITH THE ENEMY ACT OF 1917, AS AMENDED, AND FROM WHICH THE FORMER OWNER OF THE VESSEL HAS BEEN DIVESTED OF ALL BENEFICIAL INTEREST AND CONTROL.

ACTING COMPTROLLER GENERAL WEITZEL TO NELLIE E. SCHNYDER, MARITIME COMMISSION, JULY 21, 1954:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 16, 1953, FILE REFERENCE 2D1:214, TRANSMITTING A VOUCHER, WITH ATTACHMENTS, PROVIDING FOR DEPOSIT WITH THE TREASURER OF THE UNITED STATES THE SUM OF $422,684.05 AS JUST COMPENSATION FOR THE EX-1GERMAN VESSEL ARAUCA, WITHOUT PREJUDICE TO SUCH RIGHTS AS THE UNITED STATES MAY ACQUIRE UNDER THE PROVISIONS THE " CONVENTION ON RELATIONS BETWEEN THE THREE POWERS AND FEDERAL REPUBLIC OF GERMANY, SIGNED AT BONN ON MAY 26, 1952," AND " A PROTOCOL TO THE NORTH ATLANTIC TREATY SIGNED AT PARIS ON MAY 27, 1952" ( SENATE EXECUTIVES Q AND R, 82ND CONGRESS, 2ND SESSION). YOU REQUEST ADVICE AS TO WHETHER THE TRANSFER OF FUNDS SHOULD BE MADE IN VIEW OF THE PROVISIONS OF THE SO- CALLED " PEACE CONTRACT.'

IT IS REPORTED THAT ON JULY 28, 1941, THE MARITIME COMMISSION REQUISITIONED TITLE TO AND POSSESSION OF THE ARAUCA PURSUANT TO THE IDLE FOREIGN VESSELS ACT OF JUNE 6, 1941, 50 U.S.C. APP. 1271, AND EXECUTIVE ORDER NO. 8771, 6 F.R. 2759.

THE UNITED STATES DECLARED WAR ON GERMANY ON DECEMBER 11, 1941, AND ON AUGUST 28, 1942, THE ALIEN PROPERTY CUSTODIAN, PURSUANT TO THE TRADING WITH THE ENEMY ACT OF 1917, 40 STAT. 411, AS AMENDED BY THE FIRST WAR POWERS ACT OF DECEMBER 18, 1941, 50 U.S.C. APP. 616 AND EXECUTIVE ORDER NO. 9095, 7 F. R. 1971, AS AMENDED, ISSUED VESTING ORDER NO. 126, 7 F.R. 7061. BY THE TERMS OF THAT ORDER "ALL PROPERTY * * * OWNED OR CONTROLLED BY, PAYABLE OR DELIVERABLE TO * * * THE HAMBURG AMERICAN LINE" WAS VESTED IN THE ALIEN PROPERTY CUSTODIAN "TO BE HELD, USED, ADMINISTERED, LIQUIDATED, SOLD OR OTHERWISE DEALT WITH IN THE INTEREST OF AND FOR THE BENEFIT OF THE UNITED STATES.' MORE SPECIFICALLY, VESTING ORDER NO. 17336, FEBRUARY 12, 1951, 16 F.R. 2015, ISSUED BY THE ATTORNEY GENERAL, AS SUCCESSOR TO THE ALIEN PROPERTY CUSTODIAN, EXECUTIVE ORDER NO. 9788, OCTOBER 14, 1946, PROVIDED AS FOLLOWS:

* * * ANY AND ALL CLAIM TO JUST COMPENSATION (UNDER THE IDLE FOREIGN VESSELS ACT) * * * CREATED IN FAVOR OF THE OWNER OR OWNERS OF THE S.S. ARAUCA BY VIRTUE OF AND ARISING OUT OF THE REQUISITIONING OF SAID VESSEL * * * BY THE UNITED STATES * * * AND AND AND ALL RIGHTS TO DEMAND, ENFORCE AND COLLECT SAID CLAIM AND ALL RIGHTS THEREUNDER, INCLUDING PARTICULARLY BUT NOT LIMITED TO ANY AND ALL MONIES HERETOFORE OR HEREAFTER PAID OR DEPOSITED AS COMPENSATION * * * IS HEREBY VESTED IN THE ATTORNEY GENERAL * * *. (ITALICS SUPPLIED.)

