273 U.S.

182
47 S.Ct. 315
71 L.Ed. 596

GREAT NORTHERN RY. CO. et al.

v.
SUTHERLAND, Alien Property Custodian.
No. 53.
Argued Dec. 3 and 6, 1926.
Decided Jan. 17, 1927.

Walker D. Hines, of New York City, for appellants.

The Attorney General and Mr. Assistant Attorney General Letts, for
appellee.
[Argument of Counsel from page 183 intentionally omitted]
Mr. Justice BRANDEIS delivered the opinion of the court.

This is a suit under section 17 of Trading with the Enemy Act, October 6, 1917,
c. 106, 40 Stat. 411, 425 (Comp. St. 3115 1/2 i), which confers upon the
district courts jurisdiction to enter 'such orders and decrees, and to issue such
process as may be necessary and proper in the premises to enforce the
provisions of this act.' It was brought on February 7, 1925, in the federal court
for southern New York. The Alien Property Custodian was the plaintiff; the
Great Northern Railway way Company and the Central Union Trust Company
the defendants. The relief sought is that the Great Northern be ordered to
cancel upon its books and records designated certificates for shares of its stock
standing in names of or held for enemies; that it issue new certificates therefor
in the names of certain trust companies as depositaries for the Custodian; that
the Central Union be ordered to countersign the new certificates as Registrar of
Transfers; and that the new certificates so countersigned be delivered to the
Custodian without his presenting and surrendering the old ones. The defendants
entered a general appearance. On the pleadings and facts stipulated, the court
entered a final decree, which required the issue, countersigning, and delivery of
the new certificates without presentation or surrender of those outstanding.

Rights arising under the Constitution and treaties are alleged to have been
violated. On this ground, a direct appeal was taken to this Court under section
238 of the Judicial Code (Comp. St. 1215), as it stood prior to the effective
date of the Act of February 13, 1925 (43 Stat. 936).
2

During the war the Great Northern filed with the Custodian, from time to time,
the reports required by section 7(a) of the act (Comp. St. 3115 1/2 d). All of
these reports, except one, contained lists of persons who were registered owners
of specified numbers of shares and were believed to be enemies. One report
stated that Lieber & Co., believed to be an enemy, was believed to be the
beneficial owner of shares standing in the name of A. Biederman & Co. All
these reports stated that the actual location of the certificates representing said
shares was unknown to the company. In consequence of these reports, the
Custodian made upon the Great Northern demands in writing in respect to the
shares therein referred to. All these demands were made during the war, and all
were in substantially the same form. The construction and effect of that
document are the principal matters in controversy. The part of it requiring
special consideration is this:

'To Great Northern Railway Company, Address 32 Nassau St., New York, N.
Y.:

'I, A. Mitchell Palmer, Alien Property Custodian, duly appointed, qualified, and
acting under the provisions of the act of Congress known as the 'Trading with
the Enemy Act,' approved October 6, 1917, and the executive orders issued in
pursuance thereof, by virtue of the authority vested in me by said act, and by
said executive orders, after investigation do determine that Albertine, Baroness
Schauenburg (name of enemy or ally of enemy), whose address is Friedburg,
Baden, Germany (last known address), is an enemy (not holding a license
granted by the President), and has a certain right, title, and interest in and to 12
shares of preferred (common, preferred) stock standing on your books in the
name of Albertine, Baroness Schauenburg.

'I, as Alien Property Custodian, do hereby require that you shall convey,
transfer, assign, and deliver to me as Alien Property Custodian, to be by me
held, administered, and accounted for as provided by law, every right, title, and
interest of the said enemy in said stock, including in respect to the said stock
the right which the said enemy may have, (a) to receive all notices issued by
you to the holders or owners of similar stock, shares, or certificates; (b) to
exercise all voting power appertaining to such stock, shares, or certificates; (c)
to receive all subscription rights, dividends, and other distributions and
payments, whether of capital or of income, declared or made on account of such

stock, shares, or certificates.

6

'I, as Alien Property Custodian, do hereby further require that you note the
substance of this demand upon your stock books and/or stock ledger, and that
you furnish a copy of this demand to the registrar and/or transfer agent, if any,
of the stock in respect to which this demand is made.

'I, as Alien Property Custodian, do hereby further require that within ten days
from the service of this demand upon you, you report to me any and all acts
which you have done, or omitted to do, pursuant to the requirements of this
demand.

'Until otherwise directed, you will remit to the Alien Property Custodian at
Washington, by check payable to his order, all payments, whether of capital or
income, now or hereafter declared or due on account of such stock, shares, or
certificates, and you will direct such notices in respect to the said stock, shares,
or certificates to the Alien Property Custodian.

