221 F.2d 770 | 3rd Cir. | 1955
This case involves conflicting claims to a fund which was on deposit in the Virgin Islands National Bank comprising the net rents of realty situate in the town of Charlotte Amalie in the island of St. Thomas. This court has heretofore had occasion to review the interests in this realty which passed under the will of Richard Edgar Clifford Callwood when he died on January 17, 1917 in Germany.
Clifford W. L. Callwood, nephew of the life tenant Mrs. Peiffer and son of Richard E. C. and Elsa E. Callwood, claimed this fund of $7,706.12 by virtue of an assignment dated January 31, 1947, executed by Iza Callwood, as attorney in fact for her aunt, Mrs. Peiffer. The assignment purported to transfer the claim to all the funds then on deposit in the bank, stated to be approximately $6,700.00, and the future income from Mrs. Peiffer’s life estate in the realty in St. Thomas. On July 27, 1948, Callwood, accompanied by Kean, presented the assignment to the bank. Upon Callwood’s direction, Kean thereupon opened a new account in the amount of $5,206.12 entitled “Osmond Kean, in trust for Elsa Callwood & C. W. L. Callwood” and another new account in the amount of $2500.00 in the name of “Osmond Kean in trust for C. W. L. Callwood” alone. Subsequently, on July 18, 1949, Kean, without authority from Callwood, transferred these two accounts into a checking account entitled “The Estate of Anna Peiffer (bom Callwood), German National, deceased, by Osmond Kean.”
On June 27, 1951 Clifford W. L. Call-wood instituted the present suit in the District Court of the Virgin Islands against the Virgin Islands National Bank and Osmond Kean to recover the balance of $7,706.12 in the account just referred to, claiming that he was entitled to it as assignee of Anna R. Peiffer. The complaint sought a judgment directing the defendants to pay the plaintiff the said sum of $7,706.12. On July 5, 1951 the bank before filing an answer moved to interplead as parties defendant August Betz, of Wiesbaden, Germany, the executor of the estate of Anna R. Peiffer, Iza Callwood of Wiesbaden-Bie-brich, Germany, and Elsa E. Callwood of St. Thomas, all of whom had asserted claims to the fund. The district court granted the motion and all three of these parties subsequently appeared in the action by counsel. On July 13, 1951 the bank filed its answer and counterclaim for interpleader, admitting the deposit account and asserting that it was a mere stakeholder. At the same time it paid the amount of $7,706.12 into the registry of the court.
On August 3, 1951 Mrs. Callwood filed her answer asserting that the assignment under which the plaintiff claimed was invalid and that she was entitled to $5,200.00 of the fund by virtue of a verbal assignment to her by Mrs. Peiffer in August, 1939. Thereafter on March 5, 1952 Iza Callwood and August Betz filed joint answers denying the validity of the assignments relied on by Callwood and Mrs. Callwood, respectively, and a cross claim that Iza Callwood as sole heir and next of kin of Anna R. Peiffer, deceased, should be adjudged entitled to the fund. On March 6, 1952 Callwood filed a reply to the answer of Mrs. Callwood, denying her allegations in toto. On November 6, 1952 Callwood filed a reply to the answer and cross claim of Iza Callwood denying her allegations.
On December 8, 1952 Mrs. Callwood with leave of court filed an amended answer setting up by way of counterclaim her claim to $5,200.00 of the fund under the verbal assignment alleged in her original answer and a further claim for an additional award out of the fund to reimburse her for the cost of repairing waste alleged to have been committed by the life tenant, Mrs. Peiffer, to the realty in St. Thomas. Thereupon all the other parties filed amended pleadings. Call-wood in his amended reply to Mrs. Call-wood’s amended answer and counterclaim reiterated his prior denial of the validity of her alleged verbal assignment and also denied her allegations of waste on the part of Mrs. Peiffer. Iza Call-wood in a separate amended answer to the plaintiff’s complaint reiterated her allegations of the invalidity of Call-wood’s assignment but no longer sought a direct award of the fund to herself.
