Behn, Meyer & Co. v. Miller

Background

A company organized in the Straits Settlements (a British colony) carried on business in the Philippine Islands before World War I. Most of its stock was held by German subjects, but the company itself was not resident in any nation at war with the United States. In February 1918 the Alien Property Custodian seized the company’s assets in the Philippines, converted them to cash, and the proceeds have been held by the Custodian or the U.S. Treasury. The company sued in federal court in 1922 to recover the funds; the trial court dismissed the suit and the Court of Appeals affirmed.

Reasoning

The Court addressed whether the company, never itself an enemy or ally, could recover under §9(a) of the Trading with the Enemy Act, and whether the President’s seizure authority in §7(c) allowed taking corporate property simply because enemy stockholders existed. The Court held that §9(a) still gives a right of recovery to anyone who was never an enemy or ally. It rejected the view that corporations may be treated as enemies solely because some shareholders were enemy subjects. The opinion explains that Congress’ statutory definitions and later amendments allow certain classes to recover but do not permit permanent confiscation of property taken unlawfully merely because some stockholders were enemies.

Real world impact

Non-enemy foreign companies that had assets seized during the war may pursue their claims to get property or proceeds returned. The decision narrows the scope of wartime seizure powers and sends the case back to the lower court for further proceedings consistent with this ruling.