'This demand is supplementary to any demand which may hitherto have been
made upon you, accompanied by the presentation of certificates which
represent shares or beneficial interests, for the transfer into my name as Alien
Property Custodian, of such certificates, or for the transfer thereof into the
name of any nominee of me as Alien Property Custodian, and this demand shall
not prejudice or affect any demand accompanied by such certificates which has
been, or which may hereafter be, made.'

10

The Custodian admitted that, during the war, there was no request specifically
for the cancellation of the old certificates and the issue of new ones. He
contended that the President determined, as set forth in the original demand,
that the persons in whose names the shares were registered, or those for whom
the shares were held, were enemies not licensed, each having a certain right,
title, and interest in and to the specific shares; that, by the demand, he duly
seized these shares and the alien's interest therein; that thereby the Custodian
secured legally a control over the shares as complete and effective as the
control given the Custodian over chattels physically seized; that this is true,
although prior to the Act of November 4, 1918, c. 201, 1 (40 Stat. 1020),
Congress had not provided any method for enforcing the issue of new
certificates without surrender of the old; that, when the Trading with the Enemy
Act was so amended, he became entitled to have new certificates for the shares
delivered to him without the presentation or surrender of the old ones; that,
having thereafter duly requested their issue and delivery to him, he was entitled

to the relief prayed for.

11

The companies admitted that, after the war and before institution of the suit,
there was a request, appropriate in form. They denied that the determinations
and the demands made during the war were duly made. But their defense was
rested mainly on the claim that the corpus of the shares, as distinguished from
an undefined interest therein, was not seized or demanded during the war. They
contend that by the original demand the President determined only that the
enemy had some interest; that the instrument did not constitute a symbolic
seizure of the shares; and hence that it did not create such a right as could serve
as a basis for compelling their transfer to the Custodian, or the cancellation of
the old certificates and the issue of the new ones. They insist that the
determination of some interest is not equivalent to determining that the shares
belong to or are held for the enemy; that any interest held by the enemy,
however remote or contingent, might satisfy such a determination and yet the
shares in fact belong to and be held for another, not an enemy; that a demand
upon the corporation to assign such an undefined interest is not a demand that
the shares themselves be transferred; and that this interpretation of the
document is supported by the fact that the Custodian made, at the time, no
effort to obtain a new certificate, and in fact expressly indicated that he was not
making any such effort. The companies' further contention is that, as applied to
the facts stipulated, the act as amended did not purport to require cancellation of
the old and delivery of new certificates, and that, if it did, it denied due process,
and hence was void under the Fifth Amendment.

12

It may be assumed that under section 7 recovery by the Custodian of property

demanded by him is limited by the scope of the demand. Compare Sutherland
v. Guaranty Trust Co. (C. C. A.) 11 F. (2d) 696; and that the demand made
after the war, if it stood alone, would not avail the Custodian. Compare Miller
v. Rouse (D. C.) 276 F. 715, 717.

13

First. The main question is whether the Custodian had, by the demand above
set forth, taken action which could legally serve as a basis for the specific
request for the certificates made after the war. The demand must be read in the
light of the then existing legislation, of its formal title or designation, of the
extracts of the Executive Order embodied in it, and of the reports of the Great
Northern out of which it originated. And these reports must be read in the light
of the fact that stock is presumed to be owned by the registered owner, and that,
where stock is stated to be held by the registered owner for another named
person, the latter is presumed to own the whole beneficial interest. Compare
Turnbull v. Payson, 95 U. S. 418, 421, 24 L. Ed. 437; Keyser v. Hitz, 133 U. S.
138, 149, 10 S. Ct. 290, 33 L. Ed. 531; Finn v. Brown, 142 U. S. 56, 67, 12 S.

Ct. 136, 35 L. Ed. 936.

14

The omission from the demand of the request for a new certificate is
susceptible of a simple explanation. At the times of the earlier demands, section
12 of the act, as amended by Act March 28, 1918, c. 28, 1, 40 Stat. 423, 460,
made it the duty of corporations to transfer seized shares upon its 'books into
the name of the Alien Property Custodian' only if his demand was
'accompanied by the presentation of the certificates which represent such
shares.' The Custodian was unable to present the old certificates. Consequently
a request for the new certificates would not have been inserted in the demand,
even if the instrument had contained an express recital of the determination that
the enemy owned the whole interest in the shares and that the whole interest
had been seized. It was not until the amendment of November 4, 1918, that the
corporation was required to cancel the old certificates and issue the new ones,
whenever enemy property consisted of

15

'shares of stock or other beneficial interest * * * standing upon its * * * books

in the name of any person * * * or held * * * for the benefit of any person * * *
who shall have been determined by the President, after investigation, to be an
enemy * * * and which shall have been required to be conveyed, transferred,
assigned, or delivered to the Alien Property Custodian or seized by him. * * *'
40 Stat. 1021.