It w..ll thus be seen that the issues presented to the district court for 'determination at the trial included the validity and effectiveness of the assignment of January 31, 1947 by Mrs. Peiffer through her attorney in fact Iza Call-wood to Callwood of the fund in controversy, the validity and effectiveness of the alleged verbal assignment by Mrs. Peiffer to Mrs. Callwood in August, 1939, whether the fund should be determined to belong to the estate of Anna R. Peiffer, deceased, and whether Mrs. Callwood was entitled to an award out of the fund to compensate her for waste committed by Mrs. Peiffer as life tenant. As to this last issue the pleadings also posed the qu sstion whether the claim for waste could properly be presented in this action or whether it must be presented later in a probate proceeding involving the estate of Anna R. Peiffer. There were also subsidiary questions as to the rights of the various parties to be awarded counsel fees and costs.
After trial of the issues the district court filed an opinion, holding that the assignment under which Callwood claimed the fund was invalid upon a number of grounds, and that the assignment under which Mrs. Callwood claimed a portion of the fund was likewise invalid, but that she was entitled to an award of $2500.00 to reimburse her for the expense of repairing waste to the St. Thomas realty committed by Anna R. Peiffer as life tenant. 121 F.Supp. 379. The district court accordingly entered a judgment awarding to Mrs. Callwood $2500.00 plus $700.00 to cover attorneys’ fees and costs, a total of $3200.00, to the Virgin Islands National Bank $400.00 to cover attorneys’ fees and costs, and to the estate of Anna R. Peiffer $1400.00 to cover attorney’s fees and costs plus the balance of the fund, $2504.62, a total of $3904.62. The court had previously awarded $201.50 out of the fund to cover the cost of the transcript of the testimony taken at the trial. From the judgement thus entered the plaintiff Callwood appealed to this court.
The primary question raised upon this appeal is whether the district court erred in holding that the assignment made on January 31, 1947, in Wiesbaden, Germany, by Iza Callwood, as attorney in fact for Mrs. Peiffer, to Clifford Call-wood was invalid and of no effect. We are satisfied that the district court correctly decided this question.
As pointed out earlier the assignment dealt with two things, the accumulated rents then on deposit in the Virgin Islands National Bank and the right which Mrs. Peiffer had to receive future rents during the remainder of her life. We consider first the attempted assignment of the bank deposit. The generally accepted common law rule of conflict of laws is that the effect of an assignment of a chose in action is determined by the law of the place where the assignment is executed. This is the rule laid down in the Restatement of Conflict of Laws.
Here the assignment under discussion was of a chose in action to the extent that it related to the rents collected prior to January 31, 1947, and then on deposit in Mrs. Peiffer’s account in the Virgin Islands National Bank. Wiesbaden, the place where the assignment was executed, was in the zone of Germany under occupation by the American military forces and was then under American Military Government. Among the laws promulgated by the Military Government and then in force in Wiesbaden was Law No. 53,
On January 31, 1947 Mrs. Peiffer and Iza Callwood resided in Wiesbaden and each was, therefore, a person in Germany. Callwood then resided in London and was, therefore, a person outside Germany. Mrs. Peiffer’s deposit account in the Virgin Islands National Bank in St. Thomas was, of course, property located outside Germany and a foreign exchange asset within the meaning of Law No. 53. It is, therefore, clear that the attempted assignment of that bank account by Iza Callwood as attorney in fact for Mrs. Peiffer in Wiesbaden at that time was in direct violation of Law No. 53 and was null and void by virtue of the express provisions of Article V of that law.
Callwood argues that the assignment cannot be treated as invalid under Article V of Law No. 53 because it has not been shown that it was made with intent to defeat or evade that law. In making this contention, however, he misreads Article V which clearly was intended to invalidate two different types of transactions, the first, any transfer effected in direct violation of Law No. 53, and the second, any agreement or arrangement not in direct violation of the law but made with intent to defeat or evade it or the objects of Military Government. A transaction of either kind is expressly invalidated by Article V. In the present case the transfer sought to be effected by the assignment was in direct violation of the express prohibition of the law. It was, therefore, not necessary to establish its intent.
Callwood urges, however, that the validity of the assignment is supported by a license issued on January 12, 1951 by the Office of Alien Property of the Department of Justice of the United
Neither license, therefore, gives any life or validity to the unlawful assignment of January 31, 1947. It follows that Callwood’s claim was rightly denied by the district court insofar as it involved that portion of the fund in controversy which was on deposit in the Virgin' Islands National Bank on January. 31, 1947, the date of the purported assignment.
