is clear that both the Attorney General and the Alien Property Custodian had the authority on behalf of the United States to settle the Halbach stock claims as they did.
Plaintiffs do not question the authority of the Attorney General acting for the United States in disposing of litigations as exemplified in the Confiscation Cases, 7 Wall. 454, 19 L. Ed. 196; Castell v. United States, supra, and New York v. New Jersey, 256 U.S. 296, 41 S. Ct. 492, 65 L. Ed. 937, but they seek to restrict the scope of those decisions to an allowance of some latitude to the Attorney General in determining conditions under which he will cease to prosecute for the Government or will abandon an appeal. Those decisions do not permit of such restriction. The Confiscation Cases opinion is the leading one in the field. That was also an enemy property case. It concerned a group of Southern ships and arose under the Act of August 6, 1861. The Government had obtained judgments against six of the ships and these had been appealed to the Supreme Court. In that tribunal, the Attorney General, over the objection of the informer, moved to reverse and remand those judgments in order that the cases might be dismissed below. This was in accordance with an agreement with the claimants. The court allowed the motion saying:
'Appointed, as the Attorney-General is, in pursuance of an act of Congress, to prosecute and conduct such suits, argument would seem to be unnecessary to prove his authority to dispose of these cases in the manner proposed in the respective motions under consideration, * * *.'
The Castell litigation was a suit under the 1917 Trading with the Enemy Act. Following a judgment for the plaintiff there was a settlement in which the Attorney General agreed to abandon his appeal and pay over the property in consideration of the Government retaining part of it on account of a tax claim against the plaintiff. Later the plaintiff, as here, challenged the right of the Attorney General to make the settlement and the latter's power to do so was upheld. In the New York v. New Jersey opinion the Attorney General was sustained in accepting on behalf of the Government different relief from that for which he had sued.
The power of Congress to specifically limit the authority of the Attorney General with reference to litigation in which the Government is a party is, of course, undeniable. The Federal Tort Claims Act is a late illustration of this. Under that Act the Attorney General's right to settle cases is subject to the approval of the district court. 62 Stat. 984, 28 U.S.C. § 2677. Similarly, violations of the Immigration Act cannot be compromised without the consent of the court and the reason for the compromise must be spread on the court minutes. 39 Stat. 893, 894, 8 U.S.C.A. § 164. But where such express restriction is not spelled out in a particular statute '* * * no Act of Congress has amended the statutes which impose on the Attorney General the authority and the duty to protect the Government's interest through the courts.' United States v. California, 332 U.S. 19, 27, 67 S. Ct. 1658, 1663, 91 L. Ed. 1889. See also Swift & Co. v. United States, 276 U.S. 311, 48 S. Ct. 311, 72 L. Ed. 587; Kern River Co. v. United States 257 U.S. 147, 155, 42 S. Ct. 60, 66 L. Ed. 175.
The opinions of the Attorney General since 1831 uphold his authority to compromise Government litigation. Those opinions are quoted in the opinion of Attorney General Cummings of October 2, 1934, 38 Op.Attys.Gen 98.
Royal Indemnity Co. v. United States 313 U.S. 289, 61 S. Ct. 995, 85 L. Ed. 1361, cited by plaintiffs as contrary authority, merely held that in the face of an express statute outlining the only method in which a tax controversy could be compromised, an attempt by a collector of internal revenue to settle that type of claim was of no effect. Botany Worsted Mills v. United States, 278 U.S. 282, 49 S. Ct. 129, 73 L. Ed. 379, is in the same general category. Nor are the Societe Suisse Cases, cummings v. Societe Suisse Pour Valeurs De Metaux, 66 App.D.C. 121, 85 F.2d 287, 69 App.D.C. 154, 99 F.2d 387, certiorari denied 306 U.S. 631, 59 S. Ct. 463, 83 L. Ed. 1033, of any comfort to plaintiffs. While fraud was existent in both suits, the Court of Appeals in the second opinion stated that fraud was not necessary for the Government to prove if it showed that it had settled the claim involved out of court upon a mistake of fact, namely, that Swiss Corporation was the owner of the stock in question prior to the commencement of the First World War.
In arguing that neither the Attorney General nor the Alien Property Custodian possess authority under the Trading with the Enemy Act of 1917 to have entered into this settlement on behalf of the United States, plaintiffs are confronted with Section 5(b) of that statute as amended by Section 301 of Title III of the First War Powers Act, 1941. 55 Stat. 839, 50 U.S.C. Appendix, § 616. This reads:
'* * * and any property or interest any foreign country or national thereof shall vest, when, as, and upon the terms, directed by the President, in such agency or person as may be designated from time to time by the President, and upon such terms and conditions as the President may prescribe such interest or property shall be held, used, administered, liquidated, sold, or otherwise dealt with in the interest of and for the benefit of the United States, and such designated agency or person may perform any and all acts incident to the accomplishment or furtherance of these purposes; * * *.' (Emphasis supplied.)
