201 Ct. Cl. 823 | Ct. Cl. | 1973
Lead Opinion
By H. Res. 324, 91st Cong., 1st Sess., approved February 17,1970, the Blouse of Representatives referred to the Chief Commissioner of the Court of Claims, pursuant to 28 U.S.C. §§ 1492 and 2509 (1970), H.R. 8568, 91st Cong., 1st Sess., a bill for the relief of the heirs of Amadeu Ghitescu, “for further proceedings in accordance with applicable law.” The Chief Commissioner referred the case to Trial Commissioner David Schwartz for proceedings in accordance with the applicable rules, and designated the above-named members of the Review Panel to consider Commissioner Schwartz’ opinion on the merits of the matter.
Amadeu Ghitescu, a wealthy man in pre-World War II Rumania, was a political prisoner of the post-war communist Rumanian regime from 1952 to his death in 1961. In 1958, assets in the United States in a blocked account (termed, prior to blocking in 1940, the “A. Ghitescu Special Guaranty Account”)
In 1962, Mr. Ghitescu’s widow and children, plaintiffs herein, escaped from Rumania to France, and in February 1963 they unsuccessfully applied to the Office of Alien Property (OAP) for a divesting of the property vested in 1958. H.R. 8568, introduced March 10, 1969, proposes to repay to plaintiffs some $133,000, as “settlement in full of their claim arising out of the vesting of that amount representing money belonging to Amadeu Ghitescu.”
On October 31, 1972, following pretrial proceedings and trial, the trial commissioner filed a report containing his opinion, findings of fact, and ultimate findings and conclusions, on the basis of which he recommended the enactment of H.R. 8568 with a minor amendment. Both parties have excepted to the trial commissioner’s report. Defendant vigorously challenges the recommendation that H.R. 8568 be enacted at all, while plaintiffs contend that the minor modification suggested is inappropriate.
Our conclusions in the matter are that plaintiffs have no legal claim but do have one which should be recognized from the standpoint of the conscience and honor of the sovereign; that in all of the circumstances their delay in pressing that claim should be forgiven; and that, accordingly, enactment of H. R. 8568, with minor amendments as to the amount to be paid and as to the source of payment, would be appropriate and not a mere gratuity.
Issues related to the passage of time, plaintiffs’ right to consideration of their claim on its merits, and the nature of the reference, dealing as it does with vested property, are detailed and discussed hereinafter. On the merits, the central issue is whether the account vested should equitably be deemed Mr. Ghiteseu’s individual property, either from and after the time of its creation in 1934, or in any event from the time of the dissolution of the partnership on the death of Mr. Butculescu in 1957, some 18 months prior to the vesting.
In this connection, defendant contends that the trial commissioner erred in not evaluating the reference by a “standard * * * limited * * * to the judicial concept of an ‘equitable claim,’ * * *” and suggests that § 2509 does not here encompass, or permit a report incorporating, considerations of “good conscience”.
In Burkhardt v. United States, 113 Ct. Cl. 658, 667, 84 F. Supp. 553, 559 (1949), the Court of Claims expressed the view that, as used in § 2509, the term “equitable claim” was not used in any strict technical sense to mean a claim in
In 1958, defendant, acting in its sovereign capacity, vested, and thereafter utilized for governmental purposes, property which belonged either to Amadeu Ghitescu or, viewing the matter as favorably to defendant as possible, to a partnership in which he was a partner. Had that property been regarded at the time of vesting as “directly owned * * * by a natural person”, it would have been exempt from vesting.
Without pausing to attempt to define an “equitable claim” in terms sufficiently broad to encompass every possible matter that may be referred to the Chief Commissioner, it seems clear that, in the context of this reference, the basic issue, on the merits, is whether or not, in consequence of defendant’s actions with respect to that property, “the conscience and honor of the sovereign dictate that plaintiff [s] should receive compensation that is not recoverable under a legal cause of action.” Drake America Corp. v. United States, 168 Ct. Cl. 318, 326 (1964); see also O'Donnell v. United States, 166 Ct. Cl. 107, 117-18 (1964). And, it is equally clear that that question must here be answered in the affirmative.
The relevant statute is Title II of the International Claims Settlement Act of 1949, added by the Act of August 9,1955, 69 Stat. 562, 22 U.S.C. §§ 1631-1631n (1970), under which Rumanian Government and corporate property was vested and the proceeds paid into a Rumanian Claims Fund in the Treasury for the satisfaction of the claims of United States citizens for Rumanian nationalization and for war damage. Title II, here called Public Law 285, related to the property of all the satellite enemies, Rumania, Bulgaria and Hungary, but will here be described as though it related only to Rumania.
Public Law 285 contains three 1-year time limitations. The first, a limit on the only remedy open to Rumanians such as Mr. Ghitescu and his family, is found in § 202 (a) .
Section 202(a) opens with a sweeping authorization of the vesting of any Rumanian property, blocked during World War II under Executive Order 8889, which “was owned directly or indirectly by * * * Rumania or by any national thereof as defined in such Executive Order.”
The determination that vested property was not directly owned by a natural person at the date of vesting is, by
Limitation periods of 1 year are also found in § 210 of Public Law 285, applicable to the remedies afforded by §§ 207 (a) and (b) — a suit in district court and an administrative claim, judicially reviewable, for the return of vested property. 22 U.S.C. §§ 1631i, 1631f (a) and (b) (1970). By subsection (c) of § 207, the remedies in §§ 207(a) and (b) are to be the “sole relief and remedy” of any person having a claim to vested property. 22 U.S.C. § 1631f(c) (1970). Both claim and suit are restricted to claims for the return of non-Rumanian property mistakenly vested as Rumanian and to claimants who can prove that they are not nationals of Rumania. Bohrager-Binger v. Attorney General, supra. Those remedies were thus doubly unavailable to Mr. Ghitescu and his family.
There is no doubt that the 1-year period following vesting, in which application, claim, or suit for divesting might have been made, had expired long before the first steps on the claim were taken by any of the Grhitescus. The claim is concededly time-barred, and for this reason, and for others as well, plaintiffs have no legal claim.
Section 2509(c) requires, however, that the “facts, including facts relating to delay or laches, facts bearing upon the question whether the bar of any statute of limitation should be removed, or facts claimed to excuse the claimant for not
The facts of this case compel the conclusion that the conceded failure to apply for divesting within the period of limitations prescribed by § 202 (a) should be excused.
Mr. Ghitescu was a political prisoner in Rumania from 1952 to his death in 1961.- Even assuming his awareness of the 1958 vesting, any action on his part to attempt to obtain divesting, from prison, would appear to have been a practical impossibility. Moreover, the futility and even dangers of such an application in post-World War II communist Rumania would have operated as a clear deterrent to any such action were it otherwise practicable.
Prior to 1958, the Rumanian Government, by a series of decrees, had nationalized buildings and houses, had confiscated “abandoned” property, had substantially expropriated all industry and trade, with the exception of the smallest stores and shops, and had ordered foreign assets and claims to be reported and transferred to the national bank, in exchange for promised or nominal compensation in revalued currency at the rate of 1 new Rumanian “stabilized leu” for 20,000 old Rumanian lei. See Foreign Claims Settlement Commission Dec. & Ann. (227 — 28) (1968). If the money in the guaranty account, in the United States, had not been declared to the Rumanian authorities, as is likely, the making
Still to be considered, however, is whether, notwithstanding that conclusion, the passage of time prior to the 1970 filing of the petition herein with the Chief Commissioner militates against the claim on its merits.
