The opinion of the court was delivered by: Adair, District Judge.
The above cause having duly come on to be heard in its regular
order on September 5, 6, and 7, 1950, upon the pleadings and
proofs, and the court having heard the evidence adduced on behalf
of the parties and having heard oral argument and examined the
written briefs submitted by counsel and being fully advised and
satisfied in the premises, now makes the following findings of
fact and conclusions of law:
1. The plaintiff, Moritz Walter Lippmann, was born at Chemnitz,
Germany on August 3, 1903 and lived in Germany until 1926. He
first arrived in the United States as a quota immigrant on May
13, 1926. He was employed as a shipping clerk at George Borgfeldt
Co., New York City, from May 1926 until September 1926 and was
employed as a production engineer at Hooven and Allison Company,
Xenia, Ohio, from October 1926 until November 1930. At that time
Hooven and Allison Company reduced its working force because of
the depression and Lippmann resigned upon request of the company.
Lippmann returned to Germany from March 1928 until May 1928 and,
after the termination of his employment at Hooven and Allison
Company, from November 1930 until February 1931.
2. The plaintiff, Mathilde Josefine Lippmann, was born Mathilde
Josefine Walz at Stuttgart, Germany on January 13, 1904. She
lived in Germany until 1928 and first arrived in the United
States as a quota immigrant on November 14, 1928. The plaintiffs
were married at Bloomington, Illinois on July 9, 1931.
3. Neither of the plaintiffs ever became a citizen of the
United States. They were citizens of Germany by birth, and have
always been and still are citizens of Germany.
4. Mr. Lippmann secured employment as an engineer at the Peoria
Cordage Company, Peoria, Illinois on April 1, 1931, working on a
special project. He resigned in May 1934 because the work for
which he had been hired was completed. From the time of their
marriage until they left he United States in 1934, the plaintiffs
resided in Peoria, Illinois.
5. Mr. Lippmann's father, Moritz Lippmann, was a citizen of
Germany and a resident of Chemnitz, Germany. He owned a furniture
manufacturing and retail house in Chemnitz, the Moritz Lippmann
Company, which consisted of a factory, a six-story retail store,
and several branch stores. He and his wife visited the plaintiffs
in Peoria, Illinois, in 1933 and at that time urged the
plaintiffs to return to Chemnitz in order that the plaintiff,
Moritz Walter Lippmann, could assume the management of the
business. The father was growing old and was in poor health and,
although he had two other sons, they were artisans without
managerial experience; Walter was the eldest son and the only one
trained for management responsibilities. The plaintiffs accepted
this offer and left the United States on June 19, 1934.
6. At all times during their stay in the United States the
plaintiffs had lived in rented rooms and apartments. Upon leaving
the United States the Lippmanns gave up their apartment. Mr.
Lippmann resigned from his employment at the Peoria Cordage
Company, they gave their furniture to friends and the church, and
they purchased one-way tickets to Germany.
7. The plaintiffs thereafter resided in Germany for fourteen
years from 1934 to
1948. Upon his arrival in Germany Mr. Lippmann assumed the
management of his father's business. He promised his mother that
he would remain there for the rest of her life. The Lippmanns
took an apartment, furnished it, acquired an automobile, and
within a year after their arrival, built a large country
residence. Mr. Lippmann acquired a 25% interest in his father's
business, Moritz Lippmann Company, Chemnitz, and a 90% interest
in another furniture manufacturing house, Krebs and Co. of
Brand-Erbisdorf, Germany. He was a wealthy man in Germany with
substantial industrial interests and with an annual income of
$25,000 to $30,000. He joined the Nationalsozialistische
Volkswohlfahrt (NSV — National Socialist Welfare Organization)
and the Deutsche Arbeitsfront (DAF — German Labor Front),
affiliated organizations of the Nazi Party.
8. The plaintiffs have two children, Wolfgang Walter Lippmann,
born April 15, 1934 at Peoria, Illinois, and Ingeborg Winifred
Lippmann, born February 17, 1938 at Chemnitz, Germany.
9. Plaintiffs resided in Germany continuously from 1934 to
1948. During that period they made one trip to the United States,
arriving at New York on April 30, 1937 and departing for Germany
on July 1, 1937. Upon leaving Germany for this trip plaintiffs
purchased round-trip tickets on the Hamburg-American Line. They
did not travel to the United States on this trip for the purpose
of renewing their residence in the United States but solely for
the purpose of securing renewals of their re-entry permits and
for the purpose of concealing their United States assets from the
German Foreign Exchange Control authorities as hereafter set
10. Upon leaving the United States in 1934 plaintiffs had
secured re-entry permits dated June 13, 1934 and valid for one
year until June 13, 1935. These permits were extended for four
six-months' periods by the United States Consulate at Dresden,
Germany and the last extension expired June 13, 1937. While in
the United States in 1937 plaintiffs secured new re-entry permits
dated June 2, 1937 and valid for one year until June 2, 1938.
Plaintiffs did not secure extensions of these permits and they
expired on June 2, 1938.
11. Pursuant to the German Foreign Exchange Control Laws
(Devisen Laws) plaintiffs, as residents of Germany
(Deviseninlanders), were required to report their foreign
exchange holdings and could be required, upon demand, to
surrender such assets to the Reichsbank in exchange for German
currency. During the period of their residence in the United
States prior to 1934 plaintiffs had accumulated the sum of
$4,400, which they left in the United States upon their return to
Germany in 1934. Plaintiffs desired to conceal these assets from
the German Foreign Exchange Control authorities and, when in the
United States in 1937, they borrowed the sum of $1,100 from the
First National Bank, Peoria, Illinois, and purchased the premises
described as: "Lot 15 in Block 3 in Table Grove Addition to
Peoria situated in the City of Peoria, County of Peoria and State
of Illinois," for the sum of $5,250. Thereafter the plaintiff,
Moritz Walter Lippmann, executed a report in Germany of his
foreign property holdings as required by the German Foreign
Exchange Control laws and falsified the report in that he omitted
to report the aforesaid real property.
12. The above premises were purchased by plaintiffs on June 17,
1937, and plaintiffs left the United States on July 1, 1937.
During all of the time that plaintiffs owned the property, it was
occupied by tenants, and was managed for plaintiffs by the ...