In the 1940 case of Jackson, Attorney General, on behalf of the United States, and as successor to the Alien Property Custodian v. Irving Trust Co., Executor et al., the Supreme Court ruled in favor of Irving Trust Company. The case revolved around a dispute over property seized during World War I under the Trading with Enemy Act from an enemy alien who had died before his property was taken by U.S government's Alien Property Custodian (APC). After APC sold off some assets and held onto others for years after war ended, it tried to transfer remaining properties back to deceased’s estate but faced opposition from creditors who claimed they should receive those funds instead. The court decided that once APC took control of enemy alien's property during wartime, it became vested in U.S government - not just held in trust - so any subsequent claims against that property were invalid because they could only be made against original owner prior to seizure by APC. Therefore, when APC later transferred residual assets back to deceased’s estate without having satisfied all creditor claims first – which would have been required if this was simply a matter of administering someone's estate – no legal error occurred.

In the dissenting opinion for Jackson v. Irving Trust Co., Justice Frank Murphy argued that the majority's decision was a misinterpretation of both the Trading with Enemy Act and its amendments. He contended that these laws were not intended to deprive American citizens of their property without compensation, but rather to prevent enemy aliens from using their assets in America against U.S interests during wartime. The Alien Property Custodian, he believed, should only have power over properties belonging to enemies or allies of enemies; it was never meant to seize properties owned by Americans who had no connection with any enemy country except through inheritance. Thus, according to him, Mrs. Sibray - an American citizen who inherited her father’s estate (who was a German national) - should be entitled full rights over her inheritance without government interference or seizure under this act.