228

in the courts of that state, after the expira- | quires a right to subject the assets of the tion of the period limited by the order of the probate court, in which creditors may present claims against the deceased for examination and allowance, and after an allowance of the administrator's final account, and a final decree of distribution, such suit could not have been maintained.

We are now to consider whether such a suit can be successfully maintained in a Federal court by a nonresident owner of a claim against the estate of a decedent.

Be

estate to seizure and sale for the satisfaction of his debt, which he could not do by suing in the state court, that the whole estate, in case there were foreign creditors, might be swept away. Such a result would place the judgments of the Federal court on a higher grade than the judgments of the state court, necessarily produce conflict, and render the state powerless in a matter over which she has confessedly full control. sides this, it would give to the contract of Some general principles have become so a foreign creditor made in Arkansas a wider well settled as to require only to be stated. scope than a similar contract made in the One of these is that a foreign creditor may same state by the same debtor with a home establish his debt in the courts of the United creditor. The home creditor would have to States against the personal representative await the due course of administration for of a decedent, notwithstanding the fact that the payment of his debt, while the foreign the laws of the state relative to the admin- creditor could, as soon as he got his judg istration and settlement of decedents' es- ment, seize and sell the estate of his debtor. tates do in terms limit the right to estab- to satisfy it, and this, too, when the laws of lish such demands to a proceeding in the the state in force when both contracts were probate courts of the state. Union Bank v. made provided another mode for the comVaiden, 18 How. 503; 15 L. ed. 472; Law-pulsory payment of the debt. Such a difrence v. Nelson, 143 U. S. 215, 36 L. ed. 130, ference is manifestly unjust and cannot be 12 Sup. Ct. Rep. 440; Byers v. McAuley, supported. The administration laws 149 U. S. 608, 37 L. ed. 867, 13 Sup. Ct. Rep. of Arkansas are not merely rules of practice for the courts, but laws limiting the rights Another principle, equally well settled, is of parties, and will be observed by the Fedthat the courts of the United States, in en-eral courts in the enforcement of individual forcing claims against executors and administrators of a decedent's estate, are administering the laws of the state of the domicil, and are bound by the same rules that govern the local tribunals. Aspden v. Nixon, 4 How. 498, 11 L. ed. 1074.

906.

"The circuit courts of the United States, with full equity powers, have jurisdiction over executors and administrators, where the parties are citizens of different states, and will enforce the same rules in the adjustment of claims against them that the local courts administer in favor of their own citizens." Walker v. Walker, 9 Wall. 745, sub nom. Walker v. Beal, 19 L. ed. 814.

rights.

It is possible, though not probable, that state legislation on the subject of the estates of decedents might be purposely framed so as to discriminate injuriously against the creditor living outside of the state; but if this should unfortunately ever happen, the courts of the United States would find a way, in a proper case, to arrest the discrimination, and to enforce equality of privileges among all classes of claimants, even if the estate were seized by operation of law and intrusted to a particular jurisdiction."

ministrator, as required by this act, before the end of two years from the granting of letters, shall be forever barred," begins, on the granting of letters of administration, to run against persons under age out of the state.

In Morgan v. Hamlet, 113 U. S. 449, 28 L. ed. 1043, 5 Sup. Ct. Rep. 583, it was held In Yonley v. Lavender, 21 Wall. 276, 22 that the statute of Arkansas, that "all deL. ed. 536, it was decided that while a non-mands not exhibited to the executor or adresident creditor may get a judgment in a Federal court against a resident administrator, and come in on the estate according to the law of the state for such payment as that law, marshaling the rights of creditors, awards to debtors of his class, yet he cannot, because he has obtained a judgment in a Federal court, issue execution and take precedence of other creditors who have no right to sue in the Federal courts, and if he do issue execution and sell lands, the sale is void.

The doctrine of the case of Yonley v. Lavender, 21 Wall. 276, 22 L. ed. 536, was approved in Byers v. McAuley, 149 U. S. 615, 37 L. ed. 871, 13 Sup. Ct. Rep. 906, wherein it was held that the administration laws of a state are not merely rules of practice for

The reasoning of this case is worthy of the courts, but laws limiting the rights of quotation:

"The several states of the Union necessarily have full control over the estates of deceased persons within their respective limits, and we see no ground on which the validity of the sale in question can be sustained. To sustain it would be in effect to nullify the administration laws of the state by giving to creditors out of the state greater privileges in the distribution of estates than creditors in the state enjoy. It is easy to see, if the nonresident creditor, by suing in the Federal courts of Arkansas, ac

parties, to be observed by the Federal courts in the enforcement of individual rights.

