Opinion
April 3, 1951 —
May 8, 1951.
APPEALS from four separate orders of the county court of Milwaukee county: M. S. SHERIDAN Judge. The order entered August 1, 1950, in the matter of the estate of John Rade, deceased, is affirmed. The orders entered October 2, 1950, in the matter of the estates of Stephen Kern, Martin Mack, and Johanna Reis, deceased, are reversed.
For the appellant there were briefs by the Attorney General of Wisconsin, Stewart G. Honeck, deputy attorney general, and Beatrice Lampert, assistant attorney general, and oral argument by Mrs. Lampert.
For the respondent there was a brief by Harold I. Baynton, assistant attorney general of the United States, Timothy T. Cronin, United States district attorney for the Eastern district of Wisconsin, and Thomas H. Creighton, George B. Searls, and Irwin A. Seibel, Department of Justice, all of Washington, D.C., and oral argument by Mr. Seibel.
Each of the above-named decedents died intestate and each at the time of death was a resident of Milwaukee county, Wisconsin. The estate of each consisted entirely of personal property. In each case petition for administration was made by the public administrator, who recited that the decedents left no known heirs at law or no known heirs or next of kin residing in this country.
In the matter of the estate of John Rade, deceased, the Alien Property Custodian, acting under the authority of the Trading with the Enemy Act (40 U.S. Stats. at L., p. 411, as amended, 50 USCA App. secs. 1 et seq.) by a vesting order dated December 6, 1945, and by an amended vesting order dated February 12, 1946, vested in himself "all right, title, interest, and claim of any kind or character whatsoever" of two brothers and a sister in and to the estate. The two brothers and sister were designated by name in the order and their residence was given as Bulgaria. At the time, said heirs of the decedent were nationals of an enemy country. Formal demand for the vested interests were made on the administrator. The state of Wisconsin petitioned the court to include in its final judgment in the estate an order that the administrator hold the shares of the foreign heirs in the estate for one hundred twenty days, and if any share or shares should remain unclaimed by the heir or heirs to whom assigned at the expiration of such time, the administrator should pay said share or shares into the state treasury, all pursuant to secs. 318.02 and 318.03, Wis. Stats. The public administrator filed a petition for the determination of heirship. Upon the hearing it was established that the two brothers and sister named in the amended vesting order were living in Bulgaria, and that they were the heirs at law of the decedent. A treaty of peace between Bulgaria and the United States was signed in 1947, after the filing of the amended vesting order. On September 7, 1948, there was filed with the court a power of attorney signed by the two brothers and sister of the deceased, which was executed and acknowledged before the consul of the United States at Sofia, Bulgaria, appointing the minister of Bulgaria in the United States as the attorney in fact for said heirs.
In the other three estates similar vesting orders were executed and filed by the Alien Property Custodian. In each of said orders the names of heirs of the various decedents were given and their addresses were stated to be Germany. The vesting orders were filed and demand made on the administrator for the reason that the heirs named were nationals of an enemy country. The state of Wisconsin appeared in each of said estates and filed petitions like that in the Rade estate.
In the Rade estate the order denied the petition of the state of Wisconsin and directed the public administrator, upon the entry of the decree of distribution, to make immediate payment of the shares assigned to the two brothers and the sister of the decedent, to the attorney general of the United States as successor to the Alien Property Custodian. In the other three estates no hearing has been had for the determination of heirship. The order in each of the three matters denied the petition of the state of Wisconsin and directed the public administrator, upon the entry of the decree of distribution, to make immediate payment of the shares of the persons named in the vesting orders filed by the Alien Property Custodian to the attorney general of the United States as his successor. The court retained jurisdiction in said three matters to make such further order or judgment with respect to distribution as may be necessary.
It was stipulated that the appeals from the four orders be heard together.
Upon this appeal the state contends that the issues in each case must be resolved on the basis of the interpretation of the Wisconsin statutes by the state courts. There seems to be no issue in respect to that contention.
The state next argues that the Wisconsin statutes condition succession upon the distributive share being claimed by the heir, and provide for alternative succession to the school fund on failure of the condition. The state is asking for a strict construction of the provisions of sec. 318.03, Wis. Stats., which reads in part as follows:
"(1) Heirs unknown. In case there shall be no known heir of the decedent, the residue of the estate, not disposed of by will, shall escheat and shall be ordered paid into the state school fund. . . .
"(3) Unclaimed legacies and shares; escheat. Except as provided in section 331.42, if any share of intestate property including property distributable as intestate property under subsection (2) shall not be claimed by the heir within one hundred twenty days after the entry of final judgment by the county court, or within such time as shall be designated in said final judgment, the executor or administrator shall convert the same into money and pay it to the state treasurer for the state school fund, and it shall be a part of said fund until and unless refunded as prescribed by subsection (4).
"(4) The moneys received by the state treasurer pursuant to subsections (1) and (3) shall be paid to the owner on proof of his right thereto. The claimant may, within seven years after the date of publication by the treasurer of notice of receipt thereof as provided by section 14.42 (15), file in the county court in which the estate was settled, a petition alleging the basis of his claim to the residue or to the legacy or share. . . ."
The state contends that, even though there are known heirs of a decedent and even though there has been a determination of heirship, the residue of the estate does not automatically become the property of such heirs and that it becomes the property of an heir only when it is claimed "by the heir" as provided by said statute. We cannot agree with this strict construction. When it is established that a decedent leaves known heirs the state has no interest in the residue of said estate except in remote instances where no claim is made for the share of a known heir. However, the heir has an interest in the estate that can be reached by garnishment or other action. In the cases before us the vesting orders have the effect of assignments by operation of law and vest the interest of the named heirs in the Alien Property Custodian.
The state next contends that the interests vested by the Alien Property Custodian were conditional and defeasible, and that he did not obtain a greater interest than the enemy alien had under our laws of succession, and that under its prior argument the interest of the alien heir would be defeated if he did not claim the property. This contention is answered by our determination of the state's prior argument.
In the matter of the estate of John Rade, deceased, the state further claims that when peace is concluded with an enemy country prior to judgment of distribution the distributive shares payable to nationals of such country are not subject to vesting by the Alien Property Custodian. That may or may not be true. Even if true, it would avail the state nothing. The distributive shares of the Bulgarian heirs would then go to the Bulgarian minister to the United States by virtue of the power of attorney he holds. In neither case would the residue of the estate, nor any portion thereof, escheat to the state. Possible conflicting claims between the heirs, through their attorney in fact, and the attorney general of the United States are not before us. It is sufficient to note that the state of Wisconsin as appellant has no further interest in this particular estate.
The orders in the other three matters provided that the public administrator, upon entry of the decree of distribution, make immediate payment of the shares of the persons named in the respective vesting orders to the attorney general of the United States. This can be done only after there has been a determination of heirship. The court retained jurisdiction of said proceedings to make such further order or judgment with respect to distribution as may be necessary. This might be a sufficient safeguard. The orders, however, seem to be premature and the petitions of the state should not be denied until heirship has been determined. Although its chance of sharing in these estates seems to be remote, it can do no harm to permit the state to remain a party in interest in the proceedings and all questions can be determined at the time of the hearing on the final account and the determination of heirship. The funds can safely be held by the public administrator and a reasonable time can be given to the attorney general of the United States to present his proofs that each of said decedents has known heirs and that they are nationals of an enemy country.
By the Court. — The order entered August 1, 1950, in the estate of John Rade, deceased, is affirmed. The orders entered October 2, 1950, in the estates of Stephen Kern, Martin Mack, and Johanna Reis, deceased, are reversed and causes remanded with directions to enter orders consistent with this opinion.