« PreviousContinue »
or national thereof." It surely was not the purpose of Congress to leave the door halfway open.
The Court's holding disregards the normal incidents of corporate responsibility and frustrates the purpose of Congress to repair the gap in our defense policy toward alien property pointed out by our Behn-Meyer decision. The Uebersee case did not decide the issue here presented. It left open the effect of enemy ownership of minor interest in a foreign corporation but it would hardly have been thought until today that Uebersee left open the fate of the property of an enemy-dominated corporation, which corporation was part of a scheme, as shown in n. 2, "to avoid seizure and confiscation in the event of war." Congress has indicated its attitude quite clearly. To
* Clark v. Uebersee Finanz-Korporation, 332 U. S. 480, 483. See note 3, p. 485, describing the maze of corporate schemes for enemy control of war economy.
5332 U. S. at 489-490:
"It is suggested, however, that this approach may produce results which are both absurd and uncertain. It is said that the entire property of a corporation would be jeopardized merely because a negligible stock interest, perhaps a single share, was directly or indirectly owned or controlled by an enemy or ally of an enemy. It is also pointed out that securities or interests other than stock might be held by an enemy or ally of an enemy and used effectively in economic warfare against this country. But what these interests are, the extent of holdings necessary to constitute an enemy taint, what part of a friendly alien corporation's property may be retained where only a fractional enemy ownership appears, are left undecided. Since we assume from the allegations of the complaint that respondent is free of enemy taint and therefore is not within the definition of enemy or ally of an enemy, those problems are not now before us. We recognize their importance; but they must await legislative or judicial clarification.”
6 50 U. S. C. App. 32:
“The President, or such officer or agency as he may designate, may return any property or interest vested in or transferred to the Alien
day's ruling cuts deeply into the congressional purpose to hold the property of enemy-tainted foreign corporations for satisfaction of war claims.
The result reached by the Court is brought about by a disregard of the ordinary incidents of the relation of a stockholder to a corporation. A stockholder has no present interest in the physical property of an unliquidated corporation. The corporation is responsible for the acts of the corporation. The stockholder normally is not. By his contribution to capital and his participation in profits, he puts his investment at risk, according to the conduct of the corporation. He may have claims against management but those claims have nothing to do with corporate assets subject to the demands of creditors or governments. Those corporate assets grow or diminish because of corporate, not shareholder, conduct. Surely, if a corporation violated the Sherman Act, its assets would be subject to the triple-damage claims of wronged competitors, even to its last cent and to the detriment of stockholders who may have protested vehemently but ineffectively against the illegal course of conduct. Surely
Property Custodian . . . whenever the President or such officer or agency shall determine
"(2) that such owner, and legal representative or successor in interest, if any, are not
"(E) a foreign corporation or association which at any time after December 7, 1941, was controlled or 50 per centum or more of the stock of which was owned by any person or persons ineligible to receive a return under subdivisions (A), (B), (C), or (D) hereof: ..
(A), (B), (C) and (D) refer substantially to national, corporate or individual enemies.
? Cook, Corporations (8th ed.), vol. I, § 11; vol. III, SS 663, 664. 8 Christopher v. Brusselback, 302 U. S. 500, 503:
"A stockholder is so far an integral part of the corporation of which he is a member, that he may be bound and his rights foreclosed by
a corporate deed of the corporation's "interest, right, or title” to a piece of property would not leave in a stockholder any interest adverse to the grantee.
The Court finds justification for allowing a stockholder to sue in the language of $ 9; the Court says the holding "is based on the Act which enables one not an enemy as defined in $2 to recover any interest, right or title which he has in the property vested." No authority is cited for the proposition that a stockholder has an "interest,” within the meaning of the Act, in the physical assets of the corporation, separate from the interest of the corporation. Corporations may recover on showing their nonenemy character, just as individuals may, but the corporate entity should not be disregarded without some evidence of such congressional intention. The language of $ 9, "interest. in [the] property . . . seized," could not normally be taken to mean a stockholder's interest in the administration and profits of the corporation; in our opinion it means an interest in the assets actually
authorized corporate action taken without his knowledge or participation...."
