Central Union Trust Co. of NY v. Garvan

Background

A federal official called the Alien Property Custodian sued to obtain securities held by trustees for a German insurance company the government had determined to be an enemy. The libels asked a marshal to seize the specified securities and required the trustees, who held the funds under state trust rules for American policyholders, to show cause why the property should not be delivered. The District Court ordered possession to the Custodian, and the Circuit Court of Appeals affirmed those decrees.

Reasoning

The Court asked whether the President’s determination, made through the Custodian after investigation, authorizes an immediate demand or seizure of property believed to belong to an enemy. It concluded that the statute and later amendments give the President and the Custodian authority to require transfer or to seize such property promptly. The opinion explains that the law provides a special claim process for anyone who disputes the taking, and that courts may enforce the Custodian’s demand under the statute. The Court emphasized that this step is a preliminary, peremptory measure to secure the property pending the statutory claim procedures.

Real world impact

Practically, the ruling lets federal officials take custody of assets suspected to belong to an enemy without waiting for a full judicial determination of ownership. Owners or trustees can still file the statutory claim and bring suit to seek return, but the property will remain under Custodian control until a final decision. The opinion describes this remedy as custody equivalent to a seizure meant to keep the property available if it is later condemned.