Source: https://supreme.justia.com/cases/federal/us/215/33/
Timestamp: 2019-04-22 17:59:49+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 215 › Waterman v. Canal-Louisiana Bank Co.
The equity jurisdiction of the federal courts is derived from the federal Constitution and statutes, and is like unto that of the High Court of Chancery in England at the time of the adoption of the Judiciary Act of 1789; it is not subject to limitations or restraints by state legislation giving jurisdiction to state courts over similar matters.
While federal courts cannot seize and control property which is in the possession of the state courts and have no jurisdiction of a purely probate character, they can, as courts of chancery, exercise jurisdiction, where proper diversity of citizenship exists, in favor of creditors, legatees, and heirs, to establish their claims and have a proper execution of the trust as to them.
Although complainant in this case asks in some of her prayers for relief which is beyond the jurisdiction of the court as being of a purely probate character if the allegations of the bill support them the court may grant other prayers for relief which are within its jurisdiction, and, as a court of equity, shape its decree according to the equity of the case.
Where the bill does not seek to set aside the probate of a will or interfere with the possession of the probate court, the federal court of equity, in a case where diverse citizenship exists, may determine as between the parties before the court their interests in the estate and such decree will be binding upon, and may be enforced against, the executor.
of the federal court having jurisdiction settling the rights of parties in an estate, and the denial of effect of such a decree presents a claim of federal right which can be protected by this Court.
While a federal court of equity cannot, either under the forty-seventh rule in equity or general principles of equity, proceed to adjudication in the absence of indispensable parties, if it can do justice to the parties before it without injury to absent persons, it will do so and shape the decree so as to preserve the rights of those actually before the court, without prejudice to the rights of the absentees.
In this case, the absent party was not of the same state as complainant and had no interest in common with complainant, and while a proper, was not an indispensable, party, as his interests were separate and could be protected by retention of his legacy by the executors subject to adjudication in another suit.
The facts, which involved the jurisdiction of the circuit court, are stated in the opinion.
District of Louisiana, and also against the Charity Hospital of New Orleans, St. Ann's Asylum, Protestant Episcopal Orphan Asylum, Home for Incurables, Christian Woman's Exchange, State Insane Asylum of Jackson, Louisiana, City of New Orleans, and Louisiana Retreat, conducted by the Society of the Daughters of St. Vincent de Paul, all and each of them being institutions established under the laws of Louisiana, and citizens of the State of Louisiana, and inhabitants of the Eastern District of Louisiana; also against Robert Waterman and Frederick Waterman, citizens of the State of Louisiana, and inhabitants of the Eastern District thereof. The bill set forth in substance that Caroline Stannard Tilton, widow of Frederick W. Tilton, late of the City of New Orleans, duly made and published her last will and testament and codicils thereunto annexed, and by said will and codicils said Caroline Stannard Tilton gave and bequeathed to Robert Waterman the sum of $3,000; to the said Robert Waterman and his wife, fifteen premium bonds; to Frederick Waterman, $3,000; to Frederick Tilton Davis, $1,000, and the whole series of No. 5,963 premium bonds. That the said Caroline Stannard Tilton departed this life on or about the sixth of July, 1908; that the Canal-Louisiana Bank & Trust Company, executor in said will named, duly proved the same in the court of probate jurisdiction in and for the Parish of Orleans, in the State of Louisiana, and undertook the executorship thereof, and possessed itself of the personal estate and effects to the said testatrix to a very considerable amount, and more than sufficient to discharge her just debts, funeral expenses, and legacies.
