Source: https://supreme.justia.com/cases/federal/us/386/484/
Timestamp: 2019-04-19 10:21:04+00:00

Document:
Held: Since the statutory scheme of § 34, which as modeled on the Bankruptcy Act, was intended to provide a fair and equitable distribution of vested enemy assets to American residents or citizens, the limitations period was tolled during the pendency of the Abe litigation, and petitioners' right to bring their suit was not foreclosed. Pp. 386 U. S. 494-502.
"claims not filed within the time hereinabove prescribed may nevertheless be filed within such time a the court may fix or for cause shown extend, and, if duly proved, shall be allowed against an surplus remaining in such case."
See also Nassau Works v. Brightwood Co., 265 U. S. 269. Pp. 386 U. S. 496-498.
(b) The 60-day limitation serves only as a means of expediting the distribution of vested assets to creditors, and here there are no other creditors, a surplus remains in the fund, and the Attorney General is a mere stakeholder. P. 386 U. S. 498.
(c) Since petitioners filed their suit immediately upon settlement of the Abe case, they did not interfere with the speed or manner in which this litigation was conducted. Pp. 386 U. S. 499-500.
(d) In this case, where the public treasury is not directly affected, it is consistent with the overall congressional purpose to apply a traditional equitable tolling principle, aptly suited to the facts of this case and nowhere eschewed by Congress, to preserve petitioners' cause of action. Pp. 386 U. S. 500-502.
123 U.S.App.D.C. 12, 356 F.2d 351, reversed and remanded.
the Trading with the Enemy Act, 40 Stat. 411, 50 U.S.C.App. § 1 et seq. The District Court dismissed their suit against the Attorney General [Footnote 1] as barred by limitations, and the Court of Appeals affirmed by a divided vote. 123 U.S.App.D.C. 12, 356 F.2d 351. We granted certiorari because of the importance and unusual character of the questions involved, affecting the proper application of this wartime statute. 385 U.S. 917.
Both as the case was treated by the lower courts, and, as it was largely argued here, the limitations issue has been thought to turn on whether the Government is estopped from asserting the 60-day time bar provided for actions of this kind by § 34(f) of the Trading with the Enemy Act. We conclude, however, that "estoppel" is not the controlling issue, but that, for reasons discussed in this opinion, the period of limitations was tolled, requiring reversal of the judgment below.
holding "yen certificates," [Footnote 2] who submitted timely claims, many being filed as early as 1946, under § 34 of the Act seeking recovery of their deposits.
debt claim with the Custodian within a specified period, § 34(b).
Approximately 7,500 yen certificate holders, including petitioners, immediately complied with this provision and submitted photostatic copies of their respective certificates. In the course of processing the claims pursuant to § 34(f), a question arose as to the redemption value of the certificates both for depositors of the Yokohama Specie Bank and for those of another bank, the Sumitomo Bank, holding similar certificates. An administrative determination was sought in a proceeding brought in the name of one of the Yokohama Bank depositors, Kunio Abe, Claim No. 55507. Abe, acting for all yen certificate holders, took the view that, since these deposits had been made in American dollars and the certificates were allegedly redeemable in dollars at any time upon demand at American branches of the bank, they should be treated as dollar debts at the amount of their value when seized in 1941, at a rate of about 4.3 yen to the dollar. The Attorney General, [Footnote 5] however, characterized the debts as yen debts, and, following the rule of Deutsche Bank v. Humphrey, 272 U. S. 517, and Zimmermann v. Sutherland, 274 U. S. 253, held that the proper measure of recovery would be at the postwar conversion rate of 361.55 yen to the dollar, or less than 2% of the prewar rate. It is noteworthy that, throughout this period, the Yokohama Bank's successor in Japan, the Bank of Tokyo, Ltd., was willing to redeem these certificates at the postwar rate. Petitioners at any time could therefore have received from the Japanese bank the amount the Government asserted would eventually be obtained from the vested assets.
"The Director of this Office decided on November 13, 1957, In the Matter of Kunio Abe, et al., Claim No. 55507, Docket No. 55 D 72, which decision the Attorney General has declined to review, that yen certificates of deposit issued by the Yokohama Specie Bank, Ltd. . . . are obligations payable in yen in Japan . . . ,"
"you may wish to utilize the funds in Japan, rather than await settlement by this Office. If this is done, the Notice of Claim filed with this Office should be canceled by signing and mailing the enclosed Notice of Cancellation of Claim card."
