^* Headnote by the Managing Editor of the Journal.

¹ Volume 45, United States Statutes at Large (hereinafter cited as “ Stat.” ), page 254. [Supplement to this Journal, April, 1928 (Vol. 23), p. 40.]Google Scholar

² The terms “ German national” and “ Austrian national” and “ Hungarian national” are defined in Section 22 of the Act. The difference in the dates found in these definitions is due to the fact that the existence of a state of war between the United States and Germany was by the United States declared on April 6, 1917, and the existence of a state of war between the United States and Austro-Hungary was by the United States declared on December 7, 1917.Google Scholar

³ Paragraphs (3) and (4) of subsection (b) of Section 3 of the Act; also paragraphs (1) and (2) of subsection (a) of Section 6 of the Act.

⁴ Revised Statutes, Section 4884.

⁵ Subsection (b) of Section 3 of the Act reads as follows:

“ (b) It shall be the duty of the Arbiter, within the limitations hereinafter prescribed, to hear the claims of any German national (as hereinafter defined), and to determine the fair compensation to be paid by the United States, in respect of-

“ (1) Any merchant vessel (including any equipment, appurtenances, and property contained therein), title to which was taken by or on behalf of the United States under the authority of the Joint Resolution of May 12, 1917 (Fortieth Statutes, page 75). Such compensation shall be the fair value, as nearly as may be determined, of such vessel to the owner immediately prior to the time exclusive possession was taken under the authority of such Joint Resolution, and in its condition at such time, taking into consideration the fact that such owner could not use or permit the use of such vessel, or charter or sell or otherwise dispose of such vessel for use or delivery, prior to the termination of the war, and that the war was not terminated until July 2, 1921, except that there shall be deducted from such value any consideration paid for such vessel by the United States. The findings of the Board of Survey appointed under the authority of such Joint Resolution shall be competent evidence in any proceeding before the Arbiter to determine the amount of such compensation.

“ (2) Any radio station (including any equipment, appurtenances, and property contained therein) which was sold to the United States by or under the direction of the Alien Property Custodian under authority of the Trading with the Enemy Act, or any amendment thereto. Such compensation shall be the fair value, as nearly as may be determined, which such radio station would have had on July 2, 1921, if returned to the owner on such date in the same condition as on the date on which it was seized by or on behalf of the United States, or on which it was conveyed or delivered to, or seized by, the Alien Property Custodian, whichever date is earlier, except that there shall be deducted from such value any consideration paid for such radio station by the United States.

“(3) Any patent (or any right therein or claim thereto, and including an application therefor and any patent issued pursuant to any such application) which was licensed, assigned, or sold by the Alien Property Custodian to the United States. Such compensation shall be the amount, as nearly as may be determined, which would have been paid if such patent, right, claim, or application had been licensed, assigned, or sold to the United States by a citizen of the United States, except that there shall be deducted from such amount any consideration paid therefor by the United States (other than consideration which is returned to the United States under section 27 of the Trading with the Enemy Act, as amended).

“ (4) The use by or for the United States of any invention described in and covered by any patent (including an application therefor and any patent issued pursuant to any such application) which was conveyed, transferred, or assigned to, or seized by, the Alien Property Custodian, but not including any use during any period between April 6, 1917, and November 11, 1918, both dates inclusive, or on or after the date on which such patent was licensed, assigned, or sold by the Alien Property Custodian. In determining such compensation, any defense, general or special, available to a defendant in an action for infringement or in any suit in equity for relief against an alleged infringement, shall be available to the United States.”

⁶ 40 Stat. 75.

⁷ Holy Trinity Church v. United States (1892), 143 U. S. (Opinions of the Supreme Court of the United States) 457, at pages 464-465;Stranahan, Buttfield v.(1904), 192 U. S. 470, 495; Cramp & Sons v. Curtis Turbine Co. (1918), 246 U. S. 28, 37; United States v. St. Paid, M. & M. Railway Co. (1918), 247 U. S. 310, 318; Duplex Printing Press Co. v. Deering (1921), 254 U. S. 443, 474; Whitney v. United States (1925), 8 Federal Reporter (hereinafter cited as “Fed.” ) (2d series) 476, 478; In re Ellingsen (1924), 300 Fed. 225, 226; Hampton and L. F. Ry. Co. (1924), 300 Fed. 438, 441; In re Columbia Railway, Gas & Electric Co. (1928), 24 Fed. (2d), 828, 830.Google Scholar

⁸ The Committee on Ways and Means (hereinafter referred to as House Committee) in reporting this measure favorably to the House of Representatives on December 15, 1927 (House Report No. 17, 70th Congress, 1st Session, at page 8), had this to say: “ Claims of German nationals against the United States Government for compensation on account of acts of the United States during the war period divide themselves into three main groups: (1) Ships seized by the United States, (2) a radio station sold to the United States, and (3) patents sold to or used by the United States.”

