Argument for Defendant in Error.

254 U. S. The decisions of this court in our own Civil War establish to a demonstration that the only rights vested in the Custodian by the Trading with the Enemy Act are the rights belonging to the enemy. Day v. Micou, supra; In re Marcuard, 20 Wall. 114; Burbank v. Conrad, supra; Conrad v. Waples, supra; Avegno v. Schmidt, supra; Risley v. Phenix Bank, 83 N. Y. 318; affd. 111 U. S. 125. See also decisions under the British trading with the enemy act: In re Ruben [1915], 2 Ch. 313.

Mr. Walter F. Taylor for plaintiff in error in No. 396.

Mr. Lucien H. Boggs, Special Assistant to the Attorney General, and Mr. Assistant Attorney General Spellacy, with whom The Solicitor General and Mr. Dean Hill Stanley, Special Assistant to the Attorney General, were on the briefs, for defendant in error:

The only issue is the right to possession of the securities. Questions of title are not involved, and the demand of the Alien Property Custodian, made pursuant to determination after investigation, is conclusive herein.

The general plan of the act has no direct precedent, the nearest analogy in American or English legislative enactment being the captured and abandoned property acts of the Civil War period. 12 Stat. 820. In the past, captures of property on land have, in the main, followed the practice applicable to capture of prizes at sea; and acts have provided, not for the taking possession and holding of property subject to future disposition, but for immediate condemnation by appropriate judicial proceedings. Under that procedure the seizure is merely a preliminary by which the property is brought within the jurisdiction of some court for judicial determination of its status as lawful prize, and for condemnation if found so to be. In fact, until the present war, the tendency for several hundred years had been away from the practice of

554.

Argument for Defendant in Error.

capturing and confiscating property of the enemy found on land. The remarkable development of international trade, commerce and investments which had taken place during the half century preceding this war, and the development of international credits, made necessary a change in this practice, if Germany was to be deprived during this war of the power to utilize for purchases in neutral countries credits based upon her investments in the allied countries. These countries, therefore, particularly England, France, Russia, and Italy, all passed legislation by which some public official, holding powers analogous to those of the Alien Property Custodian, was authorized to secure possession of enemy property, and, under certain circumstances, to liquidate enemy investments. No permanent confiscation of enemy property was decreed by any of these countries, the ultimate disposition of the property seized being left for future action.

The determination of enemy ownership made pursuant to the provisions of § 7 (c) is conclusive in so far as the Custodian's right to possession is concerned; and demands for the possession of property made by the Custodian pursuant to this section must be complied with and thereafter judicial determination had with respect to claims of ownership, as provided by § 9.

This feature of the act, although in some quarters assailed as radical and contrary to all the principles of the common law, is well justified by precedent. Since almost the beginning of our Government, it has been the law that all property taken or detained under authority of any revenue law of the United States shall be irrepleviable, and subject only to the orders and decrees of the United States courts having jurisdiction thereof. Rev. Stats., § 934. The validity of this provision has been sustained in every decision in which it has been called into question. Treat v. Staples, Fed. Cas. No. 14,162; Brice v. Elliott, Fed. Cas. No. 1,854; DeLima v. Bidwell, 182 U. S. 1, 180.

Argument for Defendant in Error.

254 U. S. Similar legislation with respect to money collected for customs duties in excess of the amount really due has also been upheld. Cary v. Curtis, 3 How. 236; Bartlett v. Kane, 16 How. 263; Arnson v. Murphy, 109 U. S. 238; and requiring a taxpayer to pay a disputed tax and sue to recover. Murray v. Hoboken Land Co., 18 How. 272; Springer v. United States, 102 U. S. 586; Dodge v. Osborn, 240 U. S. 118. Under the Abandoned Property Act of March 12, 1863, see Haycraft v. United States, 22 Wall. 81. See also Barker v. Harvey, 181 U. S. 481; Botiller v. Dominguez, 130 U. S. 238, 250; Florida v. Furman, 180 U. S. 402; Moyer v. Peabody, 212 U. S. 78; Pacific Live Stock Co. v. Lewis, 241 U. S. 440.