HOWEVER, PRIOR TO THE PRESENT FINAL DETERMINATION OF JUST COMPENSATION FOR THE ARAUCA, THE UNITED STATES BECAME A PARTY TO THE " CONVENTION ON RELATIONS BETWEEN THE THREE POWERS AND THE FEDERAL REPUBLIC OF GERMANY," SUPRA, WHICH PROVIDED ( ARTICLE 8) THAT IT AND THE PREVIOUSLY CONCLUDED " CONVENTION ON THE SETTLEMENT OF MATTERS ARISING OUT OF THE WAR AND THE OCCUPATION" WOULD ENTER INTO FORCE SIMULTANEOUSLY. ARTICLE 1 OF CHAPTER 9 OF THE LATTER CONVENTION PROVIDES, IN PERTINENT PART, AS FOLLOWS:

* * * GERMAN NATIONALS * * * SHALL NOT ASSERT AGAINST COUNTRIES WHICH * * * HAVE BEEN AT WAR WITH GERMANY * * * CLAIMS OF ANY DESCRIPTION ARISING OUT OF ACTION TAKEN OR AUTHORIZED BY THE GOVERNMENT OF THESE COUNTRIES BETWEEEN 1 SEPTEMBER 1939 AND 5 JUNE 1945 BECAUSE OF THE EXISTENCE OF A STATE OF WAR IN EUROPE * * *.

ON JULY 1, 1952, THE SENATE RATIFIED THIS AGREEMENT AND THE PRESIDENT SIGNED THE DOCUMENT ON AUGUST 2, 1952.

IN SUN INSURANCE OFFICE, LTD., V. ARAUCA FUND, 84 F.1SUPP. 516, 518, THE COURT STATED THAT," BY VESTING ORDER NO. 126 THE ALIEN PROPERTY CUSTODIAN BECAME OWNER OF THE CLAIM TO JUST COMPENSATION ARISING FROM THE REQUESTION OF THE " ARAUCA" * * *.' IT IS CLEAR, THEREFORE, THAT PAYMENT OF THE CLAIM IS REQUIRED TO BE MADE TO THE ATTORNEY GENERAL UNLESS THE OBLIGATION IS OR WILL BE BARRED BY THE PENDING TREATY UNDER WHICH THE HAMBURG- AMERICAN LINE WOULD BE PRECLUDED FROM ASSERTING ANY SUCH CLAIM AGAINST THE UNITED STATES.

BY VIRTUE OF VESTING ORDERS SUCH AS ISSUED IN THIS CASE,"THE CUSTODIAN SUCCEEDS TO ALL THE RIGHTS IN THE PROPERTY TO WHICH THE ENEMY IS ENTITLED AS COMPLETELY AS IF BY CONVEYANCE, TRANSFER OR ASSIGNMENT.' COMMERCIAL TRUST CO. V. MILLER, 262 U.S. 51, 56. BY THE SAME TOKEN, AT THE TIME OF ISSUANCE OF SUCH ORDERS THE OWNER OF THE PROPERTY IS DIVESTED "COMPLETELY" OF "ALL RIGHT, TITLE AND INTEREST IN THE (PROPERTY).' THE ANTOINETTA, 49 F.1SUPP. 148, AFFIRMED 153 F.2D 138, CERTIORARI DENIED 328 U.S. 863, REHEARING DENIED 329 U.S.

"ALL RIGHTS NATURALLY INCLUDE OBLIGATIONS FOR PAYMENT OF MONEY TO THE ENEMY ALIEN, EVEN THOUGH SUCH PAYMENTS MIGHT NOT BECOME DUE UNTIL A LATER DATE AND EVEN THOUGH NEVER IN FACT PAID.' MUTZENBECHER V. BALLARD, 16 F.2D 173, AFFIRMED 16 F.2D 174, CERTIORARI DENIED 273 U.S. 766.

AS WAS STATED BY THE UNITED STATES SUPREME COURT IN THE CASE OF UNITED STATES V. DEUTSCHE BANK, 300 U.S. 115, AT PAGE 121:

* * * AS THE TAKING LEFT IN ENEMY OWNERS NO BENEFICIAL RIGHT TO, OR INTEREST IN, THE PROPERTY, THE UNITED STATES DID NOT TAKE OR HOLD AS TRUSTEE FOR THEIR BENEFIT.

* * * TO THE EXTENT THAT THE ARGUMENT RESTS UPON THE ASSUMPTION THAT THE TAKING DID NOT DIVEST ENEMY OWNERS OF EVERY RIGHT OR THAT THE UNITED STATES DID NOT ACQUIRE ABSOLUTE TITLE, IT IS FALLACIOUS AND NEED NOT BE NOTICED. (ITALICS SUPPLIED.)

