Jackson Ex Rel. United States v. Irving Trust Co.

Background

Two surviving partners of a New York firm sued to recover a debt they said a German corporation owed them. The firm alleged the corporation’s assets had been seized and held by the Alien Property Custodian under the Trading with the Enemy Act, and they sought payment under § 9(a). A District Court entered a decree in 1929 ordering payment and the award was paid. In 1938 the United States moved to set aside that decree, claiming the District Court lacked power to hear the case. The District Court granted the motion, the Circuit Court of Appeals reversed and restored the decree, and the Supreme Court granted review.

Reasoning

The central question was whether a final, unappealed judgment for payment from seized enemy-related property could be voided later because the beneficial owner of the claim might have been an “enemy” under the Act. The Court explained that § 9(a) expressly lets a non-enemy claimant sue to establish a claim and that the court must decide all facts needed to resolve the claim. Because the status of the partners, the nature of the partnership assets, and whether the German corporation owed the debt were issues the statute committed to the court, those questions were properly litigated. The Court held that a party cannot collaterally attack a final decree on that ground when there was opportunity to litigate and no appeal was taken.

Real world impact

The ruling leaves the 1929 decree and the payment intact and means similar final judgments in § 9(a) suits cannot be undone later by the Government for lack of court power when the facts were litigated. If errors existed, the proper remedy was appeal, not a later collateral attack.