It remains to consider the validity of the assignment insofar as it purported to assign to Callwood Mrs. Peiffer’s right as life tenant to receive the rents of the St. Thomas realty in the future. As it turned out this involved his right to receive future rents for a period of less than six months, since Mrs. Peiffer died on July 11, 1947. The first question to be determined is again one of conflict of laws, by what law the validity of an assignment of future rents is to be decided. Here we are not dealing with an assignment of a chose in action but rather with the transfer of an interest in land. For the assignment, which appears to have been drawn by a German lawyer, describes Mrs. Peiffer as a usufructuary entitled for the rest of her life to the usufruct of real estate in Charlotte Amalie, which is the property of Elsa E. Callwood, and by it Mrs. Peiffer purports to assign to Callwood the exercising of her usufruct. It is evident that by the use of these civil law terms
We, thex’efore, turn to the law of the Virgin Islands to determine the validity of the assignment in question insofar as it sought to ti'ansfer Mrs. Peiffer’s right to the usufruct of the real estate situate in St. Thomas. It is urged that Law No. 53 of the Military Government of the American zone of Germany must be regarded as applicable in the Virgin Islands by virtue of the fact that it was promulgated under the authority of the Government of the United States pur
It will be recalled that the assignment was executed by Iza Callwood as attorney in fact for Mrs. Peiffer pursuant to a written power of attorney. That power of attorney was in the most general terms, authorizing Iza Callwood “to act on my behalf in all matters of whatever nature vis-a-vis private persons and visa-vis public authorities in a legally binding manner”. Iza Callwood testified that the power of attorney was given to her by her aunt shortly after the death of the latter 8 husband in 1942. The reason, she said, for giving it was that since her aunt could not speak German well enough to negotiate with the German authorities and people and her husband who spoke German was gone it was necessary for her to empower Iza Call-wood to carry on such negotiations for her. It will thus be seen that although the power was in most general terms it was given for a specific object, which had nothing whatever to do with Mrs. Peif-fer’s life estate in the St. Thomas realty.
There being no local statute on the subject the Virgin Islands follow the common law rule with respect to the interpretation of powers of attorney, That rule is well expressed in the Restatement of Agency, Section 37(1) as follows: “Unless otherwise agreed, general expressions used in authorizing an agent are limited in application to acts done in connection with the act or business to which the authority primarily relates.” Applying this rule to the power of attorney here in question it must be concluded that it conferred power only to deal with the German authorities and individuals with relation to Mrs. Peiffer’s affairs in Wiesbaden and that it did not confer authority to assign her life estate in the realty in the Virgin Islands. Accordingly, since Iza Callwood did not have authority under the power of attorney, properly interpreted, to execute the assignment of January 31, 1947 to Call-wood, that assignment was rightly held by the district court to be invalid insofar as it sought to transfer Mrs. Peiffer’s rights as life tenant of the real estate in St. Thomas. We conclude for the reasons stated that the district court was right in denying Callwood’s claim in ^oto. We, therefore, need not consider tlm other grounds advanced in support °f its action.
We pags tben ^ consideration of Mrg_ CaIlwood>s claim to a portion of the fund in controversy ag assignee of Mrs. Peiffer by vfrtue of a verbal assignment alIeged to have been made in August 1939_ Mra. Callwood testified that this wag intended to be an aggignment of tbat portion Qf the future rentg of the gt_ Thomag propertieg which had originally been owned beneficiall b her hugband Richard E c Callwood<
As we have already pointed out jn connection with the assignment of January 31, 1947 to Callwood the validity of an assignment of future rents, being an assignment of an interest in land, is to be determined by the law of the situs of the land, in this case the Virgin Islands. The applicable law in this regard is the statute of frauds which is in force in the Virgin Islands, That statute provides that no interest in land, other than a lease for a term not exceeding one year, may be assigned or transferred except by a deed of conveyanee or other instrument in writing.
The claims of both Callwood and Mrs. Callwood to the fund as assignees of Mrs. Peiffer having thus been determined to be without merit it must follow that the fund belongs to the estate of Anna R. Peiffer, deceased, as contended by Betz, the domiciliary executor of that estate. It does not necessarily follow, however, that the fund should be awarded to Betz as such executor or even that as a foreign executor he is entitled to appear as a party in this litigation. We, therefore, turn to consider that question.
The statutory law of the Virgin Islands is silent as to whether a foreign executor or administrator may sue or be sued in the district court. The generally accepted rule of the common law is that, except as authorized by local statute, a foreign executor or administrator can not sue on a claim belonging to the decedent or be sued on a claim against the estate of the decedent in a state other than that of his appointment, even though he voluntarily appears.
