In the Matter of the Accounting of CHRISTIAN A. VON RUMOHR et al., as Temporary Administrators of the Estate and as Executors and Trustees under the Will of ELIZABETH S. VON RUMOHR, Deceased, Respondents. HERBERT BROWNELL, JR., as Attorney General of the United States, Appellant.
APPEAL from a decree of the Surrogate's Court of Erie County (YEAGER, S.), entered April 28, 1954, judicially settling the accounts of the petitioners-respondents as temporary administrators of the estate and as executors and trustees under the will of Elizabeth S. von Rumohr, deceased.
John O. Henderson, United States Attorney for the Western District of New York (Irwin A. Seibel, Dallas S. Townsend, R. Norman Kirchgraber, James D. Hill and George B. Searls of counsel), for appellant.
Donald C. Lubick and Raymond W. Conklin for respondents.
William B. Mahoney, special guardian, respondent.
This appeal from a decree of the Surrogate's Court of Erie County, judicially settling the petitioners' accounts as temporary administrators and executors of and trustees under the will of Elizabeth S. von Rumohr, deceased, concerns the proper allocation of expenses incurred by the executors in the administration of the estate.
In 1937, in Buffalo, New York, Mrs. von Rumohr, a resident of Germany, executed a last will and testament disposing of her 'United States estate'. Following her death in 1945 the will was probated in the Surrogate's Court of Erie County. In October, 1943, the Alien Property Custodian (hereinafter referred to as 'Custodian'), acting under the authority of the Trading with the Enemy Act (U. S. Code, tit. 50, Appendix, § 1 et seq.), vested in himself for the benefit of the United States 1,000 shares of the capital stock of the Morland Company, a Delaware corporation, which stock was owned by Elizabeth S. von Rumohr.
As a result of this vesting order the United States acquired title to those shares 'as completely as though by conveyance, transfer or assignment'. ( Commercial Trust Co. v. Miller, 262 U.S. 51, 56.) She was divested of 'every right in respect of the * * * property'. (Cummings v. Deutsche Bank, 300 U.S. 115, 120-121.)
Following the cessation of hostilities of World War II, Mrs. von Rumohr, in August of 1944, filed a claim with the Custodian for the return of the 1,000 shares of Morland Company stock. She died testate, a resident of Germany, before any determination of her claim had been made. In August, 1948, her executors filed a claim for the same shares of stock, and on the same date Christian von Rumohr, a son of testatrix and the only legatee who was a citizen of the United States, filed a claim in his individual capacity for his interest as a life beneficiary in one fifth of the 1,000 shares, or 200 shares. The executors' claim has not been allowed and is still pending. The Custodian allowed a return in favor of Christian and his issue of 200 shares of the Morland Company valued at approximately $125,000--that being the share to which they would have succeeded by reason of the death of the testatrix had the vesting not occurred. However, the Custodian provided that the return should be made to the trustees (and not the executors) of the will, rather than to Christian individually.
Insofar as here pertinent, decedent's will leaves her residuary estate to her executors to be divided and held in separate trusts for each of her five children. Thus, under the terms of the will Christian von Rumohr is given a life interest in one fifth of the estate, his issue being vested with the remainder. With the exception of Christian and his issue, all the living beneficiaries of the trust were residents and nationals of Germany.
Assuming the legality of the 1943 vesting order, as we think we must (Matter of Carrington, 195 Misc. 442; Stoehr v. Wallace, 255 U.S. 239), it necessarily follows that the transfer of any portion of the shares was not based upon any legal or enforcible right thereto, but, rather, upon moral or equitable grounds. As such, the transfer of the 200 shares appears to be little more than a gift to Christian and his issue.
In accomplishing this objective, the Custodian was confronted with a somewhat novel problem. Of course, he looked to the will as a source of Christian's equitable claim to any part of the shares. As a practical matter, he could not turn the 200 shares back to the estate, as in that event the ...