Petitioners characterize this letter as "confusing" and "insulting." We think the opprobrium which is sought to be fastened on the letter is undeserved, and consider it more accurate and fairer to say that, although its instructions were complex. the letter was written in a manner designed reasonably to apprise a layman of the choices before him. However, on the particular facts of this case and given the empirical evidence available, it is quite understandable that, of the 7,500 initial claimants, only 1,817 responded affirmatively by sending in their certificates, and less than 1,600 canceled their claims and sought immediate recovery in Japan. The remainder, a majority of all who had claims, petitioners in this case, did nothing.
The reasons for their inaction are quite apparent, and, it can reasonably be argued, should have been so to the Government: the letter indicated that, despite as long as 12 years of waiting after the original submission of their claims, supported by copies of their certificates, they could expect to receive less than 2% of their basic deposits measured in prewar dollar terms, and that even this amount would not be forthcoming immediately, but only after issuance of a schedule (an additional interval, it turned out, of three years) plus possible judicial review. Claimants would clearly be better off getting repayment immediately from the Japanese bank itself. This recourse, suggested by the letter itself, was at the same time understandably advantageous to the Government, as well: American citizens or residents would obtain relief, but from a foreign source, thus freeing more of the vested assets for distribution to remaining claimants. It is thus understandable that the Government did nothing to ascertain why a majority of the 7,500 claimants had responded in no way to its letter.
that many more persons had claims similar to mine, and I understood that they were all being processed together. I saw in the Japanese newspaper that a court suit was or would be filed seeking to obtain for the yen claimants the proper amount for their claims. I believed, therefore, I would be protected."
being done generally, and many of them believed that, in the end, their Government would not try to keep their money, but would return it."
"Pursuant to Section 34(f) of the Trading with the Enemy Act, as amended, any claimant considering himself aggrieved by this Final Schedule may, within sixty (60) days from the date of the mailing of the Schedule, file in the United States District Court for the District of Columbia a complaint for review of this Schedule. . . ."
in the District Court pending a determination of the identical issue raised in relation to yen certificates issued by the Sumitomo Bank. The District Court upheld the Attorney General's determination, and the Court of Appeals affirmed, Aratani v. Kennedy, 115 U.S.App.D.C. 97, 317 F.2d 161, 323 F.2d 427. After this Court granted certiorari in Aratani, 375 U.S. 877, the Attorney General entered into a compromise settlement with the plaintiffs in Aratani and Abe, in the latter case approximately at the prewar rate without interest. [Footnote 9] Petitioners here were not included in the class represented by Abe, for his complaint was framed to represent only the class of those claimants listed in the schedule, rather than all outstanding claimants. Petitioners therefore filed this suit upon final disposition of the Abe litigation, and long before the dismissal of certiorari in Aratani, asking for similar treatment. [Footnote 10] The Attorney General denied their claims because petitioners were not included in the class represented in the Abe suit, and because they had not filed their suit within 60 days after mailing of the schedule as required by § 34(f).
pendency of the Abe litigation, and that petitioners' right to bring their suit was not foreclosed. An analysis of the statutory scheme as devised by Congress persuades us, in the context of this factual setting, that this is the result most consistent with the legislative purpose of this Act.
on suits was designed to further this end -- to aid claimants by expediting a final distribution -- and not primarily as a shield for the Government.
"claims not filed within the time hereinabove prescribed may nevertheless be filed within such time as the court may fix or for cause shown extend and, if duly proved, shall be allowed against any surplus remaining in such case."
"designed to remedy the inequity of returning property to the bankrupt as long as there are creditors, however tardy, whose claims have not been satisfied even in part."
"This [the statute of limitations] is a provision for the benefit of creditors, not for the benefit of the bankrupt. . . . In the present case, the provisions of the Bankruptcy Act have been complied with, and those who complied with all its provisions have been paid in full. But the fact remains that the petitioner who had reduced his claim to judgment, the existence and validity of which the bankrupt recognized in his schedules and does not now deny, has received nothing. A fund remains in the hands of the trustee."
claim, even though untimely. In Williams v. Rice, 30 F.2d 814, an estate, presumably without assets, was reopened when new assets were discovered. The question was again whether creditors who had not filed timely claims should be allowed to prove their claims. Noting that the time limitation "is intended primarily to require creditors to prove their claims promptly, in order that the estate may be closed without undue delay," id. at 815, the Court of Appeals for the Fifth Circuit held that, in the absence of negligent failure to file, claimants in such a case could file after the time limitation. See also In re Pierson, 174 F. 160, where the court allowed the reopening of the estate and the filing of claims past the statutory period when new assets were discovered. But see In re Silk, 55 F.2d 917, reaching the opposite result.
the creditor be penalized by a total loss of his claim?"
