United States Supreme Court
301 U.S. 324 (1937)
In 1918, the Soviet Union enacted a decree which dissolved, terminated, and liquidated the Russian corporation Petrograd Metal Works, and nationalized and appropriated all of its property and assets wherever they were situated. Petrograd Metal Works previously deposited a sum of money with August Belmont, (defendant), a private banker doing business in New York City under the name of August Belmonst & Co. When the Soviet Union issued its decree in 1918 dissolving the corporation and appropriating its assets, this included those deposited with Belmont. The account thus became the property of the Soviet Union, and remained that way until November 16, 1933. At this time, the Soviet Union released and assigned to the United States (plaintiff) all amounts due to it from American nationals. This included the deposit account of Petrograd Metal Works with Belmont. The United States demanded payment of the assets in the account, but Belmont refused. The United States brought suit against Belmont in federal district court to recover the sum owed to it. The district court held that the location of the bank account in New York made it incapable of being characterized as an intangible property right within the Soviet Union. Thus, if the Soviet Union’s nationalization decree in 1918 were to be given effect, the district court believed it would amount to an act of illegal confiscation. The district court held the Soviet Union decree invalid, and thus its subsequent assignment of the corporation’s bank account assets with Belmont to the United States was also invalid. The United States government petitioned for certiorari from the United States Supreme Court.
Rule of Law
Holding and Reasoning (Sutherland, J.)
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