Document: 341 U.S. 446 71 S.Ct. 832 95 L.Ed. 1096 ZITTMANv.McGRATH, Attorney General. McCARTHY v. McGRATH, Nos. 298, 314. Argued Feb. 28, 1951. Decided May Mr. Joseph M. Cohen, New York City, for petitioner Zittman. Henry I. Fillman, McCarthy. Ralph S. Spritzer, Washington, D.C., respondent. Justice JACKSON, delivered the opinion of Court. 1 On December 11, 1941, Zittman, holder claims against Deutsche Reichsbank and Golddiskontbank, caused attachment warrants to be issued by appropriate court levied on accounts maintained debtors in City with Chase National Bank. January 21, 1942, McCarthy, a claim Reichsbank, also attached its Both attachments were followed state actions which pursued default judgments. The judgments remain unsatisfied because funds are 'frozen' federal government foreign controls. courts have repeatedly extended ninety-day limitation provided sheriff reduce his possession or commence an action do so,1 so that attachments, like judgments, outstanding. 2 frozen June 14, Executive Order No. 8785,2 assets German nationals freezing controls initiated 8389,3 April 10, 1940, President, pursuant powers vested him § 5(b), Trading With Enemy Act.4 general effect basic order was forbid 'transactions' blocked nationals, including all 'transfers' such funds.5 In October, 1946, more than four half years after levy these Alien Property Custodian Vesting Orders, 'that certain debt other obligation owing to' bank 'and any rights demand, enforce collect same.' Bank notified that, due outstanding levies, it could not release accounts.6 Some sixteen months later, petitioned United States District Court Southern declaratory judgment petitioners 'obtained no lien interest in' he entitled take entire balances. granted relief sought,7 Appeals Second Circuit affirmed, per curiam, solely authority Propper Clark, 337 472, 69 1333, 93 1480.8 We certiorari.9 question is whether levies forbidden 8389. 3 Rights Judgment Creditors Under Law. 4 courts, invoked one several provisional remedies which, from time out mind, has citizens their nonresident debtors. These, circumstances, may form receivership10 attachment.11 While two differ nature incidents, they alike being available at commencement during pendency action, independent but auxiliary character, designed finally adjudge substantive secure as rendered. As employed this case, sole basis jurisdiction. 5 balances perfected service certified copy warrant banking institution,12 required certify making balance defendant.13 does require physical property, nor transfer title. prescribed: 'Any person served make suffer, disposition of, interfere with, property therein upon, * sell, assign right person, persons, serving said until ninety days date service, except upon direction court.'14 account must, sheriff's paid over within days, unless, here, been court, authorized institute recover amounts withheld.15 6 These creditors prosecuted satisfied only issuance executions.16 An merges execution when issued, annulled remains force keep alive property. Castriotis Guaranty Trust Co., 1920, 229 N.Y. 74, 79, 127 N.E. 900, 902. 7 Execution, if would credit funds, step taken and, admitted, cannot cases without license. requirement license creates something contingency satisfaction matter law deprive validity lien. Commission Polish Relief Banca Nationala Rummaniei, 288 332, 338, 43 N.E.2d 345, 347. 8 Although remedy attachment, used provide jurisdiction created judgment, clear neither attempted accomplished possession, nine years, still where before levied. That there title proceedings clear. If chose satisfy means, substitute undertaking attached, so, freed lien.17 9 law, position secured owned aliens, good debtors, subject licensing can possession. claims, collateral attack, should pronounce them wholly void effect. 10 II. Effect Federal Foreign Funds Control Attachment. 11 Government, present relies heavily General Ruling 12 under 8389, some three five levied, almost purports interpret.18 Then, first time, specifically designated prohibited 'transfer.' Government asks construed prohibit here made applied retroactively promulgation. Whether administrative agency thus lump 'transfers,' reference acquired steps various laws providing presents we need decide here. well transfers, prohibited. deal relating accounts. This Ruling, interpreted retroactive inconsistent irreconcilable contentions day both Treasury Department Appeals. Departments filed brief amicus curiae, dated 22, Rumaniei, supra. case involved identical character those Rumania, had prior levy. Government's subscribed Counsel Assistant General, members bar, presumably familiar peculiarities It called attention 12, referring incompatibility between program, declared: 'This occasion last resort country meet issue *.'19 went advise definitely comprehensively proceed involved. view Custodian's contentions, merits extensive consideration. 13 advised purposes program: '1. Protecting persons occupied countries'; '2. Preventing Axis, now our enemy, acquiring benefit assets'; '3. Facilitating use Nations war effort protecting American banks business institutions'; '4. creditors'; '5. relations, post-war negotiations settlements.'20 14 To accomplish relation seven billion dollars assets, '* problem litigation, particularly actions, affecting assets,'21 represented follows: 15 did want orderly consideration same essential program results policy considerations point control arising recognized through voluntary parties. 