In Pulliam v. Pulliam, 10 Fed. 55, 78, the distinction between ordinary statutes of limitation and statutes of administration of the estates of decedents, limiting the time within which creditors must prove their claims, is pointed out in respect that the lat ter are rules of property as well as statutes of limitation, and it was said by Hammond, J.. after citing Union Bank v. Vaiden, 18 How. 504, 15 L. ed. 473; Payne v. Hook, 7 Wall. 430, 19 L. ed. 261, and other cases:

*230

"These cases, like many others, are only intended to protect the judicial power of the United States from encroachment by preserving to it the remedies and forms of proceeding which are granted with it, and not at all to set it above the legislative control of the states in matters pertaining to their Jurisdiction. The cases cited from the supreme court do not, in my judgment, establish or in the least authorize the doctrine that state statutes, prescribing the time within which a creditor of a decedent must present or sue upon his claim in order to entitle him to share in the assets and having the effect these do, are not binding on this court."

against the estates of decedents than claims against living persons. Can that policy be defeated by a ruling of the Federal courts that the provisions of the state in that regard do not apply to parties bringing suit in those courts? In that event, the very mischief pointed out and deprecated in Yonley v. Lavender would ensue, that "the rights of those interested in the estate who are citizens of the state where the administration is conducted are materially changed, and the limitation which governs them does not apply to the fortunate creditor who happens to be a citizen of another state." The answer given to such a proposition by this court in the case just cited was: "This In Dodd v. Ghiselin, 27 Fed. 405, involv- cannot be so. The administration laws of ing the administration of a decedent's es- Arkansas are not merely rules of practice tate, and where it was contended that non- for the courts, but laws limiting the rights resident minors had a right to have the laws of parties, and will be observed by the Fed. of the state of Missouri regulating the mat-eral courts in the enforcement of individual ter disregarded in the Federal court, but it was held otherwise, per Brewer, J.: That the law of the state providing for the settle ment of a deceased person's estate is binding upon the Federal as well as upon the state

courts.

In Miner v. Aylesworth, 18 Fed. 199, it was held by the circuit court of the United States for the district of Rhode Island, as against nonresident complainants, that, under the Rhode Island statute, no suit can be commenced against an administrator, as such, after three years from the time he gave public notice of his appointment. Bauserman v. Blunt, 147 U. S. 652, 37 L. ed. 318, 13 Sup. Ct. Rep. 466.

Applying these principles to the present case, it would seem clear that the defendant in error, as a citizen of the state of New York, and having a legal claim against the estate of S. W. Matteson, deceased, had a right to elect to proceed to establish his claim by bringing a suit in the circuit court of the United States; and if he had brought his action against an existing administrator, the administration of the estate not having been closed under the statutory proceedings, and obtained a judgment, undoubtedly such a judgment, when presented to the probate court within the time fixed by its order, must have been received by that court as a claim against the unadministered estate.

But can it be said that, if the foreign creditor delayed proceedings in the Federal court until after the time fixed by the order of the probate court for the presentment of claims had expired and after the final distribution of the estate had been effected, and after the final account of the administrator had been allowed and his office had become functus officio, and after all claims of local creditors had thus been precluded, he can use the Federal process to devolve a new responsibility upon the person who had acted as administrator, and to interfere with the rights of other parties, creditors or distrib utees, which had become vested under the regular and orderly administration of the estate under the laws of the state?

It is the policy of the state of Minnesota, like that of many of the states, to prescribe a shorter term of limitations to claims

rights."

Let us now examine the reasoning employed by the circuit court of appeals in reaching its conclusion in the present case. Having correctly held that, so far as the administration law of the state of Minnesota attempts to compel citizens of other states to establish demands against the estates of decedents only by a proceeding in the probate court of the state, it is ineffectual to accomplish that object, the court proceeded to say:

"It is said, however, that although the statute in question may be ineffectual to compel nonresident creditors to submit their demands to the appropriate probate court for allowance, yet, as a statute of limitations, it should be given effect to prevent the establishment of a demand in the Federal court of the state after such lapse of time that it cannot be established in the probate court. The vice of this argument as applied to the case in hand consists in the fact that the legislature of the state of Minnesota has not undertaken to bar any claim against a decedent's estate, absolutely, until after the lapse of eighteen months from the date of the order fixing the period of allowance, and in the case at bar that period had not expired when the action was commenced, to wit, on January 22, 1897.

