tutionally confiscate the actual increment of property belonging to a citizen, or the increment of the proceeds into which such property has been converted. have been commingled with the proceeds of other sales and invested, the owner of such property is entitled to a proportionate share of the average rate of interest received upon the investment after deducting proper charges and expenses and taking into consideration the average amount of such proceeds which remain uninvested. War, § 10 4. Where the proceeds of property seized by the Alien Property Custodian APPEAL by complainant from a decree of the United States Circuit Court of Appeals for the Second Circuit affirming a decree of the District Court for the Southern District of New York dismissing a petition for a master to take an account of interest earned on an investment by the Alien Property Custodian. Reversed. See same case below, 4 F. (2d) 988. The facts are stated in the opinion of the court. L. Sherman, and Harry F. Mela, for In the case of property not actually enemy-owned, the United States could not do as it liked. It could not confiscate such property without making just compensation; and this right of just compensation in the event of seizure is clearly accorded by the 5th Amendment to the Constitution, notwithstanding the existence of war. United States v. L. Cohen Grocery Co. 255 U. S. 81, 65 L. ed. 516, 14 A.L.R. 1045, 41 Sup. Ct. Rep. 298; United States v. New River Collieries, 262 U. S. 341, 67 L. ed. 1014, 43 Sup. Ct. Rep. 565; Rockaway Pacific Corp. v. Stotesbury (D. C.) 255 Fed. 345; Ex parte Milligan, 4 Wall. 2, 18 L. ed. 281. The remedy given under § 9 is the exclusive remedy of the owner of property mistakenly seized, and such remedy was designed to afford full protection to such owner by enabling him to secure just compensation for the sei zure. Central Union Trust Co. v. Garvan, 254 U. S. 554, 65 L. ed. 403, 41 Sup. Ct. Rep. 214; Stoehr v. Wallace, 255 U. S. 239, 65 L. ed. 604, 41 Sup. Ct. Rep. 293. The express language of the Trading with the Enemy Act, relating to the return of the "property" or its "proceeds," is broad and comprehensive enough to include income or interest. Boston & L. R. Corp. v. Salem & L. R. Co. 2 Gray, 35; Wilson v. Beckwith, 140 Mo. 373, 41 S. W. 985; Rossetter v. Simmons, 6 Serg. & R. 456; Dixon v. People, 168 Ill. 190, 39 L.R.A. 116, 48 Meigs v. M'Clung, 9 Cranch, 11, 18, 3 L. ed. 639, 641; Mitchell v. Harmony, 13 How. 115, 14 L. ed. 75; Tweed's Case, 16 Wall. 504, 518, 519, 21 L. ed. 389, 393, 394; United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. Rep. 240; United States V. North American Transp. & Trading Co. 253 U. S. 330, 64 L. ed. 935, 40 Sup. Ct. Rep. 518; Brown v. United States, 8 Cranch, 110, 128, 3 L. ed. 504, 510; United States v. Perchman, 7 Pet. 51, 8 L. ed. 604; Hanger v. Abbott, 6 Wall, 532, 18 L. ed. 939. All war-time acts which provide for the seizure of property of American citizens are necessarily to be construed so as to afford such citizens full compensation, including the income or interest derived from the property seized. (271 U. S. 298, 70 L. ed. 953, 46 Sup. Ct. Rep. 524.) United States v. Lee, 106 U. S. 196, 205-209, 27 L. ed. 171, 176-178, 1 Sup. Ct. Rep. 240; Schillinger v. United States, 155 U. S. 163, 39 L. ed. 108, 15 Sup. Ct. Rep. 85; Basso v. United States, 239 U. S. 602, 60 L. ed. 462, 36 Sup. Ct. Rep. 226; United States v. North American Transp. & Trading Co. 253 U. S. 330, 64 L. ed. 935, 40 Sup. Ct. Rep. 518; Tracy v. Swartwout, 10 Pet. 80, 9 L. ed. 354; Tweed's Case, 16 Wall. 504, 518, 519, 21 L. ed. 389, 393, 394; Seaboard Air Line R. Co. v. United States, 261 U. S. 299, 67 L. ed. 664, 43 Sup. Ct. Rep. 354; Brooks-Scanlon Corp. v. United States, 265 U. S. 106, 123, 68 L. ed. 934, 941, 44 Sup. Ct. Rep. 471; Campbell v. United States, 266 U. S. 368, 370, 371, 69 L. ed. 328, 329, 330, 45 Sup. Ct. Rep. 115. The Alien Property Custodian and the Treasurer of the United States are trustees for plaintiff, and in consequence may not retain the income derived from the property of their cestui que trust. Smith v. Orton, 131 U. S. Appx. ixxy, and 18 L. ed. 62; McKee v. Lamon, 159 U. S. 317, 40 L. ed. 165, 16 Sup. Ct. Rep. 11; Order of St. Benedict v. Steinhauser, 234 U. S. 640, 58 L. ed. 1512, 52 L.R.A. (N.S.) 459, 34 Sup. Ct. Rep. 932, Ann. Cas. 1917A, 463; Chicago, M. & St. P. R. Co. v. Des Moines Union R. Co. 254 U. S. 196, 65 L. ed. 219, 41 Sup. Ct. Rep. 81. Messrs. Dean Hill Stanley, Special Assistant to the Attorney General, William D. Mitchell, Solicitor General, and Ira Lloyd Letts, Assistant Attorney General, for appellees: In the absence of statute, no interest can be recovered upon an obligation