Both limitations and laches are affirmative defenses, to be pleaded if appropriate. See Buie 37 (b), Buies of the United States Court of Claims, applicable to this reference pursuant to Paragraph 11(b), Procedure in Congressional Beference Cases, Appendix D thereto. Not until trial of this cause, when counsel for defendant endeavored to amend its answer to include the defenses of limitations and laches, were these matters mentioned.
The trial commissioner declined to permit the amendment at that stage and time, as coming too late and to plaintiffs’ prejudice if then allowed. Defendant did not request, or ask for time within which to seek, review of that ruling. Laehes is not mentioned in either defendant’s requested findings of fact or its brief to the trial commissioner. In his opinion, the trial commissioner discussed the statutes of limitations in Public Law 285, and the 6-year statute applicable to actions in the Court of Claims, and concluded that they were no bar to the claim. He did not, however, treat laches.
The defense of limitations is a jurisdictional one which should be considered in a Congressional reference case where appropriate even if not mentioned by the parties. McQuown v. United States, 199 Ct. Cl. 858 (1972); Todd v. United States, 155 Ct. Cl. 87, 93, 292 F.2d 841, 844 (1961). In contrast, laches is to be deemed waived if not pleaded. Todd v. United States, supra, 155 Ct. Cl. at 94, 292 F.2d at 845. The
While there is much to be said for the view that the foregoing considerations preclude any necessity for further discussion of laches, a majority of the Beview Panel is of the belief that, in this Congressional reference, the House may nonetheless wish to be apprised of the Panel’s conclusions respecting that question. Accordingly, despite defendant’s actions (and inactions) described above, consideration has been given to defendant’s present argument that delay between plaintiffs’ escape to France in 1962 and the introduction of private relief legislation in their behalf in 1969 justifies an adverse recommendation on H.B. 8568. On the facts available,
Long prior to 1962, in plaintiffs’ native land, decrees which were designed to, and did, confiscate assets of the propertied classes of Bumania had been promulgated by the communist regime. In 1962, shortly after Mr. Ghitescu’s death, plaintiffs succeeded in escaping to France, but, it is clear that at the time, Bumanian authorities did not knowingly permit any property within their grasp to be removed by persons fleeing from that country.
In 1963, from France, plaintiffs did make an application to the OAP for divesting of the guaranty account, only to be advised by that office that the application was both too late and devoid of any merit. At that point in time, no possible remedy of either an administrative or a judicial nature existed for plaintiffs. Their sole hope for obtaining any redress could only have been a petition to the Congress for a dispensation of legislative grace. While the record does not show when initial efforts in that direction were first begun, it does
Laches is a flexible concept based on fairness, and even where properly raised is to be applied in the discretion of the court. Mere delay in asserting rights is not, in and of itself, sufficient to establish the defense. Cason v. United States, 200 Ct. Cl. 424, 471 F. 2d 1225 (1973) ; McQuown v. United States, supra, Todd v. United States, supra. To invoke the doctrine, defendant bears the burden of showing not only delay but also that it has been prejudiced by the inaction. Ibid.
Defendant did not see fit to plead the defense prior to trial. At trial, it made no offer of proof of any facts to sustain it. Indeed, it disavowed any factual basis for the defense. Even now, defendant simply points to the mere passage of time, without the slightest hint as to how it might have been prejudiced thereby. In all of the facts and circumstances of this case, the time which has elapsed cannot be deemed unreasonable, nor can it fairly be concluded that the claim is barred by laches.
THE PROBLEM OE LACK OE A PROBATE DECREE
Plaintiffs are the widow and children of Amadeu Ghitesou and undeniably would take his property in any Rumanian probate proceeding. Nevertheless, defendant urges, lack of a decree in a Rumanian probate proceeding determining their right to succeed to such property is a bar to their claim here.
The trial commissioner found that under Rumanian law a judicial proceeding and decree are ordinarily necessary to establish heirship, and no error in that finding is shown or apparent. Equitably, however, plaintiffs’ failure to institute such a proceeding in Rumania (or in this country) and to obtain a decree of succession does not bar them from the relief contemplated by H.R. 8568.
In support of defendant’s contention that this factor should lead to an unfavorable recommendation to the House of Representatives, it alludes to the absence of “legal right of
Plaintiffs’ right to consideration of their claim does not depend solely, or even principally, upon their legal capacity to sue under Buie 61 (b) vel non. The power and right of the Congress to honor a claim for any assets of Amadeu Ghitescu over which defendant exercised dominion and control, by vesting them and paying them into the Bumanian Claims Fund, without requiring any probate or decree of succession, Bumanian or otherwise, if that be “equitable”, cannot seriously be doubted. The pivotal inquiry is whether or not plaintiffs’ claim is in fact fairly within the perimeters of that concept, as hereinabove defined, not whether they would be technically qualified to commence a legal action on the claim.
In considering whether that unquestionable power should be exercised in plaintiffs’ favor, it is relevant to reiterate that Mr. Ghitescu’s assets had been subjected to the confiscatory decrees of the Bumanian regime, and that he had been a prisoner of the regime for 9 years prior to his death. It is highly unlikely that at his death he still had any property in Bu-mania worthy of a probate proceeding. And it is unreasonable in the extreme to expect his widow to have instituted a probate proceeding in order to pass title to foreign assets, thereby disclosing to the regime that her husband had assets deposited in the United States for safekeeping, and attracting attention to herself as the widow of such a man as the regime deemed her husband to be.
Too, it would be unreasonable to expect plaintiffs to have instituted a probate proceeding in this country seeking to establish title to, in essence, a legally non-existent property right. Long prior to the time they left Bumania, the blocked guaranty account in the United States had been vested and paid into the Bumanian Claims Fund, and neither judicial
In such a situation as this it is honorable and just for those who have taken control of the property of a foreign decedent to overlook the failure of foreign heirs to obtain a formal decree of succession, and to award local assets on proof of heirship by other means. The GAP itself recognized this in 1963 by advising plaintiffs to apply to the Studebaker-Packard Motor Car Co., where Mr. Ghitescu had a credit account, and there is no question but that the sum involved was paid over. And, in this country, the Foreign Claims Settlement Commission has frequently paid the claims of heirs of persons who died abroad in circumstances where a decree of heirship would be unreasonably onerous to obtain. Foreign Claims Settlement Commission Dec. & Ann., supra, at 68 (claim of Flesch) ; 139 (claim of Finger) ; 503.
If plaintiffs are turned away for lack of a decree of heir-ship, they will have lost irretrievably property which may have been owned by their husband and father. The United States surely should not desire to perpetuate any inequity committed by it with respect to Mr. Ghitescu’s property, if such exists, by reliance upon pure technicality. As the wife and children of Amadeu Ghitescu, plaintiffs deserve to be regarded as his rightful heirs and as successors to his interest, if any, in property vested by the United ¡States and thereafter used for governmental purposes. Put another way, their claim to such property is no less valid than one by Mr. Ghitescu himself, despite the absence of any formal probate decree.
