Source: http://supreme.nolo.com/us/299/217/case.html
Timestamp: 2019-04-26 13:51:09+00:00

Document:
1. Section 66, Title 12 U.S.C., declares that a person holding stock in a national banking association as executor shall not be personally subject to any liability as stockholder, but that the estate and funds in his hands shall be liable in like manner and to the same extent as the testator would be if living and competent to act and hold the stock in his own name. Held that the purpose of the latter clause is to make plain that, although the executor is exonerated personally, the estate is not; but the statute evinces no intent to prefer the assessments of stockholders' liability over other claims against the estate, or to exempt the receiver of the bank, in the collection of assessments, from pursuing the remedy prescribed by the local law for the collection of like claims. P. 299 U. S. 222.
2. Section 64, Title 12 U.S.C., imposes no lien for the amount of an assessment against a living stockholder, and § 66 imposes none against the estate of a deceased stockholder. P. 299 U. S. 224.
3. The statute creates an unsecured and unpreferred claim against a decedent's estate. Where the assessment has been made in the decedent's lifetime, an accrued and provable debt exists against his estate; if made after his death, a claim against the funds and assets of the estate accrues as of the date of assessment. P. 299 U. S. 224.
4. The receiver of the bank may enforce his claim based on the assessment only in conformity to the law of the forum governing recovery of debts of like nature. If he elect to proceed in a federal court, the judgment or decree will determine the validity and amount of the claim; but if payment is desired from assets under the control of a state probate court, the marshaling of the claim with others, its priority, if any, in distribution, and all similar questions, are for the probate court upon presentation to it of the judgment or decree of the federal court. P. 299 U. S. 225.
5. If the receiver prosecute his claim in a state court, the litigation will be governed (at least in the absence of federal legislation to the contrary) by the common and statutory law of the State. P. 299 U. S. 226.
6. If the State does not discriminate against the receiver's claim, in favor of others of equal dignity and like character, there is no warrant for exempting the claim from the effect of local statutes governing procedure or limiting the time for prosecution of action. P. 299 U. S. 227.
7. By the law of Illinois, claims against a decedent's estate, not exhibited to the court within one year from the granting of letters, are barred as to property and estate of the deceased which has been inventoried or accounted for by the executor or administrator, and claims may not be proved while they remain contingent; but opportunity is allowed to collect claims not presented within the year from assets subsequently discovered, whether the failure to present them earlier was due to negligence or to their contingent character, and if the claim is contingent, and the liability of the estate does not become absolute until after the expiration of the year, the creditor may recover from the distributees to the extent of the assets received by them respectively.
Held that a claim of a national bank's receiver against a decedent's estate, based upon an assessment of shares, was not entitled to satisfaction out of assets inventoried within one year after the granting of letters testamentary, where the insolvency of the bank, the levying of the assessment and the presentation of the claim to the Illinois probate court, all occurred after that year had expired. P. 299 U. S. 227.
Certiorari, 298 U.S. 649, to review a judgment affirming the rejection, by the Probate Court and by the Circuit Court of Cook County, Illinois, of a claim by the receiver of a national bank. The judgment here under review was not reviewable by the Supreme Court of Illinois, for want of a "certificate of importance."
In this case, we are concerned with the bearing of state law upon the enforcement of an assessment against the estate of a stockholder of a national bank.
there are no assets not inventoried within one year from the granting of the letters, or discovered after the expiration of that period.) The Appellate Court of the First District of Illinois affirmed the judgment. A certificate of importance, requisite for a review by the Supreme Court of the state, was refused. Certiorari was granted to resolve a conflict respecting the construction of relevant federal statutes.
"The stockholders of every national banking association shall be held individually responsible for all contracts, debts, and engagements of such association, each to the amount of his stock therein at the par value thereof in addition to the amount invested in such stock."