FURTHERMORE, IT HAS BEEN HELD THAT "THE CONSEQUENCES OF AN EXECUTED VESTING ORDER OF THE CUSTODIAN CANNOT BE FRUSTRATED OR DELAYED BY WITHHOLDING DELIVERY OF THE ACCUSED PROPERTY FROM M.' KOEHLER V. CLARK, 170 F.2D 779, 782.

IT FOLLOWS THAT, SINCE THE ORDERS ISSUED IN THIS CASE DIVESTED THE OWNER OF THE VESSEL OF ALL BENEFICIAL INTEREST IN AND RIGHT TO CONTROL OR ENFORCE THE CLAIM FOR JUST COMPENSATION, NEITHER THE OWNER NOR THE GERMAN GOVERNMENT ACTING IN ITS BEHALF COULD THEREAFTER DO ANYTHING TO EITHER BENEFIT OR PREJUDICE THE RIGHTS OF THE CUSTODIAN OR THE ATTORNEY GENERAL WITH RESPECT TO THE CLAIM. THUS, IT IS CONCLUDED THAT THE PENDING TREATY, IF RATIFIED, WOULD BE INEFFECTUAL TO MODIFY SUCH RIGHTS.

IN APPLICATION OF MILLER, 288 F. 760, WHICH WAS A SOMEWHAT SIMILAR WORLD WAR I CASE EXCEPT THAT THE PARTY IN POSSESSION OF THE PROPERTY DEMANDED WAS A PRIVATE INDIVIDUAL RATHER THAN ANOTHER GOVERNMENT AGENCY, THE COURT STATED ON PAGE 767:

THE EFFECT OF THE DEMANDS MADE, EVEN THOUGH THEY HAVE NOT BEEN COMPLIED WITH BY THE EXECUTORS, IS NOT INVOLVED IN ANY DOUBT OR UNCERTAINTY. THIS COURT HAD OCCASION TO CONSIDER THE EFFECT OF SUCH UNCOMPLIED WITH DEMANDS IN RE MILLER, 281 FED. 764. WE HELD IN THAT CASE THAT A DEMAND VALIDLY MADE BY THE CUSTODIAN OPERATED AT ONCE AS A SEIZURE OF THE PROPERTY DEMANDED, NOTWITHSTANDING THE FAILURE OF THOSE UPON WHOM THE DEMAND WAS MADE TO COMPLY WITH ITS TERMS; AND WE ALSO HELD IN THAT CASE THAT THE SUBSEQUENT PROCEEDING IN THE DISTRICT COURT WHICH THE CUSTODIAN IS COMPELLED TO BRING IN CASES IN WHICH A DEMAND IS NOT COMPLIED WITH IS NOT A PROCEEDING TO MAKE A SEIZURE, BUT ONLY ONE TO ENFORCE A SEIZURE WHICH WAS ALREADY EFFECTED BY THE DEMAND. THAT BEING SO, THE RIGHTS OF THE CUSTODIAN TO THE POSSESSION OF THE PROPERTY INCLUDED IN THE DEMANDS MUST BE ADJUDGED AS OF THE DATE WHEN THE DEMANDS ARE MADE; AND IN THE INSTANT CASE AT THE TIME OF THE DEMANDS THE WAR BETWEEN THE UNITED STATES AND GERMANY WAS STILL BEING CARRIED ON, AND THE TRADING WITH THE ENEMY ACT WAS IN FULL OPERATION AND EFFECT.

SEE ALSO MILLER V. CAMP, 280 F. 520, AFFIRMED 286 F. 525; AND IN RE BENDIT'S WILL, 212 N.Y.S. 526, HOLDING IN EFFECT THAT THE JOINT RESOLUTION OF JULY 2, 1921, 42 STAT. 105, TERMINATING THE WAR WITH GERMANY AND AUSTRIA-HUNGARY DID NOT AFFECT THE RIGHT OF THE ALIEN PROPERTY CUSTODIAN TO TAKE AND HOLD PROPERTY.

ACCORDINGLY, NO OBJECTION IS PERCEIVED TO PROCESSING A NEW VOUCHER FOR THE DEPOSIT OF JUST COMPENSATION FOR THE VESSEL, WITHOUT INCLUDING REFERENCE TO THE SUBJECT CONVENTION.