In the favorable report of the Committee on Finance (hereinafter referred to as Senate Committee) made to the Senate of the United States on February 9, 1928 (Senate Report No. 273, 70th Congress, 1st Session), at page 2, the following appears: “ Property of German nationals in the United States was seized during the war by the Alien Property Custodian under the provisions of the trading with the enemy act, and a large part of it is still retained. . . . The United States Government, under the authority of a joint resolution of Congress, seized and took title to a large number of ships owned by citizens of Germany, and acquired for its own use during the war a large number of patents and a radio station. The United States is justly indebted to the German nationals for the value of their 'property.”

⁹ Article 297 (6) and (d) and paragraphs 1 and 2 of the Annex to Section IV of Part X. Similar provisions are found in the Treaty of St. Germain and in the Treaty of Trianon, the corresponding articles being numbered 249 and 232, respectively.

¹⁰ Articles I and II (42 Stat. 1939). Similar provisions are found in the Treaty of Vienna between the United States and Austria (42 Stat. 1946) and in the Treaty of Budapest between the United States and Hungary (42 Stat. 1951)

¹¹ Paragraph 1 of the Annex to Section IV of Part X.

¹² “ . . . So that notwithstanding the undoubted power of Congress to confiscate, reaffirmed in the Chemical Foundation case, Congress not only has refused to exercise that power up to the present time but has clearly by legislation asserted its policy to be the very contrary of confiscation.” (Report of House Committee December 15, 1927, page 6.)

“ . . . Of course, the committee is in unanimous accord with the proposition that private property of enemy nationals may not be confiscated, and will not be confiscated, by the United States for the payment of the debts of the enemy government. The United States has always recognized, and doubtless always will recognize, the sanctity of private property. Despite our recently reaffirmed power to confiscate private property of an enemy national, we have always steadfastly insisted upon according private property full protection in the event of war. We have no reason to assume that this policy will be departed from in the future. . . . ” (Report of Senate Committee February 9, 1928, page 17.)

¹³ In the House Committee Report of December 15,1927, at page 5, appears the following:

“ . . . patents . . . belonging to German nationals were taken over and used by the United States, and the United States still owes compensation therefor”.

In the Senate Committee Report of February 9, 1928, at page 2, this appears:

“The United States Government . . . acquired for its own use during the war a large number of patents. . . . The United States is justly indebted to the German nationals for the value of their property”.

¹⁴ Post, page 11. [Page 203, herein.]

¹⁵ The Act amends subsection (f) of Section 10 of the Trading with the Enemy Act dealing with the recovery of royalties, for the period prior to sale by the Custodian, under licenses issued by the Federal Trade Commission. The report of the conference managers on the part of the House dated February 27, 1928 (House Report No. 766, 70th Congress, 1st session), at page 33, thus explains this amendment:

“ . . . Questions have arisen in regard to such suits as to who was the owner of the patent, etc., within the meaning of the section, after seizure by the Alien Property Custodian. This amendment provides that such suits shall be held to have been brought by the owner if brought either by the Alien Property Custodian or by the person who was the owner immediately prior to the seizure by, or transfer to, the Alien Property Custodian. . . .”

¹⁶ The contention has been put forward that Section 21 of the Act, captioned “ Ship Claims of Former German Nationals,” indicates an intention on the part of the law-makers not to include former German nationals as claimants save those for which the Act makes special provision. Section 21, when properly understood, evidences exactly the opposite intention on the part of the law-makers. The two vessels dealt with in this section were, at the time the United States took title to them, owned by German juridical persons, all of the members or stockholders of which were on April 6, 1917, citizens of Germany. Representations were made to the Congress that by virtue of a plebiscite held under the Treaty of Versailles they all became citizens of Denmark. The Congress was asked to accord them special treatment with respect to the presentation and payment of their claims to the end that the amount, if any, which might be awarded them by the Arbiter should be paid them forthwith in full and no part of it temporarily withheld under other provisions of the Act. Such special treatment was accorded them through incorporating Section 21 in the Act, which is thus explained in the report of the House managers at the conference (February 27, 1928, page 30): “ Section 21 of the Senate amendment is added to provide for the determination of compensation to be paid in the case of two ships seized by the United States which were owned at the outbreak of the war by German nationals who, as a result of a plebiscite under the Treaty of Versailles, became Danish nationals. Inasmuch as all the property of nationals in similar circumstances held by the Alien Property Custodian has been returned without limitation, the section provides that the awards for these ships (net greater than the amount received by the United States upon the sale of the vessels, minus the capital expenditures thereon) shall be paid in full and an appropriation is authorized to make such payment. . . . ”

Subsection (d) of Section 21 significantly provides that while “ The provisions of this section shall constitute the exclusive method for the presentation and payment of claims. . . for which this section provides a remedy” “ This subsection shall not bar the 'presentation of a claim under section S (relating to the ship claims of German nationals)” , but therecan not be any award under both Section 21 and Section 3. It is apparent that Section 21contains an express recognition by the Congress of the right of “ former German nationals”who were German nationals on April 6, 1917, to appear and assert their claims before the Arbiter under Section 3 of the Act.