"It is true that § 4509, when conferring the discretionary power to allow claims within eighteen months, imposes the limitation that they shall be allowed 'before final settlement,' and it is also true that the final account of Matteson's administrator had been submitted to and approved by the probate court before this action was commenced. But it must be borne in mind that the administration law (§ 4523) confers upon the probate court the power to determine when the final settlement of an estate shall be made, and to allow as much as one year and six months for that purpose. We think that the Federal court must be conceded the same power, as respects the claim of a nonresident creditor, to allow it within eighteen months, which is conferred upon the probate courts of the state; and we are, furthermore, of the opinion that the right of a nonresident creditor to sue for the establish

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60

23 SUPREME COURT REPORTER.

OCT. TERM,

ment of his demand in the Federal court | of estates as they may see fit to make, leavcannot be made to depend on the length of ing administrators, when final settlements time that the probate court happens to allow are approved, in full possession of all the for making a final settlement. If the Fed-property then in their hands, and at liberty eral court gives effect to laws limiting the to deal with it as they please, until they are period for establishing claims in the pro- called to account by some other tribunal bate courts of the state, which differ essen- than that from which they originally derived tially from the general statute of limita- their authority. We are satisfied, therefore, tions, it should only be required to apply the that under the laws of the state of Minneabsolute bar arising from lapse of time sota the approval of a final settlement and which the legislature has erected. There is an order of distribution made thereon does much reason, perhaps, for saying that citi- not operate forthwith to discharge the adzens of other states ought not to be allowed ministrator, but that its effect is to give the to maintain an action in the Federal court distributees a right to the possession of the against a local administrator or executor property that has been assigned to them and after the expiration of a period when by the a right to invoke the power of the probate express command of the legislature no such court as against the administrator to compel action can be maintained in the local courts, obedience to its orders." provided the period fixed by the legislature is reasonable; but the right of a nonresident creditor to bring his action in the national courts ought not to be conditioned or made to depend upon the time that a local court chances to approve a final settlement when the time of such approval rests in its discretion and is largely a matter of convenience. For these reasons we conclude that the case in hand-the same having been brought within less than eighteen months after the order fixing the period for the allowance of claims was made-was lawfully entertained by the trial court.

The validity of this reasoning depends, of course, upon the correctness of the construction put by the learned court on the state statutes; and, as we have seen, in the cases cited, the supreme court of the state has placed an altogether different meaning on those statutes. They hold that the Probate Code of the state makes no provision for the formal discharge of an administrator, but the necessary legal effect of an order of the probate court, allowing the final account of the administrator and its final decree of distribution, assigning the whole of the estate to the heirs and distributees, is to remove the estate of the deceased from the jurisdiction of the court, and to render the office of administrator, which depends upon such jurisdiction, functus officio; and that, after the estate has been so settled and assigned, and while the final decree of distribution remains unreversed and unmodified, the probate court has no jurisdiction to entertain a petition to issue a citation to the administrator requiring him to further account for the property belonging to the estate, which is in his possession, or came into his pos session.

Adopting, then, the construction put upon the administration laws of Minnesota by the supreme court of the state, we have only to consider the force of certain other sugges tions of the court below, which are, in some measure, independent of those already con

"Another claim which is interposed by the administrator as a defense to this action is that the approval of its final account and the order of distribution made thereon by the probate court on April 27, 1896, closed the administration, and operated without more as a discharge of the administrator, so that there was in point of fact no administrator when the suit at bar was instituted. This view evidently was not entertained by the probate court by which the administrator was appointed, since the record discloses that that court, as late as November 21, 1896, entertained a petition on the part of the administrator, and at its instance made an order, founded thereon, by which the decree of April 27, 1896, was amended and corrected in important respects. It is manifest that the probate court acted upon the theory that it had not lost jurisdiction over the ad-sidered. ministrator, that it was still subject to its It is argued, in the opinion of the circuit orders as to all matters pertaining to the court of appeals, that, because § 4523 confers estate, and would remain so until it had upon the probate court the power to deterfully executed its decree and was formally mine when the final settlement of an estate discharged as administrator by an order shall be made, and to allow as much as one made to that effect. And this assumption year and six months for that purpose, the on which the probate court appears to have Federal court must be conceded the same acted, in our opinion was entirely correct. power as respects the claim of a nonresident The order of distribution that was made on creditor, to allow it with the eighteen months, April 27, 1896, required certain acts to be which is conferred upon the probate courts done and performed by the trust company in of the state. This suggestion is manifestly its capacity as administrator, and until they based on a misconception of the language had been done and performed and the court and legal purport of § 4523. That language had approved of the administrator's acts in is as follows: "The probate court at the that behalf, it was clearly subject to the or- time of granting letters testamentary or of ders of the probate court, and its functions administration shall make an order allowas administrator had not ceased. The viewing to the executor or administrator a reacontended for by the administrator is en- sonable time, not exceeding one year and six tirely untenable, since it would deny to the months, for the settlement of the estate." probate courts of the state the right to enforce such orders relative to the distribution

