826
FEDERAL 'BEPOBTER,
vol. 60.
rent.l.trxiAgto inducehiB Judgment creditor to settle:withhim at a small .What would his stateinentto Oun,ter cause a to make,lll1ijersuch cmcumstanees1:Wihat inquiry oouJcl lQ;$e that to aiiy: more information? WeD).lllilt b.Qldwith the citetlit oourtthat neither Gunter & Munson, Ilor,eitllerof them, had notice· of Meek's unrecorded deed at the date of th", levy of their execution·.· >Did tlley levy on the land, or only on Puri.l1toi:l1siintere$t in the.lalnd?The land wasshowIl by the reeordstQ :b' unqualified estate in' fee' granted to him by the . ltta.te. Why .lIlhQn,ld:!the slleriffnot levY on the laud? And why:btitcontended thOif he only levied on the interest of Purintoll Because:thesheriff recites in the deed he gave the PUl'CbRlilftl'S.tbat"I,T. (he, sheriff as aforesaid, did, upon the MY of Janl1a11'Yr A. D.1878,levy on and seize all the estate, .title, and. intin'eSt which the said defendant so had in and hereinafter described;" said premises being the land in cootroversy. The words recited above, indicating the levy, are,the very: words which the statute useS'in dedlaringwhat asheriff's dee<Lto land sold under execution shall convey. The deed, in thUI paiticular, is in the form in universal use in Texas in 1878, and now, in COllyeying land sold by sheriffs' under execution. The land the record to be the property of the defendant in the execution, 'ttwas the duty oUhe sheriff to levy on and seize the land. is either destroyed Theexecl1tion, with the sheM's ,return' or lost,"so that it cannot now be found. It is admitted that the sheriff' ha(t a ·valid execution1 and· that 'he leTied it, executed it, and returned it to the court out of which it issued. The presumption is thathelevied it properly. There is nothing in the recitations of his deed to rebut that presumption, or to show in what words he indorsed on the execution.' his levy on the land. If it is assumed that he used the same indorsing his levy op. the execution that are in the reciW:ln the deed, in our view, he levied on the land' as fully as he could have done by any other form of words. the unrecorded deed to :Meek was Against the void. The whole 11ght, title, and interest in the land was Purinton's, and subject to tlle levy. We :find no error in the decree. It is affirmed. ' v. HULL
et al.
(Circuit Court, N. D. ,Iowa/Cedar Rapids Division. Marcb 24, 1894.) 1. NATIONAL BANKS-AsSESSMEN'l'ON STOCK-LIABIJ,ITY OF ESTA1·ES.
a.
The estate of a owner of IllWonaI bank stock Is liable (Rev. § 5152) to an assessment levied a.galnst his executors in consequence of the failure Of .the his dea.th.
at.
SAME-:FEI>ER:ALJURISDICTlON....LEsTATES·IN POSSESSION OF PROBATE COURTS.
A court is I1()t of jurisdlction-oth'erwise vested in itof a.. suit against the executors .of an estate by the fact that the estate is in the possession of a state probate for purposes of administration; and the federal court has jurIsdiction to adjudge whether a liability exIsts, but cannot issue executIon :to enforce the same.
WICKHAM t1. Hl.!LL.
327
8.
SAME>-LIMITATION OF ACTIONS.
An action was brought against the executors or an estate to establish Its l1abll1ty for an assessment on certain shares of national bank stock. The estate was at the time In possession of an Iowa probate court for plliposes of administration, for which reason the federal court could not enforce the liability, if adjudged to exist. Defendants set up the limitation contained in the Iowa statute (Code, § 2421) regulating the settlement of estates. ifIeld, that the federal court would not pass upon the question whether this provision debarred complainant from sharing In the estate, for, as the claim established in the federal court must be presented for allowance in the probate proceedings, the better practice was to remit the question to the probate court.