16 'Indeed regards place disputed suggested parties adjudicate applying permit funds. then regarded equivalent payment creation interest, denied principles governing transfers assets. 17 'The feel pass application facts liability denied. felt practical questions applications least determination *.'22 18 Notwithstanding assertion complete discretion grant withhold approval ultimate 'So far concerned attachable respect *'23 language applicable us now, said: Rumania divested rights. fact, interests today perhaps most valuable confiscated Government. exercising privileges exercise. (T)he owner apply substantial one, lawful granted.'24 And continued: 19 'An national's attempt obtain unlicensed assignment account—nothing nothing less. 20 'In sense, might contingent power (i.e. authorization) A; resulting giving A what obtained assignment. 21 value course problematical. worthless worth full will depend sought accordance policies administering control. 22 'Under analysis must be, light control, allowed courts.25 23 anxious minimum interference normal litigants hear determine cases, consistent effective prosecution total war. Applied instant means hands unfettered using recognizing desirable private able attach clarify liabilities. 24 Brief. believes program. However, paramount litigations field valid limited herein suggested, reluctantly absence further authorization assets.'26 25 pointed charged, among things, preserving distributing creditors. Few question, pay questionable claims. For settled properly adjudicated law. Because debtor rarely amenable personal quasi-in-rem preceded belonging court. If, contends, puts alien beyond reach difficult see adjudications consequently settled, Treasury. logical end frustration large part believe President intended self-generated stalemate. 26 took urged held debtor, although contingency, sufficient render issues attaching creditor debtor. At acknowledged proper secured. 27 What Yok done distinguishable case. Indeed, Secretary expressly attachment. spite however, practice: 'From very inception litigants, commencing requested running into hundreds, position. bringing action. licensed judgment.'27 28 foregoing confirmed stipulation practice treated permissible levied.28 29 declare nullities. His request merely administer fund, right, title, banks. admitted He predicates reversal position, sustained it, decision supra, accordingly turn. III. 30 essence argument Clark requires invalidation stated brief, that: (I)t little short absurd suggest while enemy national precluded reaching receivership, opposite result permitted follow attachment.'29 31 answer absurdity distinction important eluded Custodian. receiver appointed special statutory purported vest corporate obviously defeat scheme notes, page 475, 1336, 1480, Propper's claim, adverse Custodian, temporary receiver, later permanent, 977—b Civil Practice Act, entitled, 'Receivers liquidate local corporations.' proceeding added 1936 Legislature,30 provides appointment liquidating State corporation dissolved, liquidated, nationalized, voluntarily otherwise, ceased business.31 Upon corporation, appoints receiver.32 Title vests appointment,33 statute empowers 'reduce credits, choses property' found State.34 established trial dissolved nationalized charter ceased, reason, business, receivership permanent35 notice given prove claims.36 Those allowed, pays priorities.37 Any surplus stockholders or, liquidator, any, domicile elsewhere.38 32 proceeding, name common traditional receivership,39 introduced protect resident shareholders confiscatory decrees nations. 33 section became 8th June, 1936, marks distinct change situated belongs nationalized. 34 purpose statute, clearly, distribution State, irrespective promulgated inclusive corporation. *' Oliner American-Oriental Banking Corp., 1937, 252 App.Div. 212, 297 N.Y.S. 432, 433, affirmed 1938, 277 588, 783. See Moscow Fire Ins. Co. & 161 Misc. 903, 924, 294 648, 676. 35 Such whose rejected Clark. themselves conflicted principle policy. said, suspends enemies prosecute plaintiff (Propper), himself nonresident, seeking cause appointment, existed, all, favor non-resident term 'enemy' defined Act *. rest sec. thereunder existing possible proceeds recovery ultimately enemies. Buck, 178 76, 78, N.Y.S.2d 13. 36 But, unequivocally Appeals, consequences. Nothing frustrate contrary, State's federal, freeze prevent withdrawal nationals. There suggestion manner enemy. beneficiaries liens derived interests. And, orders existence, tie up disposition. agree assurance proceedings, fact purport exercise power, res sees fit administration, think invalidated considered latter asked 37 IV. Order. 38 'right, interest' understand acknowledges not, Orders involved, chosen phrase them, takes program.40 has, short, put shoes cancelled course, States, limit dealing vesting, companion fund administration Act. recognition lien, priority payment, reserved presented 39 result, indicated, way impairs since admit is, therefore, nearly Lyon Singer, 339 841, 842, 70 904, 94 1323, 'We accept court's arose transactions preference. Since conditioned enforcement undiminished.' 