Sun Life Assur. Co. of Canada v. McGrath

13 F.R.D. 22, 1952 U.S. Dist. LEXIS 3570
CourtDistrict Court, N.D. Illinois
DecidedApril 30, 1952
DocketNo. 51 C 1277
StatusPublished

This text of 13 F.R.D. 22 (Sun Life Assur. Co. of Canada v. McGrath) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sun Life Assur. Co. of Canada v. McGrath, 13 F.R.D. 22, 1952 U.S. Dist. LEXIS 3570 (N.D. Ill. 1952).

Opinion

LaBUY, District Judge.

The Sun Life Assurance Company of Canada, a Canadian corporation, the issuer of four insurance policies through its Philippine Island branch at Manila, filed a complaint for declaratory judgment against the Attorney General of the United [23]*23States, William Maske a citizen of Illinois, and Edgar Friedrich Karl Krafft, a citizen and resident of Germany.

It is alleged that on or about November 8, 1948 a Vesting Order was entered by the Philippine Alien Property Administration declaring that after investigation the insured Krafft and/or his beneficiaries under said policies were found to be residents of Germany and nationals of a designated enemy country (Germany), that the proceeds due or to become due under these policies were “property withm the Philippines owned or controlled by, payable or deliverable to, held on behalf of or on account of, or owing to, or which is evidence of ownership or control by,” the aforesaid national, and that the net proceeds due or to become due under said policies was vested in the Philippine Alien Property Administrator. It is further alleged that subsequent to the issuance of said vesting order, the defendant, William Maske, advised the plaintiff that the policies were in his possession and that all rights thereunder had been assigned to him by the defendant Krafft in 1941. The plaintiff prays that this court find and declare the rights of the various parties in said policies and that plaintiff be discharged from liability except as to those whom the court finds to be entitled to the policies.

The defendant Maske filed an answer and cross-claim. The answer in general admits the allegations of the complaint but denies that the defendant Krafft is making any claim to the policies. The cross-claim asserts the assignment of said policies by Krafft to Maske and prays the court declare said assignment valid, that Maske is the true owner thereof, and declare that the Philippine Alien Property Administrator was without jurisdiction to issue the vesting order and it is therefore null and void. Attached to the answer and cross-claim are purported ratifications of the alleged assignment bearing the signatures of the insured Krafft and/or the beneficiary which are dated April 7, 1951.

The defendant, J. Howard McGrath, has filed a motion to dismiss the complaint for lack of jurisdiction over the Attorney General or the subject matter of the complaint. It is asserted that this is an action to adjudicate interests in property which are vested in the United States as enemy property and the United States has not consented to be sued in this kind of action; that it is an action against the Attorney General as an officer of the United States in his official capacity as successor to the Philippine Alien Property Administrator and is therefore an action against the United States which has not consented to be sued; and that the Attorney General is the sole owner of the property involved in this suit and is therefore an indispensable party to the action over whom the court has not and cannot acquire jurisdiction.

Thereafter, the defendant Maske filed a motion for summary judgment requesting that as a matter of law the court declare the assignment of the policies to Maske to be valid; find that the defendant Maske is the sole owner of the policies; and that the Philippine Administrator is without jurisdiction to issue its vesting order. This motion is supported by affidavits and answers to interrogatories.

The defendant J. Howard McGrath has filed a motion to dismiss the amended cross-claun of the defendant Maske on the ground that jurisdiction therein is premised on the same grounds as the complaint and therefore the court is without jurisdiction over J. Howard McGrath; has no jurisdiction of the subject matter of the amended cross-claim; the amended cross-claim fails to state a claim upon which relief can be granted; the United States has not consented to be sued in the manner attempted by the complaint and cross-claim; the cross-claim has not complied with essential conditions precedent to the institution of suit under the Trading With the Enemy Act, SO U.S.C.A.Appendix, § 1 et seq.; and that the Attorney General is an indispensable party to the action and the court has not acquired jurisdiction over him.

It is contended by plaintiff and cross-claimant that the issuance of the vesting [24]*24order was an abuse of power and an act in excess of the authority conferred by statute and executive order; that therefore the suit is not one against the United States and the question of the consent of the United States to be sued is not to be considered; that the suit is governed by the principle enunciated in Philadelphia Co. v. Stimson, 1912, 223 U.S. 605, 32 S.Ct. 340, 345, 56 L.Ed. 570 as follows:

" * * * If the conduct of the defendant constitutes an unwarrantable interference with property of the complainant, its resort to equity for protection is not to be defeated upon the ground that the suit is one against the United States. The exemption of the United States from suit does not protect its officers from personal liability to persons whose rights of property they have wrongfully invaded. * * ”

This argument is premised on the interpretation to be given Executive Order No. 9818 issued January 8, 1947, 22 U.S.C.A. § 1382 note, pursuant to the • Philippine Property Act of 1946, 22 U.S.C.A. § 1381 et seq. This order provides as follows:

“2. The Philippine Alien Property Administrator is hereby designated to exercise and perform, and there are hereby transferred to him, such rights, privileges, powers, authority, duties and functions, with respect to property located within the Philippines and property transferred pursuant to section 3 hereof, as were vested in or transferred or delegated to the Alien Property Custodian by the Trading With the Enemy Act * * *.
“3. The Attorney General * * is authorized and directed to transfer to the Philippine Alien Property Administrator all property or interests vested in or transferred to him which were located in the Philippines at the time of such vesting or transfer, or the proceeds thereof * * *”.

The abuse of the order is claimed to rest on the fact that these insurance policies were not “property located within the Philippines” and therefore the order is void.

The complaint alleges that jurisdiction rests on diversity of citizenship and presence of requisite jurisdictional amount. Fundamental to the problem of jurisdiction is (1) has the court acquired jurisdiction over the defendant, J. Howard McGrath, Attorney General of the United States, and (2) if it has not, is his presence essential to an adjudication of the issues in this suit.

Service was made upon the defendant, J. Howard McGrath, by serving the United States Attorney for the Northern District of Illinois and forwarding by registered mail a copy of the writ to the defendant. The authorized mode of process in serving the United States or an officer thereof is covered by Rule 4(d)(4) and (5) of the Federal Rules of Civil Procedure. It is as follows:

“(d) Summons: Personal Service.
* * * Service shall be made as follows:
* *****

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Related

Philadelphia Co. v. Stimson
223 U.S. 605 (Supreme Court, 1912)

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Bluebook (online)
13 F.R.D. 22, 1952 U.S. Dist. LEXIS 3570, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sun-life-assur-co-of-canada-v-mcgrath-ilnd-1952.