16

It is true that the demands for some of the shares were not made until after
November 4, 1918, and that in them the request for the new certificates might
have been made. But, in view of war conditions, it is not surprising that the
modification of the form in use was not promptly made, and that the old form
continued in use.

17

The form used indicated clearly, in parts other than that quoted above, the
intention to seize the whole property. It was entitled:

18

'Demand on Corporation for Stockholders' Interest without Presentation of

Certificates. Demand by Alien Property Custodian for Property.' Preceding that
part of the document addressed specifically to the Great Northern quoted
above, were printed the following 'Extracts from Executive Order of February
26, 1918':

19

Section 1(c): 'The words 'right,' 'title,' 'interest,' 'estate,' 'power,' and 'authority'
of the enemy, as used herein, shall be deemed to mean respectively such right,
title, interest, estate, power, and authority of the enemy as may actually exist

and also such as might or would exist if the existing state of war had not
occurred, and shall be deemed to include respectively the right, title, interest,
estate, power, and authority in law or equity or otherwise of any representative
of or trustee for the enemy or other person claiming under or in the right, of, or
for the benefit of, the enemy.'
20

Section 2(a): 'A demand for the conveyance, transfer, assignment, delivery, and
payment of money or other property, unless expressly qualified or limited, shall
be deemed to include every right, title, interest, and estate of the enemy in and
to the money or other property demanded as well as every power and authority
of the enemy thereover.'

21

Section 2(c): 'When demand shall be made and notice thereof given, as
hereinbefore provided, such demand and notice shall forthwith vest in the Alien
Property Custodian such right, title, interest, and estate in and to and possession
of the money or other property demanded and such power or authority
thereover as may be included within the demand, and the Alien Property
Custodian may thereupon proceed to administer such money and other property
in accordance with the provisions of the 'Trading with the Enemy Act' and with
any order, rules, or regulations heretofore, hereby, or hereafter made by me or
heretofore or hereafter made by the Alien Property Custodian.'

22

Section 3(d): 'The Alien Property Custodian may exercise any right, power, or
authority of the enemy in, to, and over corporate stock, shares, or certificates
representing beneficial interests owing or belonging to or held for, by, on
account of, or on behalf of or for the benefit of an enemy, including (1) the
right to receive all notices issued by the corporation, unincorporated
association, company, or trustee which issued such stock, shares, or certificates,
to the holders or owners of similar stock, shares, or certificates, (2) the right to
exercise all voting power appertaining to such stock, shares, or certificates, and
(3) the right to receive all subscription rights, dividends, and other distributions
and payments, whether of capital or income, declared or made on account of
such stock, shares, or certificates, regardless of whether or not such stock,
shares, or certificates be in the possession of the Alien Property Custodian and
regardless of whether or not such stock, shares, or certificates have been
transferred to the Alien Property Custodian upon the books of the corporation,
association, company, or trustee issuing the same.'

23

Following the provisions of section 3(d) of the Executive Order, the Custodian
enumerated in its demand upon the Great Northern substantially every right
which the sole owner of shares could exercise, except the right to receive a
certificate representing the stock and the right to dispose of the same. His

request should be construed as a demand for delivery of the shares, because it

extended to everything which the legislation permitted prior to the amendment
of November 4, 1918. The Custodian sought possession, not title. Central Trust
Co. v. Garvan, 254 U. S. 554, 566, 569, 41 S. Ct. 214, 65 L. Ed. 403. The term
seizure as used in this connection connotes merely the taking of possession.
Hence there was no occasion to define the extent of the enemy's ownership.
The demand operated as a symbolic seizure.
24

The claim of the Custodian to have the new certificates does not rest, as has
been argued, upon post-war action taken by him; or upon a construction of the
Joint Resolution of July 2, 1921 (42 Stat. 105), officially declaring the war at an
end; or upon any provision of the Treaties of Peace, Auguest 24, 1921, 42 Stat.
1946; August 25, 1921, 42 Stat. 1939. The Custodian's claim and the decree
rest wholly upon the demands made during the war. Since the Custodian's
possession of the shares was completed before the end of the war, it is
immaterial that the demand for new certificates was not made until after the
war. The Act of November 4, 1918, had made it the duty of the corporation to
cancel the old certificates and to issue new ones, whenever the Custodian had
seized shares. Section 5 of the Joint Resolution of July 2, 1921, reserved to the
Custodian all property which before that date had come under his control.

