Document: 338 U.S. 241 70 S.Ct. 4 94 L.Ed. 31 McGRATH, Attorney General,v.MANUFACTURERS TRUST CO. MANUFACTURERS v. General. Nos. 11 and 15. Argued Oct. 12, 1949. Decided Nov. 7, Mr. Joseph W. Bishop, Jr., Washington, D.C., for J. Howard McGrath, General etc. Leonard G. Bisco, New York City, Manufacturers Trust Co. Justice BURTON delivered the opinion of Court. 1 Numbers 15 are cross appeals from Clark Trut Co., 2 Cir., 169 F.2d 932.1 Certiorari was granted in No. 11, 337 953, 69 1525, on petition Custodian,2 to resolve a conflict between judgment below that E. Lavino & 3 175 897. The is confined Custodian's claim allowance interest, his favor, summary proceeding under § 17 Trading with Enemy Act.3 He claims interest date Turnover Directive4 served upon Company, here referred as bank, computes such sum which he ordered turned over. For reasons hereinafter stated, we agree its denial interest. We certiorari also appeal bank 1526. This enable us reexamine pleadings and, if they were found permit it, consider bank's District Court lacked authority order it turn over Custodian principal question, face indebtedness enemy creditor sum, setoff excess alleged debt, lien proceeds debt. find record does not reach issue. February 1, 1946, issued Vesting Order 5791, Fed.Reg. 3005, s 5(b) Act,5 vesting himself following described 'property': 'That certain debt or other obligation owing Deutsche Reichsbank, by 55 Broad Street, York, arising out dollar account, entitled Reichsbank Direktorium Divisen Abteilung, any all rights demand, enforce collect same, * *.' January 30, 1947, Directive based thereby directed $25,581.49, 'together accumulations increments thereon, shall forthwith be undersigned (the Custodian) held, used, administered, liquidated, sold otherwise dealt benefit United States'. October 29, filed States Southern against seeking enforcement Act, supra. November 13, answered.6 5 December Court, without opinion, pay plus at 6% per annum 1947. Appeals Second Circuit struck but affirmed judgment. One judge said would have preferred limit court's holding point answer did allege sufficiently unequivocal raise defense. Another dissented Petitions denied both parties, 17, 335 910, 480, 482. 6 June 16, 1949, asked leave file rehearing writ ground that, Third had decided supra, expressly allowed Custodian, circumstances largely comparable those case below. present contentions shoul granted. All applications I. 7 Act war measure.7 It creates powerful swift executive procedures particularly seizure property enemies legal process an effective alternative military force. provides enemy-held money owed debts. Kohn Jacob Josef Kohn, Inc., D.C.S.D.N.Y., 264 F. 253. Special proceedings provided try merits seized possessory procedures.8 action 17.9 Section has accompanied since 1917, prescribes fines, sentences forfeitures special sanctions punish willful violations orders turnover directives follows: whoever willfully violate provisions this license, rule, regulation thereunder, violate, neglect, refuse comply President compliance shall, conviction, fined more than $10,000, or, natural person, imprisoned ten years, both; officer, director, agent corporation who knowingly participates violation punished like fine, imprisonment, both, property, funds, securities, papers, articles documents, concerned forfeited States.' 40 Stat. 425, 50 U.S.C.App. U.S.C.A.Appendix, 16.10 8 makes no mention charges connection these procedures. recognize absence express statutory provision sometimes been favor Government statutes when Government's position primarily collecting debtor.11 See Rodgers States, 332 371, 373, 68 5, 6, 92 3, rule stated disallowed. In case, however, dealing accruing contractual indebtedress customs duties taxes. quite different matter, Alien Property him physical possession funds protective measure. instant is, essence, same kind compel delivery $25,000 bond owned held Company latter's safe-deposit vaults. Statutory prescribed bond, obvious there basis addition charge, computed judicially determined rate estimated value running merely