¹⁷ Conrad v. Waples (1877), 96 U. S. 279, 286; Briggs v. United States (1892), 143 U. S. at 353; Schrijver et al. v. Sutherland (1927), 19 Fed. (2d) 688, 689.

¹⁸ “ S e c . 3477. U1 transfers and assignments made of any claim upon the United States,or of any part or share thereof, or interest therein, whether absolute or conditional, andwhatever may be the consideration therefor, and all powers of attorney, orders, or otherauthorities for receiving payment of any such claim, or of any part or share thereof, shallbe absolutely null and void, unless they are freely made and executed in the presence of atleast two attesting witnesses, after the allowance of such a claim, the ascertainment of theamount due, and the issuing of a warrant for the payment thereof. . . . ”

¹⁹ House Committee Report of December 15, 1927, at page 14.

²⁰ Report of February 9, 1928, at page 18.

²¹ Report of February 9, 1928, at page 17 ; see also identical language in the report of the House Committee of December 15, 1927, at page 14 .

²² Decisions and Opinions, Mixed Claims Commission, United States and Germany, page 10 .

²³ When the legislation was before the Sixty-ninth Congress Mr. Garrard B. Winston, then The Undersecretary of the Treasury, testifying before House subcommittees (page 38 of first volume of the reported hearings, April, 1926 ) said:

“ In the case of the awards of the Mixed Claims Commission it is protided that the awards shall be paid to the person in whose name the award has been entered. That relieves the Treasury Department and the Department of State from any necessity of determining who is the real owner of this award, and it leaves anybody who has a claim against the award their rights in court, but we do not have to decide it.

“ In the case of the arbiter, in the awards to Germans, the same rule is followed: That the awards are to be paid to the persons in whose names the awards are made out.”

²⁴ Hicks, Sturchler v. ( 1926 ), 17 Fed. (2d) 321, 324 Google Scholar.

²⁵ Report of December 15. 1927 , at page 21 .

²⁶ This identical language is found in the report of the Senate Committee dated February 9, 1928 , at page 30.

²⁷ Brothers v. United States ( 1919 ), 250 U. S. at page 89 .

²⁸ Richmond Screw Anchor Company v. United States (decided January 3, 1928 ), 275 U. S. at page 341 .

²⁹ Erwin v. United States ( 1878 ), 97 U. S. 392, 397; Seaboard Air Line Railway v. United States (1921), 256 U. S. 655, 657; Goodman v. Niblack ( 1880 ), 102 U. S. 556, 560; Western Pacific Railroad Co. v. United States ( 1925 ), 268 U. S. 271, 275;Price v. Forrest ( 1899 ), 173 U. S. 410, 422; Houston v. Qrmes ( 1920 ), 252 U. S. 469, 473.

³⁰ See note 29, supra.

³¹ Goodman v. Niblack, 102 U. S. 556, 550.

³² Goodman v. Niblack, supra.

³³ 40 Stat. 704, 705, amending the Act of June 25, 1910 (36 Stat. 851).

³⁴ Richmond Screw Anchor Company v. United States, decided January 3, 1928, 275 U. S. 331, citing Wood v. Atlantic Gulf & Pacific Company ( 1924 ), 298 Fed. 718.

³⁵ Richmond Screw Anchor Company v. United States, 275 U. S. at 345.

³⁶ 41 Stat. 1313, 1314.

³⁷ 37 Defendants' exhibit No. 85-A, record in Chemical Foundation case, Volume XI, pages 2624 -2627.

³⁸ See page 3176, Part 3, Volume 69, Congressional Record, 70th Congress, 1st Session; also Report of House Committee, December 15, 1927 , pages 5 and 9; Report of Senate Committee of February 9, 1928 , pages 2 , 3, 15, and 16; Statement of Managers on the part of the House at the Conference, February 27, 1928 , page 30 .

³⁹ House Committee Report of December 15, 1927 , page 9 .

⁴⁰ See references to authorities in note 7, supra.

⁴¹ Substantially the same language is found in the report of December 15, 1927 , of the House Committee at page 15 .