This is a bill filed by A. W. Wickham, as receiver of the First National Bank of Ellsworth, Kan., against Nelson Hull and John T. Liddle, executors of the last will of O. N. Hull, deceased, to enforce collection of an assessment upon certain shares of capital stock of the bank, belonging to the estate. The cause is submitted on bill and answer. Mills & Kreler, for complainant. C. J. Deacon, for defendants. SHIRAS, District Judge. This cause is submitted to the court upon the bill and answer, from which the following faCts are gathered: On the 11th day of September, 1884, the First .National Bank of Ellsworth, Kan., was organized under the provisions of the national banking act, having a capital stock of $50,000, and it continued in business until January 26, 1891, when it closed its doors. On the 11th day of February, 1891, the complainant was duly appointed receiver of said bank by the comptroller of the currency, and on the 11th day of December, 1891, 'the said comptroller made an assessment of 70 per cent upon the capital stock of said bank, and authorized the receiver to enforce the payment of such assessment against the stockholders of the bank. Previous to December, 1889, O. N.· Hull, then a resident of Cedar Rapids, Iowa, had become the owner of 40 shares of the capital stock of said bank. On the 16th day of December, 1889, said O. N. Hull died, leaving a will, which was, on the 14th of January, 1890, duly admitted to probate in the district court of Linn county, Iowa, and the defendants, Nelson Hull and John T. Liddle, were duly confirmed as executors, and notice of their appointment was given by publication for three successive weeks, as required by the statute of Iowa, the first publi.:?3tion being made on the 19th of January, 1890. At the time of the death of O. N. Hull, 20 shares of the capital stoek of the Hamed bank were held by certain creditors of said Hull, having been previously pledged to them, and the executors, shortly after the probate of the will, redeemed said shares of stock by paying the indebtedness for which the same had been pledged, and on February 26, 1890,. they surrendered the certificates to the bank, and procured the issuance of a new certificate for said 20 shares, the same being issued to them as executors of said O. N Hull, deceased. The present suit was commenced on the 12th day of June, 1893; it being averred in the bill that on the 26th day of January, 1891,
328
;REPORTER,
when. the bank ceal;led to do businl;lSSI' the; defenda.I1ts, .as; . capand had i.!Liled to pay the assessment thereonl as well as the assessment up<jn ,such other shares of stock as the estate; The bill prays for a disclosure-of the total Iil'tock belonging to said estate, and for a decree orderijig payment by defendants of the amount found to be due upon the assessment made upon the capital stock. In view of the in section 5152, Rev. St., that executors holding stock in It national bank shall not be personally liable as s1:9ckholders, it cannot be and is not claimed that a decree the defendants personally, but only in their representative capacity, and to be satisfied out of the assets of the estate. . The first .position taken by the defendants is. that no claim exists against the estate; that when O. N. Hull died the bank was then a going concern, and his liability to be assessed upon the shares of stock owned by him was merely a contingency; and that his estate in the hands of his executors can only be subject to the payment of such demands as were existing claims at the time of the death of the testator. The liability to respond to assessments made upon the capital. stock i$ purely statutory in its origin, and the extent and nature of the obligation is determined by the provisions of the statute creating the same. Section 5151 of the Revised Statutes enacts that "the shareholders of every national banking association shall be, held individually respdrisible, equally and ratably, and not one for another,for all contracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereo'f,in addition to the amount invested in· such shares." Under the provisions of this section there existed a personal liability against O. N.. iillull for allcontracts,debts, and engagements of the bank, in force a:t the date· of his death. After his death no additionall liability could be created against O. N. Hull personally by the creation of new debts orobligationsoh: part of the bank. Provision for such cases is made in section, 5152, Rev. St., in which it is enacted that "persons holding'stock as executors, administrators, guardians ()ll' 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,. andcompetellt to act and hold the stock in his own name." Upon the death of a stockholder the legal title of the shares may pass to his executor or administrator, but the liability fo:r the debts of the bank does not follow the transfer of the title to the execntoror administrator, but the statute declares that the liability for the debts shall attach to the estate of the deceased. In other words,theel!ltate is put in the place of the deceased owner, and the statutory liability will exist against the estate, and not . against the executor individually. In Richmond,v. Irons, 121 U. S. 27-55, 7 Sup. 01. 788, it was contended thut,the 'personal liability' of the intestate for assess-
?f Silill.'.J>e;_.liI."r.c . H.;
WICKHAM V. HULL.