"Persons holding stock as executors, administrators, guardians, or trustees, shall not be personally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust funds would be, if living and competent to act and hold the stock in his own name."
of settlement. The principal object of the section was to prevent a personal liability from running against executors, administrators, trustees or guardians, who had purchased as trustees, or to whom had been transferred in their names, as trustees national bank stocks for the benefit of the trust estates. Having by such purchase voluntarily entered into a contingent liability for assessments, it might be claimed that a judgment de bonis propriis could be rendered against them. The main object of the section was to prevent personal judgments being rendered against such persons in whom the stock stood on the books of the bank, as trustees."
been made in the decedent's lifetime, an accrued and provable debt exists against his estate; if made after his death, a claim against the funds and assets of the estate accrues as of the date of assessment.
"The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply."
create such inconsistency or conflict as to require the overriding of the law of the state with respect to distribution of the estate of a decedent. Where, as here, a res has come into the possession and under the control of a state court, one having a right to go into the federal court, either by reason of diversity of citizenship, or because he is a federal officer, cannot obtain a judgment or decree entitling him to interfere with the administration of the res by the court having its possession. While he may not be denied his right to prosecute an action to judgment or a suit to final decree in the federal court, such judgment or decree can do no more than adjudicate the validity and amount of his claim. The marshaling of that claim with others, its priority, if any, in distribution, and all similar questions are for the probate court upon presentation to it of the judgment or decree of the federal court. [Footnote 9] Thus, though a receiver should resort to the United States District Court, he would need to present, in a probate court, any judgment obtained if he desired payment from the assets under the control of the latter.
conversely, if the law prescribes a suit in equity, the receiver cannot bring an action at law. And if, under the state statutes, demands against a decedent's estate must be proved in a probate court, the receiver cannot pursue some other form of action. This is not to say that a state may deny all remedy for the substantive right arising out of the federal statute (see Seabury v. Green, supra); it is merely to say that, if the state does not discriminate against the receiver's claim in favor of others of equal dignity and like character, there is no warrant for exempting the claim from the effect of local statutes governing procedure or limiting the time for prosecution of action.
"Sixth. All other debts and demands of whatever kind without regard to quality or dignity, which shall be exhibited to the court within one year from granting of letters as aforesaid."
accounted for, and shall cause notice to be published in the manner provided by § 60 of this Act, or give such other notice as the court may direct, of a day fixed upon, which shall be not less than three months after the date of such first publication, for the filing and exhibiting of further claims against said decedent, all claims not exhibited to the court prior to the date so fixed shall be forever barred as to the property and estate listed in such inventory, and the amount remaining due on all claims exhibited to the court on or prior to the day so fixed upon as aforesaid, including those filed within one year from the granting of letters, shall be paid pro rata out of such subsequently inventoried estate, saving, however, to infants, persons of unsound mind, and persons in the employment of the United States or of this State and residing outside of the United States the term of one year after their respective disabilities are removed to exhibit their claims."
It is apparent that the decision under review enforces the policy of the state evidenced by § 70 of the Administration Act as it has been uniformly applied to claims of like character.
The petitioner relies on Mortimer v. Potter, 213 Ill. 178, 72 N.E. 817, but it is not in point. The claim of the receiver for an assessment in that case accrued after the estate had been fully administered, and while the stock with respect to which assessment was levied was in the hands of a trustee to whom it was devised by the testator. Under the principles of Illinois law, as has been shown, such a devisee who received assets from the decedent's estate is liable for the assessment to the extent of those assets.
The petitioner also cites Zimmerman v. Carpenter, 84 F. 747, as authority in his favor. In that case, a circuit court of the United States entered a decree charging the assets in the hands of an executor with the amount of an assessment levied after the decedent's death. It is not clear from the opinion whether the court thought that § 66 creates a lien on estate assets from the date of the bank's failure or construed the section as creating a claim sui generis enforceable directly against assets in the possession of the executrix and under the control of a state court of competent jurisdiction. As we have shown above, either theory is wrong.
McClaine v. Rankin, 197 U. S. 154, 197 U. S. 161; Christopher v. Norvell, 201 U. S. 216, 201 U. S. 225; McDonald v. Thompson, 184 U. S. 71, 184 U. S. 73-74; Forrest v. Jack, 294 U. S. 158, 294 U. S. 162.