265 U.S. at 265 U. S. 272-273.
way interfered with the speed or manner in which this litigation was conducted.
The only arguable difference it might have made had petitioners filed their action immediately upon publication of the schedule is that the Government's willingness to settle the case might have been dampened because the larger number of plaintiffs would have made settlement more costly to the total fund. Upon examination, however, even this possibility should be discounted when it is recalled that these are not in any real sense government funds, but rather vested assets of an enemy debtor which will be distributed to another class of war victims if petitioners' claims are barred. The Government has no interest in the fund except to enforce the primary congressional mandate that bona fide creditors recover their due. Since the amount in the fund adequately covers a full settlement with all these claimants at the Abe rate, exhausting the surplus should not have played a part in the Government's decision to settle with the Abe claimants.
For these reasons, we think the statutory purpose is best served by invoking the equitable doctrine of tolling to preserve petitioners' action in which they seek payment on the same basis as that accorded the claimants in Abe.
Banco Mexicano v. Deutsche Bank, 263 U. S. 591, the statute of limitations may not be tolled without express congressional consent. It is well settled, of course, that the Government is ordinarily immune from suit, and that it may define the conditions under which it will permit such actions. E.g., Kendall v. United States, 107 U. S. 123; United States v. Sherwood, 312 U. S. 584. It is also true that, in many cases, this Court has read procedural rules embodied in statutes waiving immunity strictly, with an eye to effectuating a restrictive legislative purpose when Congress relinquishes sovereign immunity. E.g., Kendall v. United States, supra; United States v. Sherwood, supra; Soriano v. United States, 352 U. S. 270; compare Crown Coat Front Co. v. United States, post, p. 386 U. S. 503.
"The Custodian has emphasized to the committee that he is anxious to satisfy the proper claims of creditors, and the committee concur in the view that there exists a strong moral obligation to satisfy them inasmuch as, but for the vesting of their debtors' property, they would presumably have been able to pursue ordinary remedies against the debtors."
H.R.Rep. No. 2398, 79th Cong., 2d Sess., 10 (1946); S.Rep. No. 1839, 79th Cong., 2d Sess., 3-4 (1946). We consider it much more consistent with the overall congressional purpose to apply a traditional equitable tolling principle, aptly suited to the particular facts of this case and nowhere eschewed by Congress, to preserve petitioners' cause of action. Burnett v. New York Central R. Co., 380 U. S. 424; cf. 320 U. S. S. 502Á Horticultural Co. v. Pennsylvania R. Co.,@ 320 U. S. 356, 320 U. S. 360.
The judgment of the Court of Appeals upholding the dismissal of this action is therefore reversed, and the case is remanded to that court for further proceedings consistent with this opinion.
MR. JUSTICE CLARK took no part in the decision of this case.
This suit was originally filed against Robert F. Kennedy, then Attorney General. Nicholas deB. Katzenbach was substituted as statutory defendant in the District Court, and Ramsey Clark, the present Attorney General, succeeded him as respondent here by operation of law. Sup.Ct.Rule 48(3).
"This is to certify that the sum of yen ___ has been submitted to our Head Office, Yokohama, to be placed in Fixed Deposit there in your name at ___ percent per annum for ___ months, maturing ___, subject to the conditions on the back hereof."
"Both principal and interest are payable, when due, at our aforesaid Head Office, Yokohama, upon surrender of this Certificate, properly endorsed and/or sealed."
Section 9(a) of the Trading with the Enemy Act, 50 U.S.C.App. § 9(a).
"those of citizens of the United States or of the Philippine Islands; those of corporations organized under the laws of the United States or any State, Territory, or possession thereof, or the District of Columbia or the Philippine Islands; those of other natural persons who are and have been since the beginning of the war residents of the United States and who have not during the war been interned or paroled pursuant to the Alien Enemy Act, and those acquired by the Custodian ."
The Attorney General assumed the duties of the Custodian in 1946 by Executive Order No. 9788, 11 Fed.Reg. 11981.