329
ments upon the capital stock did not survive as against an istrator, nor as against the funds of the estate in his hands; but this contention was overruled, it being held that under the provisions of the national bank act "the individual liability of the stockholders is an essential element in the contract by which the stockholders became members of the corporation. It is voluntarily entered into by subscribing for and accepting shares of stock. Its obligation becomes a part of every contract, debt, and engagement of the bank itself, as muc!:.. so as if they were made directly by the stockholder instead of by the corporation. There is nothing in the statute to indicate that the obligation arising upon these undertakings and promises shall not have the same force and effect, and be as binding in all respects, as any other contracts of the individual stockholder. We hold, therefore, that the obligation of the stockholder survives as against his personal representatives." Under the ruling of the supreme court in that case, if at the time of the death of O. N. Hull there ensted a personal liability against him under the provisions of section 5151, Rev. St., such liability would survive against his executors; and, if the liability was created after his death, and while the shares of stock formed part of his estate, then, under the provisions of section 5152, the estate became responsible for such liability, and under either state of facts a claim would exist against the estate. It is further contended on part of the defendants that,. granting the enstence of a claim against the estate, there is a lack of jurisdiction in this court to grant any relief in the premises, on the ground that the property of the estate is in the possession of the district court of Linn county, Iowa. From the admitted allegations of fact in the bill and answer contained it appears that the complainant was, when the suit was brought, and continues to be, a citizen of the state of Kansas, and sues in the capacity of a receiver of a national bank; and the defendants were, when the Buit was brought, and continue to be, citizens of the state of Iowa, and residents of the northern district thereof. If no relief can be granted in the case except a decree interfering with the sion of the property of the estate now held by the district court of Linn county acting as a probate court, then the objection to the exercise of jurisdiction would be well taken, notwithstanding the fact that the complainant and defendant are citizens of different states. Thus, in Byersv. McAuley, 149 U. S. 608, 614,615, 13 Sup. Ct. 906, a case in which the authorities are fully cited, it is held that "it is a rule of general application that where property is in the actual possession of one court, of competent jurisdiction, such possession cannot be disturbed by process out of another court;" and, further, that: "An administrator appointed by a state court is an officer of that court. His possession of the decedent's property is a possession taken in obedience to the orders of that com"!. It is the possession of the court, and it is a possession which cannot be disturbed by any other court." It appearing in this case that the will of O. N. Hull was filed for probate in the district court of Linn county, and that the estate
380
by th.at ,court, it follows, as. is held in Byers the cannot be compelled ,to submit to two courtlil. of., jurisdiction, touching the dispf\:tP.,eproperty<in their hands belonging to the estate; and, state court hadattacl,1ed before this suit this ,couTt is debarred ,from interfering with the lind controlPfthe property forming the estate which is int1).estate court. But it is also expressly heldil); "v. McAultly tllat tlie, fact that the pOl'lsession of the estate ,to the court which has undertaken to :the same the la,ws, of the state does not prevent Of, the. Unitejl. States bom taking jUrisdiction over suits brqugl,1t. by citizens ot a state than that whereof the executo;r,p,ltadnlinistrator ,.is a for the purpose of establishing a claim,against or, for the purpose of sl,1alle in the, estate belonging to the plaintiff, or other settling andinsupppI,'t of this principle the cases of Payne like v. lIook, 7 Wall. 425; Yonley v. Layender, 21 Wall. 276; Hess v. Reynolds,l,l!J.P.:s' 73, Ct. 377;, and Borer v. Chapman, 119 587; 1 "S'qp. at. cited!. "These authorities clearly establish that, the principle ,of noninterfe,rence with the posliUl$ion,apjl,!control court of probate over the property of an estate being by it, does not defeat the right of other, com1s W.hear and, adjudge tbe ,!Iuestion of the existence, of theJlebts tJ,ue from the testator or intestate. 'Therefore, il); th,e, ;beforetb.iscourt" the fact that the estate of O. N. Qf,administration before the district court of Linncoullty,.!owa, does'pot defeatth,ejuris(,1.i,ction of this court over the question whether., upder the statutes of the United States, a Jiability on part was orwali!not created by the assessment, ord,ered by" tAe, the shares of the capEllsworth. .That quesital stock of the ,First Na.tional tiQIl can be heard and qetermined willi,.out interfering with the pos\ session of the pl'operty byth;e state cour;t. The limitations on suell, JLjudgment, however, are clearly stated m,,¥pnley v" Laveuder,'IjIUPJ'a, and Byers v. McAuley, supra, in wb,ich it is held that the judgment Creates no lien upon the propthe levy of an execution el'tyof',the, estate,nol',does it fGi' its enforcelllent. Thedudgmentsimply determines the existence of a claiJnagainst the estate, and adjudges the amount thereof, "but the estll'blished must 'take its place and share of the estate as administered by the court, and it cannot be enforced directly against the property of the decedent." Byers v. McAuley, 149 U. K620, 13, Sup. Ct. 906. As the bill in this case ilil as, to allow a d,ecree determiping solely the question :of, the .of liability on part of the estate of, O. N. Hull,fQr the assessment .made by the 'comptroller, it followlil that the court h!UJ jurisdiciipn,;tg:determinethat issue. As a further defense, the answer, COntains a plea of the., statute of limita.tipUIil,) bllse,q, upon sections; :;l420and 2421 of the Code" of Iowa, cla,ims against estates is v. the
WICKHAM t1. HULL.
