Henkels v. Miller

298 F. 947 | S.D.N.Y. | 1924

HEARTED HAND, District Judge

(after stating the facts as above). If the plaintiff had a present right unconditionally to receive the principal, its retention by the defendants involved a loss to him arising from the defendants’ wrong. The proceeds must, under section 12 (Comp. St. 1918, Comp. St. Ann. Supp. 1919," § 3115%fE), be invested in United States securities, and these I may take judicial notice bear a smaller interest than 6 per cent., the legal rate. Thus the delay in receiving the principal would have resulted in a loss to the plaintiff pending the accounting, assuming that the legal rate is a fair compensation for the use of money. Hence the plaintiff argues that he was subjected to a penalty in case he refused to give the release and satisfaction. I will not, because I need not, say that it would not be duress to exact the documents as a condition of immediate payment, if the principal was due. Perhaps the case, so viewed, may be within the doctrine of Maxwell v. Griswold, 10 How. 242, 13 L. Ed. 405; Robertson v. Frank Bros. Co., 132 U. S. 17, 10 Sup. Ct. 5, 33 L. Ed. 236; Edwards v. Chile Copper Co. (C. C. A. 2) 273 Fed. 452; Swift Co. v. U. S., 111 U. S. 22, 4 Sup. Ct. 244, 28 L. Ed. 341. But in those cases the payment was exacted to secure the release of property to which the plaintiff was absolutely and immediately entitled, or to avoid a statutory penalty, or to prevent a business from being closed. Unless there be some such right, the plaintiff has no case.

In the case at bar the plaintiff had no present right to the principal sum. In the first place, the interlocutory decree did no more than give him an accounting, on which the account had not yet been stated. True, the parties had agreed on the amount due for principal; but that agreement did not create a present right or duty, and the defendants would have had no warrant for the payment till the court had so ordered. Formally, at any rate, the necessary condition was lacking until the plaintiff had procured a decree for the payment of the principal.

But the case does not stop there. No such decree could lawfully have been passed until the whole account was finally struck, including interest as well as principal. The statute is explicit on the duties of the defendants in this regard. Section 9, so far as relevant, reads as follows:

“If suit shall be so instituted, then such money or property shall be retained in the custody of the Alien Property Custodian, or in the treasury of the United States, as provided in this act, and until any final judgment or decree which shall be entered in favor of the claimant shall be fully satisfied by payment or conveyance, transfer, assignment, or delivery by the defendant, or by the Alien Property Custodian, or Treasurer of the United States on order of the court, or until final judgment or decree shall be entered against the claimant or suit otherwise terminated.”

It is true that this provision was intended primarily to protect the claims of third persons, of whom the plaintiff is one, upon the fund; but it is none the less the rule, and the only rule, applicable to the payment of moneys out of the funds collected under the act, in the absence of further action by Congress. It forbids any payment of the sums collected after suit commenced under section 9, except on order of the court in satisfaction of the final decree or other termination of the suit. The defendants had no lawful power to pay, and the plaintiff had no right to get, any part of the sum collected from the sale of the property until the suit had gone to final decree. Thus he was not unlawfully kept out of his money; the statute gave him the option, and only that, to take what the defendants would agree to give in final settlement, or to prosecute the accounting to final decree.

Even if the defendants had willfully refused, which they did not, to give him interest known to them to be due, his recourse was only to the court. The question whether any interest was earned at all in the sense that the law intended was possibly open to them, even under the decree ; but if not, and if, as the plaintiff says, the decree had foreclosed it, still the amount was open to genuine dispute, and the defendants were in duty bound to insist on its liquidation by a court. Till it was liquidated the plaintiff had no rights whose denial could be the basis of a charge of duress. If he would get his past-due interest, it was at the expense of suffering any loss involved in letting his principal meanwhile lie at a lower rate of interest. He might not consent to treat the decree as final, by giving a satisfaction in full, and still reserve his right later to litigate the question of interest. To set aside the satisfaction would make the payment of principal unlawful, since it would then have beén a payment without any final decree to support it, which is contrary to the statute.

The result is not so harsh as the plaintiff would have pie think, though its harshness would be irrelevant, if it existed. It was not unreasonable for Congress to insist that the payments should not be made piecemeal, and that the whole fund should remain intact until finally disposed of by the court. After all, the security was the highest possible, and the return was what the financial world deems adequate under such circumstances.

The motion is denied.