of the United States. United States v. Rogers, 255 U. S. 163, 169, 65 L. ed. 566, 568, 41 Sup. Ct. Rep. 281; United States v. North American Transp. & Trading Co. 253 U. S. 330, 336, 64 L. ed. 935, 938, 40 Sup. Ct. Rep. 518; United States ex rel. Angarica v. Bayard, 127 U. S. 251, 259, 32 L. ed. 159, 162, 8 Sup. Ct. Rep. 1156; United States v. Lee, 106 U. S. 196, 27 L. ed. 171, 1 Sup. Ct. Rep. 240; United States v. North American Transp. & Trading Co. 253 U. S. 330, 64 L. ed. 935, 40 Sup. Ct. Rep. 518; United States v. Sherman, 98 U. S. 565, 25 L. ed. 235; United States v. Verdier, 164 U. S. 213, 41 L. ed. 407, 17 Sup. Ct. Rep. 42; United States v. North Carolina, 136 U. S. 211, 34 L. ed. 336, 10 Sup. Ct. Rep. 920. Mr. Justice Sutherland delivered the opinion of the court: This is a suit in equity, under § 9 (a) of the Trading with the Enemy Act [October 6, 1917], chap. 106, 40 Stat. at L. 411, 419, as amended by [July 11, 1919], chap. 6, 41 Stat. at L. 35, and [June 5, 1920], chap. 241, 41 Stat. at L. 977, Comp. Stat. § 3115e, Fed. Stat. Anno. Supp. 1920, p. 268, brought by Henkels, a citizen of the United States, in the Federal district court for the southern district of New York, to recover the proceeds of the sale of 2,298 shares of common stock of International Textile, Inc., a Connecticut corporation, theretofore seized by the Alien Property Custodian upon the claim that it was the property of an alien enemy. A decree was rendered in Henkel's favor, adjudging him to be the sole owner of the stock; and the Treasurer of the United States was directed to account for, and pay over to Henkels, the proceeds of the sale "together with the income or interest, if any, earned thereon." There was realized from the sale of the stock, made on March 26, 1919, after deducting expenses, a balance of $1,505,052.55. This amount the Treasurer paid to Henkels. Subsequently, Henkels applied to the district court to name a master to take and state the account of interest or income earned upon the fund prior to its payment. The application was denied and a final decree of dismissal entered upon the ground that the principal sum had been paid to Henkels, who had executed a release and satisfaction in full which the court refused to set aside on the claim of duress. 298 Fed. 947. Upon appeal, the circuit court of appeals, without passing upon this ground, held that the United States was not liable for income resulting from an investment of the funds in its own securities. 4 F. (2d) 988. The proceeds arising from the sale of the stock were deposited with the Treasurer in conformity with law; and by that officer they were commingled with the proceeds of other sales of alien property and invested in interest-bearing securities of the United States. The government admits Henkel's right to recover income earned on the corporate shares prior to their sale, but denies his right to recover for interest actually paid on government securities in which the proceeds had been invested. This presents the only question for our determination, the government having expressly waived the point upon which the district court decided the case. No question is made in respect of the right of the Custodian to seize property supposed to belong to an enemy, although it may subsequently turn out to have been a mistake, adequate provision having been made for a return in that case. Central Union Trust Co. v. Garvan, 254 U. S. 554, 566, 65 L. ed. 403, 408, 41 Sup. Ct. Rep. 214; Stoehr v. Wallace, 255 U. S. 239, 245, 65 L. ed. 604, 612, 41 Sup. Ct. Rep. 293. By Executive Order No. 2813 of February 26, 1918, made pursuant to law, moneys deposited with the Treasurer by the Custodian are to be held by the Secretary of the Treasury "for account of the Alien Property Custodian," and may be invested and reinvested from time to time in bonds or United States certificates of indebtedness. All moneys so deposited, together with interest or income received from the investment thereof, are made subject to withdrawal by the Secretary of the Treasury for the purpose of making payments pursuant to the provisions of the Trading with the Enemy Act, which would include, of course, payments under § 9 (a). Section 9 (a) authorizes a suit in equity by any person not an enemy, etc., to determine a claim to any interest, right or title in the property seized. If, in the meantime, the seized property has been sold, the same remedy, by § 7 (c), as amended [November 4, 1918], chap. 201, 40 Stat. at L. 1020, becomes available "against the net proceeds received therefrom and held by the Alien Property Custodian or by the Treasurer of the United States." No distinction in this respect is made between the property and its proceeds. It