Source: https://supreme.justia.com/cases/federal/us/242/394/
Timestamp: 2019-04-23 09:56:02+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 242 › Baker v. Baker, Eccles & Co.
The rule that the personal estate of an intestate has its situs at his domicile, and is subject to be administered and distributed according to the domiciliary laws, is merely a rule of the common law, which the states may adopt, modify or reject, as their policies dictate.
Each state has the power to control and administer the personal assets of an intestate found within her borders, such as debts due from a local corporation or the shares of its stock, to satisfy the rights of her own citizens in the distribution of such assets.
No state therefore has the power, by probate or other proceedings in rem, to fix the status as to administration, and determine the course of devolution, of personal property of an intestate situate beyond her borders and within the domain of another state.
Under the Fourteenth Amendment, the courts of one state are without power to determine by an action in personam the domicile of a decedent or the devolution of his personal assets situate in another state, as against persons, residents of the latter, who do not appear in the proceedings and are notified by publication only.
to extraterritorial effect if it be shown that it was rendered without jurisdiction over the person sought to be bound.
The federal question presented in this record is whether the Court of Appeals of Kentucky gave such faith and credit to certain judicial proceedings of the State of Tennessee as were required by Article IV, § 1, of the Constitution, and the act of Congress passed in pursuance thereof, Act of May 26, 1790, c. 11, 1 Stat. 122, Rev.Stats. § 905.
The facts are as follows: Charles Baker died in September, 1912, the owner of certain real and personal property in Hardin County, Tennessee, and of 270 shares of stock of Baker, Eccles & Company, a Kentucky corporation, of the par value of $27,000, and a claim of several thousand dollars against that corporation for surplus profits. He left a widow, Josie C. Baker, now plaintiff in error, and a mother, Augusta H. Baker, one of the defendants in error. He appears to have left no children or descendants, nor any considerable indebtedness, and the personal estate, if distributable according to the laws of Tennessee, would go entirely to the widow; if distributable according to the laws of Kentucky, it would go one half to the widow, the other half to the mother. The place of his domicil, admittedly determinative of the law of distribution, was in controversy.
Shortly after his death, the widow applied to the County Court of Hardin County, Tennessee, for letters of administration. The proceedings were ex parte, and her application was granted, the order of the court appointing her administratrix reciting that, at the time of his death, the residence of Charles Baker was in that county. Afterwards, and in December, 1912, the widow presented to the same court a settlement of her accounts as administratrix, and an order was made reciting that it appeared from proof that Charles Baker died intestate, and at the time of his death was a resident of Hardin County, Tennessee, and that he left no children or descendants of such surviving, but left surviving his widow, the said Josie C. Baker, and under the laws of Tennessee she, as widow, was entitled to all of the surplus personal property; whereupon it was ordered that she, as administratrix, transfer and deliver to herself, as the widow of the deceased, all of the personal estate in her possession, including the stock in the Kentucky corporation, the certificates for which she held. Subsequently, and on December 28, 1912, the widow, individually and as administratrix, filed in the Chancery Court of Hardin County, Tennessee, her bill of complaint against Mrs. Augusta H. Baker, the mother, as a nonresident of Tennessee and a resident of the State of Kentucky, and also against several persons who were residents of Tennessee, setting up her appointment as administratrix, averring that her husband died intestate, a resident of and domiciled in Tennessee, leaving his widow as his sole heir and distributee, and his mother and a brother his only heirs at law. The bill further set up the widow's ownership of the stock in Baker, Eccles & Company, and averred that the mother was asserting an interest in one half of the personal estate left by the intestate upon the theory that he died a resident of Kentucky and that, under the laws of that state, the mother was entitled to one-half of his surplus personal estate.