The complainant further avers that she is the sole surviving niece, and that Robert and Frederick Waterman and Frederick Tilton Davis are the sole surviving nephews, of said Caroline Stannard Tilton, and that there are no other persons within the nearest degree of kinship of the said testatrix, and that the said Frederick Tilton Davis resides in the State of Alabama, outside of the court's jurisdiction.
and Frederick Tilton Davis, legatees in said will, became entitled to have and receive their said respective legacies, and did receive the same, and, accordingly, by receiving said bequests, have renounced the succession of said Caroline Stannard Tilton, deceased, and, by taking said legacies, have renounced all their rights as heirs at law, and are estopped and debarred from claiming any portion of the estate undisposed of, because of certain provisions of the will, which are set forth in the bill.
It is further averred by the complainant that, by reason of the renunciation and estoppel of said legatees, the complainant remains the sole heir at law of Caroline Stannard Tilton, and, as such, is entitled to the shares which would have gone to Frederick and Robert Waterman and Frederick Tilton Davis, of the same degree and collateral line, by right of accretion.
the Christian Woman's Exchange was not entitled to share in the residue, because the bequest to it of $1,000 was not a charitable bequest, and the said Christian Woman's Exchange was not one of the institutions mentioned in the will to share in the residue.
Waterman have renounced and abandoned all their right, title, and interest as heirs of said Caroline Stannard Tilton, deceased, in the said lapsed and caducous legacy made in favor of the so-called 'Home for Insane;' (3) that it be further adjudged and decreed that your oratrix, as the nearest sole heir and next of kin of said Caroline Stannard Tilton, deceased, capable of inheriting, is alone entitled to the amount of the caducous and lapsed special legacy bequeathed to the said so-called 'Home for Insane,' for the sum of three thousand dollars ($3,000), and to the proportionate share of said nonexisting and uncertain legatee in the residue of the estate of said Caroline Stannard Tilton, and that the Canal-Louisiana Bank & Trust Company, executor of said deceased, Caroline Stannard Tilton, be condemned to pay over and deliver to your oratrix the whole amount of said caducous special legacy, together with the proportionate share and interest to said so-called 'Home for Insane' in the residue of the estate of said deceased remaining after the payment of the particular legacies and the costs of administration of her estate, and for such further sum as the court may find to be justly due and owing unto your oratrix as legal heir and next of kin of the said Caroline Stannard Tilton; (4) and that it be further ordered and decreed that the Christian Woman's Exchange is not a charitable institution, or entitled, as such, under said will to participate or receive any share or portion of the residue of the estate of said deceased; (5) and that an account be taken of the personal estate and effects of the said testatrix coming to the hands of the said executor, or of any person or persons by its order or for its use, and also of the said testatrix's funeral expenses, debts, legacies, and costs of administration, and especially showing the residue remaining in the hands of the said executor after making the aforesaid deduction, and that the same may be applied in due course of administration, and that, for these purposes, proper directions may be given."
"And your oratrix further prays for all general and equitable relief, as well as all costs. "
From an early period in the history of this Court, cases have arisen requiring a consideration and determination of the jurisdiction of the courts of the United States to entertain suits against administrators and executors for the purpose of establishing claims against estates, and to have a determination of the rights of persons claiming an interest therein. And this Court has had occasion to consider how far the jurisdiction in equity of the courts of the United States in such matters may be affected by the statutes of the states providing for courts of probate for the establishment of wills and the settlement of estates. We will not stop to analyze or review in detail all these cases, as they have been the subject of frequent and recent consideration in this Court. The general rule to be deduced from them is that, inasmuch as the jurisdiction of the courts of the United States is derived from the federal Constitution and statutes, that, insofar as controversies between citizens of different states arise which are within the established equity jurisdiction of the federal courts, which is like unto the High Court of Chancery in England at the time of the adoption of the Judiciary Act of 1789, the jurisdiction may be exercised, and is not subject to limitations or restraint by state legislation establishing courts of probate and giving them jurisdiction over similar matters. This Court has uniformly maintained the right of federal courts of chancery to exercise original jurisdiction (the proper diversity of citizenship existing) in favor creditors, legatees, and heirs, to establish their claims and have a proper execution of the trust as to them. In various forms, these principles have been asserted in the following, among other, cases: Suydam v. Broadnax, 14 Pet. 67; Hyde v. Stone, 20 How. 170, 61 U. S. 175; Green v. Creighton, 23 How. 90; Payne v. Hook, 7 Wall. 425; Lawrence v. Nelson, 143 U. S. 215; Hayes v. Pratt, 147 U. S. 557, 147 U. S. 570; Byers v. McAuley, 149 U. S. 608; Ingersoll v. Cogam, 211 U. S. 335.
