International Mortgage & Investment Corp. v. Von Clemm

301 F.2d 857
CourtCourt of Appeals for the Second Circuit
DecidedApril 5, 1962
DocketNo. 158, Docket 27178
StatusPublished
Cited by10 cases

This text of 301 F.2d 857 (International Mortgage & Investment Corp. v. Von Clemm) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
International Mortgage & Investment Corp. v. Von Clemm, 301 F.2d 857 (2d Cir. 1962).

Opinions

LUMBARD, Chief Judge.

Whether shareholders and equitable owners of a corporation claiming ownership of property seized by the Alien Property Custodian may intervene as parties defendant in a suit by other claimants to the vested property against the Office of Alien Property so that they may protect their corporate and individual rights is the question for decision on this appeal.

The suit was commenced in July 1960 by Werner Von Clemm and Rayford W. Alley, Trustee, co-partners of Bridge Import Company and Von Clemm individually, against the Treasurer and the Attorney General of the United States, under § 9(a) of the Trading with the Enemy Act, 50 U.S.C.A.Appendix, § 9(a), for recovery of the common stock of Pioneer Import Corporation, a New York company, and the proceeds of the sale of certain precious stones, all alleged to be worth over $900,000. The stock of Pioneer and the precious stones are also claimed by International Mortgage & Investment Corporation (IMC), organized in Maryland in 1926, of which two-thirds of the stock was vested by the Alien Property Custodian. It is to protect this claim of IMC that two groups of stockholders in IMC are here seeking to intervene.1 One group, the Heims claimants, consists of eight individuals, an estate, a foundation and a company, all of whom claim to be American citizens since prior to 1939 and all of whom claim ownership of IMC common and preferred stock since prior to 1939.

The second group of IMC stockholders are the Kroch claimants, consisting of Hans Kroch and members of his family, Jewish residents of Germany under Hitler, who claim that they were the owners of approximately one-third of IMC’s preferred stock before the Hitler regime appropriated the property by compelling transfer of the stock to a German bank. Ultimately this stock was vested by the Alien Property Custodian.

I.

Notice of claim to the Pioneer stock and precious stones was filed by Von Clemm and Alley at some time prior to May, 1949. Other notices of claim to this property and to the vested IMC stock were filed after May, 1949. There followed administrative proceedings under 50 U.S.C.A.Appendix §§ 9(a), 32(a), to determine which, if any, of the claims should be allowed. On June 14, 1955 the Chief Hearing Examiner of the Office of Alien Property recommended that the IMC stock of which the Krochs had formerly been deprived be returned to them. On April 9, 1959, the Chief Hearing Examiner recommended that the derivative claims of IMC by the Heims group to the Pioneer stock and to the precious stones be allowed. All these recommendations, though in one case made almost seven years ago and in the other three years ago, are still awaiting review by the Director of the Office of Alien Property and by the Attorney General.

As Von Clemm and Alley were dissatisfied with the Examiner’s recommendations, they commenced this suit which raises the same questions already passed upon by the Hearing Examiner.2 All the [860]*860parties to the suit are now united as to only one thing and that is that they wish to prevent intervention by IMC or persons interested in IMC. The would-be interveners, barred from instituting suit against the United States by failure to file notice of claim prior to May 1949,3 see 50 U.S.C.A.Appendix, § 33, Grabbe v. Brownell, 247 F.2d 402 (2 Cir. 1957), sought in the district court leave to intervene both as parties plaintiff and as parties defendant. The district court denied their petitions in an opinion reported at 27 F.R.D. 488 (1961). On appeal they seek only to be permitted to intervene as parties defendant. We hold that petitioners should have been given such permission under Rules 24(a) (2) and 24(a) (3) of the Federal Rules of Civil Procedure, 28 U.S.C.

An order denying intervention as of right is clearly appealable, Sam Fox Publishing Co. v. United States, 366 U.S. 683, 81 S.Ct. 1309, 6 L.Ed.2d 604 (1961); Sutphen Estates v. United States, 342 U.S. 19, 72 S.Ct. 14, 96 L.Ed. 19 (1951).

II.

The appellants contend that they have a right to intervene as parties defendant in this action under Rule 24(a) (2) of the Federal Rules of Civil Procedure which provides that “Upon timely application anyone shall be permitted to intervene in an action; * * * (2) when the representation of the applicant’s interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action.” We agree.

IMC’s claim to the property gives it an interest which can be asserted derivatively by the Heims claimants as minority stockholders. Stoehr v. Wallace, 255 U.S. 239, 41 S.Ct. 293, 65 L.Ed. 604 (1921).

Each non-enemy stockholder in IMC has an individual interest in the assets of IMC proportionate to his stock-holdings; this interest is sufficient to give him the right to intervene under Rule 24(a) (2) in his own right in an action by IMC to recover these assets— at least where there is sound reason for belief that IMC may fail adequately to protect his interest. Kaufman v. Societe Internationale, 343 U.S. 156, 72 S.Ct. 611, 96 L.Ed. 853 (1952).

Whether a stockholder’s interest in the corporate assets is also sufficient to permit him to intervene when the corporation is willing and able to protect his rights is left unresolved by Kaufman. But such decisions as we have found indicate that each stockholder must himself assert his own right to a prorata share of the vested assets and that neither the corporation or other stockholders can recover on behalf of non-enemy stockholders not present in the action. See Kaufman v. Brownell, 101 U.S.App.D.C. 147, 247 F.2d 553 (1957); Societe Internationale v. McGrath (McGranery), 17 F.R.Serv. 394 (D.C.D.C.1952). If this is so, each stockholder has patently a sufficient “interest” in the vested property to entitle him to intervene under Rule 24(a) (2) in an action for recovery of the property and this remains true regardless of the presence in the action of the corporation or of other stockholders.

Apparently the Office of Alien Property, which recognizes the applicability of Kaufman v. Societe Internationale to administrative proceedings, see In the Matter of Maria, Comtesse de Beurges, Title Claims 42430, 43996, 43997, Docket 57 T 38-40, recommended decision, June 27,1957, approved, August 15, 1957, has in the present case permitted both IMC and the various persons in[861]*861terested in IMC to participate in the administrative proceedings concerned with the property claimed by Von Clemm.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
301 F.2d 857, Counsel Stack Legal Research, https://law.counselstack.com/opinion/international-mortgage-investment-corp-v-von-clemm-ca2-1962.