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STASI v. MARKHAM

December 10, 1946

STASI
v.
MARKHAM, Alien Property Custodian, et al.



The opinion of the court was delivered by: MEANEY

This is an action brought under the Trading with the Enemy Act of October 6, 1917, 40 Stat. 411, 50 U.S.C.A.Appendix, ยงยง 1-31, as amended, for the recovery from the Alien Property Custodian of money claimed to be owed to the plaintiff by an Italian Company, the American assets of which have been vested by the Custodian.

Pursuant to the above statute (hereinafter referred to as the Act), the property of the Italia Societa Anonima Di Navigazione, also known as the Italian Lines, was seized by the Alien Property Custodian by Vesting Order 182, dated September 28, 1942.

 The plaintiff, a citizen of Italy, has been residing in the United States since 1930. In 1939, while employed as a longshoreman on board the vessel 'S.S. Bermonia,' owned by the said Italian Lines, the plaintiff sustained accidental injuries. Subsequently, on December 18, 1942, in a negligence action brought against the Italian Lines in the New York Supreme Court, the plaintiff recovered a judgment in the sum of $ 18,000. He thereafter, on February 18, 1943, filed a claim with the Alien Property Custodian but received no payment. He now brings suit under section 9(a) of the Act as a creditor of the said Italian Lines.

 The matter is presently before the court on plaintiff's motion for summary judgment, on the ground that there is no genuine issue as to any material fact raised by the answer of the defendant and none of the defenses set forth in the answer are sufficient in law.

 The government opposes the motion and has made a counter-motion for summary judgment on the ground that the plaintiff has no standing to institute or maintain this action and the complaint fails to set forth a claim upon which relief can be granted.

 The defendant has urged several grounds in support of its counter-motion. In the view of the court, the contentions raised by the second ground are dispositive. This opinion will, therefore, be confined to the arguments raised thereon.

 On the second ground, the government contends that the plaintiff may not recover in this action because the 'debt' claim of the plaintiff against the Italian Lines did not arise until after the declaration of war against Italy and the vesting of the Italian debtor's property. This contention makes necessary a determination of what constitutes a 'debt' within the meaning of section 9(a) of the Act, and raises the question of whether a debt might be paid which had not been 'owing' before the Act became effective with respect to Italian funds and property by the declaration of war against Italy on December 11, 1941.

 The pertinent provisions of section 9(a) are:

 'Any person not an enemy or ally of enemy * * * to whom any debt may be owing from an enemy or ally of enemy whose property or any part thereof shall have been conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian * * * may institute a suit * * * in the district court of the United States * * * to establish the * * * debt so claimed * * * .'

 While it is true that the word 'debt,' as used in section 9(a), must be given a liberal construction, and is not confined to causes for which the common law action of debt might be maintained ( Miller v. Robertson, 266 U.S. 243, 45 S. Ct. 73, 69 L. Ed. 265), it is equally true that the construction will not be enlarged to include a claim for damages for personal injuries arising out of a tort. Norris v. Bergdoll, D.C., 283 F. 981.

 In the instant case, prior to the entry of a judgment in favor of the plaintiff in the negligence suit brought in the New York Supreme Court, the plaintiff had nothing more than an unascertained and unliquidated claim based upon an alleged liability in tort. Cf. W. S. Tyler Co. v. Deutsche D. G. Hansa, D.C., 276 F. 134. In the opinion of this Court such a claim is not a 'debt' within the meaning of section 9(a) of the Act.

 Assuming, but not deciding, that the judgment obtained by the plaintiff in the New York action created a debt upon which a claim could properly be made within Section 9(a) of the Act, the further question remains whether it is then, on that date, such a debt as 'may be owing from an enemy' within the time limitations contemplated therein.

 The Supreme Court in Markham v. Cabell, 327 U.S. 404, 66 S. Ct. 193, 90 L. Ed. . . ., has stated that the trading with the enemy Act automatically went into effect again when World War II broke out. In the same opinion that court ruled that the time limitations in Section 9(e) of the Act relate only to claims against property seized during World War I and have no relation to property seized during the recent conflict. Thus, while section 9(a) became effective automatically, section 9(e), which specifically provided that no debt shall be allowed under section 9 'unless it was owing to and owned by the claimant prior to October 6, 1917', did not. There was, therefore, no specific limitation clause in ...


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