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For Damon and Pythias, it is the best of times and it is the worst of times.

Theirs is a tale of two kitties in the dog days of summer that has the fur flying in an upper-crust 5th Avenue apartment building, an estate executor pondering legal action, a veterinarian lining up prospective adoptive parents, a cat psychologist worried about trauma to the feline heirs, legal experts scratching their heads, and thoughtful pet owners reviewing their wills. It is an odd, bittersweet story that turns on love and money and goes to the heart of what is meant by ”family.”

The 5th Avenue matron who adopted the brothers six years ago so cherished them that she has bequeathed them the use of her $750,000 cooperative apartment, appointed two guardians to care for them and authorized all expenses to be paid by the foundation administering her $4 million-plus estate.

Less than a month after her death, however, the building`s board of directors banished the siblings from their home and refuses to let them return, citing a co-op rule (apparently heretofore overlooked) that it claims overrides the will: an official no-pets policy. In their view, Damon and Pythias are simply pets, elegant Burmese specimens, to be sure, but cats nonetheless.

Evidently, to the late Terry Krumholz, a by-all-accounts solitary, recently widowed woman with no children, no siblings and few relatives, the sleek pair of bronze-furred purebreds came to be much more. After her death at age 55 from cancer on July 25, her will, filed for probate in Manhattan`s Surrogate`s Court, made that much very clear.

To those who knew her, it came as no great surprise. ”She loved these cats. She adored these cats. They were her children,” says Dr. Lewis Berman, director of the Park East Animal Hospital, a tony veterinary clinic ensconced in a townhouse just off Park Avenue. Damon and Pythias have been his patients, he says, ”since they were kittens.” Indeed, Berman was named in her will as a consultant on the welfare of the cats.

After her husband, Elroy, a bond investor, died in 1988 at age 51, Terry Krumholz apparently grew even more devoted to the two cats they had selected together. After she learned of her own illness in 1989, it seemed her anxiety over the health of the cats became intense.

In the last year, Berman says, at her insistence he began making monthly house calls to her 5th Avenue apartment.

”I`d clean out their ears, trim their toenails, listen to their hearts and lungs. I would do both cats for the price of one because I was embarrassed to be doing it,” he says. Berman, who describes Krumholz as a

”high-strung, nervous woman,” did it nonetheless, he says, because ”she needed this reassurance.” In his view, the cats were perfectly healthy, though ”they had emotional problems.”

They did indeed, according to Carole Wilbourn, a Manhattan cat psychological therapist and author of books such as ”The Inner Cat” and

”Cat on the Couch,” who also began making house calls in 1989 to the apartment and to Krumholz`s country house on Long Island.

Although they bore the names of two youths of Greek legend whose loyalty to each other was such that their names became synonymous with friendship, Damon and Pythias fought viciously.

”Their stress tolerance was low. It had all started with the loss of the husband-separation anxiety-and her grief,” says Wilbourn, who conducted 15 sessions with Damon and Pythias.

Wilbourn remembers Krumholz as a ”very caring, dynamic person,” who was desperate to stop the cats` fighting. She also was meticulous about following Wilbourn`s therapeutic program, which involved the playing of audiotapes to the patients.

”It was really beautiful because she had set up a whole little audio corner for them in the kitchen with their blanket and they would just sort of hang out. She used to call that their audio nook,” Wilbourn recalls.

Whisked away

Krumholz had told Wilbourn that she was going to make provisions for the cats in her will and named Wilbourn as a consultant on their welfare.

If Krumholz knew what had befallen Damon and Pythias, Wilbourn says,

”she`d be tearing her hair out. She intended something more constant, and right now, things aren`t constant.”

Indeed, after Krumholz`s death, police sealed her apartment and one of Krumholz`s household staff members took the cats to the Park East Animal Hospital. After 10 days, they were whisked away by friends of Krumholz. Eventually, in early August, when the apartment was unsealed, the executor of the will, Sanford Becker, tried to return the cats to their home, only to be stopped at the door.

At this point, neither Berman nor Wilbourn knows where the cats are, though rumors have placed them with their ”guardians,” two former household staff members, or friends. Mysteriously, Becker will not reveal their whereabouts except to say, ”They`re well taken care of right now.”

No one is happy about the current state of affairs. Berman says he has people standing by to adopt the cats if only he could find them. Wilbourn is worried that the stress might prompt a psychological relapse. The board of directors of the building is appalled by the media interest and shuffles off requests for comment to its equally appalled attorney, Arnold Hackmyer of Hackmyer & Nordlicht, who only managed to sputter, ”There`s no question the policy is no pets,” and ”This is a longstanding rule.” The executor, Becker, is ”disgusted by the whole thing.”