"A citizen of another state may establish a debt against the estate. Yonley v. Lavender, 21 Wall. 276; Hess v. Reynolds, 113 U. S. 73. But the debt thus established must take its place and share of the estate as administered by the probate court, and it cannot be enforced by process directly against the property of the decedent. Yonley v. Lavender, supra. In like manner, a distributee, citizen of another state, may establish his right to a share in the estate, and enforce such adjudication against the administrator personally, or his sureties (Payne v. Hook, 7 Wall. 425); or against any other parties subject to liability (Borer v. Chapman, 119 U. S. 587), or in any other way which does not disturb the possession of the property by the state court. (See the many cases heretofore cited.)"
therefore laid down in Byers v. McAuley, supra, in which it was held that the federal court could not exercise original jurisdiction to draw to itself the entire settlement of the estate of the decedent and the accounts of administration, or the power to determine all claims against the estate. But it was there decided that a circuit court of the United States could entertain jurisdiction in favor of citizens of other states, to determine and award by decrees binding in personam their shares in the estates.
In view of the cases cited, and the rules thus established, it is evident that the bill in this case goes too far in asking to have an accounting of the estate, such as can only be had in the probate court having jurisdiction of the matter, for it is the result of the cases that, insofar as the probate administration of the estate is concerned in the payment of debts, and the settlement of the accounts by the executor or administrator, the jurisdiction of the probate court may not be interfered with. It is also true, as was held in the court below in the case at bar, that the prior possession of the state probate court cannot be interfered with by the decree of the federal court. Still, we think there is an aspect of this case within the federal jurisdiction, and for which relief may be granted to the complainant, if she makes out the allegations of her bill under the other prayers, and the prayer for general relief therein contained. Under such prayer, a court of equity will shape its decree according to the equity of the case. Walden v. Bodley, 14 Pet. 164.
The complainant, a citizen of a different state, brings her bill against the executor and certain legatees named, who are likewise citizens of another state, and are all citizens of Louisiana, where the bill was filed, except one, who was beyond the jurisdiction diction of the court; and, for the reasons stated in her bill, she asks to have her interest in the legacy alleged to be lapsed and the residuary portion of the estate established.
Court, and such jurisdiction cannot be limited or in anywise curtailed by state legislation as to its own courts. The complainant, it is to be noted, does not seek to set aside the probate of the will, which the bill alleges was duly established and admitted to probate in the proper court of the state.
The United States circuit court, by granting this relief, need not interfere with the ordinary settlement of the estate, the payment of the debts and special legacies, and the determination of the accounts of funds in the hands of the executor, but it may, and we think has the right to, determine, as between the parties before the court, the interest of the complainant in the alleged lapsed legacy and residuary estate, because of the facts presented in the bill. The decree to be granted cannot interfere with the possession of the estate in the hands of the executor, while being administered in the probate court, but it will be binding upon the executor, and may be enforced against it personally. If the federal court finds that the complainant is entitled to the alleged lapsed legacy and the residue of the estate, while it cannot interfere with the probate court in determining the amount of the residue arising from the settlement of the estate in the court of probate, the decree can find the amount of the residue, as determined by the administration in the probate court in the hands of the executor, to belong to the complainant, and to be held in trust for her, thus binding the executor personally, as was the case in Payne v. Hook and Ingersoll v. Coram, supra.
entire settlement of the estate from the hands of the probate court, and denied the jurisdiction of the circuit court of the United States in the premises. We are of opinion that, to the extent stated, the bill set up a valid ground for relief; and, while all that it asks cannot be granted, enough was stated in it to make a case within the jurisdiction of the federal courts within the principles we have stated.