THE VESTING ORDER AND STATUTE AS A BAR TO THE CLAIM
Next, defendant puts up the vesting order and statute as a bar to inquiry into the question whether the guaranty account should now be treated as the personal, individual property of Amadeu Ghitescu in 1958. The contention does not bear close examination.
The first intention of Public Law 285 was to vest the property of the Government of Rumania and apply the
Pursuant to § 202(a), property “owned directly by a natural person” was to be left unvested, and if it were vested by mistake, the executive was during the following year empowered to divest it. The reason the property of individuals was to be preserved for them was that “we do not wish to alienate the support of friendly nationals of Bulgaria, Hungary, and Rumania or impair their faith in the United States.” Assistant Secretary of State Thruston B. Morton, in Hearings on H.R. 6382, supra.
Consistently with the foregoing statutory purpose and provisions, the guaranty account was vested as the property of a partnership, considered by the OAP to be an entity akin to a corporation, with title to its assets. Vesting Order No. SA-260 of July 24,1958, recited determinations that the account was blocked property “owned directly or indirectly by N. Butculescu Societe en Commandite, a national of Rumania as defined in said Executive Order 8389, as amended,” and, also, that “the property described herein is not owned directly by a natural person.” Under § 202(c), the determination that the property was not individually owned was within “the sole discretion of the President or his designee”, and “not * * * subject to review by any court.” Citing § 202(c), the government now maintains that plaintiffs are in this proceeding engaged in a forbidden effort to challenge the determination in the vesting order.
It is, of course, clear that § 202 precludes any “legal” claim by plaintiffs. The present proceeding is in reality an inquiry, undertaken at the request of the House of Representatives, into the “equity” of their claim, and it will culminate solely in an advisory opinion to the referring House. See Glidden Co. v. Zdanok, 370 U.S. 530, 579, n. 51, 579-83 (1962).
The reason for the prohibition in § 202(c) of any review of the determination in the vesting order was that “as the Act’s legislative history shows, the Congress did not want the process of vesting to be delayed or interrupted by litigation.” Schrager-Singer v. Attorney General, supra, 271 F. 2d at 814. A report to Congress, now, upon request, will not affect the processes of vesting, which are long since concluded, nor constitute a “review” of the vesting order in violation of § 202(c). It will simply furnish a basis for decision by Congress whether or not, in equity and good conscience, it should dispense legislative grace, and as such is completely appropriate.
THE MERITS OE THE MATTER
The “A. Ghitescu Special Guaranty Account” was vested by defendant in 1958 as the property of a Bumanian partnership. Two possible issues on the merits emerge from that action. The first is whether, from and after creation of the account in 1934 with $100,000 of Mr. Ghitescu’s own money, it was (and remained) his own individual account, or instead was (or subsequently became) partnership property. The second is whether, even assuming the account to have been partnership property at the time of Mr. Butcu-lescu’s death in 1957, that portion of the account vested in 1958 should nonetheless equitably be treated as Mr. Ghitescu’s individual property as of the time of vesting. The facts bearing on these issues available to the trial commissioner and to the Beview Panel are largely stipulated, and understandably sparse.
In about 1931, Mr. Ghitescu and Mr. Butculescu became partners in a Bumanian partnership known as “N. Butculescu
In 1934, on Caterpillar’s request that a cash deposit be made to back up its exports to the Rumanian partnership, “Mr. Ghitescu sent $100,000 from his own funds to Caterpillar for deposit in an account to be entitled ‘A. Ghitescu Special Guaranty Account.’ Thereafter the difference between list price, remitted from Rumania, and price at which Caterpillar merchandise was actually charged to the Rumanian purchaser, was added to this account, as well as remittances from other sources. It is not known whether these other remittances were individual property of one or another of the two partners or partnership property.” There was $267,474.28 credited to the account in 1940, at the time of blocking, when Caterpillar renamed it the “A. Ghitescu, Blocked Export Dealer Account No. 714.”
In Caterpillar’s reports to the Treasury under freezing regulations, it is stated that the “A. Ghitescu Special Guaranty Account” was the property of Amadeu Ghitescu, whose given address was different from that of the partnership; that the type of ownership was “Individual”; and that Nicu Butculescu “might have an interest in this property as he and Mr. Ghitescu work closely together. However, the extent and nature of that interest, if any, are unknown.”
Caterpillar also had on its books an account in the name of the partnership, containing only property of nominal value such as spare parts, and still another account, in the name of Mr. Butculescu individually, in which there was slightly over $50,000 at about the time of the blocking. In reporting this last account, Caterpillar noted that Mr. Ghitescu “might have an interest in this property as he and Mr. Butculescu work closely together. However, the extent and nature of that interest, if any, are unknown.” These other accounts were not vested.
The trial commissioner concluded (and defendant implicitly concedes) that Mr. Ghitescu owned the guaranty account at the time it was established. He also determined that no part of the guaranty account was at any time partnership property; that all of it was at all times individually owned property, perhaps partly owned by Mr. Butculescu; that, in view of Mr. Butculescu’s (and his estate’s) receipt of half the amount in the account and release of all claims against it prior to vesting, the balance in it was solely owned by Mr. Ghitescu at the time of vesting; and that, had an application for divesting been made by Mr. Ghitescu within 1 year from the date of vesting, the property would have been determined to be “directly owned at the date of vesting by a natural person” and divested.
The trial commissioner also concluded, however, that “the guaranty account, if it was originally partnership property * * * became individual property no later than 1957, before the issuance of the vesting order in 1958.” The essence of his reasoning on the latter phase of the matter appears in the six paragraphs immediately following.
Rumanian law provides that a limited partnership is a legal entity, with title to its assets, and that neither entity nor title terminates automatically on the dissolution of the partnership by the death of a partner. Under the Rumanian Commercial Code, dissolution of a partnership is usually
On these principles defendant contends that since no proceedings to liquidate the partnership took place, title to the account (claimed by defendant to be originally in the partnership) remained with the partnership and never passed to the partners individually. This line of argument overlooks that the circumstances prevailing in Rumania on Mr. But-culescu’s death differed vastly from those that would have prevailed in normal, pre-war, times.
By 1957 most private business in that country had been confiscated. The content of the Commercial Code had been or in any event was being replaced by “socialistic” content, and the courts administering the Commercial Code, in which liquidation might take place, were severely limited in their operations.
Moreover, the partnership had long since lost all viability. Imports of American machinery had ceased in 1939. One of the two partners had emigrated to the United States in 1948, and the other had been in jail in Rumania since 1952. Any Rumanian partnership assets as may have survived the war and post-war confiscation had doubtless been consumed and liquidated de facto by the partners and their families long before 1957. It can safely be concluded that by 1957 the partnership had no existence — that it had neither activities, creditors, nor assets in Rumania.
Even in normal times a Rumanian court would not entertain proceedings to liquidate a partnership which had neither assets nor creditors. Thus, formal liquidation proceedings for tins partnership in 1957, at the time Mr. Butculescu died in America, would in all likelihood have been impossible even for one not captive, and in any event useless.
