Sigg-Fehr v. White

Decision Date02 January 1923
Docket Number3857.
Citation285 F. 949
PartiesSIGG-FEHR et al. v. WHITE, Treasurer of the United States, et al.
CourtU.S. Court of Appeals — District of Columbia Circuit

Submitted October 5, 1922.

Appeal from the Supreme Court of the District of Columbia.

Lyttleton Fox and Spier Whitaker, both of New York City, for appellants.

Peyton Gordon, Dean Hill Stanley, and A. A. McLaughlin, all of Washington, D.C., for appellees.

Before SMYTH, Chief Justice, and ROBB and VAN ORSDEL, Associate justices.

VAN ORSDEL, Associate Justice.

Appellants Jak. Robert Sigg-Fehr, Gottfried Rudolph Baumann-Kienast, and Edmund Gams, individually and as a copartnership organized under the laws of the Confederation of Switzerland, filed a bill in equity in the Supreme Court of the District of Columbia seeking an injunction against defendants, Frank White as Treasurer of the United States, and James C. Davis as Director General of Railroads, restraining them from disbursing certain funds in the Treasury of the United States. From an interlocutory order discharging the rule to show cause, the case comes here on special appeal.

It appears that Schmidt'sche Heissdamf-Gesellschaft, a German corporation doing business at Cassel, Germany (hereafter for convenience referred to as the German Corporation), was the record owner of certificate No. 134 representing 13,490 shares of the capital stock of the Locomotive Superheater Company, a Delaware corporation. On October 2, 1914, the Superheater Company, by direction of the German Corporation, canceled certificate No. 134 without surrender thereof, and between this date and February 21 1916, 6,750 shares were transferred on the books of the Superheater Company to Briesen & Schrenk, a firm of lawyers in New York. It is conceded, however, that Briesen & Schrenk had no beneficial interest in the stock; they were merely holding it as trustees.

In November, 1916, the German Corporation undertook, by written contract, to sell to the complainants 12,825 shares of the said stock. Under the terms of sale the purchase price was made payable in Swiss funds 'six months after the conclusion of peace between the German Empire and those states now at war with it, as well as those who may hereafter enter the World War against it. ' The contract further provided that:

'Because of the deferring of the duty of payment, the shares of stock sold are not to be delivered to the purchaser for the present, but are transferred to an American firm as trustee until full payment of the purchase price. As long as this trust lasts, the trustee remains as owner of the shares of stock and shall be recorded as such on the books of the American corporation. The trustees shall exercise the right of owner of this stock under the direction of the purchasers.' The purchaser pledged itself not to incumber or sell the stock during the trust. The dividends were to be collected by Leu & Co., a corporation doing business in Zurich, who were required to pay to the purchasers 1 per cent. of the amount of dividends. The remaining 99 per cent. to be 'accumulated as security for the rights of the seller.'

By a separate contract, complainants appointed Briesen & Schrenk trustees for the 12,825 shares of stock. Under this agreement Briesen & Schrenk were to hold the stock and pay the dividends to a New York bank, which, under a further agreement between the complainants and the German Corporation, was to turn the dividends over to Leu & Co., who were to hold the same in accordance with the original agreement of sale.

October 11, 1918, Briesen & Schrenk reported to the Alien Property Custodian that they were the record holders as trustees under an agreement between complainants and themselves of 12,775 shares of the capital stock of the Locomotive Superheater Company. Upon investigation the Alien Property Custodian discovered that a certificate for 12,825 shares of the Superheater Company stock was on deposit in a London branch of a German bank and stood in the name of the German Corporation; the certificate having been deposited prior to 1914. It was also discovered that the agreed purchase price at which complainants purchased the stock from the German Corporation was $200 per share. Accordingly the Alien Property Custodian determined that the German Corporation was an enemy, within the purview of the Trading with the Enemy Act, and that the 12,825 shares of stock, here involved, were held for the benefit of the German Corporation. He therefore required the shares to be transferred to him as Alien Property Custodian and new certificates to be issued therefor. He also took possession of certain accrued dividends and Liberty Bonds in possession of Briesen & Schrenk, as well as certain accrued dividends still in the possession of the Superheater Company.

The Alien Property Custodian later sold the 12,825 shares of the stock to the Director General of Railroads, acting for and in behalf of the United States, for the sum of $200 per share, or $2,565,000, which sum, together with United States Liberty Bonds of the par value of $489,000 and $36,830.39 paid to the Alien Property Custodian by Briesen & Schrenk, representing accrued dividends on said stock at the date of seizure by the Alien Property Custodian, was deposited with the Treasurer of the United States, and credited to trust No. 2975, and is now so held. About two years later the Director General of Railroads sold the stock to the Superheater Company and received therefor $248 per share, or $3,180,600. The money received from this sale was paid into a 'revolving fund' in the Treasury of the United States.

This suit was brought by complainants to recover the sum of $3,180,600, being the proceeds of the sale of the stock by the Director General of Railroads to the Superheater Company, together with the bonds, moneys, and dividends accumulated on said stock, with interest upon all of said sums and upon said bonds, all of which are alleged to be illegally possessed and retained by the defendant Frank White. A temporary injunction was sought to restrain the defendants, Frank White, Treasurer, James C. Davis, Director General of Railroads, and Thomas W. Miller, Alien Property Custodian, 'from transferring, assigning, delivering, paying out, or in any other way disposing of the said sum of $3,180,600, and said Liberty Bonds, with the interest thereon, together with any additional sum or sums of money received by any of said defendants, or by any predecessor in office of any of said defendants, by way of dividends or otherwise upon the said 12,825 shares of stock, or in any other way in respect thereof.'

From the order of the court, discharging the rule to show cause and denying the temporary injunction, the case comes here on special appeal, naming as appellees, Frank White, individually and as Treasurer of the United States, and James C. Davis, individually and as Director General of Railroads.

We think the case, so far as...

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7 cases
  • United States v. Chemical Foundation, Inc.
    • United States
    • U.S. District Court — District of Delaware
    • January 3, 1924
    ... ... whose property has been mistakenly seized or seized and sold ... It does not apply to 'enemies or allies of enemies.' ... Sigg-Fehr v. White, 285 F. 949, 952, 52 App.D.C ... 215, 218. Section 7 (c) is not directly involved in this ... suit. Plaintiff's theory with respect to ... ...
  • Clark v. Tibbetts
    • United States
    • U.S. Court of Appeals — Second Circuit
    • April 7, 1948
    ...Pflueger v. United States, 73 App.D.C. 364, 121 F.2d 732, certiorari denied 314 U.S. 617, 62 S.Ct. 98, 86 L.Ed. 497; Sigg-Fehr v. White, 52 App.D.C. 215, 285 F. 949. See also Becker Steel Co. of America v. Cummings, 296 U.S. 74, 56 S.Ct. 15, 80 L.Ed. 54; Kahn v. Garvan, D.C.S.D.N.Y., 263 F.......
  • Pflueger v. United States
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • April 7, 1941
    ...These opposing positions present the issue here. An answer to appellant's position may be found in our opinion in Sigg-Fehr v. White, 52 App.D.C. 215, 285 F. 949, 954. The Custodian had seized certain shares of stock alleged to belong to a German corporation and had sold them to the Directo......
  • Federal Trade Commission v. Claire Furnace Co.
    • United States
    • U.S. Court of Appeals — District of Columbia Circuit
    • January 2, 1923
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