40 below reversed. 41 Reversed. 42 CLARK cases. DOUGLAS, concurring. 44 I join places public phase controversy Payment license.1 license, refused accrue directly indirectly But subverted ripen Denial equality claimants, regardless innocence guilt. find leveling faith claimant unsecured status others.2 45 REED, whom BURTON joins, concurring dissenting part. 46 fails importance previously 8785, gives displaces best Nation citizens. defers 'recognition payment' decision. today's knowing handling uncertainty hamper open invitation owners sell phrases 'to friendly speculators willing buy discount await unblocking.' troublesome question. petition 'respondents Zittman McCloskey, sheriff, 'Reichsbank-Direktorium' Golddiskontbank accounts, thereby, virtue 7792 7870 remaining books respondent Bank, together accrued dividends accumulations.' 47 decree 1480. noted prayer referred turned over. simple turn-over seeks declaration program.' 48 construction possible, read seek rather different complaint prayed ruling Congress. statements excerpted margin.1 substantiated relies.2 49 doubt anything else meant decree, insert modifying proviso 'no creditor, court.' 1323. 50 my subsequent blocking order, sure compelling 51 482—486, 1339 1341, holds. case—a suit vesting get credits. passed third party, Propper, permanent judicial entered orders. group weaken holding likewise decided claimants preferred alien. distinctly affected 'the liquidator claimed adversely deny States.' Therefore rule administers entirely free stands unimpaired. situation seem me difference licensor, limitation. Court's 52 disagree, too, interpretation 345. holds creditor. hold beirf, concede. approved suits settle litigants' rights, gransfers litigation 12(d), note 2, excerpts appear below.3 53 propriety above left future 'all custodian payment,' forbear expressing views length presented. 54 indicated above, modify insertion heretofore pages 467—468 U.S., 844 S.Ct., modified affirm decree. 922. CFR, 1943 Cum.Supp. 948, Fed.Reg., 2897, U.S.C.A. 95a note. 645, Fed.Reg. 1400, Stat. 411, 415, amended Joint Resolution 7, 179, First War Powers 301, 55 839, U.S.C.A.Appendix, 5(b). amended, provides: 'Section 1. All following prohibited, regulations, rulings, instructions, licenses, involve Order, thereof, whatsoever, direct indirect: 'A. institutions *; 'B. payments institution States; 'E. withdrawals exportations dealings in, evidences indebtedness ownership 'F. transaction evading avoiding prohibitions.' succeeded functions but, convenience, Respondent throughout Nat. N.Y., 82 F.Supp. 740. McGrath Cir., 182 F.2d 349. 340 882, 195. N.Y.Civ.Pract.Act, §§ 974—977. Id. 902—973. 917(2). 918. 922(1). 520. 952, 953. 12(5)(a) Cum.Supp., 8849, 'transfer' actual act purpose, intent, create, surrender, release, transfer, alter, indirectly, remedy, privilege, shall include lien; issuance, docketing, filing, execution, process garnishment *.' Brief p. pp. 5, 9, 14. 14—15. 42. 50. 52. 53. 39. states: From 'freezing' controls, who, levy, received response nature: Regulations thereunder, States. you your letter, covered national. '6. adopted numerous requests him, therein, recovered '7. Department.' Respondent, 16—17. L.1936, c. 917. N.Y.Civ.Pract.Act 977—b(1). 977—b(4). 977—b(19). 977—b(10). 977—b(11). 977—b(16). Ibid. agent representative either pending final judgment. Weeks Weeks, 1887, 106 626, 631, 96, 98; People ex rel. Security Life Annuity 1879, 79 267, 270. acquires officer made.' Stokes Hoffman House, 1901, 167 554, 559—560, 60 667, 669, L.R.A. 870, quoting Keeney Home 1877, 396, 401, Am.St.Rep. 60, 63. Carmody's Manual (Carr, Finn, Saxe, 1946 Ed.) 609. 27. 5(b) II, Part 511. contained 34(g), 925, 928, reason lawfully proceedings. 'Petitioners thereafter acquire prevail Custodian.' Resp. 9. stress regulations prohibits correct. outset vis-a-vis nationals.' 'Respondent contend sbsoutely (sic) illegal. agrees process. states simply proscribed hand stayed extent. Not controlled. fixed absolute (as distinguished 'a potential lien') perfecting characteristically contingencies e.g., entry plaintiff's imposition condition operation law—the procurement license—is effect, then, this:—Blocked injunction transfer. issuing writ directs intact. own offering promise (sic), objection declaring suitor confer proprietary necessarily awaits lifting injunction.' 49—50. '(d) and/or shall, ruling, enforceable determining liabilities litigated; Provided, garnishment, create greater privilege to, license.' 2991. 'Almost fully developed assets.' P. procedure generally geared proceeding. great political international magnitude inhere foreign-owned groups problems handled adequately forced decisions particular executive, judiciary. They state. call uniform treatment policies, disparate accord policies. Moreover Congress executive set machinery problems, relate solution whole inevitable postwar problems.' 12. 'Freezing overrun countries desire available, part, Axis. Needless say, true prevented effort. Pp. 9—10. "Blocked dollars' dollars. 'free dollars.' More eighty licenses 400,000 authorizing purposes. Moreover, 'hope springs eternal human breast.' always who wait expectation lifted.' 8.

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