So that, expressly the time for the settlement of the estate must be fixed by the pro

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⚫236

bate court at the time when the letters of administration are granted, and it is provided, by the following section, that "the probate court may, upon good cause shown by the executor or administrator, extend the time for the settlement of the estate not exceeding one year at a time, unless, in the judgment of the court, a longer time be necessary." [ 4524.]

than eighteen months. Between those limits of six and eighteen months the probate court may have power of discretionary action on good cause shown. But having once exercised that power, as in the present case, by fixing the term of probation at six months, any extension of that term could only be had, upon good cause shown, "before final settlement."

These sections have nothing to do with the limitation prescribed for the proof of pre-present case to determine whether a Federal sentation of the claims of creditors, which is found in § 4509. Moreover, in the present case, the court having fixed the period of six months within which the estate should be settled, the administrator, accordingly, having no good cause to show to the contrary, filed his final account of the settlement of the estate within the time so limited, and the account was allowed and the final decree of distribution made before the institution of the present suit.

We are not called upon by the facts of the court might or might not, on good cause shown, extend the time in which a claim might be asserted against a decedent's estate beyond the term previously fixed by the probate court. But it is sufficient to say that, in the present case, no application was made to the Federal court to exercise such a power, either before or after the limitation prescribed under the state statute had expired. All that was before the circuit court of the United States was an action at law upon a cause of action against a decedent's estate, which, under the laws of the state of Minnesota, could not be maintained in the courts of that state, because barred by the ex-operation of the laws of the state regulating the administration of the estates of deceased persons. Moreover, it is obvious, and it has always been held, that the circuit court cannot, in the trial of an action at law, exercise the power of a court of equity. An application to the Federal court to decree an extension of time beyond the period previously prescribed by the probate court would have to be made by a bill in equity, showing good cause. Scott v. Armstrong, 146 U. S. 499, 36 L. ed. 1059, 13 Sup. Ct. Rep. 148.

Section 4509 provides that, at the time of the granting letters testamentary or of administration, the court shall make an order limiting the time in which creditors may present claims against the deceased for amination and allowance, which shall not be less than six months nor more than one year from the date of such order, and that no claim or demand shali be received after the expiration of the time so limited, unless, for good cause shown, the court may, in its discretion, receive, hear, and allow such claim upon notice to the executor or administrator.

But it should be observed that such power to extend the time limit must be exercised, on good cause shown, "before final settle ment," and, in the present case, no such good cause was shown, either to the probate court or to the circuit court of the United States, before final settlement. It is evident that the discretion to extend the time for proof of claims was to be appealed to for some good reason, that is, reason showing why the claim was not made or the suit brought before the expiration of the time fixed in the original order.

The circuit court of appeals admits that "there is much reason, perhaps, for saying that citizens of other states ought not to be allowed to maintain an action in the Federal court against a local administrator or executor after the expiration of a period when, by the express command of the legislature, no such action can be maintained in the local courts, provided the period fixed by the legislature is reasonable, but the right of a nonresident creditor to bring his action in the national courts ought not to be conditioned or made to depend upon the time that a local court chances to approve a final settlement when the time of such approval rests in its discretion, and is largely a matter of convenience." But the legisla tion of Minnesota does not make the limit within which claims must be made against the estates of decedents to depend on the exercise of discretionary power by the courts. It does provide that the probate court shall fix a time within which claims must be presented, to wit, not less than six nor more

Following our previous and repeated decisions, that the courts of the United States, when exercising jurisdiction over executors and administrators of the estates of decedents within a state, are administering the laws of that state, and are bound by the same rules which govern the local tribunals, we conclude, in the present case, that—

The judgment of the Circuit Court of Ap peals must be reversed; the judgment of the Circuit Court is also reversed, and the cause is remanded to that court, with directions to enter judgment in conformity with the opinion of this court.

(187 U. S. 237) SECURITY TRUST COMPANY, as Administrator of the Estate of Sumner W. Matteson, Deceased, Petitioner,

v.