When, however, the district court decided that the claims of Callwood and Mrs. Callwood under their respective
We do not regard with favor the short cut which the district court thus took in by-passing the ancillary administration called for by Virgin Islands law of this local asset of the estate of Anna R. Peiffer. Certainly the judgment of the district court gives no opportunity for other creditors of the estate, if any there are, to present their claims for payment out of this local asset before it is transmitted to the domiciliary executor in Germany. We will, therefore, direct that the amount due the estate be paid to an ancillary administrator to be appointed by the district court, for administration under the local law. But this does not mean that we think that Mrs. Callwood should have a second trial of her claim for waste. The district court has complete jurisdiction of the administration of decedent’s estates in the Virgin Islands and the proof and allowance of claims against such estates. That jurisdiction is to be exercised in a proceeding in the nature of a suit in equity.
There is a generally recognized common law duty on the part of a life tenant to preserve the land and structures comprising the estate in a reasonable state of repair to the extent that the rents are sufficient to do so.
“A repair or act of preservation is clearly within such duty whenever*780 such repair or act is necessary to preven'; a progressive deterioration of the land or structures or whenever the condition existing as a result of the failure to make such repair will amount to substantial deterioration of the land or structures from "he condition in which such land and structures were at the time of the commencement of the estate for life. A repair necessary to make good ordinary wear and tear is not within this duty unless such repair is also within one of the two groups described in the next preceding sentence.’’
The failure of the life tenant to perform this duty is termed waste and if there is such failure the remainderman or rever-sioner i.j entitled to recover from the life tenant's estate the resulting damages.
Applying the rules of law which we have- discussed to the facts shown by the evidence in this case we conclude that the district court erred in finding Mrs. Peiffer guilty of waste and in awarding $2,500.00 on that account to Mrs. Call-wood. The buildings with respect to which, the claim of waste is made are frame structures between 85 and 125 years o!d. Admittedly they were not in the best condition when Mrs. Peiffer died. But Mrs. Callwood wholly failed to sustain the burden of proving that their condition was worse then than when the life tenancy began. Indeed the only evidence before the court on this question was to the contrary. Kean, who as rental agent was necessarily familiar with the properties during the entire period, testified that they were in better condition when Mrs. Callwood took them over in 1947 than when he first began to manage them for Mrs. Peiffer in 1919. At that time, he said, they were all in poor condition and during the intervening years he gradually repaired them and brought them up to the fair condition in which they were when he turned them over to Mrs. Callwood after Mrs. Peif-fer’s death.
Mrs. Callwood testified that she had expended a total of $8,673.66 in making necessary repairs after she took over the properties and she also offered the testimony of six of the tenants as to the condition of the houses which they occupied and as to the repairs which were made and those which they thought should have been made. The evidence of the tenants was wholly inconclusive, however, since the condition of the houses at the beginning of the life tenancy was not shown to have been better than that described by them. The testimony of Mrs. Callwood as to her expenditures for repairs was likewise too indefinite to be conclusive as to the extent of the repairs which were required to remedy waste as distinguished from those required to improve the properties.
A final word is required as to the action of the district court in awarding to three of the parties sums out of the fund in controversy as compensation for attorney’s fees and costs. The Virgin Islands National Bank was awarded $400.00 on this account. As the defendant in this action it secured the order of the court directing the interpleader and promptly paid the fund in controversy into court. It acted fairly and is entitled to costs and reasonable counsel fees out of the fund.
In his responsive pleading in this case the defendant Kean claimed $418.00 which he had paid to Mrs. Callwood in the case of Callwood v. Kean, 3 Cir., 189 F.2d 565. The district court disallowed this claim as filed too late. It does not appear that it is a claim against Mrs. Peiffer’s estate but if it is in reality such a claim it may be presented in the ancillary administration of her estate.
The judgment of the district court will be vacated and the cause will be remanded with directions to enter a judgment awarding $400.00 to the Virgin Islands National Bank for attorneys’ fees and costs and $7,104.62, the balance of the fund in controversy (less the sum of $201.50 paid to the official reporter) to the ancillary administrator of the estate of Anna R. Peiffer, deceased, appointed by the district court; the costs of August Betz, executor of the estate of Anna R. Peiffer, deceased, in the district court and in this court to be paid by the plaintiff, Clifford W. L. Callwood.
. Callwood v. Kean, 3 Cir., 1951, 189 F.2d 565.
