Findings of Fact 145 C. Cls. 2, 1953. The contract covered the sale by the Justfrank Company and the purchase by USI of: approximately 5,675,000 U. S. wine gallons of ethyl alcohol, at 190 Ú. S. proof, of which 3,275,000 gallons is stored in Le Havre, France and 2,400,000 is stored in Rouen, France. It was provided in the contract that the ethyl alcohol should be delivered to USI at its Curtis Bay plant. The contract prescribed various specifications, in addition to the matter of proof, which the ethyl alcohol should meet. 5. During June and July of 1953, the Justfrank Company shipped or caused to be shipped to USI from France, purportedly in accordance with the contract dated June 2, 1953, a total of 5,583,529 U. S. wine gallons of impure ethyl alcohol. This ethyl alcohol failed to meet a number of the specifications prescribed in the contract. It did, however, meet the requirement of the contract as to proof. 6. Although the ethyl alcohol furnished to USI under the contract of June 2, 1953 failed to meet a number of the specifications prescribed in the contract, the ethyl alcohol was accepted by USI when it was tendered for delivery at USI's Curtis Bay plant. Because of the presence in the ethyl alcohol of impurities, particularly excessive amounts of methyl alcohol (methanol), amyl alcohol, and nonvolatile residue, the ethyl alcohol, at the time when it was delivered to and received by USI, was not suitable for human consumption, and it was not usable in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts. 7. Shortly after the receipt by USI of the impure ethyl alcohol referred to in findings 5 and 6, such material was processed by USI in its domestic registered industrial alcohol plant at Curtis Bay. The processing consisted, first, of a chemical treatment in order to make the excessive impurities in the ethyl alcohol susceptible of removal through further distillation, and, second, of an additional distillation procedure, unusually complicated in nature, for the removal of the excessive impurities. 8. As a result of the chemical treatment and additional distillation mentioned in finding 7, USI produced from the impure ethyl alcohol referred to in findings 5 and 6 more 160 Findings of Fact than 5,000,000 U. S. wine gallons of ethyl alcohol that was suitable for human consumption and was usable in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts. 9. (a) On August 7, 1953, USI sold to the plaintiff 7,620.20 proof gallons of the ethyl alcohol that resulted from the processing mentioned in finding 7. A tax was paid by USI to the Internal Revenue Service at the rate of $10.50 per proof gallon, or in the total amount of $80,012.10, in connection with the delivery of the 7,620.20 proof gallons of ethyl alcohol to the plaintiff. The purchase price which the plaintiff paid to USI for this ethyl alcohol included the amount of such tax. (b) In making the sale referred to in paragraph (a) of this finding, USI impliedly warranted (among other things) that the ethyl alcohol sold to the plaintiff constituted nonbeverage drawback spirits. 10. During the period between August 7 and September 30, 1953, the plaintiff used in the manufacture and production of flavoring extracts 6,073.20 proof gallons of the taxpaid ethyl alcohol which it had purchased from USI on August 7, 1953. Such flavoring extracts were unfit for beverage purposes. 11. On or about October 1, 1953, the plaintiff filed with the Internal Revenue Service a claim in the amount of $305,938 under Section 3250 (7) of the Internal Revenue Code of 1939, as amended, for drawback of tax on distilled spirits used during the quarter-year July-September 1953 in the manufacture of nonbeverage products. This claim was based to the extent of $57,695.40 on the use for the purpose indicated in finding 10 of 6,073.20 proof gallons of the ethyl alcohol which the plaintiff had purchased from USI on August 7, 1953. 12. The plaintiff's claim for drawback mentioned in finding 11 was allowed in part and rejected in part by the Internal Revenue Service on or about October 26, 1953. To the extent of $57,695.40, the partial rejection of the claim was based upon a determination by the Internal Revenue Service that the 6,073.20 proof gallons of ethyl alcohol which the plaintiff had purchased from USI on August 7, 1953 and used in the manufacture of flavoring extracts comprised "im Conclusion of Law 145 C. Cls. ported alcohol" rather than ethyl alcohol produced in a domestic registered distillery or industrial alcohol plant. 13. (a) In a letter dated November 19, 1953 from USI to the plaintiff, it was stated in part as follows: *** We very much regret that your claim for drawback of Internal Revenue Tax on the alcohol covered by our Invoice No. 45-2336 has been disallowed by the Alcohol & Tobacco Tax Unit. This is to advise you that our lawyers are endeavoring to have this ruling reversed, if necessary by legal action. So that you may not be inconvenienced in the meantime, we enclose our check for $57,695.40 to secure the payment of your claim for drawback of Internal Revenue Tax on alcohol charged to you on our Invoice No. 45-2336 when used as provided in Regulations 29. It is understood between us that in the event there is a final ruling by the Internal Revenue Department under which your claim for drawback is approved and you are paid the amount due as drawback on the alcohol covered by our Invoice No. 45-2336 as provided by law and Regulations 29, then you agree to refund to us the $57,695.40 which is given to you by us as a security