Equitably viewed, then, the partnership should be regarded as de facto dissolved and liquidated in 1957, at the latest. Thus, on the technical dissolution of the partnership by the death of Nicu Butculescu in 1957, title to any assets it may have had in the United States should be regarded in equity and good conscience as belonging to the surviving partner and the successors of the deceased partner.
Considering the foregoing, the Review Panel is of the opinion that in 1958 defendant, by vesting, exercised dominion over property which, in equity and good conscience, should be regarded as being individual property at that time, and which, therefore, should now equitably be “divested.” It follows that plaintiffs’ claim addressed to the honor and conscience of the sovereign is a valid one. There is, therefore, no need to reach the difficult question whether the guaranty account was at all times individually owned property.
There is, too, no need to discuss plaintiffs’ further contentions that vesting under Public Law 285 was intended to be limited to corporations and not to include partnerships; that even if the account was properly vested as partnership property, Amadeu Ghitescu’s share in it should have been returned under § 207 (c) of Public Law 285 (22 U.S.C. § 1681f (c)) which provides for partial returns to stockholders of vested corporate property; and that in any event simple equity requires that the Ghitescus be treated equally with the Butculescus, to whom one-half of the account was paid by decision of the OAP.
H.R. 8868 denominates as a source of funds for payment to plaintiffs “tbe moneys deposited pursuant to tbe Agreement between tbe United States and Rumania signed at Washington March 30, 1960 * * Tbe trial commissioner observed that approximately half of tbe $2,500,000 paid by tbe Rumanian Government pursuant to tbe 1960 agreement “is presently held in tbe Rumanian Claims Fund, awaiting tbe disposition of Congress * * *” and was therefore available for satisfaction of plaintiffs’ claim, should Congress conclude to recognize and satisfy it.
Defendant’s brief to tbe Review Panel alludes to advice from tbe Bureau of Accounts, Treasury Department, that “as of June 30, 1972 there was a balance of $43,473.55 in tbe Rumanian fund which amount has been fully obligated. ”
THE AMOUNT VESTED
H.R. 8568 proposes that plaintiffs be paid from the Rumanian 'Claims Fimd the sum of $133,737.14, the amount actually vested. As the trial commissioner noted, however, only $132,399.77 was paid into the Rumanian Claims Fund as the proceeds of vesting. The balance, $1,337.37, was retained for the 'administrative expenses of the CAP. He concluded that such expenses were “payable without question,” that the correct amount to be paid plaintiffs from the Fund was thus $132,399.77, and that H.R. 8568 should therefore be amended accordingly.
Plaintiffs urge that § 202, the statutory provision pertain
In sum, plaintiffs have no legal claim for several reasons. As a matter of equity and good conscience, however, they do have a meritorious claim, and the circumstances are such that their delay in pressing that claim should be excused. It is accordingly concluded that enactment of H.R. 8568, modified as 'hereinabove suggested, would be appropriate and not a mere gratuity.
This determination is submitted to the Chief Commissioner for transmission to the House of Representatives.
That account hail been established in 1934 on the boohs of the Caterpillar Tractor Co. of Illinois.
Defendant’s Brief, p. 23.
Section 202(a) (22 U.S.C. § 1631a(a) (1970)) provided:
“* * * any property which was blocked in accordance with Executive Order 8389 of April 10, 1940, as amended, and remains blocked on August 9,1955, and which, as of September 1,5, 1947, was owned directly or indirectly by * * * Rumania or by any national thereof as defined in such Executive Order, shall vest * * * when, as, and upon such terms as the President or his designee shall direct. * * * The net proceeds remaining upon completion of the administration and liquidation thereof * * * shall be covered into the Treasury. Notwithstanding the preceding provisions of this subsection, any such property determined by the President or his designee to be owned directly by a natural person shall not be vested under this subsection but shall remain blocked subject to release when, as, and upon such terms as the President or his designee may prescribe. If, at any time within one year from the date of the vesting of any property under this subsection, the President or his designee shall determine that it was directly owned at the date of vesting by a natural person, then the President or his designee shall divest such property and restore it to its blocked status prior to vesting, subject to release when, as, and upon such terms as the President or his designee may prescribe * *
Executive Order 8389 of April 10, 1940, was amended effective October 9, 1940, to include Rumania among the foreign countries designated in the order. 5 F.R. 1400, 4062 (1940) ; full text at 12 U.S.C. § 95a note.
Section 5E of the order defines the term national as including:
“(i) Any person who has been domiciled in, or a subject, citizen or resident*830 of a foreign country at any time on or since tlie effective Sate of tliis Order.
“(ii) Any partnership, association, corporation or other organization, organized under the laws of, or which on or since the effective date of this Order had or has had its principal place of business in such foreign country, or which * * * was or has been * * * owned or controlled by, directly or indirectly, such foreign country and/or one or more nationals thereof as herein defined * *
Section 202(c) (22 U.S.C. § 1631a(c) (1970)) provided:
“The determination under this section that any vested property was not directly owned by a natural person at the date of vesting shall be within the sole discretion of the President or his designee and shall not be subject to review by any court.”
Equitable considerations Rave a special place in tbe determination of questions affecting limitations in this case. The Supreme Court has held that under such a statute as the Trading with the Enemy Act (on which Public Law 285 is modeled), where assets go not into the Treasury but to creditors and private claimants (as they do under Public Law 285), limitations are to be applied less strictly than in suits against the assets of the sovereign, and thus that equitable considerations may serve to toll the running of limitations. Honda v. Clark, 386 U.S. 484 (1967).
At least to plaintiffs’ escape from Rumania in mid-1982, any inaction •with respect to the account was, for reasons heretofore stated in connection with Mr. Ghlteseu’s failure to apply for divesting, equally excusable.
Counsel for defendant stated at trial that “the issue [sic] raised by me is a question of law and of law only, * * and, in defendant’s brief to the Review Panel, defendant reiterates that its effort to raise at trial limitations and laches raised no “factual issues * * Befendant’s Brief, p. 5. It is thus reasonable to assume that the available facts are all of the facts.
Defendant’s Brief, p. 6.
American creditors of tlie partnership, it may be noted, were, under Public Law 285, as under the Trading with the Enemy Act, able to satisfy their claims from the proceeds of the vested account. Section 3, Public Law 285, 22 U.S.C. § 1631g (1970).
Defendant’s Brief, p. 22.
See. 216, Title II, International Claims Settlement Act of 1949, added by tbe Act of July 24, 1968, 82 Stat. 420, 421, Public Law 90-421, 22 U.S.C. § 1631o (1970).
Concurrence Opinion
Concurring in the result.
I concur in the result reached by the review panel. However, the majority’s conclusion that the claim which forms the subject matter of this Congressional reference case is not barred by laches is, in my opinion, contrary to all established principles of appellate review. Such principles are intended to apply to a Congressional reference proceeding. See 28 U.S.C. § 2509 (c) and Appendix D of the Rules of this court.
A careful reading of the trial transcript indicates that counsel for defendant, on the first day of trial, attempted to amend his answer to plead the affirmative defenses of limitations and laches. Claimants objected to such a belated motion. Because of the failure by defendant to raise such defenses in either its answer or at any of three pretrial conferences, the motion was denied by the trial commissioner.