"that the said Charles Baker, at the time of his death, was a citizen of and had his domicil at Savannah, Tennessee, and that the complainant, as his widow, is his sole distributee, and as such entitled to all of the personal estate of the said Charles Baker after payment of such debts as were owed by him at the time of his death,"
and also that the title to the stock of Baker, Eccles & Company was in complainant, and that she was entitled to have a new certificate or certificates in her own name issued by the corporation in lieu of the certificates issued to said Charles Baker, and was entitled to receive from the corporation the amount of the accumulated profits and surplus and other amounts due from it to the decedent.
one half of these to the widow, the other half to the mother. This judgment has only historical importance, since the Kentucky Court of Appeals in the present case held it invalid as against the widow because of failure to comply with the local law respecting notice to her.
of the pertinent Tennessee law, the case was submitted for hearing, and it was adjudged that the widow's petition be dismissed. The widow appealed to the Kentucky Court of Appeals, and that court, having determined the judgment of the McCracken Circuit Court in the mother's administration suit to be invalid as against the widow, held that the judgments of both Tennessee courts were invalid as against the mother because entered without process of law as against her, and then, passing upon the question of fact as to the domicil of Charles Baker, found upon the evidence that he was domiciled in the State of Kentucky and his personalty was distributable according to the laws of that state, and affirmed the judgment, with a modification directing the lower court to enter a judgment that Charles Baker died a resident of Kentucky, that his mother and his widow were each entitled to one half of his personal estate situate in Kentucky at the time of his death, after the payment of his debts, that Baker, Eccles & Company should cancel all certificates of stock issued to Charles Baker, and reissue one half of these to the widow and the other half to the mother, and that the lower court embody in the judgment such other matters as would, after the payment of debts, distribute equally between the widow and the mother all other personal estate situate in Kentucky of which Charles Baker died possessed. 162 Ky. 683. To review this judgment upon the federal question, the widow brings the case here upon writ of error.
personal property situate in Kentucky, or as conclusively determining the fact of the domicil of the decedent as affecting that right, in view of the failure of the Tennessee courts to acquire jurisdiction over her person or over the corporation, Baker, Eccles & Company.
It is the fundamental contention of plaintiff in error that the personal estate of an intestate decedent is a legal unit, having its situs at the owner's domicil; that the title to the whole of it, wherever situate, is vested in the duly qualified domiciliary administrator, and not in the distributees, and that its distribution is governed by the law of the domicil of the deceased owner. Wilkins v. Ellett, 9 Wall. 740. Conceding that such is the general rule of law, it is so not because of any provision of the federal Constitution, but only because the several states, or most of them, have adopted it from the common law into their respective systems. And the question remains, how is the fact of decedent's domicil to be judicially ascertained as a step in determining what law is to govern the distribution? Obviously, if fundamental principles of justice are to be observed, the ascertainment must be according to due process of law -- that is, either by a proceeding in rem in a court having control of the estate or by a proceeding in personam after service of process upon the parties to be affected by the judgment.
state of the debtor's domicil may impose a succession tax. Blackstone v. Miller, 188 U. S. 189, 188 U. S. 205. It is equally clear that the state which has created a corporation has such control over the transfer of its shares of stock that it may administer upon the shares of a deceased owner and tax the succession. See Matter of Bronson, 150 N.Y. 1, 9; Matter of Fitch, 160 N.Y. 87, 90; Greves v. Shaw, 173 Mass. 205, 208; Kingsbury v. Chapin, 196 Mass. 533, 535; Dixon v. Russell, 79 N.J.L. 490, 492; Hopper v. Edwards, 88 N.J.L. 471; People v. Griffith, 245 Ill. 532. The rule generally adopted throughout the states is that an administrator appointed in one state has no power virtute officii over property in another. No state need allow property of a decedent to be taken without its borders until debts due to its own citizens have been satisfied, and there is nothing in the Constitution of the United States aside from the full faith and credit clause to prevent a state from giving a like protection to its own citizens or residents who are interested in the surplus after payments of debts. All of which goes to show what plaintiff in error in effect acknowledged when she brought her present action in a Kentucky court -- that the Tennessee judgments had no effect in rem upon the Kentucky assets now in controversy. She invokes the aid of those judgments as judgments in personam. But it is now too well settled to be open to further dispute that the "full faith and credit" clause and the act of Congress passed pursuant to it do not entitle a judgment in personam to extraterritorial effect if it be made to appear that it was rendered without jurisdiction over the person sought to be bound.
This rule became established long before the adoption of the Fourteenth Amendment, as a result of applying fundamental principles of justice and the rules of international law as they existed among the states at the inception of the government. Notwithstanding that Mills v.
