The War Merit Cross with Swords recognized those military men whose acts of courage were above the call of duty, yet did not meet the criteria for the Iron Cross.  These acts could either be in the form of bravery not under direct enemy fire or the planning/leading of combat operations.  All members of the military were eligible without distinction to rank, and non-Germans Allies were equally eligible.
Here is a nice War Merit Cross 2nd class with swords in nearly mint condition. Manufacturer stamped on the ring "32" is not commonly found.