only. It is further agreed that in the event the Internal Revenue Department does not approve and pay your claim for drawback on alcohol charged to you on our Invoice No. 45-2336 when used by you as provided in Regulations 29 you agree to permit us to institute suit in court in your name at our expense to recover the said drawback. In the event the suit thus instituted results in a decision in your favor and you are paid the amount of your claim for drawback, then you agree to refund to us $57,695.40 which is given to you as a security only. In the event the suit thus instituted results finally in a decision in favor of the Internal Revenue Department then the $57,695.40 which is given herewith as a security will become your property. (b) The proposal quoted in paragraph (a) of this finding was accepted by the plaintiff on November 23, 1953. CONCLUSION OF LAW Upon the foregoing findings of fact, which are made a part of the judgment herein, the court concludes as a matter of law that plaintiff is not entitled to recover, and the petition is therefore dismissed. Syllabus GMO. NIEHAUS & CO., C por A., A CORPORATION ORGANIZED UNDER THE LAWS OF COSTA RICA, APARTADO 493 SAN JOSE, COSTA RICA, AND IMKE STEINHOFF, KURT NIEHAUS, GERTRUDE BOESE, FRANZ LAUE AND HORST LAUE, SOMETIMES INCORRECTLY DESIGNATED AS FRANZ BOESE AND HORST BOESE, ALL c/o DR. HANS LOENING, SOEGESTRASSE 18/20 BREMEN, GERMANY v. THE UNITED STATES [No. 501-56. Decided February 11, 1959] ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT Trading with the Enemy Act; authority of Government to vest.-In an action for just compensation for property vested by the Office of Alien Property, it is held that the vesting of plaintiffs' property on July 26, 1951, which property had been acquired by the German plaintiffs after December 31, 1946, was unauthorized and invalid, because the President of the United States had, prior to the vesting, limited the vesting power to the vesting of German property and rights acquired before January 1, 1947. Defendant's motion for summary judgment denied. War and National Defense 12 Trading with the Enemy Act; vesting power-limitation on.-The President, who had been entrusted by Congress with complete power over the subject of alien property, including the authority to determine what property was subject to vesting, effectively limited that power to vest with respect to property acquired by German or Japanese interests after December 31, 1946, when the Attorney General, together with the Secretaries of the Treasury, State and War, issued a press release on March 4, 1947, announcing that the Office of Alien Property of the Department of Justice would not vest such property and that the fiduciaries of enemy property acquired after December 31, 1946, need no longer report it and were free to transfer it. That press release was an invitation to aliens to bring property into, or acquire property in, this country without danger of confiscation. Further evidence of the President's intention to limit the right to vest such property are the letters sent to the Vice President, as President of the Senate, and to the Speaker of the House, proposing congressional action terminating the state of war but preserving the right to vest German property acquired before January 1, 1947. War and National Defense 12 Opinion of the Court 145 C. Cls. Mr. Philip W. Amram, for the plaintiffs. Mr. Laurence A. Knapp was on the brief. Mr. George B. Searls, with whom was Mr. Assistant Attorney General George Cochran Doub and Mr. Assistant Attorney General Dallas S. Townsend, for the defendant. Mr. M. Morton Weinstein was on the briefs. MADDEN, Judge, delivered the opinion of the court: In a prior proceeding in this case the Government moved to dismiss the plaintiffs' petition on the asserted grounds that this court had no jurisdiction of the subject matter and that the petition failed to state a cause of action upon which relief could be granted. This court denied that motion, in an opinion rendered July 12, 1957, 139 C. Cls. 605. Thereupon the Government filed an answer to the petition, made the instant motion for a summary judgment, and submitted affidavits of four officials of the Government, the complete text of a letter dated July 9, 1951, from the President of the United States to the Vice President, the text of a press release, and other documents from the files of the Alien Property Custodian. The plaintiffs oppose the Government's motion for summary judgment. They have not submitted affidavits or other documents. The essential elements of the case may be gathered from our prior opinion, and will not be repeated here. After that opinion was rendered, the Government, as we have said, filed its answer. In its answer it has directly denied the allegation of the petition that the President, before the vesting of the plaintiff's property on July 26, 1951, "had limited and confined the vesting power to the vesting of German property and rights located in the United States before January 1, 1947." The Government points out that the plaintiffs' petition contains "no allegation of the date when such limitation was imposed, or of how it was imposed, and no reference to any executive order or other specified official act." The First War Powers Act, 1941 (55 Stat. 838), amended section 5(b)(1) of the Trading with the Enemy Act, 50 U.S.C. App. §§ 1-40, to make it provide that any property of a foreign national "shall vest, when, as and upon the terms, directed by the President, in such agency or person as may be |