cannot be doubted that, if the seized property had been securities of the United States and these, thereafter, had been held in their original form, maturing coupons for interest would have belonged to the American claimant equally with the body of the bonds. In principle, there can be no difference between such a case and the one here, where claimant's property had been converted into securities of the United States. Such securities constitute the statutory "net proceeds," and, by the clear import of the statute, claimant's rights in respect of such proceeds are not inferior to his rights in respect of the original property. And no distinction fairly can be made between the accumulated inter come of prop est upon securities War-title to inconstituting the erty in hands of Alien Property proceeds, in the one Custodian. case, and like securities constituting the property, in the other. InterestUnited States interest. The government cannot be sued without its consent; and, accordingly, it cannot be sued for interest unless it consents to be lia- liability for ble therefor. But the claim here is not for interest to be paid by the United States in the sense of the rule. It is for income, derived from an investment of Henkels's money in obligations of the United States, which income has been actually received by the Treasury and is in its possession to be held, as the proceeds themselves are to be held, for the account of the Alien Property Custodian. With enemy-owned property seized by the Custodian, it has been held, the United States may deal as it sees fit, White v. Mechanics Securities Corp. 269 U. S. 283, 70 L. ed. 275, 46 Sup. Ct. Rep. 116 (decided December 14, 1925); but it has no such latitude in respect of the property of an American citizen. (271 U. S. 298, 70 L. ed. 953, 46 Sup. Ct. Rep. 524.) Whether the government shall pay interest upon its obligations depends upon congressional assent; Constitutional law-confiscation of increment of property in possession of Alien Property Custodian. but it cannot confiscate the actual increment of property belonging to a citizen, or the increment of the proceeds into which such property has been converted, any more than it can confiscate the property or its proceeds, without coming into conflict with the Constitution. The government contends that United States ex rel. Angarica v. Bayard, 127 U. S. 251, 32 L. ed. 159, 8 Sup. Ct. Rep. 1156, is to the contrary, and the court below so held. In that case, the suit was for interest or income realized upon the amount of an award in favor of Angarica paid by the Spanish government to the United States. This court, in This court, in denying the right of recovery, applied the general rule of immunity from interest, saying (pp. 259, 260) that the claim "is not different in character from what it would have been if, instead of being a claim for increment or income actually received by the United States, it were a claim for interest generally, or for increment or income which the United States would or might have received by the exercise of proper care in the investment of the money." Without challenging the correctness of this view as applied to the precise facts of that case, it cannot be accepted as a rule of general application. Especially, it cannot be accepted as applicable here, where the property of a citizen has been mistakenly seized and, by executive authority, after conversion into money, has been invested in government securities. We cannot bring ourselves to agree that a direction to invest such money in securities of the United States, rather than in other securities, may be utilized to enable the government unjustly to enrich itself at the expense of its citizens, by appropriating income actually earned and received which morally and equitably belongs to them as plainly as though they had themselves made the investment. War-right to share of income of investments of Alien Property Custodian. Since the proceeds resulting from the sale of Henkels's property have been commingled with the proceeds of other sales and thus invested, an account must be taken to ascertain the average rate of interest received by the Treasury upon all the proceeds invested and, thereupon, after deducting proper charges and expenses and taking into consideration the average amount of such proceeds which remained uninvested in the Treasury, a proportionate allocation made in respect of the proceeds belonging to Henkels for the period of their investment. Compare Distilled Spirits (Harrington v. United States) 11 Wall. 356, 368, 369, 20 L. ed. 167, 171; Intermingled Cotton Cases, 92 U. S. 651-653, 23 L. ed. 756, 757; Duel v. Hollins, 241 U. S. 523, 60 L. ed. 1143, 36 Sup. Ct. Rep. 