Miller, Application of

• Decision Date: 13 March 1923
• Docket Number: 194.
• Citation: 288 F. 760
• Parties: Application of MILLER, Alien Property Custodian. Appeal of SCHWAB et al.
• Court: U.S. Court of Appeals — Second Circuit

288 F. 760

Application of MILLER, Alien Property Custodian. Appeal of SCHWAB et al.

No. 194.

United States Court of Appeals, Second Circuit.

March 13, 1923

Choate Larocque & Mitchell, of New York City (Joseph Larocque and Nelson Shipman, both of New York City, of counsel), for appellants.

William Hayward, U.S. Atty., of New York City (Duer & Taylor and George Winship Taylor, all of New York City, of counsel), for Alien Property Custodian.

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

ROGERS Circuit Judge.

This is an appeal from an order entered in the District Court for the Southern District of New York on November 10, 1922, which adjudged and decreed that Gustav Schwab and William Siegel executors of the estate of Herman C. Von Post, deceased, pay and deliver to Thomas W. Miller, as Alien Property Custodian of the United States, the sum of $14,064.08, due and owing to the persons named in the said order, in the amounts set opposite their respective names, with the interest accrued thereon, in compliance with the demands which the Custodian issued and served upon the executors in accordance with the provisions of the act of Congress known as the Trading with the Enemy Act.

The Act approved October 6, 1917 (40 Stat.pt. 1, c. 106, p. 415 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, Sec. 3115 1/2cc)), provided for the transfer or delivery to the Alien Property Custodian of property held for or on account of an alien enemy if the President so required; and by an act approved on November 4, 1918, the act of 1917 was amended and express provision was made giving to the Custodian the right to seize property which the President had determined belonged to an alien enemy and had required to be paid over (40 Stat.pt. 1, c. 201, p. 1020 (Comp. St. Ann. Supp. 1919, Sec. 3115 1/2d)).

It appears that on October 10, 1913, Herman C. Von Post died while a resident of the city, county, and state of New York, and left a will which was duly admitted to probate in the Surrogate's Court for New York County on January 15, 1914. Letters testamentary under the will were duly issued to Gustav Schwab and William Siegel, each of whom resides in the city of New York. The executors entered upon the administration of the estate, and on February 10, 1921, filed an account in the Surrogate's Court, setting out their acts as executors up to January 3, 1921, which was settled by a decree of that court dated June 27, 1921. The seventh and eighth paragraphs of the will read as follows:

'Seventh. I give and bequeath to the same persons as are made my residuary legatees in the next succeeding clause of this my will, in the proportions, therein specified, whatever sum of money may be due me from the firm of Oelrichs & Company at my death, as a copartner in said firm or otherwise, subject however to the right of said firm, or of any firm succeeding to its business in which my said nephew Gustav H. Schwab or his son Gustav Schwab, Jr., or either of the nephews of said Gustav H. Schwab is a partner, to retain said sum for a period of two years from the date of my decease, paying interest thereon to my said legatees at the rate of five per centum per annum, at the end of which period I direct said firm to pay over one-half of said sum to my said legatees; and subject further, to the right of said firm, or such succeeding firm with the approval of my executors, to be given within two years from the date of my decease, to retain at its option the remaining one-half of said sum for a further definite period not exceeding eight years, paying interest thereon to my said legatees at the rate above specified, at the end of which period, or at the end of said period of two years from my decease if my executors shall not by that time have given their approval as aforesaid, I direct said firm to pay over said remaining one-half to my said legatees; the said firm or succeeding firm to have the right, however, at its option at any time after my death, to pay off and discharge the whole or any part of said indebtedness; and subject further, and I hereby direct, that my executors shall determine the amount due me at my death from said firm, and that their determination shall be final and conclusive upon my said legatees and all persons interested in my estate, without any right on the part of said legatees or persons to examine into the books or records of said firm or such succeeding firm or to require any statement from either of said firms in regard to its business or affairs, or any statement from my executors other than a memorandum of the amount so due as determined by them.

