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decided: November 17, 1924.




Author: Butler

[ 266 U.S. Page 245]

 MR. JUSTICE BUTLER delivered the opinion of the Court.

This is a suit brought under § 9 of the Act of Congress, approved October 6, 1917, known as the "Trading with the Enemy Act," c. 106, 40 Stat. 411, 419. The plaintiff below, Frederick Y. Robertson, is a citizen of the United States, and sued as assignee of the Mammoth Copper Minning Company, a Maine corporation, hereinafter called the "seller," The defendants are the Alien Property Custodian, the Treasurer of the United States and five citizens of Germany, enemies of the United States, as defined by the act, co-partners doing business under the name of Beer, Sondheimer & Company, and hereinafter called the "buyers." The purpose of the suit is to establish a "debt" plaintiff claims to be owing from the enemy defendants on account of damages alleged to have resulted

[ 266 U.S. Page 246]

     to the seller from the buyers' breach of a contract for the purchase of zinc ore.

The contract provided: "The product covered by this contract is the total production of zinc crude ore shipped by the seller from its properties in Shasta County, California. The buyer is not obligated to accept any of the product running less than thirty-three (33%) per cent. metallic zinc. Should the seller produce a zinc product running less than thirty-three (33%) per cent. metallic zinc, the buyer reserves the option to purchase same under the terms of this contract. If the buyer should not elect to accept such product, the seller has the privilege of disposing of it elsewhere. This contract shall run for a period of one year from the date of first shipment made after the completion of the picking plant which the seller contemplates building, but in no event shall the life of the contract exceed eighteen (18) months from the date of its execution." Places of delivery were provided for, and the seller agreed to bear freight charges to Bartlesville, Oklahoma, or their equivalent. Shipments were to be made in as nearly as possible equal weekly quantities. The prices were $19 per ton for ore containing 40 per cent. metallic zinc, based on a spelter price of $5 per cwt. at St. Louis, to be increased $1 per ton for each unit of one per per cent. over, and to be decreased correspondingly for each unit below, 40 per cent.; and also to be increased or decreased five cents per ton for each cent the market price of spelter at St. Louis rose above or fell below $5 per cwt. And it was provided that, "Whenever the production or shipment of ore by the seller or the receipt or treatment of the ore by the buyer is prevented or delayed . . . by . . . any cause . . . which may be properly termed 'Vis Major' . . . this agreement shall be suspended during such delay or prevention; the seller, if so prevented or delayed in producing or

[ 266 U.S. Page 247]

     shipping the ore hereby contracted for, shall not be under any duty or obligation to furnish ore to the buyer . . . while . . . so prevented or delayed, and the buyer if so prevented or delayed in receiving or treating the ore hereby contracted for, shall not be under any duty or obligation to receive any of the ore hereby contracted for, while so prevented or delayed. Upon the termination of the delay or interruption herein set forth, the obligation of the contracting parties shall be resumed."

The District Court gave judgment in favor of the seller for $259,597.21 with costs. On appeal by the Custodian and Treasurer, and a cross appeal by the plaintiff (Judicial Code, § 128), the Circuit Court of Appeals affirmed the decree, except that the amount of interest allowed by the trial court was increased. 286 Fed. 503. The Custodian and Treasurer have appealed to this court. Judicial Code, § 241. They contend that plaintiff's claim was not a "debt" within the meaning of § 9 of the act; that the alleged contract was lacking in mutuality and void for want of consideration; that the seller broke the contract by refusing to make shipments "in as near as possible equal weekly quantities"; that the contract was not enforceable because made in violation of an earlier contract for the sale of the same ore; that no more than nominal damages should have been awarded; and that the lower court erred in allowing interest. The plaintiff has appealed and contends that the lower courts erred in giving the buyers credit for the amount by which the freight charges on the ore resold were less than they would have been if the ore had been shipped under the contract. The enemy defendants did not appear in the case; and it has been stipulated that the decree will not be enforced against them personally.

1. Is plaintiff's claim a "debt" within the meaning of § 9 of the act?

[ 266 U.S. Page 248]

     This section gives to "any person, not an enemy, or ally of enemy . . . to whom any debt may be owing from an enemy, or ally of enemy," the right to "institute a suit in equity in the district court . . . (to which suit the alien property custodian or the Treasurer of the United States, as the case may be, shall be made a party defendant), to establish the . . . debt so claimed. . . ."

At the time of the passage of the act, a large amount of property was owned and much business was carried on by alien enemies and their allies in this country. Congress determined that their property should be taken over and that trade with them should cease. The purpose was to weaken enemy countries by depriving their supporters of power to give aid. But the seizure of the money and property of enemies and their allies would tend to hinder and might embarrass or ruin those having business transactions with them. By the taking, the property seized would be put out of reach of persons claiming it and beyond the power of creditors to attach it for debt. The purpose of § 9 was to prevent or lessen losses and inconvenience liable to result to non-enemy persons. This provision is highly remedial and should be liberally construed to effect the purposes of Congress and to give remedy in all cases intended to be covered. United States v. Anderson, 9 Wall. 56, 65, 66; United States v. Padelford, 9 Wall. 531, 538. The just purpose of the section is not to be defeated by a narrow interpretation or by unnecessarily restricting the meaning of the word within technical limitations. United States v. Freeman, 3 How. 556, 565; Danciger v. Cooley, 248 U.S. 319, 326; French v. Weeks, 259 U.S. 326, 328.

Appellants contend that "debt", as used in § 9, is limited to its common law meaning. Undoubtedly, Congress intended to include causes of action which at common law were enforceable in an action of debt, such as those arising

[ 266 U.S. Page 249]

     on bonds, notes, and other express promises to pay, (Raborg v. Peyton, 2 Wheat. 385; United States v. Colt, 25 Fed. Cas. No. 14,839, p. 581) quantum meruit and quantum valebat. Smith v. First Congregational Meetinghouse, 8 Pick. 178, 181; Norris v. School District, 12 Me. 293, 297; ...

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