”Why don`t you tell them they`re very nasty people,” he says of the building`s board of directors. ”This is a very cruel world we live in, you know, a very cold world,” he blurted out before refusing further comment.

Friends and relatives of Krumholz were reluctant to talk about her, particularly, one said, after the case prompted calls from the staff of tabloid TV star Maury Povich.

Ruth Shifman, a cousin`s wife, had apparently gotten into the tabloid spirit, announcing to an inquiring reporter: ”If there`s a book to be written, I want to write it. I want to get the money,” and ”I won`t give any information unless I know what`s in it for me.”

Although a foggy picture emerges of a woman who loved opera, collected old movies and had amassed a collection of thoroughbred horse racing memorabilia, the protective discretion of those who knew Krumholz best makes it difficult to move beyond the obvious conclusion that she was an eccentric given to indulging her pets to excess.

”I knew that this was very important to her,” says her cousin Rose Glasner of Krumholz`s determination to provide for the cats. ”I never really discussed it because this was very strange to me. Leaving cats that well-provided for, well, I think most people would find that very unusual.”

From co-op to kennel

Unusual perhaps, but not unheard of. ”There are lots of cases where people have left their estates for these purposes,” says Arthur Murphy, a professor and specialist on trusts, wills and estates at Columbia University Law School. And such arrangements are, in principle, perfectly legal, he says. Whether eccentric or not, Terry Krumholz did seem somewhat lonely.

Signed in December 1990, her will, which leaves most of the estate-including the co-op-to a non-profit foundation named for Krumholz and her late husband, makes few personal bequests.

A few cousins and friends were left small items such as photographs, videotapes, opera tickets and a collection of ceramic cat figurines. Instructions were left to the foundation to continue funding an educational program for Jewish children and the soup kitchen for the homeless at the Park Avenue Synagogue, where the Krumholzes worshiped.

But when it came to the cats, the instructions were almost passionate, including those on their care and feeding.

Although the intent seems clear that the cats should be cared for in the co-op for the rest of their lives, the will also raises the possibility of adoption. However, it is fuzzy on the circumstances under which an adoption might take place and what, if any, financial responsibilities the foundation would have to the cats if they were adopted.

Berman, who says that Becker already has told him that the cats` medical expenses would not be paid under those circumstances, believes ”the executor is going to kiss them off as soon as they find a home.”

In any event, the will is adamant that ”under no circumstances shall the cats be separated before, during or after adoption.”

”She was clearly covering the bases as well as she could,” says Wilbourn, who advises pet owners to be as clear and specific as possible about their provisions in wills for their pets` care.

Krumholz obviously thought she had done that. But, says Marc Luxemburg, a Manhattan attorney specializing in wills and trusts at Snow, Becker, Krauss,

”She and her attorney forgot one thing. They forgot to talk to the co-op board before they drafted the will.”

Many Manhattan co-ops have a no-pets clause in their proprietary lease or by-laws, which they tend to exercise-or ignore-at their discretion. Given the regular comings and goings of Damon and Pythias over the last six years, it seems unlikely that the board of directors suddenly realized that they had cats in the house.

Moreover, at a time when many formerly well-to-do New Yorkers are scratching to meet their mortgages, it is ironic that two long-term co-op tenants, who present neither financial risk nor threats of wild parties or unseemly behavior, are being, in effect, evicted.

”Some board members might be miffed that the building might be viewed as having become a kennel,” said a bemused Scott Mollen, a real estate columnist for the New York Law Journal and a partner in Graubard, Mollen, Horowitz, Pomeranz & Shapiro.

Her kids, in effect?

Executor Sanford Becker says he has not decided whether to legally challenge the board`s position.

If he does, Mollen speculates, ”An argument could be made that in this particular family, the decedent deemed the cats to be her children. And, just like the (N.Y.) Court of Appeals in the (1989) Braschi decision, where it initially said that we must place substance over form and held that gay lovers may be entitled to spousal rights, it`s conceivable that someone might argue that, in substance, in this case, the cats became her children and may be entitled to succession under the proprietary lease and by-laws, particularly since they had been long-term tenants.”

This would seem to be rather a long shot, but, Mollen muses, ”There are times when the harshness of the black letter of the law will be tempered by compassion and equity.”

Damon and Pythias, poor little rich cats, can only hope.