615. Decree reversed. ANNOTATION. Extent of liability in respect to property seized by Alien Property Custodian under Trading with the Enemy Act. [War, § 10.] As to the effect of Trading with the Enemy Act on the right of an alien to prosecute a suit during the war, see annotation in 3 A.L.R. 328 [War, $91. The Act of October 6, 1917, chap. 106, 40 Stat. at L. 411, U. S. C. title 50, § 30-9 (Mason's), known as the Trading with the Enemy Act, § 9, which provides for the return, under certain conditions, of property of persons not enemies of this country, which has been seized by virtue of that act as property of enemy aliens, makes no provision for the payment of interest upon funds wrongfully seized in this manner, or for the payment of increments accruing upon the proceeds of the sale of property so seized; nor does the Amendatory Act of June 5, 1920, chap. 241, 41 Stat. at L. 977, U. S. C. title 50, § 30-9 (Mason's), make any provision in regard to the payment of interest or increments on such property. The question then arises whether, by general principles of law, the government will be required, in making restitution of the proceeds of nonenemy property which it has seized as that of enemy aliens, to pay over increments of such funds accruing while so held by it. It is, of course, an established rule that, in the absence of a statutory direction, interest is not allowable on claims against the United States government. 26 R. C. L. § 55, title "United States." And the lower Federal courts and the court of appeals of the. District of Columbia have denied the right of a claimant of property wrongfully seized, to interest on or increments of the proceeds of the property while in the hands of the Alien Property Custodian, holding the rule, that interest is not allowable, applicable. Henkels v. Miller (1925; C. C. A. 2d) 4 F. (2d) 988, reversed by the reported case (HENKELS v. SUTHERLAND, ante, 229); Becker v. Miller (1925; C. C. A. 2d) 7 F. (2d) 293; Kny v. Miller (1924) 55 App. D. C. 95, 2 F. (2d) 313. In Kny v. Miller (D. C.) supra, the court held that, as the Trading with the Enemy Act made no provision, and Congress had made no appropriation, it had no power, in view of the rule that, in the absence of statutory direction interest is not allowable on claims against the United States government, to afford relief to one entitled to the proceeds of bonds wrongfully seized and sold by the Alien Property Custodian, in the way of allowing a claim for interest against the government. And further, it was held that there is no distinction between the liability of the government for interest on the proceeds of the sale of property wrongfully seized by the Alien Property Custodian, and its liability for the increments earned on the funds thus held pending the decision of the question of title thereto. (This case was appealed to the United States Supreme Court, but the government afterwards, on the strength of the Supreme Court decision in the reported case (HENKELS V. SUTHERLAND, ante, 229), paid the full amount claimed, and the appeal was, on motion of the appellant, dismissed January 17, 1927; and, in view of the HENKELS CASE, the Kny Case, so far as it denies the right to the actual increment of the bonds seized or the proceeds thereof, must be taken as effectually overruled. It may be noted, also, that an appeal in the Becker Case, supra, was dismissed on motion of appellant in (1925) 269 U. S. 596, 70 L. ed. 431, 46 Sup. Ct. Rep. 105). However, as will be observed, the United States Supreme Court in the reported case (HENKELS V. SUTHERLAND, ante, 229) holds that the gov ernment cannot constitutionally confiscate the actual increment of property belonging to a citizen, or the increment of the proceeds into which the property has been converted. (In the Kny Case the court ruled that the claims for interest were analogous to the general claims against the United States for which allowance of interest has been denied, so that no objection can be taken to the denial of the right to recover interest, on the ground that such denial operates to deprive the claimant of his property without due process of law in violation of the 5th Amendment to the Federal Constitution.) Further, if the proceeds of the property wrongfully seized have been commingled with the proceeds of other sales and invested, the owner is entitled to a proportionate share of the average rate of interest received upon the entire investment, deducting proper charges and expenses, and taking into consideration the average amount remaining uninvested. As pointed out by the HENKELS CASE, the claim for the increments or of interest on property wrongfully seized is not for interest to be paid by the |