Matteson v. Dent, 176 U. S. 521; Forrest v. Jack, supra; Seabury v. Green, 294 U. S. 165.
In Witters v. Sowles, 32 F. 130, 140, and in Drain v. Stough, 61 F.2d 668, there are statements that the statute imposes a lien on estate assets. In Rankin v. Miller, 207 F. 602, 611, one ground of decision was that such a lien existed. So, in Drake v. Dilatush, 16 F.Supp. 120, the District Court for Eastern Illinois by decree imposed a lien upon the assets of a decedent's estate held by the executor, under circumstances like those presented in the instant case.
Kennedy v. Gibson, 8 Wall. 498; Price v. Abbott, 17 F. 506; Armstrong v. Trautman, 36 F. 275; Brown v. Smith, 88 F. 565; Stephens v. Bernays, 41 F. 401, aff'd, 44 F. 642; Rankin v. Herod, 140 F. 661. See also United States v. Weitzel, 246 U. S. 533, 246 U. S. 541.
McDonald v. Thompson, supra; McClaine v. Rankin, supra; Morgan v. Hamlet, 113 U. S. 449.
Keyser v. Hitz, 133 U. S. 138; Christopher v. Norvell, supra.
Suydam v. Broadnax, 14 Pet. 67; Union Bank v. Vaiden, 18 How, 503; Hyde v. Stone, 20 How. 170; Lawrence v. Nelson, 143 U. S. 215.
Yonley v. Lavender, 21 Wall. 276; Byers v. McAuley, 149 U. S. 608; Security Trust Co. v. Black River National Bank, 187 U. S. 211, 187 U. S. 227.
Chapter 3, � 71, §70 Ill.Rev.Stats., 1935.
Cahill's Ill.Stats.1923, c. 3, � 68; Johnson v. Tryon, 78 Ill.App. 158; Dunnigan v. Stevens, 122 Ill. 396, 13 N.E. 651; Foreman Trust & Sav. Bank v. Tauber, 348 Ill. 280, 180 N.E. 827.
Waughop v. Bartlett, 165 Ill. 124, 46 N.E.197; Durflinger v. Arnold, 329 Ill. 93, 160 N.E. 172.
Peacock v. Haven, 22 Ill. 23; Russell v. Hubbard, 59 Ill. 335; Shephard v. Rhodes, 60 Ill. 301; Shepard v. National Bank, 67 Ill. 292; Snydacker v. Swan Land Co., 154 Ill. 220, 40 N.E. 466; Union Trust Co. v. Shoemaker, 258 Ill. 564, 101 N.E. 1050; Chicago T. & T. Co. v. Fine Arts Bldg., 288 Ill. 142, 123 N.E. 300; People v. Small, 319 Ill. 437, 150 N.E. 435.
Snydacker v. Swan Land Co., 154 Ill. 220, 40 N.E. 466; Union Trust Co. v. Shoemaker, 258 Ill. 564, 101 N.E. 1050; Beebe v. Kirkpatrick, 321 Ill. 612, 152 N.E. 539; Durflinger v. Arnold, 329 Ill. 93, 160 N.E. 172; Whittemore v. Weber, 217 Ill.App. 628.
See the cases in note 19 Welch v. Wallace, 3 Gilman 490; Peck v. Stevens, 5 Gilman 127; Bull v. Harris, 31 Ill. 487; Dye v. Noel, 85 Ill. 290.
Roberts v. Flatt, 142 Ill. 485, 32 N.E. 484; Union Trust Co. v. Shoemaker, 258 Ill. 564, 101 N.E. 1050.
Strauss v. Phillips, 189 Ill. 9, 23, 59 N.E. 560; compare Blanchard v. Williamson, 70 Ill. 647. The petitioner cites cases to the effect that probate courts in Illinois act upon equitable principles. Some of these are collected in note 13 supra, but they go only to the point that, in probating claims against an estate, those courts recognize equitable doctrines, and do not remit a creditor to a court of equity if his claim is equitable, rather than legal. No statute or case has been found indicating that these tribunals have independent equity jurisdiction.

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