Document: 343 U.S. 156 72 S.Ct. 611 96 L.Ed. 853 KAUFMAN et al.v.SOCIETE INTERNATIONALE POUR PARTICIPATIONS INDUSTRIELLES ET COMMERCIALES, S.A., al. No. 172. Argued Jan. 2, 1952. Decided April 7, Mr. Irving Moskovitz, New York City, for petitioners. David Schwartz, Washington, D.C., respondents, mCgrath, John J. Wilson, respondent, Societe Internationale etc. Messrs. William P. MacCracken, Urban A. Lavery, and W. Barron, all of Remington Rand, Inc. Justice BLACK delivered the opinion Court. 1 Acting under § 5(b) Trading with Enemy Act,1 Alien Property Custodian vested in himself American assets Interhandel, a Swiss corporation.2 Interhandel sued District Court to recover assets. The Custodian3 answered alleging that corporation was dominated controlled by officers, agents, stockholders who were engaged conspiracy German nationals Government operate company's business their interests while we at war Germany. Petitioners, United States citizens own stock filed motion intervene. They admitted Custodian's charge officers had been such conspiracy. also right retain an interest seized proportional ownership enemy stockholders. But petitioners contended they other nonenemy claims corporate which it corporation's duty protect. Alleging dominant group suit would not press claim manner adequately protect innocent shareholders, asserted intervene Rule 24(a) Federal Rules Civil Procedure, 28 U.S.C.A. denied intervene, 90 F.Supp. 1011, Appeals affirmed, 88 U.S.App.D.C. 296, 188 F.2d 1017. Underlying claimed is important question power Act, namely: What part organized laws neutral country may where owned enemies, citizens, aliens? This reserved Clark v. Uebersee Finanz-Korp., 332 480, 489—490, 68 174, 178, 92 880. To consider granted certiorari this case. 342 847, 74, —-. 2 First. Switzerland. Prior 1941, even its domination have justified seizure In order reach corporations, Congress amended controlling Act 1941. background, scope consequences amendment discussed supra. We there held 1941 authorized seize vest property any foreign or national, friendly nations. At same time refused hold deprived nations returned if could prove free open concealed taint. purpose amendment, found, 'not appropriate but masqueraded those fronts.' supra, page 485, 176. 3 Thus, character because nation no longer conclusively determines must be treated as neutral. veil can now pierced. taint found are stockholders; presence some does prevent governmental requires consideration plight For stated case, contemplate appropriation While has clearly provided forfeiture assets, used language requiring us confiscated guilt Nor legislative history pointed out persuade intended inflict harsh upon innocent. decline read congressional into Act. 4 Our holding when seizes country, rights proportionate holdings fully protected. based on technical concept derivative law corporations. It enables one defined interest, title he vested. stockholder indicated should merely others like enemies. 5 Second. Section 9(a) authorizes maintain action recovery alleged dominated. stockholders, Interhandel's assert return though dominate Petitioners further allege management refuses claim, continues only theory whatever obtained divided among shareholders proportion holdings. position taken, charge, being very whose account will worthless management, fearing confiscation enemytainted interests, about settle amount less than value Should done, said contemplates dividing proceeds proportionately thus violating two ways: (1) depriving property, (2) returning 6 A mere narration allegations shows petitioners' fears means fanciful. Indeed, agrees alike. wishes sell entire Interhandel. And argued given chance court (which challenged), limited individual suits money judgments against Custodian. specific driven accept share price happen get from sale these valuable play safe, separate think questions involved disputes more appropriately resolved actions resort multiplicity actions. his caused Courts trying adequate equitable procedural flexibility benefit nonenemies. 7 view our recognized corporations severable Custodian, follows entitle them These allegations, true, show inadequately represented bound judgment action. brings intervention squarely within 24(a)(2) Procedure.4 8 Reversed. 9 CLARK took decision 10 REED, whom CHIEF JUSTICE MINTON join, dissenting. 11 holds 'when protected.' Such opens wide door escape damage enemies territory. As indicate whether bear burden proving character, assume rests claimant enemy-tainted corporation. Even so, difficulty rebutting individual's self-serving evidence neutrality obvious. prewar activities connections many residents, world-wide dealings, known largely interested individual. definition 'enemy' leaves innumerable paths sheltered Court's responsibility acts agency investments made powerful efficient undermine security.1 12 Thus national nation, Guessefeldt McGrath, 308, 338, —-, recover, showing enemy-dominated Every dollar drawn nonenemies reduces sums available indemnification damage.2 objective sterilization funds use during creation reparation pool injuries, diminutions imperil purposes Cf. Propper Clark, 337 472, 484, 69 1333, 1340, 93 1480. II. 13 permits sympathizers, residents territory, covered avoid sacrifice financial through trite scheme investment defeat. If issue Finanz-Korporation 205, 618, stockholder, despite fact 'owned subsidiary Hungarian mining bauxite Hungary, 1939 1940 guaranteed loan bank operations. repaid November 1942. Hungary December 13, During October, November, shipped Germany contract do so until end 1942.' 