'Eighth. All the rest, residue and remainder of my property and estate, real and personal, and wherever situated, which at the time of my decease I may be seized or possessed of, or in or to which I may then have any right, title or estate or interest, including the one-third of the net proceeds of the house and lot in Fifty-Seventh street, referred to in a preceding clause of this my will, I direct to be divided by my executors into as many equal shares or parts as shall be equal to the number of nephews and nieces who shall survive me, and who shall have died before me leaving lineal descendants who shall survive me, these nephews and nieces being the children of my deceased sisters, Catherine Elizabeth Schwab, late of New York City, Henrietta Margareta Schwab, late of the city of Stuttgart, Germany, Clementine Schrader, late of the city of Bielefeld, Germany, and Emily Maria Pauli, late of the city of Bremen, Germany; and I give, devise and bequeath one of said shares to each of said nephews and nieces who shall survive me and one of said shares to the lineal descendants collectively who may survive me of each of said nephews and nieces who may have died before me, such descendants in each case to take equally, per stirpes and not per capita.'

The amount due the decedent representing his share as a partner in the firm of Oelrichs & Co. at the time of his death was found to be $1,286,607.03. Under the seventh paragraph of the will above set forth the firm of Oelrichs & Co. was entitled to retain the whole of said sum for a period of two years from the decedent's death, to wit, until October 10, 1915, paying 5 per cent. interest thereon. Prior to that time, however, and by July 14, 1915, the firm had paid to the executors the sum of $645,807.03, leaving a balance due of $640,800, which balance the firm at that time, with the approval of the executors and in accordance with the terms of the will, elected to retain for the further period of eight years and until October 10, 1923. And since July 14, 1915, the firm has paid to the executors on the said sum of $640,800 interest semiannually at the rate of 5 per cent. per annum on the 1st days of January and July of each year.

On January 18, 1918, the executors filed with the Alien Property Custodian a report as required by the Trading with the Enemy Act, wherein they reported the names and addresses of the persons listed in the margin, ^[1] stating that they were legatees under the will and that they were believed to be enemies residing in Germany. The persons so named were all nephews and nieces or descendants of deceased nephews or nieces of the testator Von Post, surviving at the time of his death and entitled to share as residuary legatees under the seventh and eighth paragraphs of the will. Thereafter and on November 23, 1918, the Custodian determined that the persons listed in the margin ^[2] were enemies not holding a license granted by the President, and that each of said enemies had a certain right, title, and interest in the estate of the deceased, Von Post. He thereupon issued 14 demands, one for each of the said enemies, and served them upon the executors on November 30, 1918, requiring the latter to pay over to him the interest of the said enemies in and to the said estate.

Thereafter, on June 26, 1919, the Custodian determined that the following additional persons, listed also in the margin, ^[3] were enemies not holding a license granted by the President, and that each had a certain right, title, and interest in the estate of Von Post, and he demanded that their respective interests be paid over to him. Thereafter the executors from time to time paid over to the Custodian various sums of money representing the interests as residuary legatees of the said enemies up to and including July 1, 1921.

However, on January 1, 1922, the executors reported to the Custodian that they had received from Oelrichs & Co. the sum of $16,020.20, representing a semiannual payment of interest from July 1 to December 31, 1921, on the $640,800 retained by that firm. The executors further reported that out of said installment of interest, after deducting commissions and expenses, the sum of $7,032.04 was due to the said enemies. This amount the executors refused to pay over to the Custodian for reasons hereinafter referred to. And on July 1, 1922, the executors reported to the Custodian that they had received from Oelrichs & Co. a further sum of $16,020, representing the semiannual payment of interest due from January 1 to June 30, 1922, on the amount retained by the firm. The executors further reported that out of said installment of interest, after deducting commissions and expenses, the sum of $7,032.04 was due to the said enemies whose interests had been demanded by the Custodian as already set forth. The executors have also refused to pay this amount over to the Custodian.

Because of these refusals of the executors to pay over these amounts of money, which they admit having in their hands, the Custodian filed his petition in the District Court, and prayed that court to enter such orders and issue such process as might be necessary to...