⁴² United States v. Chemical Foundation, Inc. ( 1926 ), 272 U. S. 1.

⁴³ 40 Stat. 460 (Act of March 28,1918 ).

⁴⁴ United States V. Chemical Foundation, Inc., 272 U. S. 1, 12.

⁴⁵ United States v. Chemical Foundation, Inc. (1924), 294 Fed. 300 ( 1925 ), 5 Fed. (2d) 191 ( 1926 ), 272 U. S. 1.

⁴⁶ Court record, Volume 1, pages 540 -541.

⁴⁷ Court record, pages 2624 -2627.

⁴⁸ Ibid., page 2822 .

⁴⁹ Ibid., pages 2993 and 3022.

⁵⁰ United States v. Chemical Foundation, Inc. ( 1924 ), 294 Fed. 300.

⁵¹ United States v. Chemical Foundation, Inc. ( 1925 ), 5 Fed. (2d) 191

⁵² United States v. Chemical Foundation, Inc. ( 1926 ),272 U. S. 1.

⁵³ United States v. Chemical Foundation, Inc. 294 Fed. 300, 303.

⁵⁴ United States v. Chemical Foundation, Inc. 5 Fed. (2d) 191, 202.

⁵⁵ American Paper-Bag Co. v.Van Nortwick ( 1892 ), 52 Fed. 752.

⁵⁶ St. Louis Street F. M. Co. v. Sanitary Street F. M. Co. ( 1910 ), 178 Fed. 923, 926; Cook v. Sterling Electric Co. ( 1907 ), 150 Fed. at 769; Jones v. Berger ( 1893 ), 58 Fed. 1006.

⁵⁷ Union Switch & Signal Co. v. Johnson Railroad Signal Co. ( 1894 ), 61 Fed. 940, 944.

⁵⁸ Volume II, Court record, pages 1259 -1260.

⁵⁹ See page 30, supra. [Page 218 , herein.]

⁶⁰ Kinsman et al. v. Parkhurst ( 1856 ), 59 U. S. (18 Howard) 289, 293; Birdsall v. Perego ( 1865 ), 5 Blatchford 251, 255; Clark v. Amoskeag Manufacturing Co. ( 1883 ), 62 New Hampshire 612, 615; Jones v. Burnham et al. ( 1877 ), 67 Maine 93, 97; Moore v. National Water- Tube Boiler Co. ( 1897 ), 84 Fed. 346, 347; Marsh v. Harris Mfg. Co. ( 1885 ), 63 Wisconsin 276, 283.

⁶¹ Lindley, L. J., in Low v. Bouverie, L. R. ( 1891 ), 3 Ch. 82, 101.

⁶² A like rule was announced by the United States Court of Claims in Zeidler v. United States (1926), 61 Court of Claims Reports, at 553-554. There the claimant sought to recover under the Act of October 6, 1917 (40 Stat. 394), a war measure, for alleged use of his invention during the war by the Government of the United States. As a measure of public safety or defense the issuance of letters patent was withheld and an order of secrecy issued. Letters patent were subsequently issued to Zeidler February 15, 1921. Among other defenses the Government alleged and sought to prove the invalidity of the patent, which was met with the contention that no defense of invalidity could be raised by the Government which, it was contended, in issuing the secrecy order and subsequently issuing the patent, had under the Act recognized the validity of the patent and agreed to make compensation for its use thereof from the date of such use. Unlike the Acts of 1910 and 1918, the Act of October 6, 1917, under which the Zeidler suit was brought, does not in terms reserve to the United States the usual defenses of a defendant in an infringement suit. The Court of Claims, however, held that the Government was not estopped to prove invalidity and applied the prior art to the patent and held it invalid. In the course of the opinion this language was used:

“Why should the Government estop itself from resorting to legitimate defenses at a time when prospective inventors were extremely active and insufficient time prevailed to investigate with care and caution the exact legal status of the situation?”

⁶³ It is interesting to note that under the terms of the Trading with the Enemy Act provision is made for the payment1 “ after the end of the war ” to “ the owner of any patent ” for all use and enjoyment thereof under licenses issued by the Federal Trade Commission. But it is provided “ That the licensee may make any and all defenses which would be available were no license granted.” (Subsection (f) of Section 10 of the Trading with the Enemy Act.) This suggests an established policy on the part of the Government not to bind a licensee under a government agency by the ordinary rule of estoppel as against a licensee.

⁶⁴ Hanover Star Milling Company v. Metcalf ( 1916 ), 240 U. S. 403; Hicks v. Anchor Packing Company ( 1926 ), 16 Fed. (2d) 723.

⁶⁵ Hicks v. Anchor Packing Company ( 1926 ), 16 Fed. (2d) 723.