Woodson v. DEUTSCHE G. & S. SCHEIDEANSTALT V. ROESSLER

• Citation: 68 F.2d 391
• Decision Date: 20 November 1933
• Docket Number: No. 5963.,5963.
• Parties: WOODSON v. DEUTSCHE GOLD UND SILBER SCHEIDEANSTALT VORMALS ROESSLER.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

68 F.2d 391 (1933)

WOODSON v. DEUTSCHE GOLD UND SILBER SCHEIDEANSTALT VORMALS ROESSLER.

No. 5963.

Court of Appeals of the District of Columbia.

Argued October 2, 1933.

Decided November 20, 1933.

Thomas E. Rhodes and H. B. Cox, Sp. Assts. to Atty. Gen., for appellants.

Richard H. Wilmer and Douglas L. Hatch, both of Washington, D. C., for appellee.

Before MARTIN, Chief Justice, and ROBB, VAN ORSDEL, HITZ, and GRONER, Associate Justices.

VAN ORSDEL, Associate Justice.

This is a special appeal from a decree in the Supreme Court of the District of Columbia denying the motion of appellants, defendants below, to dismiss plaintiff's amended bill of complaint.

By the motion to dismiss, defendants admit the material allegations of the amended bill, in which it is alleged, among other things, that the plaintiff, Deutsche Gold und Silber Scheideanstalt Vormals Roessler, filed its bill in equity against the Alien Property Custodian and the Treasurer of the United States in the Supreme Court of the District of Columbia under the provisions of section 9 of the Trading with the Enemy Act, as amended (50 USCA Appendix § 9), to recover money alleged by the plaintiff to have been retained by the custodian to pay administrative expenses contrary to section 24 (a) of the Trading with the Enemy Act, as amended, 42 Stat. 1516 (50 USCA Appendix § 24 (a). Plaintiff also sought to recover all money alleged to have been wrongfully retained from the property of Holzcerkohlungs Industrie Aktiengesellschaft, hereinafter referred to as Hiag, to all of whose interests the plaintiff alleges that it succeeded as a result of the merger of the former with the latter in 1930.

It appears that plaintiff and Hiag were, at the time of the war with Germany, corporations with their places of business located at Frankfurt a/Main and Konstanz, Germany, respectively. Both companies were engaged in the manufacture of chemicals, dyes, etc. They owned stock in certain American corporations, which were engaged in similar business. This stock was seized by the Alien Property Custodian under the provisions of the Trading with the Enemy Act.

In connection with the administration of this property by the custodian, it is alleged that he paid out by way of fees, commissions, costs, attorney fees, etc., in administering plaintiff's property, the sum of $40,251.74, and in the administration of the Hiag property, $13,608.12, a total of $53,859.86. For the amount of these expenditures the plaintiff is not seeking to recover in this suit. These expenses, it is alleged, were paid by the custodian out of the specific trusts of the two claimants in the amounts actually incurred and were not charged against the general administration costs of the custodian's office.

Under the amendment of the Trading with the Enemy Act of March 4, 1923, 42 Stat. 1511, known as the Winslow Act (see 50 USCA Appendix § § 9, 20), plaintiff and Hiag each received $10,000 in principal amount, and thereafter income in the amount of $10,000 per annum, after a deduction, it is alleged, of 1 per cent. administration expenses, except as to the last release of income, where an administration fee of 2 per cent. was deducted.

With the enactment of the Settlement of War Claims Act of 1928, 45 Stat. 254 (see 50 USCA Appendix § 9), under which the Alien Property Custodian was authorized to release to German claimants all of their property except 20 per cent. of the principal thereof, Hiag and plaintiff filed their claims and were subsequently paid 80 per cent. of the principal amounts of their property and all accrued income, less 2 per cent. Administration fees, and a sufficient amount to meet any liability for income taxes. It is alleged that the custodian withheld from plaintiff $39,599, and from Hiag $20,747.52, or a total of $60,346.52, and that the custodian also deducted from treasury interest earned after March 4, 1923, by plaintiff's invested cash, $5,841.70, and from Hiag's invested cash balance $2,300.61, a total of $8,142.31. It is for these amounts, totaling in the aggregate $69,888.83, for which this suit was brought and for which recovery is sought.

The present action challenges the authority of the Alien Property Custodian to deduct from the principal sum a flat percentage as a charge for the expenses incurred in administering the trust, plaintiff's contention being that only the actual expense of administering each trust should be deducted from the property involved therein. This question was before this court in the case of Tate v. Escher, 59 App. D. C. 81, 33 F.(2d) 556. In that case...