'Commissioner Schwartz’ October 31,1972, report and findings of fact correctly deals with the related jurisdictional question of limitations. The propriety, indeed the duty, of the commis'sioner dealing sua sponte with the question of limitations is mandated by the Congressional reference case of Todd v. United States, 155 Ct. Cl. 87, 93, 292 F. 2d 841, 844 (1961), declaring:
The statute of limitations is jurisdictional. It cannot be waived except by act of Congress. It is the duty of the court to raise the question if it is not raised by the parties.
Defendant, at p. 5 of its brief and exceptions to the commissioner’s report, sets forth the above events and then mistakenly contends:
The opinion of the Commissioner resuscitates this issue [defendant’s motion to amend the answer to include the defenses of statute of limitations and laches] however, and without discussing the laches issues disposes of the statute of limitations question as one of law. * * * defendant contends that plaintiffs’ claim is also barred by laches.
Claimants, at p. 4 of their reply brief, respond to defendant’s unjustified comment of laches as follows:
Defendant seizes on a mention in the Trial Commissioner’s opinion of the fact that the one-year limitation imposed by statute had expired, as reviving defendant’s belated and unsuccessful effort to amend its answer to interpose defenses of limitations and laches. These affirmative defenses were never mentioned by defendant until the day of trial, and the Trial Commissioner refused to allow these issues to he introduced at that stage. Defendant sought no review of this ruling, and has not made it the subject of an exception. It sought no findings on laches or limitations, and its effort now to revive these defenses as to which there was no opportunity for the presentation of evidence or argument is*846 contrary to principles of proper trial and appellate, procedure and tbe applicable rules.
The majority appears to be more concerned with what it terms a “belief that, in this Congressional reference, the House may * * * wish to be apprised of the Panel’s conclusions respecting [laches] * * *” than with claimants’ position that addressing the issue of laches for the first time at the review panel level would be contrary to all principles of proper trial and appellate procedure — principles, I take it, that all would agree are not to be consigned to oblivion simply because we are deliberating in the context of a Congressional reference rather than a suit at law. See, e.p., Eule 11, Appendix D, Eules of the U.S. Court of Claims.
The majority feels, in spite of the lack of opportunity by both sides to fully treat, at the trial level, such laches-related subjects as the cause of the claimants’ delay in bringing suit, the prejudice, if any, to defendant, etc., that the present record enables it to conclude that the claim cannot be barred by laches. With this I cannot agree. One can only speculate as to what additional evidence defendant might have introduced if the defense of laches had been timely and properly raised. The fact is defendant did not timely raise the defense and the trial commissioner properly denied defendant’s belated attempt to do so on the first day of trial. Further, the trial commissioner correctly made no findings of fact on the subject of laches, and, based on the record before us, I do not feel that the panel should either.
If the majority’s concern to fully apprise the House of defendant’s defense of laches is to be taken seriously, Eule 147 (b) authorizes the panel to remand the reference back to the trial commissioner to receive further evidence on the subject. To reach the conclusion, on the necessarily limited record that is presently before this panel, that the claim is not barred 'by laches not only may do a disservice to defendant, but may be substantively incorrect.
The puzzling aspect of the majority’s position is its recognition that a detailed discussion of the defense of laches was not necessary in order to resolve the issue involved in
Finally, I am obliged to explain that I concur in the result because the proofs satisfy me that had the actions complained of by claimants been perpetrated by a private party, the claim asserted would have been redressable at law. Thus, I conclude that claimants have made out an “equitable claim” within the meaning of 28 U.S.C. § 2509(c).
FINDINGS OF FACT
1. H. Ees. 324, 91st Cong., 1st Sess., introduced March 17, 1969 and approved February 17, 1970, referred H.E. 8568, 91st Cong., 1st Sess., “A bill for the relief of Yiorica Anna Ghitescu, Alexander Ghitescu, and Serban George Ghitescu, together with all accompanying papers”, introduced March 10, 1969, to the Chief Commissioner of the Court of Claims pursuant to 28 U.S.C. §§ 1492 and 2509 (1970), “for further proceedings in accordance with applicable law.”
2. H.R. 8568, supra, reads in part as follows:
* * * the Secretary of the Treasury is authorized and directed to pay to Viorica Anna Ghitescu, Alexander Ghitescu, and Serban George Ghitescu, the heirs of Amadeu Ghitescu, out of the moneys deposited pursuant to the Agreement between the United States and Eu-mania signed at Washington March 30,1960, the amount of $133,737.14, as settlement in full of their claim arising out of the vesting of that amount representing money belonging to Amadeu Ghitescu.
3. H. Eep. No. 91-820, 91st Cong., 2d Sess., February 3, 1970, accompanying H. Ees. 324, contains a letter, dated September 17,1969, from the then Deputy Attorney General, setting out the facts of the matter and recommending against the enactment of H.E. 8568.
Subcommittee No. 2 of the House Committee on the Judiciary heard testimony on the bill on September 18 and October 16, 1969. Among the witnesses was Irving Jaffe,
4. Plaintiffs filed a petition with the Chief Commissioner July 20, 1970, and defendant filed its answer September 17, 1970.
Three pretrial conferences were held at which agreement was reached on a stipulation of facts and on the admission in evidence of a number of exhibits. The stipulation and exhibits form the basis for findings 5-29.
Among the pretrial agreements was a stipulation of Bu-manian law. Further provisions of Bumanian law were testified to at trial by experts in Bumanian law, one on behalf of each party.
Trial was held on November 12, 1971. Post-trial briefing by the parties was completed on May 17, 1972.
BINDINGS BASED ON PRETRIAL DATA
The Ghitescu Guaranty Accownt
5. In about 1931 in Bumania, Nicu Butculescu and Amadeu Ghitescu, citizens and residents of Bumania, formed a limited partnership without shares, also called a simple partnership, known as N. Butculescu Societe en Commandite. Each of the partners had a one-half interest in the partnership, according to an agreement between the parties limited to this proceeding. Mr. Butculescu was the general partner and Mr. Ghitescu a limited silent partner. At the subcommittee hearings on H.B. 8568 (finding 3) Mr. Jaffe described Mr. Ghitescu as a wealthy man who as the silent limited partner put up the capital. The partnership acted as the distributor in Bumania for the products of the Caterpillar Tractor Co., of Peoria, Illinois, and its main business was the importation of Caterpillar tractors and other products.
6. Assets of the partnership in Bumania, if any, are not involved in this proceeding. The asset of concern here is an account at Caterpillar Tractor Co. known as the “A. Ghitescu Special Guaranty Account,” that is, a debt owed by Cater
7. The account originated in a request in 1934 from Caterpillar for a cash deposit to guarantee future shipments to the partnership. In response to the request, Mr. Ghitescu sent $100,000 from his own funds to Caterpillar for deposit in a guaranty account.
8. The title of the account is variously described in the stipulation of facts as the “A. Ghitescu Special Guaranty Account” and the “A. Ghitescu guarantee account.” It is found that the title of the account is “A. Ghitescu Special Guaranty Account.” Whether or not Mr. Ghitescu specified or knew the title to be given the account is not clear from the stipulation. Although it seems reasonable that the details of the disposition of so large a sum should have been approved by the remitter of the money, it cannot be found on this record that Mr. Ghitescu directed the naming of the account.