209—210, 620. 14 Nation allowed easy penalties war, relying protection.3 Behn, Meyer & Co. Miller, 266 457, 45 165, 374, demonstrated futility method protection. plug loophole enacted existing authorizing President 'any thereof'.4 surely leave halfway open. III. 15 disregards normal incidents frustrates repair gap defense policy toward alien Behn-Meyer decision. case did decide here presented. left effect minor hardly thought today fate corporation, scheme, shown n. 'to event war.'5 attitude quite clearly.6 Today's ruling cuts deeply satisfaction claims. 16 result reached brought disregard ordinary relation present physical unliquidated responsible corporation.7 normally not. By contribution capital participation profits, puts risk, according conduct He nothing subject demands creditors governments. Those grow diminish corporate, shareholder, conduct.8 Surely, violated Sherman §§ 1—7, note, triple-damage wronged competitors, last cent detriment protested vehemently ineffectively illegal course conduct. Surely deed 'interest, right, title' piece adverse grantee. 17 finds justification allowing sue 9; says 'is vested.' No authority cited proposition 'interest,' meaning Corporations just individuals may, entity disregarded without intention. 9, 'interest * (the) seized', taken mean stockholder's administration profits corporation;9 actually seized. There indication vesting Attorney General confer each enforceable 18 Where subjects aiding pay penalty. permitted strained statutory interpretation withdraw injury reduce claimants. see real difference, liability between enemy-domiciled producing munitions States. refers appears equally applicable 19 affirmed. 40 Stat. 411, 50 U.S.C.App. seq., U.S.C.A.Appendix, First War Powers 55 839, (Supp. V) 5(b), 5(b). Although commonly called 'Interhandel,' full legal name Pour Participations Industrielles Commerciales consisted accounts over 90% Aniline Film Corporation Delaware, apparently valued $100,000,000.00. 1946, succeeded powers duties Exec. Order 9788, Fed.Reg. 11981, note. 'Upon timely application anyone shall action: representation applicant's parties inadequate applicant action; *.' See Sutphen Estates, States, 19, 14, 2: 'The word 'enemy,' herein, deemed mean, trading Act— '(a) Any individual, partnership, body individuals, nationality, resident territory (including occupied military naval forces) outside doing incorporated territory.' respondent conceal, camouflage cloak ownership, control, I. G. Farben properties countries world, including Among various objectives assist Farben: '(e) control located countries, Germany, Germany.' alleges owner 2,050,000 shares Common B stock, 455,448 Corporation, excess One Hundred Million Dollars ($100,000,000),' stake. Hamburg-American 277 138, 140, 48 470, 471, 822. Finanz-Korporation, 483, 175, note 3, 176, describing maze schemes economy. pages 178: 'It suggested, however, approach produce results both absurd uncertain. jeopardized negligible perhaps single share, directly indirectly ally enemy. securities might effectively economic warfare country. what are, extent necessary constitute taint, retained fractional appears, undecided. Since complaint therefore enemy, problems before us. recognize importance; await judicial clarification.' 32, 32: President, officer designate, transferred whenever determine— '(2) owner, representative successor any, not— '(E) association after per centum person persons ineligible receive subdivisions (A), (B), (C), (D) hereof: (C) refer substantially Cook, (8th ed.), vol. I, 11; III, 663, 664. Christopher Brusselback, 302 500, 503, 58 350, 352, 82 388: 'A far integral member, foreclosed knowledge participation. *' Pink AAA Highway Express, 314 201, 207, 62 241, 245, 86 152. Anderson Abbott, 321 349, 361, 64 531, 537, 793: 'Some Banco rescind purchases ground misrepresentations sale. relief instances, seems clear Banco's decisions directors determined, charter, kind quality undertaking.' analogous prize, settled portion Polzeath, (1916) 256 (C.A.), affirming 117: '* British entitled suggested ship appraised, payment power; cannot administer affairs company. hardship declaration appeal merciful Crown.' Steamship 'Marie Glaeser,' Lloyd's Prize Cases 56, 111 (1914): 'Now, regard vessel, go capture vessel put money—a sailing flag Not Empire, happened be, be—I know—persons shareholder invests taking liable capture, takes risk. 'If likes Crown ought leniently dealt with, another matter. I that. am law, whatsoever protected vessel.' Standard Oil Tankers Case, Arbitration Award, Aug. 5, 1926, II Foreign Relations p. 166. Pedro, 175 354, 367—368, 20 142—143, 44 195.

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