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DIX v. BROWNELL

May 8, 1956;

George C. DIX, Plaintiff,
v.
Herbert BROWNELL, Jr., Attorney General of the United States, as successor to the Alien Property Custodian, Defendant



The opinion of the court was delivered by: BRUCHHAUSEN

The defendant moves to amend his answer and for summary judgment. The plaintiff, by cross-motion, asks for summary judgment.

Plaintiff, an attorney at law, originally represented certain bungalow owners, and others similarly situated, of a summer camp in New Jersey. The camp was purchased by German-American Vocational League, Inc., a New York membership corporation (hereinafter referred to as the membership corporation) and title was taken by D.A.B. Recreational Resort, Inc., a New York realty corporation (hereinafter referred to as the realty corporation) specially organized for that purpose. The directors of the membership corporation held all of the stock of the subsidiary-realty corporation as trustees for the members of the membership corporation. Several members rented lots from the realty corporation at annual rentals to cover their pro rata share of the taxes, and built and furnished bungalows on their rented parcels at their own expense.

 The Alien Property Custodian, defendant's predecessor herein, by three successive vesting orders, moved against the property involved herein under the Trading With the Enemy Act, 50 U.S.C.A.Appendix, § 1 et seq.

 By the first Vesting Order No. 626 issued to the realty corporation, dated January 6, 1943, he vested all of the shares of stock of the realty corporation and undertook the management and control of its affairs after finding that it was a national of a designated enemy country. No contention is made that by his action the Custodian became owner of the real estate involved herein.

 'By the second Vesting Order No. 1765 herein, issued on July 8, 1943, to the membership corporation and subsequently published, the Custodian claims that he vested real estate herein involved, which matter is hereinafter referred to.'

 In and by the third Vesting Order No. 18294 dated August 8, 1951, issued to the realty corporation, the defendant, as successor to the Custodian, referred to the findings of the first vesting order, found that the realty corporation owned the real estate involved herein, and vested it in himself.

 The complaint is under Section 9(a) of the Act, 50 U.S.C.A.Appendix, § 9(a). The plaintiff seeks to establish his interest in and title to the property. He alleges that he is and always has been an American citizen, and that he acquired his interest by purchase of tax title certificates on December 27, 1946, subsequent to second vesting order.

 He foreclosed the right of redemption of the realty corporation, which was the record owner, by an action in the Superior Court of New Jersey. Subsequent to the commencement of that action, but before final judgment on April 7, 1953, the third vesting order was issued.

 In his complaint, filed on July 23, 1953, shortly after the foreclosure action became final, plaintiff only referred to the first and third vesting orders, since they were the ones issued to the realty corporation, whose right of redemption had been foreclosed. In his answer, defendant's predecessor, the Alien Property Custodian, admitted that the realty corporation was the owner of the property until the issuance of the third vesting order.

 Prior cross-motions for summary judgment were made in this court in March, 1954 before Judge Rayfiel, 122 F.Supp. 538 who held, that plaintiff, by the purchase of the tax certificates, had acquired a sufficient interest in the property to permit him to commence this action under Section 9(a).

 Defendant now moves to amend his answer to withdraw his admission that the realty corporation owned the property until the issuance of the third vesting order, and to only admit that the realty corporation owned the property until April 3, 1944, which is the date when claim No. 1970 was filed by certain of the bungalow owners, as a class on behalf of themselves and others of the membership corporation in response to the second vesting order against the membership corporation No hearing on this claim has been held.

 Further background indicates that several of the members are citizens and engaged in military service during World War II; that separate judgments and criminal fines were imposed against both corporations after indictment and default in the Federal Court in New Jersey subsequent to the second vesting order, and that plaintiff purchased an existing mortgage on the property, after there had been default in several interest payments, in January 1946.

 Defendant further moves, contingent upon the filing of his amended answer, for summary judgment under Rule 56 of the Federal ...


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