Tate v. Escher
| Decision Date | 03 June 1929 |
| Docket Number | No. 4777.,4777. |
| Citation | 59 App. DC 81,33 F.2d 556 |
| Parties | TATE, United States Treasurer, et al. v. ESCHER et al. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Thos. E. Rhodes, of Washington, D. C., for appellants.
Lawrence A. Baker, of Washington, D. C., and Spier Whitaker, of New York City, for appellees.
Before MARTIN, Chief Justice, and ROBB and VAN ORSDEL, Associate Justices.
A suit was brought in the Supreme Court of the District of Columbia December 8, 1921, by Jak. Robert Sigg-Fehr, Gottfried Rudolph Baumann-Kienast, and Edmund Gams, hereafter referred to as the plaintiffs, under section 9 of the Trading with the Enemy Act, as amended June 5, 1920, 41 Stat. 977 (50 USCA appendix § 9), to recover from the Treasurer of the United States and the Alien Property Custodian proceeds of the sale of 12,825 shares of the capital stock, together with accrued dividends, of the Locomotive Superheater Company, a Delaware corporation. This property was seized by the Alien Property Custodian during the war as the property of the Schmidt'sche Heissdampf Gesellschaft, a German corporation.
After the suit was instituted, Jak. Robert Sigg-Fehr died, and Henry Escher was appointed ancillary administrator of his estate and substituted as plaintiff in his stead. After protracted litigation it was adjudged that the plaintiffs were citizens of the Confederation of Switzerland and residents of the city of Zurich, and as such entitled to recover the property seized. A decree was accordingly entered January 19, 1928, for the return to the plaintiffs of the proceeds from the sale of the stock, amounting to $2,565,000, with accumulated earnings thereon. This was subsequently paid to the plaintiffs by the Alien Property Custodian and the Treasurer, with a deduction of $55,909.83 for administrative expenses.
The present action is on a rule to show cause why the amount so deducted should not be paid over to the plaintiffs, and from a decree directing such payment the Alien Property Custodian and the Treasurer have appealed.
Under section 6 of the Trading with the Enemy Act, 40 Stat. 415 (50 USCA appendix § 6), the President was authorized to appoint an Alien Property Custodian and to employ "and fix the compensation of such clerks, attorneys, investigators, accountants, and other employees as he may find necessary for the due administration of the provisions of this act."
By authority of the act an executive order was issued on July 16, 1918, which, among other things, provides: "All costs and expenses incurred by reason of or in respect of, and all claims and demands of every kind, character and description based upon or arising out of, the custody, management, administration, protection, preservation and control of any such property, and the conduct or other operation of any such going business or other undertaking and the sale or other disposition of any such property, shall be limited to and paid or satisfied out of only the property or business or undertaking involved and out of which, on account of which, or in respect of which such cost, expenses, claim or demand shall have been incurred and shall have arisen or been created; provided that whenever such property or the income therefrom or the assets of any such going business or other undertaking shall be insufficient therefor, such cost, expenses, claim or demand shall be charged thereto, but may be paid or satisfied out of money or other property received from, or as the property of, the same enemy."
By the Act of March 4, 1923, § 2, 42 Stat. 1511 (50 USCA appendix § 24), the Alien Property Custodian was authorized to pay the taxes assessed against property held by him and the necessary expenses incurred by him or any depository for him in securing the possession, collection, or control of money or other property seized by him or in protecting or administering the same out of the funds so seized.
Section 12 of the Trading with the Enemy Act, as amended March 28, 1918, 40 Stat. 459 (50 USCA appendix § 12), provides: "The Alien Property Custodian shall be vested with all of the powers of a common-law trustee in respect of all property, other than money, which has been or shall be, or which has been or shall be required to be, conveyed, transferred, assigned, delivered, or paid over to him in pursuance of the provisions of this act, and, in addition thereto, acting under the supervision and direction of the President, and under such rules and regulations as the President shall prescribe, shall have power to manage such property and do any act or things in respect thereof or make any disposition thereof or of any part thereof by sale or otherwise, and exercise any rights or powers which may be or become appurtenant thereto or to the ownership thereof in like manner as though he were the absolute owner thereof."
Recognizing the duties and authority thus conferred upon the Alien Property Custodian, Congress in the Act of May 16, 1928, 45 Stat. 574, making appropriations for the executive office and executive bureaus, boards, commissions, etc., provided: "All expenses of the office of the Alien Property Custodian authorized by the act entitled `An act to define, regulate, and punish trading with the enemy, and for other purposes,' approved October 6, 1917, as amended, including compensation of the Alien Property Custodian at not to exceed $10,000 per annum; shall be paid from interest and collections on trust funds and other properties under the control of such Custodian."
It will thus be observed that it was the policy of Congress and the Executive Department, through its orders, to require the payment of the costs of administration under the Alien Property Act to be deducted from the funds administered. We are of opinion that the contention of the plaintiffs that this rule should not be applied to property that was afterwards found to have been wrongfully seized is without merit.
If the seizure and...
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