At the last term of the court, counsel in this case were invited to file, on or before the first day of the present term of court, briefs upon the question whether Frederick Tilton Davis, averred in the bill to be a resident of the State of Alabama, and outside of the jurisdiction of the court, is an indispensable party to the suit, and, in his absence, a dismissal of the cause required for want of jurisdiction in the court to proceed without him. These briefs have been filed, and we come now to consider this branch of the case. In so doing, it is essential to remember that the complainant's cause of action is primarily against the executor of the estate for a decree against it concerning the right of the complainant to recover because of the alleged lapse of the legacy to the Home for the Insane, and the consequent increase in the residuary portion of the estate to be distributed to the heirs of Mrs. Tilton because of the allegations contained in the bill. The Watermans and Davis are made parties to the bill, and asked to be excluded from a participation in the recovery because of the alleged renunciation of their rights in the succession to Mrs. Tilton. If it shall be found that they have not thus renounced their interest, and a decree be rendered in complainant's favor, they are entitled to participate in the recovery. They have no interest in common, however, with the complainant, and the shares of the complainant and other heirs are separate and distinct. The question is, therefore, is Davis an indispensable party to this suit, his absence creating a want of jurisdiction in the federal court to proceed without him?
"When there are several defendants in any suit at law or in equity, and one or more of them are neither inhabitants of nor found within the district in which the suit is brought, and do not voluntarily appear, the court may entertain jurisdiction, and proceed to the trial and adjudication of the suit between the parties who are properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties not regularly served with process nor voluntarily appearing to answer."
administer such relief as may be in its power between the parties before it. And there is a third class whose interests in the subject matter of the suit and in the relief sought are so bound up with that of the other parties that their legal presence as parties to the proceeding is an absolute necessity, without which the court cannot proceed. In such cases, the court refuses to entertain the suit when these parties cannot be subjected to its jurisdiction."
The relation of an indispensable party to the suit must be such that no decree can be entered in the case which will do justice between the parties actually before the court without injuriously affecting the rights of such absent party. 1 Street's Fed. Equity Practice § 519.
If the court can do justice to the parties before it without injuring absent persons, it will do so, and shape its relief in such a manner as to preserve the rights of the persons not before the court. If necessary, the court may require that the bill be dismissed as to such absent parties, and may generally shape its decrees so as to do justice to those made parties, without prejudice to such absent persons. Payne v. Hook, 7 Wall. 425.
Applying these principles to the case at bar, we are of opinion that the presence of Frederick T. Davis as a party to the suit is not essential to the jurisdiction of the federal court to proceed to determine the case as to the parties actually before it. In other words, that, while Davis is a necessary party, in the sense that he has an interest in the controversy, his interest is not that of an indispensable party without whose presence a court of equity cannot do justice between the parties before it and whose interest must be so affected by any decree to be rendered as to oust the jurisdiction of the court.
and the Watermans are entitled to share, without prejudice to the rights of Davis. It may direct the retention of his share in the hands of the executors, to be adjudicated in some other suit, or may otherwise shape its relief so as to do justice to the parties before the court without affecting his interest.
Upon the whole case, we are of opinion that that federal court has jurisdiction for the purpose of ascertaining the rights of the complainant to recover as against the executor, and the interest of the persons before the court in the fund. While the court could make no decree which would interfere with the possession of the probate court, it had jurisdiction to entertain the bill and to render a judgment binding upon the parties to the extent and in the manner which we have already stated. We are therefore of the opinion that the court below erred in holding that there was no jurisdiction to entertain this suit, and the decree is reversed and the cause remanded to the Circuit Court of the United States for the Eastern District of Louisiana for further proceedings in accordance with this opinion.

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