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UNITED STATES v. BROVERMAN

November 25, 1959

UNITED STATES of America, Plaintiff,
v.
Frederick S. BROVERMAN and M. Broverman & Son, Defendants



The opinion of the court was delivered by: WEINFELD

The defendants move to dismiss all counts of a five-count indictment on the ground that no count charges an offense against the United States.

The first two counts charge violation of section 5(b) of the Trading with the Enemy Act, 50 U.S.C.A.Appendix, § 5(b), and regulations issued thereunder in that, on two separate occasions, the defendants wilfully imported a quantity of hog bristles, the country of origin of which was China (other than Formosa).

The third and fourth counts charge that with respect to the foregoing importations, the defendants wilfully made false statements on United States Customs' forms in violation of 18 U.S.C. § 542.

 The fifth, the inevitable conspiracy count, charges that the defendants conspired to commit the substantive crimes charged in the first four counts.

 Section 5(b)(1)(B) of the Trading with the Enemy Act, insofar as here pertinent, empowers the President or his designee to:

 '* * * regulate * * * or prohibit, any * * * importation * * * involving, any property in which any foreign country or a national thereof has any interest, by any person * * * subject to the jurisdiction of the United States * * *.' *fn1"

 The same section also grants power to the President to vest 'any property or interest of any foreign country or national thereof' upon terms and conditions prescribed by him. Thus, the powers granted under the act relate to (1) trade activities and (2) vesting of property.

 The main thrust of the defendants' attack upon counts one and two is that while they allege China (other than Formosa) is the 'country of origin' of the hog bristles, there is no allegation that any enemy country or enemy national had any interest in the hog bristles; apart from this, they emphasize the counts even fail to allege in the language of the statute that China or a national thereof had 'any interest' in the bristles. In sum, however, their basic contention is that only those transactions in which a foreign 'enemy' has an interest come under the ban of section 5(b) of the Trading with the Enemy Act.

 The indictment does not purport to charge a violation of the act qua act. Essentially it charges a violation of regulations issued under authority of the act pursuant to Executive Order 9193. *fn2" The Trading with the Enemy Act authorizes the President or his delegate to issue regulations to secure its enforcement *fn3" and makes a willful violation of a regulation a criminal offense. *fn4"

 The specific charges against the defendants here are violations of regulation 500.204, one of a series promulgated after the outbreak of the Korean conflict. *fn5" In substance, it prohibits all trading in merchandise originating in Communist China or North Korea except that which may be authorized by governmental license. Chinese hog bristle is one of the prohibited items.

 The direction of the defendants' attack is twofold: first, that the act itself requires as an essential element of the offense that 'enemy taint' attach to the importation of the hog bristles. This is based upon the contention that the President's authority under section 5(b)(1)(B) of the act to prohibit transactions involving any property 'in which any foreign country or a national thereof has any interest' is limited to 'a foreign enemy country' and an 'identifiable property interest'; second, that since the regulation fails to refer to foreign taint or foreign interest, it exceeds the grant of authority under the act and is void.

 Both contentions stem from Clark v. Uebersee Finanz-Korporation, *fn6" which centered about the vesting provision of section 5(b)(1)(B) of the act. The defendants read this case as holding that the President's power to vest is restricted to property in which an 'enemy' country or a national thereof has an identifiable interest. Accordingly, the defendants argue that since the President's power to prohibit trading activities is contained in the same section which gives him power to vest property, a fortiori, his power to proscribe trading activities is similarly restricted to 'enemy tainted' transactions. The argument is based upon a statement in the Court's opinion that:

 '* * * the phase of the problem with which we are presently concerned and with which Congress was wrestling when it amended the Act in 1941 started and ended with property having an enemy taint. We find not the slightest suggestion that Congress was concerned under this Act with property owned or controlled by friendly or neutral powers and in no way utilized by the Axis.' *fn7"

 Defendants' counsel have misconceived the issue involved in that case and have misunderstood the Court's holding. The issue was not the power of the President to vest foreign funds belonging to a nonenemy alien. The power to seize and vest all property, of any foreign country or foreign national, even that of friendly or neutral nations, was not questioned. Indeed, it was expressly recognized. What was at issue was the remedy, if any, ...


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