Commercial Trust Co. of NJ v. Miller

Background

A New Jersey trust company held bonds in a joint trust for a man in Paris (Frederick Wesche) and a woman in Germany (Helene von Schierholz), payable to either of them or the survivor. The federal Alien Property Custodian investigated, concluded that von Schierholz was an enemy and demanded the securities. The trust company refused, arguing the Custodian failed to investigate the neutral co-owner and that the law had ended with the war. Lower courts ordered the trust company to turn over the property, and the trust company appealed.

Reasoning

The Court looked to earlier decisions that explained the Trading with the Enemy Act. Those cases say the President may vest the Custodian with power, the Custodian’s determination is conclusive for taking preliminary custody, and a suit by the Custodian functions like a seizure. The Court held the Trust Company’s defenses were unavailable because the Act gives the Custodian peremptory authority to take preliminary custody and the right of a claimant to seek later recovery under the Act’s claim procedures. The Court also rejected the argument that the statute automatically ended with the fighting, noting Congress had retained the law for continued handling of enemy property.

Real world impact

Banks, trustees, and others holding mixed or joint accounts that include an enemy-linked interest must yield preliminary possession to the Custodian when he so determines. Claimants who believe the Custodian erred still may pursue claims under the Act to recover property or compensation. The decision affirms a strong wartime administrative power while preserving a post-taking legal path for correcting mistakes.