The broad powers above outlined were conveyed to the Custodian by Executive Order 9193, July 6, 1942, 7 Fed.Reg. 5205, 50 U.S.C.A.Appendix, § 6 note. They are exemplified in the vesting order used in this matter which employed language appearing in all such orders until 1946 when that language was eliminated as unnecessary. The order read:
'Such property and any or all of the proceeds thereof shall be held in a special account pending further determination of the Alien Property Custodian. This shall not be deemed to limit the powers of the Alien Property Custodian to return such property or the proceeds thereof, or to indicate that compensation will not be paid in lieu thereof, if and when it should be determined that such return or compensation should be made.'
In the sole reported decision directly on the point the Custodian was sustained under this section in conveying vested property as part of a suit settlement. Standard Oil Co.v. Markham, D.C.S.D.N.Y., 64 F.Supp. 656, 666-667, mod. sub. nom. Standard Oil Co. v. Clark, 2 Cir., 163 F.2d 917, 932, certiorari denied 333 U.S. 873, 68 S. Ct. 901, 92 L. Ed. 1149. In that matter too the Custodian was acting in cooperation with the Attorney General and the district court's holding that the Custodian and the Attorney General had the authority to transfer vested property was not disturbed. I think that decision is sound and applicable to the issue at bar.
Additionally as urged by the Government, this was in reality the return of the ascertained non-enemy interest in the stock in accordance with the terms of the vesting order above quoted. Finally as to Section 5(b) all of the briefs leave no room for doubt that the problem of the Halbach claim to the General Dyestuff stock was in the language of the section, '* * * dealt with in the interest of and for the benefit of the United States, * * *' by the Attorney General and the Alien Property Custodian. (Emphasis supplied.)
Plaintiffs contend that the payment for their claim by the Custodian was in conflict with Section 12 of the Act. That section, reads:
'All moneys (including checks and drafts payable on demand) paid to or received by the alien property custodian pursuant to this Act shall be deposited forthwith in the Treasury of the United States, and may be invested and reinvested by the Secretary of the Treasury in United States bonds or United States certificates of indebtedness, under such rules and regulations as the President shall prescribe for such deposit, investment, and sale of securities; and as soon after the end of the war as the President shall deem practicable, such securities shall be sold and the proceeds deposited in the Treasury.'
The end of the war referred to in the section is the end of World War I. On May 15, 1939 the President by Executive Order May 15, 1939, No. 8136, Section 4, 4 Fed.Reg. 2044, ordered the securities held by the Secretary of the Treasury sold and thus concluded the Secretarys obligation under Section 12 to invest, etc. I agree with the defense that if Section 12 limits what would be proper under 5(b) as presently worded, the latter section, which came into the Act as part of the First War Power Act on December 18, 1941, would prevail.
The money used by the Custodian to pay the Halbachs was from his special account with the Treasurer of the United States which account had been set up in accordance with the mandate of the vesting order. But even if the money had been on deposit with the Treasurer there would not have been the slightest difficulty in arranging for the Halbach payment. Executive Order Feb. 26, 1918, No. 2813, Section 5(d) in effect on that date gave the Secretary of the Treasury the right to withdraw monies deposited in the Treasury under the Act '* * * for the purpose of making any payment or payments pursuant to the provisions of said Act, * * *.' And the Attorney General had already held that the Secretary of the treasury had the authority to pay out money for services to the Custodian, 31 Op.Attys.Gen. 438. It seems obvious that under the circumstances of this case if the funds used to pay the plaintiffs' claim had been on deposit with the Treasury, the Secretary thereof on request would have put them at the disposal of the Custodian for use in the settlement.
It is conceded that Section 12 does authorize the Custodian to return property under Section 9 of the Act upon the order of the President. That section has been construed as providing for the '* * * administrative consideration and allowance of claims to property transferred to the Custodian.' McGrath v. Manufacturers Trust Co., 338 U.S. 241, 246, Note 8, 70 S. Ct. 4, 7, 94 L. Ed. 31. Plaintiffs say the section does not apply in this instance because it makes no provision for a compromise settlement and because the President did not delegate his power of return under the section to the Custodian. There is no merit to the second objection. By Executive Order 8136, May 15, 1939, 4 Fed.Reg. 2044, the President vested all of his power under Sections 9, 12, 20 and 21 of the Act in the Attorney General or the Assistant Attorney General in charge of the claims division in the Department of Justice. Later, by Executive Order 9142, April 21, 1942, 50 U.S.C.A.Appendix § 6 note, he transferred that authority to the Custodian. Cf. Markham v. Cabell, 326 U.S. 404, 66 S. Ct. 193, 90 L. Ed. 165, concurring op. Mr. Justice Burton, 326 U.S. at pages 421, 423, 66 S. Ct. at pages 201, 202. As to plaintiffs' first objection the presentation of their claim followed by this suit was strictly under the requirements of Section 9(a) of the Act. The foundation of the settlement from the standpoint of the Custodian was the return of the calculated non-enemy interest in the stock with the Custodian for the United States retaining the enemy interest. Plaintiffs might disagree with the amount arrived at by the Custodian and with his construction of the option but the record reveals that he had substantial grounds for his conclusion that $ 118 a share fairly represented the non-enemy value of the shares and it was at that rate he settled the plaintiffs' claim. I think the transaction came well within Section 9(a) reasonably interpreted.
Under the facts and law the settlement of this litigation was properly entered into and carried to a conclusion by the Attorney General and the Alien Property Custodian representing the United States. It should not be set aside.
The motion will be denied with costs in favor of the defendant.