25

The seizures made before November 4, 1918 were equally effective with those
made after. It is urged that so to hold gives retroactive effect to the amendment
of that date. But this is not true. The amendment does not enlarge the scope of
the seizure. No substantive right is thereby affected. The amendment confers
merely the adjective right to require of the corporation delivery of the usual
evidence of effective possession of shares. The right conferred is comparable to
providing a new judicial remedy for an existing substantive right. As was said
in Cox v. Hart, 260 U. S. 427, 435, 43 S. Ct. 154, 67 L. Ed. 332:

26

'A statute is not made retroactive merely because it draws upon antecedent facts
for its operation.'

27

Second. The companies contend that, even after the amendment of November
4, 1918, the act did not purport to confer upon the Custodian the power to
demand new certificates without surrender of the old. As seen above, section 12
of the original act (Comp. St. 3115 1/2 ff) made it the duty of the corporation
to transfer shares or certificates into the Custodian's name only if the old
certificates were surrendered. It is true that this condition was never in terms
removed from that section. But it was necessarily removed when the Act of
November 4, 1918, amended section 7(c) by requiring the corporation to issue
new certificates whenever the Custodian had demanded the shares of alien

enemies. See Garvan v. Marconi Co. (D. C.) 275 F. 486; Garvan v. Certain
Shares of International Agricultural Corp. (D. C.) 276 F. 206; Columbia
Brewing Co. v. Miller (C. C. A.) 281 F. 289; Miller v. Kaliwerke Aschersleben
Aktien-Gesellschaft (C. C. A.) 283 F. 746.
28

Third. The companies contend that the act, so construed and applied, deprives
them of due process, since it confers upon the Custodian rights not possessed
even by the owners of the shares. It is urged that the owners of stock in the
Great Northern took it subject to the provision inserted in the certificate that it
is 'transferable only on the books of the company in person or by attorney upon
surrender of this certificate'; that the Great Northern's by-laws provide that its
shares 'shall be transferred only on the books of the company by the holder
thereof in person or by his attorney upon surrender and cancellation of
certificates for a like number of shares'; that these conditions were imposed by
it under its charter, a special act of the Legislature of Minnesota; and that they
constitute property attributes inhering in the shares and in the stock certificates
which are evidences thereof; that the Great Northern shares are listed upon the
New York Stock Exchange and the company maintains in New York on office
for transferring certificates of its stocks; that section 178 of the Personal
Property Law of New York (Consol. Laws, c. 41) provides that, except where a
certificate is lost or destroyed, the corporation shall not be compelled to issue a
new certificate until the old certificate is surrendered to it; and that the Central
Union, registrar of Great Northern stock, is under agreement with the New
York Stock Exchange, whereunder such registrar, as a condition of being
accepted by the New York Stock Exchange, is obligated not to register the
transfer of certificates of Great Northern without surrender of the certificates
outstanding therefor.

29

The decisions of this court and provisions made in the act dispose of this
contention. Protection to the rights of owners other than enemies was provided
for by section 9 (Comp. St. 3115 1/2 e). Stoehr v. Wallace, 255 U. S. 239,
243, 246, 41 S. Ct. 293, 65 L. Ed. 604; Central Trust Co. v. Garvan, 254 U. S.
554, 567, 569, 41 S. Ct. 214, 65 L. Ed. 403. Neither the railway nor the
registrar has any interest in the shares. They are protected in making delivery of
the new certificates by section 7(e) of the act which provides:

30

'No person shall be held liable in any court for or in respect to anything done or
omitted in pursuance of any order, rule, or regulation made by the President
under the authority of this act.

31

'Any payment, conveyance, transfer, assignment, or delivery of money or

property made to the alien property custodian hereunder shall be a full

acquittance and discharge for all purpose of the obligation of the person
making the same to the extent of same.'
32

The requirement that the company make complete delivery to the Custodian of
the possession of the shares including the usual indicia was well within the war
powers of Congress. See, also, Garvan v. Certain Shares of International
Agricultural Corporation (D. C.) 276 F. 206; Miller v. Kaliwerke Aschersleben
Aktien-Gesellschaft (C. C. A.) 283 F. 746.

33

Affirmed.

34

Mr. Justice SUTHERLAND, Mr. Justice SANFORD, and Mr. Justice STONE,
dissent.