9. There were added to the guaranty account, presumably from time to time, the amounts (herein called the “rebates”) of the differences between the list price of the merchandise shipped by Caterpillar to the partnership and the lower actual sales price. Remittances from other sources were also added to the account. The amounts of the rebates as compared with the “other remittances” are not known. Their combined total, by the time war broke out in Europe in 1939, was approximately $167,474.28, which with the $100,000 first deposited, brought the amount in the account to $267,474.28.
War and Freezing
10. On October 9, 1940, the account was with all other Rumanian property blocked as the property of Rumanian foreign nationals under Executive Order 8389, the basic order in the program of freezing of foreign assets. On this, Caterpillar renamed the account, “A. Ghitescu, Blocked Export Dealer Account No. 714.”
11. In 1941 and 1948, in compliance with freezing regulations, the Caterpillar Tractor Co. reported the nature and state of the guaranty account to the Federal Reserve Bank
In answer to the question as to interests of any other person in the property, the report stated:
Mr. N. Butculescu, a citizen of Roumania, residing in Bucuresti, Roumania, might have an interest in this property as he and Mr. Ghitescu work closely together. However, the extent and nature of that interest, if any, are unknown.
12. Caterpillar also had on its books and reported to the Treasury (1) an account in the name of “N. Butculescu Societe en Commandite,” described as a “machinery dealer,” of 116 Galea Victoriei, Bucharest, in which account there were credited spare parts of nominal value and a dealer contract ; and (2) an account in the name of Nicu N. Butculescu, to which there was credited $51,507. Mr. Butculescu was described as an individual, whose address was c/o N. Butculescu Societe en Commandite. In answer to the question as to interests of any other person in the account of Nicu N. Butculescu, Caterpillar stated:
Mr. A. Ghitescu, a citizen of Roumania, residing at 8 Str. Dumbrava Rosie Bucuresti, Roumania, might have an interest in this property as he and Mr. Butculescu work closely together. However, the extent and nature of that interest, if any, are unknown.
Partial Butculescu Uiiblockmg
13. Mr. Butculescu and his wife, Rumanians, who had lived in Rumania before and during World War II, emigrated to the United States in 1948 and became American citizens in 1954.
14. On Mr. Butculescu’s successive applications prior to his death in 1957, the sums of $44,185, $7,322.28 and $1,500, a total of $53,007.28, were successively unblocked by the Treas
Program for the Testing of Rumanian Property
15. In 1955 Congress directed, pursuant to the treaties of peace with the satellite enemy countries in World War II, Bulgaria, Hungary and Rumania, that the previously blocked property of the governments and of corporations of those countries should be vested, in the manner of the vesting of German and Japanese assets under the Trading with the Enemy Act, and the proceeds utilized to compensate American citizens for nationalization and war damage connected with those countries. To this end the Act of August 9, 1955, 69 Stat. 562, 22 U.S.C. §§ 1631-1631n (1970), added Title II to the International Claims Settlement Act of 1949. Title II, called herein Public Law 285, relates to Rumanian, Bulgarian, and Hungarian property, but will be described as though it covered Rumanian property only.
16. (a) Section 202(a) of Public Law 285 provided that pursuant to the treaty of peace with Rumania, blocked property in the United States owned directly or indirectly by Rumania or any Rumanian national should vest in the President or his designee, the Office of Alien Property (henceforth, together, “the executive”), and its proceeds covered into the Treasury, there, under other sections, to be paid into a Rumanian Claims Fund and used to pay the claims of U.S. nationals arising from Rumanian nationalization and war-connected damage.
Section 202(a) further provided, however, that property determined by the executive to be “owned directly by a natural person” should not be vested, but should remain in a blocked account in the Treasury, subject to release with other blocked property. If at any time within 1 year from the date of vesting, it should be determined by the executive that the vested property was in fact “directly owned at the date of vesting by a natural person,” it, or if it had been sold, its
By § 202(c) a determination that any vested property was “not directly owned by a natural person at the date of vesting” was to be within the sole discretion of the executive and “shall not be subject to review by any court.” 22 U.S.C. § 1631a(e) (1970).
(b) Sections 207 (a) and (b) provided for a suit and an administrative claim, judicially reviewable, for return of vested property. Both remedies were limited to claimants who were not nationals of Rumania under Executive Order 8389. 22 U.S.C. §§ 1631f(a) and (b). The period of limitations for suit or ciaim was 1 year. Section 210, 22 U.S.C. § 1631i (1970).
(c) By § 207 (c), a claim based on “ownership of shares of stock or other proprietary interest in a corporation which was the owner of property at the date of vesting” was to be allowed, in suits or claims under § 207, on certain conditions, if 25 percent or more of the stock or proprietary interest in the corporation was owned by nationals of other than the satellite enemy or enemy countries. 22 U.S.C. §1631f(c) (1970).
(d) Section 208 created machinery for the payment to creditors of the debts owed by the owner of vested property immediately prior to vesting. 22 U.S.C. § 1631g (1970).
Unblocicing of 50 Percent to Mr. Butculescu a/nd His Estate
17. Mr. Butculescu died on January 19,1957, survived by his widow, his sole heir. In July 1958, the widow, as executrix of her husband’s estate, applied for a license unblocking the remainder of the decedent’s claimed half interest in the guaranty account, that is, half the amount of the account at the time of blocking, less the $53,007.28 already released to him.
18. In considering the application, the OAP concluded that (a) the account was the property of a Rumanian partnership, in which each partner had a half interest; (b) the partnership was a legal entity under Rumanian law, and not a “natural person” within the meaning of § 202(a) of Public Law 285 and that therefore its property was not exempt from vesting (finding 16(a)); (c) that, if the account were
19* Accordingly, on July 19, 1958, the OAP granted the application for unblocking and unblocked an amount it determined to be Mr. Butculescu’s half interest in the account by issuing a license for the payment of $80,729.86 to Mrs. Butculescu, as executrix. This sum, with the $53,007.28 paid to Mr. Butculescu previously (finding 14), a total of $133,-737.14, constituted half of the guaranty account. In connection with the unblocking, Mrs. Butculescu as executrix released any further claim against the account.
Vesting of the Balance of the Aceov/nt
20. Five days later, on July 24,1958, the OAP by Vesting Order No. SA-260, issued under § 202(a) of Public Law 285, vested the balance of the guaranty account, $133,737.14, and after the deduction of administrative expenses in the amount of $1,337.37, the net proceeds of the account, $132,399.77, were eventually paid into the Rumanian Claims Fund at the Treasury (see finding 16(a)). The order contained determinations that the account was owned by the partnership and not by a natural person, as follows:
1. That the property described as follows:
That certain debt or other obligation of Caterpillar Tractor Co., Peoria, Illinois, evidenced by an ac*854 count payable, identified as Blocked Export Dealer Account No. 714, maintained on its books and records, together with any and all rights to demand, enforce and collect the same,
is property within the United States which was blocked in accordance with Executive Order 8389, as amended, and remained blocked on August 9, 1955, and which is, and as of September 15,1947 was, owned directly or indirectly by N. Butculescu Societe en Commandite, a national of Rumania as defined in said Executive Order 8389, as amended.