331
are to Le paid, ranging them in five classes, and which declare that I'all claims of the fourth of the above classes not filed and proved within twelve months of the giving of the notice aforesaid, are foreyer barred, unless the claim is pending in the district or supreme court, or unless peculiar circumstances entitle the claimant to equitable relief." Counsel for the defendants has submitted a very full brief of the authorities upon the general question of the availability of state statutes of limitation as defenses to suits pending in the courts of the United States, but the record does not present ,this general question. ,The answer does not set forth a plea based upon anyone of the several clauses of the statute existing in Iowa which limits the time within which the actions named therein may be brought, and therefore the record does not present the mooted question whether these provisions of a state statute can be availed of to defeat a suit in a court of the United States based upon a cause of action created by an act of congress, as in the case of suits for infringements of patents, for the collection of assessments on national bank shares, and other like matters; or whether the right to plead the state statute is restricted to causes of action which come within the legislative jurisdiction of the states. The limitation actually pleaded in the answer is that contained in section 2421 of the Code, which is part of the chapter regulating the settlement of estates, and the powers and duties of the courts of pr()bate of the state. The question whether the provisions' of that section debar the complainant from sharing in the estate will properly come up when application is made to the probate court for leave to file the claim in the court. Even if it be true that this court might pass upon the question, it is certainly true that, un· less previously adjudicated, the probate court has full jurisdiction to all questions arising under the provisions of section 2421 of the Code, of Iowa; and, in my judgment, it is the better practice to leave the decision of the plea based on the state statute to the state court. As already pointed out, t}lis court cannot award execution to complainant, nor otherwise enforce payment of the claim, and of neeessity the complainant must resort to the probate court in order to share in the proceeds of the estate. It is when application is made to the probate court that the question arises whether,by reason of the lapse of time, the creditor is debarred from sharing in the estate; and hence, waiving the question of the jurisdiction of this court, I hold it the better course to remit the decision of the matter to the state court. The decree of this court will therefore, be limited to the question whether the assessment made by the comptroller upon the capital stock of the bank perfected a clahn against the estate of O. N. Hull, and, if so, for what amount. It b("ing admitted that the estate held 40 shares of the capital stock at the date of the assessment, 20 of which stood in the names of the executors, and that the call was for 70 cents on the dollar, I hold that when said asseEsment was made a claim for $3,040 was thereby perfected against said estate of O. N. Hull. Decree accordingly.
FEDERAL'
BILLING etl!-l. v. GILMER. .(Olrcult Court of Appeals;. Circuit. J annary SO; 1894.) No. 188. 1. RES
as tln!llly made up, asserted,· on complainant's part, a pledge of the stock in . a continuill,J pledge in 1876, Defendant denied the pledge ,eitllti;rc1lSe, and claimed to be. tile owner of the stock from 1871. The materia11,ssue involved was the nature of the transaction had in 1875 in relAtion'to the stock. There was a hearing on the pleadings and the testimoD)r' as noted, whleh reSulted In a tinal decree dismissing the bill. was atIirmed by the state supreme cour1;.i]Jeld., that the to· thtil ownership of the stocltwas res .judicata, and comp4dtiilllt could . not. thereafter maintaI.D a sliit in a federal court to ,, compel &'oonveyance to h i m . ' ' 2: SAl1tE;"'i,""
OF CAU8E$OF AC'l'ION. '. . Ai 'bUI 'Wll$ brought ,to redeem certain corPorate stock, and the pleadings,
M a::lilq1t in a federal court" o.· decree of an AlAbama chancery court, dis.mfll.\lill,J.a blll j)etWej:1nthe. sawe, .parties,was setup in bar. This de. ,rendered in. rac/!-t1(}n"a,!t1l ,it Is settled Al4bama that a decree ill vacation dismissing o....b111 on. demurrer without giving opportunityto amend Is erro:neous.'.l:h1s decree, however, had been affirmed py thesta.tesnpreine court. Be'lIJ., that the, atftrmance necessarily, involved an /-I,djud1ca1;1on that thltdecree was rendered on issues.of fact; and thereas res judicata could not be avoided by claiming that it was demurrer· ·1
,
Appeal from the Circuit Court of the United States for the Middle District:of A1a;bama. This was'a bill in equity, brought by James N. Gilmer against Josiah:M0rril!l and F. M. Billing, to compel a transfer of certain corporate stock, and an accounting for dividends thereon. Morris having.died,his executors, B. J. Baldwin, Hulit Baldwin, and F. M. Billing,were substituted as defendants. An opinion was rendered ona-plea setting' up a prior adjudication (46 Fed. 333), and afterwardfll there was a decree for complainant (55 Fed. 775), from which this appeal is taken. Thomas' Semmes, H. O. Tompkins, and Alex. Troy, for appellants. W. A. Gunter, E. H. Farrar, and E. B. Kruttschnitt, for appellee. Judge, and LOCKE all;4;l TOULMIN, District Ju4;lges. District Judge. This was a bill filed by appellee, J. M. QUll\er, <lJl the 9th day of January, 1890, against Josiah Morris andll'· to compel the transfer of 60 shares of the capital oftil,a Elyton Land ,Company, a corporation under ,the laws of Alabapla, wNel;l.stock appeUee alleges, he had pledged with Morris; q,nd; to compel}forris to account to him for· the dividends thereon. The the .that in 1870 the appellee, being·the owner of certain stock of the Elyton Land Company, and being indebted to appellant Josiah Morris for money paid for him on account of the su'bscription to said the same with Morris, to hold as a pledge for the debt, and transferred by indorsement the certifi·