Mr. Justice Story, who wrote the opinion in Mills v. Duryee, in his treatise on the Conflict of the Laws, published in 1834 (§ 609), declared that the "full faith and credit" clause and the act of Congress did not prevent an inquiry into the jurisdiction of the court to pronounce the judgment, and this view was adopted and made the basis of decision by this Court in D'Arcy v. Ketchum (1850), 11 How. 165, which was followed by Thompson v. Whitman, 18 Wall. 457, 85 U. S. 459, with a review of many cases.
intimated, if not held by some of the state courts, that a personal judgment, effective within the territory of the state, could be rendered against a nonresident defendant who did not appear and submit himself to the jurisdiction, provided notice of the suit had been served upon him in the state of his residence, or had been published in the state within which the court was situate pursuant to the provisions of a local statute. See Smith v. Colloty, 69 N.J.L. 365, 371. As was said by Mr. Justice Field, speaking for this Court in Pennoyer v. Neff, 95 U. S. 714, 95 U. S. 732, it is difficult to see how such a judgment could legitimately have force even within the state. But, until the adoption of the Fourteenth Amendment (1868), this remained a question of state law, the effect of the "due process" clause of that amendment being, as was held in the case just mentioned, to establish it as the law for all the states that a judgment rendered against a nonresident who had neither been served with process nor appeared in the suit was devoid of validity within as well as without the territory of the state whose court had rendered it, and to make the assertion of its invalidity a matter of federal right.
The fundamental requisite of due process of law in judicial proceedings is the opportunity to be heard. Louisville & Nashville R. Co. v. Schmidt, 177 U. S. 230, 177 U. S. 236; Simon v. Craft, 182 U. S. 427, 182 U. S. 436; Grannis v. Ordean, 234 U. S. 385, 234 U. S. 394. To hold one bound by the judgment who has not had such opportunity is contrary to the first principles of justice. And to assume that a party resident beyond the confines of a state is required to come within its borders and submit his personal controversy to its tribunals upon receiving notice of the suit at the place of his residence is a futile attempt to extend the authority and control of a state beyond its own territory.
an administratrix, it is controlled by Thormann v. Frame, 176 U. S. 350, and Overby v. Gordon, 177 U. S. 214, 177 U. S. 227. But, it is pointed out, in this case, the county court went beyond the bare appointment of an administratrix, and proceeded to a settlement and distribution of the estate. Moreover, plaintiff in error relies not merely upon this judgment, but upon the decree in the chancery court of the same county, which in form specifically determined her exclusive right to the Kentucky personalty. It results, however, from what we have already said that this right could not be conclusively established by any Tennessee court as against a resident of Kentucky who was not served with process and did not appear therein, and that the Kentucky courts did not go counter to the federal Constitution and the act of Congress in refusing to give faith and credit to the Tennessee judgments.
to pass upon the subject matter, either by service of process or by their voluntary appearance, it must in many cases be impossible to have a single controlling decision upon the question. In some cases, the ideal distribution of the entire personal estate as a unit may thus be interfered with; but whatever inconvenience may result is a necessary incident of the operation of the fundamental rule that a court of justice may not determine the personal rights of parties without giving them an opportunity to be heard.
* Borden v. Fitch (1818), 15 Johns, 121, 143-144; Aldrich v. Kinney (1822), 4 Conn. 380, 383; Hall v. Williams (1828), 6 Pick. 232, 242-245; Miller v. Miller (1829), 1 Bail. 242, 248; Hall v. Williams (1883), 10 Me. 278, 287; Wernwag v. Pawling (1833), 5 Gill & J. 500, 507. See also Phelps v. Holker (1788), 1 Dall. 261, 1 U. S. 264; Curtis v. Martin (1805), 2 N.J.L. 399, 405, 406e; Rogers v. Coleman (1808), 3 Ky. 413, 415; Kilburn v. Woodworth (1809), 5 Johns. 37, 41; Fenton v. Garlick (1811), 8 Johns. 194, 197; Shumway v. Stillman (1825, 1831), 4 Cow. 292, 294, 6 Wend. 447, 449, 453; Starbuck v. Murray (1830), 5 Wend. 148, 156; Bissell v. Briggs (1813), 9 Mass. 462, 468; Whittier v. Wendell (1834), 7 N.H. 257.

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