See Pink v. A. A. A. Highway Express, 314 U. S. 201, 207.
Anderson v. Abbott, 321 U. S. 349, 361: "Some shareholders of Banco claim the right to rescind their purchases of its shares on the ground of misrepresentations in the sale. But whether or not such relief might be granted in some instances, it seems clear that Banco's stockholders are bound by the decisions of the directors which determined, within the scope of the corporate charter, the kind and quality of the corporate undertaking."
'In the analogous law of prize, it is settled that the nonenemy stockholders of an enemy corporation have no right to recover any portion of seized property which was owned by the corporation. The Polzeath,  P. 241, 256 (C. A.), affirming (1916) P. 117: "... the British shareholders are not entitled to intervene. It is suggested that the ship should be appraised, and that payment should be made to the British shareholders in proportion to their holdings. The Court has no such power; it cannot administer the affairs of the company. If any hardship is caused to innocent shareholders by the
seized. There is no indication that Congress intended that the mere vesting of the corporate assets by the Attorney General should confer upon each stockholder an enforceable interest in those assets.
Where the corporation subjects its assets to forfeiture by aiding our enemies, the corporation should pay the penalty. The friendly stockholder should not be permitted by strained statutory interpretation to withdraw his contribution to the funds that were used to our injury and so reduce the assets available for war claimants. We see no real difference, as to liability to have assets vested under the Trading with the Enemy Act, between a corporation enemy-dominated as this is alleged to be and an enemy-domiciled corporation producing munitions of war for use against the United States. The Court's opinion refers only to enemy-dominated neutral corporations but
declaration of forfeiture their position is that they can only appeal to the merciful consideration of the Crown."
Steamship “Marie Glaeser," 1 Lloyd's Prize Cases 56, 111 (1914):
"Now, with regard to the shareholders in the vessel, it is quite clear that if they are enemy shareholders their property must go with the capture of the vessel in which they have put their money—a vessel sailing under the flag of the enemy. Not only is that so with regard to shareholders who might be citizens of the German Empire, but it is equally so if some of those shareholders happen to be, as they may be—I do not know-persons who are citizens of this country. If a shareholder invests his money by taking shares in a vessel which is liable to capture, he takes that risk.
"If in the case of a British shareholder he likes to present his case to the Crown as one which ought to be leniently dealt with, that is another matter. I have nothing to do with that. I am here only to administer the law, and I must hold that no shareholders have any right whatsoever to be protected from the results of the capture of this vessel.”
Standard Oil Tankers ('ase, Arbitration Award, Aug. 5, 1926, II Foreign Relations of the United States (1926), p. 166. Cf. The Pedro, 175 V'. S. 354, 367–368.
the theory of recovery for friendly stockholders appears to be equally applicable to friendly stockholders of enemy corporations.
The Court of Appeals should be affirmed.
UNITED STATES v. SPECTOR.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF CALIFORNIA.
No. 443. Argued March 6, 1952.-Decided April 7, 1952.
1. Section 20 (c) of the Immigration Act of 1917, as amended, 8
U. S. C. $ 156 (c), which makes it a felony for an alien against whom a specified order of deportation is outstanding to “willfully fail or refuse to make timely application in good faith for travel or other documents necessary to his departure” is not, on its face,
void for vagueness. Pp. 170–172. 2. The question whether the statute is unconstitutional because it
affords a defendant no opportunity to have the court which tries
The District Court dismissed two counts of an indictment against respondent on the ground that $ 20 (c) of the Immigration Act of 1917, as amended, 8 U. S. C. $ 156 (c), on which they were based, was void for vagueness. 99 F. Supp. 778. On appeal to this Court under 18 U. S. C. $ 3731, reversed, p. 173.
Robert L. Stern argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General McInerney, Beatrice Rosenberg and Kenneth C. Shelver.
John W. Porter and A. L. Wirin argued the cause and filed a brief for appellee.