While the remedy under § 9 remains, in contemplation of law there is no possibility that a person rightfully entitled to property seized by the Custodian can be materially injured or deprived of property without due process of law.

The decisions so far rendered upon the Trading with the Enemy Act support this contention. Salamandra Ins. Co. v. New York Life Ins. & Trust Co., 254 Fed. Rep. 852; American Exchange Bank v. Palmer, 256 Fed. Rep. 680 (later in effect overruled in the same case); Keppelmann v. Keppelmann, 89 N. J. Eq. 390, reversed 108 Atl. Rep. 432; Garvan v. $6,000 Bonds, 265 Fed. Rep. 481; Biesantz v. Royal Arcanum, 175 N. Y. S. 46; Kahn v. Garvan, 263 Fed. Rep. 909; Kohn v. Kohn, 264 Fed. Rep. 253, and other cases in the lower courts, unreported. The answer sets up no facts sufficient to justify any exception in this case to the proposition under discussion.

The fact that the Custodian has resorted to the courts for the enforcement of his demand does not alter the construction of the act with respect to his right of possession. It would be a strange perversion of the law to place a premium upon disobedience to the clear mandates of a war statute by holding that when litigation ensues the

person who had disobeyed the law had by such disobedience acquired greater rights than the person who had complied with its requirements.

The facts set forth in the answers confirm the determination of the Custodian and justify his demand. They establish, if true, that the securities libeled belonged to or were held for the Munich Re-Insurance Company within the purview of § 7 (c); that although policyholders and creditors of that company within the United States may have an interest in the nature of security therein, such interest is not within the scope of § 8 (a); and therefore that the Custodian is entitled to possession of these securities, leaving the protection of whatsoever rights these creditors and policyholders, or these claimants on their behalf, may have to the remedies provided by § 9.

MR. JUSTICE HOLMES delivered the opinion of the court.

These are libels brought by the Alien Property Custodian under the Trading with the Enemy Act, October 6, 1917, c. 106, § 17, 40 Stat. 411, 425, to obtain possession of securities in the hands of the plaintiffs in error respectively as trustees. The libel in each case alleges that the Alien Property Custodian after investigation determined that a German insurance company named was an enemy not holding a license from the President, &c.; that certain specified securities belonged to it or were held for its benefit by the party now appearing as a plaintiff in error in that case; and that a demand for the property had been made but not complied with. The libellant prayed an order directing the marshal to seize the property and citing claimants of a right to possession to show cause why the same should not be delivered to him. The plaintiffs in error appeared as claimants in their several cases, denied that the funds were held for the benefit of an enemy, and set up the trust under which they held

them as required by the laws of Massachusetts or Connecticut for the security of American policyholders and creditors, with reasons for their right to retain the funds alleged in detail. The libellant moved for decrees for possession upon the pleadings which were granted by the District Court. The decrees were affirmed by the Circuit Court of Appeals, 265 Fed. Rep. 477; ibid., 481. As the decision of the latter Court is not made final by the statute the cases have been brought on writ of error to this Court.

As is obvious from the statement of the pleadings the libels are brought upon the theory that these are purely possessory actions and that for the purposes of immediate possession the determination of the Enemy Property Custodian is conclusive, whether right or wrong. The claimants on the other hand set up substantive rights and seek to have it decided in these suits whether the funds are enemy property in fact and whether they have not the right to detain them. Strictly possessory actions still survive in the laws of some States and have been upheld, leaving the party claiming title to a subsequent suit. Grant Timber & Manufacturing Co. v. Gray, 236 U. S. 133. There can be no doubt that Congress has power to provide for an immediate seizure in war times of property supposed to belong to the enemy, as it could provide for an attachment or distraint, if adequate provision is made for a return in case of mistake. As it can authorize a seizure in pais it can authorize one through the help of a Court. The only questions are whether it has done so as supposed by the libellant and if so whether the conditions imposed by the act have been performed.

If the Custodian was entitled to demand the delivery of the property in question it does not seem to need argument to show that the demand could be enforced by the District Courts under § 17 of the act, giving to those Courts jurisdiction to make all such orders and decrees as may