"Of the 1,120 Honda claimants who have . . . retained [our associated California counsel] . . . to the present date, the highest is for 120,000 yen -- about $30,000 at the Abe ratio [or about $332 at the Government's original rate] -- and the lowest claim is for 50 yen, or about $12 [about 14¢ at the lower rate]. Among all 4,100 petitioners, the largest debt claimant of which we are aware chose other counsel, and his claim was for 246,000 yen (about $60,000) [about $680 at the lower rate]. . . ."
"The average claim among the 1,120 retainer claimants in Honda is for about $2,000 [at the Abe rate], and the mean considerably lower; the average among all 4,100 petitioners is necessarily more modest still, because it includes the 2,980 claimants who have not even sought representation by counsel in this suit, presumably because of the very small amounts of their claims. . . ."
"on any claim by a person of Japanese ancestry against the United States arising on or after December 7, 1941, . . . that is . . . a reasonable and natural consequence of the evacuation or exclusion of such person by the appropriate military commander from a military area in Arizona, California, Oregon, or Washington; or from the Territory of Alaska, or the Territory of Hawaii, under authority of Executive Order. . . ."
70 Stat. 513, 50 U.S.C.App. § 1981.
"A claim shall be deemed abandoned when after request to do so the claimant has not furnished relevant information in support of his claim, or where by virtue of his failure to respond to inquiries regarding the claim it appears that he does not wish to pursue it further."
Neither in his motion to dismiss the complaint in the District Court nor on review in the Court of Appeals and in this Court has the Attorney General advanced the argument that failure to comply with this administrative regulation is, by itself, an independent reason for dismissing this suit. It suffices to say here that such an argument would be open to attack on lines similar to those we hold require tolling the statute of limitations.
The claimants in Aratani recovered considerably less than those in Abe because the amounts of their claims exceeded the vested assets of the Sumitomo Bank. 228 F.Supp. 706, 708.
The District Court approved the settlements in both Aratani and Abe on March 18, 1964, 228 F.Supp. 706, and entered its final order on May 18, 1964. The present suit was filed May 19, 1964. The writ of certiorari in Aratani was dismissed on March 9, 1965 380 U.S. 938, upon stipulation of counsel that the case had been settled.
"Mr. MARKHAM. . . . We propose that the law be changed so that the man could file his claim, but he would be paid on a ratable basis, if there is not enough money for everybody, and that we should have a marshaling of assets and a marshaling of debts, so that everybody would be treated alike, and would not depend upon the time when they brought the suit or the order in which the suits were brought."
"Mr. CELLER. But you want to be sure that you don't get into a situation where one creditor can fritter away all the assets of an enterprise, and you want to apply them under the principle now applied in the Bankruptcy Act, give each creditor an equitable share in the assets?"
"Mr. MARKHAM. That is the way I want it to be done. That is what I want to do."
Hearings before Subcommittee No. 1 of the House Committee on the Judiciary on H.R. 5089, 79th Cong., 2d Sess., 17 (1946). See also id. at 7, 11-13, 113-114.
"The bill before us provides that the Alien Property Custodian takes the property and sells it and divides the proceeds equitably among all creditors as pari passu, in bankruptcy."
92 Cong.Rec. 10217 (1946). And see H.R.Rep. No. 2398, 79th Cong., 2d Sess., 10, 14 (1946); S.Rep. No. 1839, 79th Cong., 2d Sess., 4, 8 (1946).
Under the War Claims Act of 1948, undistributed assets of enemy property are transferred to a War Claims Fund for distribution to United States citizens who suffered losses caused by enemy military operations during World War II. 62 Stat. 1246-1247, as amended, 50 U.S.C.App. §§ 39, 2012. That Act also declares that no vested property be returned to the former German or Japanese owners, as had been the case with some assets after World War I. § 39(a). See H.R.Rep. No. 976, 80th Cong., 1st Sess., 2-3 (1947); H.R.Rep. No. 2439, 80th Cong., 2d Sess. (1948); S.Rep. No. 1742, 80th Cong., 2d Sess. (1948).
See references cited in n 11, supra. There is nothing in the legislative history of the 1946 Act indicating that Congress had the interests of those who were in effect "remainder beneficiaries" in mind when imposing the procedures of § 34. It is further noteworthy that, in 1953, the Congress refused to enact legislation, supported by the Government, that would have had the effect of wiping out entirely debt claims payable in foreign currency, the Yokohama Bank certificates being the largest group of such debts. See S.Rep. No. 616 83d Cong., 1st Sess. (1953); 99 Cong.Rec. 7408-7409 (1953).

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