US SUPREME COURT DECISIONS

1. Pursuant to the Trading with the Enemy Act, as amended by the First War Powers Act of 1941, and Executive Order 9095, as amended, the Alien Property Custodian issued an order vesting in himself title to certain shares of stock in petitioner, a Delaware corporation, and directing petitioner to cancel the certificates for such stock outstanding on its books and to issue new certificates to the Custodian. The order contained a finding that, although, prior to August 31, 1939, the shares stood on the books of petitioner in the name of a Swiss corporation, they were held for the benefit of a German corporation, and constituted property belonging to a national of Germany. It was contended that the shares were pledged to certain Swiss banks as collateral for a loan.

Held: the Custodian's order is valid, and must be complied with. Pp. 332 U. S. 474-479. chanrobles.com-red

Page 332 U. S. 470

2. Petitioner has no legal interest in the issue as to ownership of its stock, and no standing to represent the interests of its shareholders or pledgees of its stock. P. 332 U. S. 474.

3. Under the war power, which includes reasonable preparation for war, the United States, acting under a statute, may summarily reduce to possession in furtherance of the war effort any property in this country of any alien, and the problems of compensation may await the judicial process. Pp. 332 U. S. 474-477.

4. The vesting order of the Custodian was authorized by § 5(b)(1) of the Trading with the Enemy Act, as amended, and Executive Order 9095, as amended. P. 332 U. S. 477.

(a) The fact that the stock certificates did not come into the hands of the Custodian is immaterial. P. 332 U. S. 477.

(b) The power to require the issuance of new certificates was incidental to the Custodian's power to vest in himself the property of a foreign national, including stock ownership in an American corporation. P. 332 U. S. 477.

5. Sections 5(b)(2) and 7(e) of the Trading with the Enemy Act, as amended, protect petitioner from any liability to bona fide holders of its shares by reason of any infirmity in the Custodian's vesting order or his direction that new certificates be issued to him. Pp. 332 U. S. 477-478.

6. The Custodian's vesting order was not contrary to § 8(a) of the Trading with the Enemy Act, which formerly exempted property pledged to "any person not an enemy or ally of enemy;" because the later enactment of § 5(b)(1) rendered § 8(a) inapplicable to the property of friendly aliens. Pp. 332 U. S. 478-479.

7. The Constitution guarantees to friendly aliens the right to just compensation for the requisitioning of their property by the United States, and it must be assumed that the United States will meet its obligations under the Constitution. Pp. 332 U. S. 479-480.

156 F.2d 793, affirmed.

A Bankruptcy Court instructed a corporation in reorganization proceedings under Chapter X to comply with an order of the Alien Property Custodian vesting in himself shares of the corporation's stock outstanding in the name of a friendly alien and directing the corporation to cancel the shares on its books and to issue new certificates therefor to the Custodian. The Circuit Court of Appeals affirmed. 156 F.2d 793. This Court denied chanrobles.com-red

Page 332 U. S. 471

certiorari, 329 U.S. 730, but, on rehearing, granted certiorari and substituted the Attorney General, successor to the Alien Property Custodian, as the party respondent. 330 U.S. 852. Affirmed, p. 332 U. S. 480.