2. That the property described herein is not owned directly by a natural person.
21. The other accounts on the books of Caterpillar in the name of the partnership and in the name of Mr. Butculescu (finding 12) were not vested.
Denial of the Ghitescu Claim
22. Amadeu Ghitescu filed no application for divestment of the vested account within the 1-year period following the vesting (see finding 16(a)) and, indeed, no application, claim or suit at any time. He was held in jail by the Rumanian Government from 1952, long prior to the vesting, until his death on August 6, 1961, at the age of 67 from heart disease.
23. In his letter to the House Committee, the Deputy Attorney General stated that Mr. Ghitescu was a political prisoner of the Rumanian Government. In testifying on H.R. 8568, Mr. JaiTe stated that there was no information on why Mr. Ghitescu was imprisoned; that “Mr. Ghitescu was a very wealthy man and he was a capitalist, I am sure. That he was anti-Communist I am willing to accept. I certainly would not dispute it.” See finding 3. It is found that Mr. Ghitescu was imprisoned for political reasons by the Rumanian communist regime.
24. Plaintiffs Viorica Anna Ghitescu and her sons Alexander Ghitescu and Serban George Ghitescu, are respectively the surviving lawful widow of Amadeu Ghitescu and the two children of the marriage. Amadeu Ghitescu died in Rumania a citizen and resident of that country.
26. On July 10, 1962, after Amadeu Ghitescu’s death, plaintiffs escaped from Rumania to France, and in February 1963 they applied to the Department of Justice for the divesting of the guaranty account.
27. By letter dated April 3, 1963, the OAP denied the application on two grounds: that it was made too late and on the merits in that the account was not the property of a natural person but was owned by the partnership. OAP did advise plaintiffs to apply to the Studebaker-Packard Motor Car Co., where Mr. Ghitescu had a credit account of some $10,000, stating that if it could be established that Mr. Ghitescu were dead and that plaintiffs were entitled to the money as his heirs, there should be no trouble in obtaining that money. There is no question but that that sum was subsequently paid over to them.
28. From an extract of the minutes of the Tribunal d’Instance of the 17th Arrondissement of Paris, it appears on June 27, 1963, the Presiding Justice of the Tribunal heard the declaration of three persons, who had known the Ghitescu family in Rumania, that Amadeu Ghitescu was married only once; died in prison on August 6, 1961; and “left as heirs, according to French law” his wife, Viorica Anna Ghitescu and two sons of his marriage, in the minutes called Colin Alexander Ghitescu and Serban Georges Ghitescu.
Stipulated Provisions of Rumanian La/w
29. By stipulation in pretrial proceedings the parties agreed, for the purpose of this proceeding, that if experts in Rumanian law were called, they would testify that under the Rumanian Commercial Code, pursuant to which the partnership was formed:
a. The Rumanian Commercial Code went into effect on January 1, 1887.
c. Under Article 83 of the Commercial Code, “Any contribution put into a partnership becomes the property of the partnership if not otherwise stipulated.”
d. The Supreme Court of Eumania ruled in 1925 that under Article 86 of the Code “as 'long as the partnership exists, the associates’ personal creditors cannot attach the contributions put into the partnership because, according to the principle stated in Article 83, these contributions are no longer in the associates’ (private) ownership.” It further ruled that “in any partnership with the exception of joint-stock corporations and partnerships limited by shares, the associates themselves also have only an eventual interest in the partnership assets at the dissolution of the partnership.”
e. Article 86 of the 'Code provides that a business partnership is a legal entity with its own patrimony, distinct from the patrimonies of its associates, composed of the contributions and rights put into the partnership by them, increased by the profits acquired during the business activities. In joining a partnership ian associate relinquishes his ownership right over the contribution.
f. A limited partnership is dissolved as a matter of law at the death of one of its general partners and the surviving partner may not continue its activities unless the partnership agreement stipulates otherwise. (Article 193).
g. In accordance with Articles 199 and 200 of the Commercial Code a legal entity does not disappear through dissolution but, as ruled by decision of the Eumanian Supreme Court in 1942 “During liquidation * * * maintains its legal personality, it's business patrimony, and continues its activi • ties for the purpose of liquidation.”
h. Eules for the liquidation of a Societe en Commandite are prescribed in the Commercial Code.
POST-TRIAL FINDINGS AND CONCLUSIONS
Conditions m Post-War Rumania
30. The communist regime which took power in Eumania following World War II accomplished a virtual confiscation
31. A cloud was cast on the provisions of the Commercial Code (finding 29) by the new constitution adopted on the institution of the communist regime, which provided that all laws contrary to the constitution were to be of no effect, and by the measures described above. While the institutions and procedures of the Commercial Code were not abolished, the official policy was to replace the concepts of former law with new “socialistic” content. By a combination of the results of this policy and the described nationalization, confiscation and currency decrees, the former law governing matters of private property became little more than an empty shell and courts engaged in enforcing the pre-war procedures of the Commercial Code were severely restricted in their operations.
32. It is a fair inference from the creation and nature of the account and the additions thereto (findings 5-9) that it represented a deposit of moneys outside of Rumania for safekeeping, and was not declared to the communist Rumanian authorities pursuant to the decree requiring declaration of foreign assets (finding 80).
Limitations and Laches
33. (a) Defendant contends that (a) both Amadeu Ghitescu and the plaintiffs failed to comply with the 1-year statute of limitations provided in Public Law 285, and (b)
(b) Defendant did not plead limitations or laches in its answer herein, nor raise either of those defenses in the course of the three pretrial conferences held following joinder of issue (finding 4). At trial, defendant moved for leave to amend its answer to include such defenses, hut the trial commissioner refused to permit such amendment, on the ground that the effort came too late and would prejudice plaintiffs if belatedly allowed at trial.
(c) Defendant made no effort to obtain a review of that ruling, and it did not make at trial any offer of proof of facts relating to limitations or laches. It then asserted that these issues presented no factual questions, and its presentation to the Review Panel reaffirms that position. Its requested findings of fact and brief to the trial commissioner do not mention laches, and its brief to the Review Panel contains no indication that defendant has been prejudiced in any way by delay on the part of plaintiffs in pressing this matter.
34. Mr. Ghitescu took no action prior to his death with respect to the guaranty account (finding 22). Plaintiffs took no action prior to 1963 to enforce any rights they might have with respect to that account (finding 26). The GAP correctly determined as a matter of law that their 1963 action came too late (finding 27). Accordingly, plaintiffs’ claim is legally barred by limitations.
35. Assuming that Mr. Ghitescu learned in prison of the vesting of the guaranty account, for him to apply for divesting at any time thereafter would have been difficult to the point of impossibility, futile, and dangerous. Had the Rumanian authorities learned of the existence of the foreign asset by reason of such an application, Mr. Ghitescu undoubtedly would have been subject to jeopardy for failure earlier to declare it, and, under the decrees described in finding 30, the
36. The failure of Mr. Ghitescu to apply for divesting within the 1-year period following the vesting, and of plaintiffs herein to take any action prior to 1963, are in all the circumstances excusable as a matter of equity and good conscience.
