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May 28, 1954

BROWNELL, Atty. Gen. et al.

The opinion of the court was delivered by: LAWS

In this case, suit was originally brought by a corporation organized under the laws of Switzerland to recover shares of stock of American corporations vested by the Alien Property Custodian in 1942 under Section 5(b) of the Trading With the Enemy Act of 1917, 40 Stat. 411, as amended by the First War Powers Act of 1941, 55 Stat. 839, 50 U.S.C.A. Appendix, § 5(b). The suit was dismissed on the pleadings. On appeal, the Supreme Court of the United States held that the amendment of 1941 authorized the Custodian to seize and vest in himself all property of any foreign country or nation, but this did not deprive friendly or neutral nations or nationals of a right to have their assets returned if they could prove they were free of open or concealed enemy taint. Clark v. Uebersee Finanz-Korporation, 332 U.S. 480, 68 S. Ct. 174, 92 L. Ed. 88.

 After an extended trial, this Court denied recovery. It held that a gift agreement of October 5, 1931, between Wilhelm and Marta von Opel and Fritz von Opel passed to the son legal title of property which later was converted into shares of plaintiff corporation, but that this agreement created a valid usufruct in the parents which gave them in rem rights. The indirect ownership and control of the corporation which the Court found was exercised by the parents constituted enemy taint and barred recovery. The Court also found that the circumstances under which Fritz von Opel acquired citizenship in Liechtenstein, his attachment to and sympathy for Germany, and plaintiff's ownership of a subsidiary corporation in Hungary which mined bauxite for the benefit of Germany were further evidence of enemy taint. Uebersee Finanz-Korporation v. Clark, D.C., 82 F.Supp. 602.

 The judgment for defendant was affirmed by the United States Court of Appeals for the District of Columbia Circuit, Uebersee Finanz-Korporation, A.G., v. McGrath, 89 U.S.App.D.C. 167, 196 F.2d 557, and by the Supreme Court of the United States, Id., 343 U.S. 205, 72 S. Ct. 618, 96 L. Ed. 888. The Supreme Court, however, vacated the judgment and remanded the cause for consideration in the light of its holding that same day in Kaufman v. Societe Internationale Pour Participations Industrielles et Commerciales, S.A., 1952, 343 U.S. 156, 72 S. Ct. 611, 96 L. Ed. 853, as it might apply to any claim which might be made within thirty days on behalf of Fritz von Opel individually.

 Fritz von Opel filed suit as intervener plaintiff within the designated time. The Court also permitted the Frima Trust Establishment of Vaduz, Liechtenstein, Hans Frankenberg, Eugen Meier and Adolph Gaeng to intervene as parties defendant so that a determination of all rights in the property, beneficial and legal, at the time of vesting might be made.

 The Government has now moved for an order declaring inadmissible additional evidence sought to be adduced by Fritz von Opel, maintaining that such evidence relates to issues previously litigated and determined so that the issues are res judicata as to him. Intervener plaintiff has moved for an order directing the issuance of letters rogatory to take certain depositions upon oral examination in Zurich, Switzerland, dependent on the Court's disposition of the Government's motion.

 In Kaufman v. Societe Internationale, supra, the Supreme Court decided that innocent nonenemy stockholders of a nonenemy corporation have a severable interest in corporate assets seized by the Custodian proportionate to their stock holdings which must be fully protected. There can be no question but that at the previous trial the alleged nonenemy status of Fritz von Opel was an essential element of plaintiff's proof and was vigorously contested. Voluminous evidence directed to that question was introduced and was considered by the Court in its determination that the circumstances surrounding Fritz von Opel's acquisition of citizenship in Liechtenstein and his attachment to and sympathy for Germany were evidence of plaintiff corporation's enemy taint.

 '* * * No such claim is made by the pleadings. This suit was not brought by Fritz von Opel upon a claim of division of interests which he held together with his parents, but was brought by a corporation of Switzerland which claimed to be entitled to a return of the vested American securities, based upon a claim that Wilhelm and Marta von Opel held no interest 'directly or indirectly, in whole or in part', in the properties. * * * Without consent of the defendant, the Court should not at this late time adjudicate an issue where the interest sought to be established is different from that set forth in the pleadings and where the party plaintiff also is different. Defendant may well desire to present other factual information and develop legal arguments which only partially have been made in this case.'

 Now that a separate claim is formally made by Fritz von Opel, it is appropriate to decide to what extent issues governing the disposition of intervener's application have been litigated and decided by the Court's previous decision.

 The principal issues raised by the pleadings, in addition to the question of res judicata now before the Court on motion, are (1) whether intervener was an enemy or ally of an enemy within the meaning of the Trading With the Enemy Act, as amended; and (2) if not, what part if any of the vested property may he recover.

 Although the Court made findings that intervener since 1939 was a naturalized citizen of Liechtenstein, and as to the circumstances under which such citizenship was acquired, no final determination was made of his enemy or nonenemy status as an individual claimant under the Act. Since the Supreme Court has held this case open to have decided the facts and the law with regard to Fritz von Opel's individual status, and since previous findings of Fritz von Opel's interest, attachment and sympathy for Germany were considered only as they related to plaintiff corporation's enemy taint, and were not specified, measured or evaluated as they might relate to intervener's innocence or enemy status, it seems proper to receive additional factual information and hear legal argument substantially along the following lines: (1) whether full faith and credit must be accorded Fritz von Opel's acquisition of citizenship in the neutral principality, or whether the Court may go behind the act of naturalization to determine its good faith and binding effect; (2) whether the naturalization process was completed, in view of his failure to take an oath of allegiance and to renounce his German citizenship; and (3) whether naturalization in Liechtenstein operated to strip him of his German nationality or whether it created a dual citizenship. See Von Zedtwitz v. Sutherland, 1928, 58 App.D.C. 153, 26 F.2d 525. It may also be pertinent to inquire whether Fritz von Opel thereafter represented and considered himself as a German national, whether he returned to Germany from time to time for visits, and what were his activities, associations and sympathies, and his ties to his native country, as indicative of intent in this regard. See Ruoff v. Brownell, D.C.D.C.1953, 14 F.R.D. 371.

 In the event Fritz von Opel is found entitled to prevail in this case, it will be necessary to determine the value of his interest. The Supreme Court has affirmed the findings of this Court that Fritz von Opel had bare legal title to the stock and the right to receive 20% of the income from the usufruct property. The United States Court of Appeals for the District of Columbia Circuit has held this was a contract right, not a right in rem, to receive from his parents 20% of the dividends and interest received by them. This Court also made findings as to his rights and interests dependent upon survivorship. Intervener maintains he is entitled to a return of all the vested property except possibly 20% of the income earned and accumulated during the life of his mother, or all the vested assets and 20% of the accumulated dividends. Defendant contends intervener has no interest in the vested property ...

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