. Richard E. C. Calhvood’s will provided that Anna Peiffer should keep “the properties in proper repair.” By her deed of June 7, 1924, she agreed to “keep the properties in proper repair.”
. Restatement of Conflict of Laws § 350. See Union Cent. Life Ins. Co. v. Woods, 1894, 11 Ind.App. 335, 37 N.E. 180, 39 N.E. 205; Republica de Guatemala v.
. Code of Laws of the Municipality of St. Thomas and St. John, Title IV, Chap-tar 13, Section 6; Code of Laws of the Municipality of St. Croix, Title IV, Chapter 13, Section 6.
. 12 PR 7003, 10 CPR, 1947 Supp. § 3.40.
. 10 CPR, 1947 Supp. § 3.40(a).
. 10 CPR, 1947 Supp. § 3.40(g) (4).
. 10 CPR, 1947 Supp. § 3.40(e).
. 2 Bouv. Law Diet. Rawle’s Third Revision, p. 3380.
. Restatement of Conflict of Laws, § 215,
. 2 Beale, Conflict of Laws, § 233.2.
. Compare In re Muller’s Estate, 1951, 199 Misc. 745, 104 N.Y.S.2d 133; Kent Jewelry Corp. v. Kiefer, Sup.1952, 119 N.Y.S.2d 242.
. Code of Laws of the Municipality of St. Thomas and St. John, Title II, Chapter 9, Sections 1 and 3. Code of Laws of the Municipality of St. Croix, Title II, Chapter 9, Sections 1 and 3.
. Restatement of Conflict of Laws §§ 507, 512, 513.
. .Restatement of Conflict of Laws, § 512, comment a, § 513, comment a. See Mothland v. Wireman, 1831, 3 Pen. & W., Pa., 185; Hargrave v. Turner Lumber Co., 1940, 194 La. 285, 193 So. 648.
. Laughlin v. Solomon, 1897, 180 Pa. 177, 36 A. 704; Kirkbride v. Van Note, 1937, 275 N.Y. 244, 9 N.E.2d 852, 112 A.L.R. 243; Sylvania Industrial Corp. v. Lilienfield, 4 Cir., 1943, 132 F.2d 887, 145 A.L.R. 612. See also 13 American & English Encyclopaedia of Law, 2d ed., p. 960; Goodrich, Conflict of Laws, 3d ed., pp. 562-565.
. Jurisdiction in interpleader was conferred by the Code of Laws of the Municipality of St. Thomas and St. John, Title III, Chapter 3, Section 13, and by the grant of general equitable power to the district court by the Organic Act, 48 U.S.C.A. § 1541 et seq. Compare Mogul Transp. Co. v. Larison, 1947, 181 Or. 252, 181 P.2d 139, a case which considers the Oregon precursor of the Virgin Islands statute. It was also conferred in this case of diverse citizenship by title 28 United States Code, § 1335.
. To ascribe a situs to an intangible, such as a debt, is of course to indulge in a legal fiction. But it is a useful fiction which the law frequently employs. See Restatement of Conflict of Laws, § 108; Blackstone v. Miller, 1903, 188 U.S. 189, 23 S.Ct. 277, 47 L.Ed. 439; Harris v. Balk, 1905, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023, 3 Ann.Cas. 1084.
. Code of Laws of the Municipality of St. Thomas and St. John, Title III, Chapter 75, Section 4.
. Code of Laws of Municipality of St. Thomas and St. John, Title III, Chapter 71, Section 3.
. 48 C.J.S., Interpleader, § 2; State of Texas v. Florida, 1939, 306 U.S. 398, 405, 59 S.Ct. 563, 83 L.Ed. 817; Mogul Trnnsp. Co. v. Larison, 1947, 181 Or. 252, 181 P.2d 139.
. Restatement of Property, § 139.
. Restatement of Property, § 139, comment g.
. Murch v. J. O. Smith Manufacturing Co., 1890, 47 N.J.Eq. 193, 20 A. 213.
. Restatement of Property, § 139, comment e.
. See In re Stout’s Estate, 1935, 151 Or. 411, 50 P.2d 768, 101 A.L.R. 672.
. First Nat. Bank v. Reynolds, 1928, 327 Me. 340, 143 A. 266, 60 A.L.R. 712; Globe Indemnity Co. v. Puget Sound Co., 2 Cir., 1946, 154 F.2d 249; Warner v. Florida Bank & Trust Co., 5 Cir., 1947, 160 F.2d 766.