Directive. Similarly, adding charge case. 9 No terms agreement deposit before us. petition, called $25,581.49 Order, together thereon date. made showing additions accordingly, rendered precisely correct total amount indebtedness. additional item reflected agreement. Whatever may been, changed so possible must sought Act. coercive added incident transfer funds. Accordingly, affirm Appeals, omitted II. 10 15, parties discussed several questions presented contained plea setoff, Reichsbank's proceeds. answer, issues do them. When read whole, deny existence credit balance claimed subject Order. Nor unequivocally assert setoff. Instead, answering alleged, information belief, offsetting arose fact instrumentality part German Government, guaranteed payment debts various banks, banks $25,581.49. Those allegations state make automatically guarantor bank.12 even status entitle resort guaranty their Reichsbank.13 depended, likewise, inadequately it. foregoing affirmed, vacated amendments further consistent opinion. 12 ordered. 13 Judgment part. 14 DOUGLAS CLARK took consideration decision either cases. McGrath substituted Tom C. Clark, General, 807, 52. term 'Custodian' used refer succeeded powers Executive 9788, note, C.F.R. 1946 Supp. 169. 'Sec. 17. That district courts hereby given jurisdiction enter rules notice otherwise, decrees, issue necessary proper premises right final decree court sections one hundred twenty-eight two thirty-eight March third, nineteen eleven, 'An codify, revise, amend laws relating judiciary.' Issued 7(c), 418, amended, 1020, 9193, C.F.R.Cum.Supp. 1174, amended 9567, 1945 77. 5(b), 415, 839, 9095, 1121. parts especially material our 15: '7. Furthermore, can only vest time issuance Manufactuerers hold behalf Reichsbank. relationship depository depositor debtor relationship. predicated particular account. unless mutual credits exceeds debits. At ofthe therefore Ab(t)eilung tht Government. Banks Company. On 1st, 1940 14th, 1941, '8. foregoing, advised counsel depositor's well recognized law. recognizes person ally lienor's realize satisfaction liener's claims.' (Emphasis supplied.) 'The whether taken originally enacted, 1917 28, 1918 4, July 1919 1920 strictly measure, finds sanction constitutional provision, Art. I, 8, cl. empowering Congress 'to declare war, grant letters marque reprisal, concerning captures land water.' 'It act relate now concerned. (After discussing §§ 9, 12): autorize provide sequestration through channels believed enemyowned, adequate return mistake, debatable. There warrant saying ownership seized; practice way. commits determination question President, representative whom acts, final.' Stoehr Wallace, 255 239, 241—242, 245—246, 41 293, 294, 295, 296, 65 604. also, Central Union Garvan, 254 554, 568, 214, 215, 403; Rubin, 'Inviolability' Private Property, Law Contemp. Prob. 166 (1945). 9(a) 42 1511, 9(a), administrative transferred Custodian. A claimant sue adjudication validity claim. 32, 60 50, 930, authorizes recognition 34, 925, procedure allowance, claimants, whose Garvan $20,000 Bonds, 265 477; Simon Miller, 298 520, 524; Kahn 263 909, 916. Petition show cause day. Answer 13. Case heard entered 12. penalties 48 5(b)(3), 5(b)(3). required Presidential determinations 7(c). 'In short, personal required; latter effect President.' V. 245, 604; see 567, 403. E.g., Royal Indemnity 313 289, 61 995, 997, 85 1361; Billings 232 261, 34 421, 58 596; Board Commissioners Jackson County, Kansas, 308 343, 350, 352, 285, 288, 84 313. description contemporary monetary banking system Germany played Military Handbook, Germany, 5: Money Banking. Army Service Forces Manual, M356—5 Revised (March 1945), pp. 66—73. examples differences liabilities foreign public semipublic corporations governments related, Deutsches Kalisyndikat Gesellschaft, 199 Coale Societe Co-op., 21 180. Michie, Banking, Perm. Ed., 126—128, cases cited; Zollmann, 4392, 4563, 4590. restrictions assertion, federal exist 14, 1941. 8785, 1A 1E, U.S.C.A. 95a 948, Propper 472, 1333.

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