37. Rumanians such as Mr. Ghitescu and plaintiffs herein were afforded no remedy other than an application to the executive, within 1 year after vesting, for a divesting order under § 202. When, in 1963, plaintiffs applied to the OAP for divesting, no remedy, administrative or judicial, in fact existed for them, and their sole hope for obtaining any redress with respect to the guaranty account lay in Congressional relief.
38. Plaintiffs’ claim is addressed to the grace of Congress, and in all the circumstances, including particularly defendant’s failures to plead limitations or laches prior to trial and to suggest, either by way of offer of proof or otherwise, that it has been prejudiced by any delay that has occurred, the time which has elapsed in this case cannot be found to be unreasonable, nor can it fairly be concluded that the claim should be barred either by limitations or by the equitable doctrine of laches.
Proof of Heirship
39. A judicial proceeding was ordinarily necessary, in Rumania, both before and during the post-World War II communist regime, to determine the right of the heirs of a deceased Rumanian to succeed to Ms property.
40. No proof has been presented that such a probate proceeding took place in Rumania with respect to any property of Amadeu GMtescu and it is concluded that no such proceeding took place.
42. It is a fair inference from the confiscatory decrees of the Rumanian Government (finding 30) and the long period — 9 years — during which Amadeu Ghitescu was imprisoned prior to his death, that at the time of his death he had no property in Rumania warranting the institution of a probate proceeding.
43. The institution of probate proceedings by plaintiffs in Rumania, if feasible, would have disclosed to the communist regime the existence of foreign assets, with consequences similar to those described in finding 35. Moreover, at least with respect to the asset involved in this reference, it is highly unlikely that such proceedings would have had any real purpose. Plaintiffs’ failure to institute proceedings which might have brought Mr. Ghitescu’s foreign assets, and plaintiffs, to the attention of the Rumanian authorities is, in all the circumstances, both understandable and excusable as a matter of equity and good conscience.
44. Plaintiffs are the sole heirs of Mr. Ghitescu under Rumanian law, and, whatever law might be deemed applicable to the guaranty account, have an equitable right to succession to his interests, if any, to the property involved in this reference, vested by defendant in 1958, paid over into the Rumanian Claims Fund, and thereafter used for governmental purposes. In considering a claim for such property (or its equivalent), Congress has the undoubted power and right to recognize and satisfy such a claim, if founded on considerations of equity and good conscience, without requiring any formal probate decree.
45. In the circumstances of this case, to expect plaintiffs to have instituted probate proceedings in this country is unreasonable. One of Mr. Ghitescu’s two known assets in this country was paid over to them without any necessity for such proceedings, and the only other known “asset” in the United States was the guaranty account, vested by de
46. To deny plaintiffs any rights they may have to any property of Amadeu Ghitescu on the ground that they failed to institute probate proceedings in Rumania, the United States, or elsewhere, would perpetuate by undue reliance on technicalities any inequity committed by the United States through the exercise of dominion and control over any such property.
47. Plaintiffs’ claim deserves to be considered on its merits (if any), notwithstanding the absence of a formal decree adjudicating them to be heirs of Amadeu Ghitescu.
The Original Ownership of the Guaranty Account
48. The first $100,000 deposited in the guaranty account is agreed to have been the personal property of Amadeu Ghitescu (finding 7). The account and its contents were therefore originally the individual, directly owned property of Amadeu Ghitescu.
49. It is agreed that the balance of the account, approximately $167,000, was composed of deposits of the difference between the billed and actual prices of goods sold to the partnership by Caterpillar Tractor Co., here called rebates, and “remittances from other sources.” The division of this sum between rebates and the other remittances is not known (finding 9).
50. In view of the conclusion (finding 58) that the guaranty account should in any event equitably be regarded as belonging to Mr. Ghitescu and Mr. Butculescu’s successors following the death of Mr. Butculescu in 1957, it is unnecessary to find whether or not it was at any time following the creation of the account in 1934 partnership property or was at all times individually owned property.
The Accou/nt as Partnership Asset
51. Under the Rumanian Commercial Code a limited partnership such as the instant one is a legal entity apart from its partners, with title to its property, which title continues until the partnership is terminated (finding 29). The
52. The death 'of the general partner in a limited partnership dissolves the partnership but does not terminate its existence, its status as an entity or its title to its assets. Dissolution is ordinarily followed by a period of liquidation, a procedure primarily for the benefit of creditors. On the conclusion of liquidation, the assets are distributed, the partnership is terminated, and the surviving partners and the heirs of the deceased partner take title to their respective shares. See finding 29.
53. No formal legal proceedings to terminate the instant partnership are shown to have taken place following the death of Nicu Butculescu in 1957 or at any other time, and it is found that none took place.
54. Under the Rumanian Commercial Code, liquidation proceedings upon the dissolution of a partnership by the death of a partner are not automatic, but must be initiated, usually by the surviving partner or a creditor.
55. Most businesses in Rumania owned by entities had been confiscated by 1957. See findings 30, 31. Private business partnerships were no longer in existence after the communist regime took over, and there is even some authority that the legal concept of a partnership entity did not exist in communist Rumania. In view of the changes undergone by the courts (finding 31), it is not clear that in 1957 any Rumanian court would have been willing to entertain proceedings of the pre-war, Commercial Code type, to liquidate a pre-war partnership.
56. In the light of the nature of the business of the partnership (finding 5), the departure of Nicu Butculescu to the United States in 1948, the imprisonment of Amadeu Ghitescu continuously from 1952 to his death in 1961, and the legal and economic conditions brought about by the .communist regime, it is concluded that at the time of the death of Mr. Butculescu in America, the partnership had long since ceased to do business, had no assets or creditors in Rumania, and was a dead letter. At least equitably, it should be regarded as having been de facto dissolved and liquidated in 1957 at the latest.
58. It is concluded that any title of the partnership to assets in the United States should equitably be regarded as having passed to the individual partners or their successors, in their respective shares, no later than the time of the technical dissolution of the partnership by Mr. Butculescu’s death in 1957, and prior to the vesting in 1958.
ULTIMATE EINDINGS AND CONCLUSIONS
59. Amadeu Ghitescu should equitably be deemed the individual owner of the $133,737.14, vested by Vesting Order No. SA-260 of July 24, 1958, and, after deduction of $1,337.37 for administrative expenses, paid into the Rumanian Claims Fund.
60. While, for several reasons, plaintiffs have no legal claim to the moneys vested in 1958, they as Mr. Ghitescu’s successors in interest have, in equity and good conscience, a meritorious claim to $132,399.77, the proceeds after administrative expenses of the property so vested, and in the circumstances of this case any delay by them in pressing that claim should be excused.
61. The enactment of II.R,. 8568, with amendments as stated in the opinion, is therefore recommended.
Rule 11(e) expressly provides that review panels are to take the place of the court In requests for review. Rule 11(e) further provides that the Rules of this court that are relevant In those instances where a petitioner Is seeking a review of a commissioner’s decision are also controlling where a claimant is requesting review in a Congressional reference case.
Defendant’s Brief, p. 4.
