Brownell v. Chase National Bank of New York

PETITIONER: Brownell
RESPONDENT: Chase National Bank of New York
LOCATION: The United States District Court for the Western District of Texas

DOCKET NO.: 24
DECIDED BY: Warren Court (1956-1957)
LOWER COURT:

CITATION: 352 US 36 (1956)
ARGUED: Oct 16, 1956 / Oct 17, 1956
DECIDED: Nov 19, 1956

Facts of the case

Question

Media for Brownell v. Chase National Bank of New York

Audio Transcription for Oral Argument - October 17, 1956 in Brownell v. Chase National Bank of New York

Audio Transcription for Oral Argument - October 16, 1956 in Brownell v. Chase National Bank of New York

Earl Warren:

Number 24, Herbert Brownell, Jr., Attorney General, versus The Chase National Bank of the City of New York.

Mr. Searls.

You may proceed, Mr. Searls.

George B. Searls:

May it please the Court.

This case results from the refusal of the Supreme Court of the State of New York to order delivery to the Attorney General of property which the Attorney General, as successor to the Alien Property Custodian, had vested under the Trading with the Enemy Act.

The questions presented turn on the provisions of a trust indenture.

On the provisions of a judgment entered in an earlier suit in 1948, as well as upon the judgment which is under review here.

The property is held by the respondent Chase Bank under an indenture which was executed in 1928.

The real settlor on the trust was the respondent Bruno Reinicke, although one Cobb was the nominal settlor.

The trust is spendthrift trust for the primary benefit of Reinicke's children.

And after the death of Reinicke and his wife, the property is to be divided equally among the children as they reach certain ages with provision for their children taking the share of any child who dies before the time of distribution.

Except as otherwise directed, the trustee is to accumulate the income for the lives of Reinicke and his wife.

But the indenture gave Reinicke authority to direct the payment of the income either to the children or to himself or to someone else for the benefit of the children.

Also, if he notified the respondent, the bank that he had returned to the United States and was intended to become a resident, then he could direct the trustee to pay him personally half of the income.

In addition, he had extensive powers of supervision over the management of the trust and over trust policy.

Now, in 1945, the then Alien Property Custodian issued a vesting order number 4551 which is in the record at pages 67 to 72, in which he found that Reinicke, his wife and his children and a number of other people names were nationals of a designated enemy country, Germany.

And by that order, he vested, "All right, title, interest or claim -- and claim of each of the persons named and into the trust."

Acting on that vesting order, the Alien Property Custodian and later the Attorney General as his successor intervened in a suit for instructions which the trustee had brought in the Supreme Court of the State of New York.

And on the basis of the vesting order, the Government asked that the state court order the trustee to pay over the income to the Attorney General that an order also be made that the trustee deliver on the termination of the trust, the shares of the persons whose interest had been vested and also for a determination that by reason of the vesting order, he had succeeded to certain powers.

The Attorney General had succeeded the certain powers over the trust.

The judgment went against the Attorney General.

It was entered on January 30th, 1948 and is in the record beginning at page 211.

The court held that the Attorney General had not succeeded to Reinicke's powers over the management of the trust or to his powers to direct the payment of income.

And that he was not entitled to receive the income.

As to those powers which had been subject to -- as to the powers which Reinicke had had to control the management and conduct of the trust, the court held that the trustee was authorized to administer the trust in his discretion for such period as Reinicke's powers should be subject to governmental control in the form of barking or other controls either in this country or in Germany.

On appeal, the Appellate Division affirmed saying that the vesting order did not indicate an intention to appropriate fiduciary powers.

The Court of Appeals of the State -- one judge dissented.

The Court of Appeals of the State of New York affirmed without opinion.

That was in 1950.

In 1953, April 6, the Attorney General amended vesting order 4551 and the amendment is in the record beginning at page 53.