WILLIAM H. DENT, as Receiver of the
First National Bank of Decorah.

Certiorari to circuit court of appeals—when writ of error improper.

writ of certiorari to the circuit court of appeals may be allowed by the Supreme Court of the United States under the judiciary act of March 3, 1891,1 where the cause has been Improperly brought up by writ of error: and In such case the copy of the record filed under the writ of error may be directed to be U. S. Comp. St. 1901, p. 547.

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*238

taken and deemed a sufficient return to the sessed by us under the judiciary act of

certiorari.

[No. 42.]

March 3, 1891, we now allow a writ of certiorari, and direct that the copy of the record heretofore filed under the writ of error shall be taken and deemed as a sufficient re

Argued April 21, 22, 1902. Decided Decem- turn to the certiorari.

ber 1, 1902.

N WRIT of Certiorari to the United States Circuit Court of Appeals for the Eighth Circuit to review a judgment which affirmed a judgment of the Circuit Court of

the United States for the District of Minnesota in favor of plaintiff in a suit against an administrator upon a claim against decedent's estate. Reversed and remanded.

See same case below, 43 C. C. A. 594, 104

Fed. 380.

The facts are stated in the opinion. Messrs. Edmund S. Durment and Albert R. Moore for petitioner.

Messrs. Edward C. Stringer and McNeil V. Seymour for respondent.

*Mr. Justice Shiras stated the facts and delivered the opinion of the court:

This was an action brought in January, 1897, in the circuit court of the United

The questions presented are similar to those just decided in the case of Security Trust Co. v. Black River Nat. Bank, 187 U. S. 211, ante, 52, 23 Sup. Ct. Rep. 52, tried in the same court, and where the parties were represented by the same counsel which appear in this one.

Accordingly, for the reasons given in the opinion in that case, the judgment of the Circuit Court of Appeals is reversed; the judgment of the Circuit Court is likewise reversed, and the cause is remanded to that court, with directions to enter judgment in accordance with the opinion of this court.

(187 U. S. 258) NORTHERN CENTRAL RAILWAY COMPANY, Plff. in Err.,

A

v.

STATE OF MARYLAND.

ment of corporate charter.

States for the district of Minnesota, by Wil- Contracts-reserved power to alter-amendliam H. Dent, as receiver of the First National Bank of Decorah, Iowa, against the Security Trust Company of St. Paul, Minnesota, as administrator of the estate of Sumner W. Matteson, deceased, to recover the sum of $13,535.06, being the amount of principal and interest of certain promissory notes made by said Matteson in his lifetime, and which were the property of the said national bank. The execution and ownership of the notes were not denied, nor that the Security Trust Company had been, on September 3, 1895, duly appointed by the probate court of Ramsey county, Minnesota, administrator of the estate of said Matte

son.

state statute fixing the rate of taxation on the gross receipts of a railroad company, enacted for the purpose of settling by agreement a pending controversy as to a charter right of the company to exemption from taxation, must, notwithstanding its contractual form, be regarded as an amendment to such charter, and therefore subject to repeal by reason of a provision of the state Constitution in force at the time of its passage, reserving the power to repeal, alter, or amend corporate charters.

[No. 43.]

ber 1, 1902.

The defendant, however, alleged in its an- Argued October 16, 1902. Decided Decem swer that the action was not brought until after the expiration of the time limited by

the order of the probate court for the filing,

examination, and allowance of claims against Matteson's estate, nor until after the examination and allowance of the administrator's final account, whereby, under the laws of the state of Minnesota, the official existence of the defendant company as administrator had ceased, and that, therefore, no action could be maintained against it; and also that the right to a judgment on the notes in suit was, by the laws of Minnesota, forever barred, notwithstanding they were owned by a nonresident of the state, and that recovery was sought in a Federal court.

The plaintiff obtained a judgment in the circuit court, and that judgment was affirmed by the circuit court of appeals for the eighth circuit. The case is reported in 43 C. C. A. 594, 104 Fed. 380. The cause was then brought here by a writ of error. We think the proper course was to have asked for a writ of certiorari to bring the final judgment of the circuit court of appeals here for review. However, under the powers pos

State of Maryland to review a judgment

N ERROR to the Court of Appeals of the

which affirmed a judgment of the trial court denying a claim of a railroad company to a contract exemption from a tax imposed by a statute of the state. Affirmed.

See same case below, 90 Md. 449, 45 Atl. 465, 51 Atl. 1108.

Statement by Mr. Justice White: The Baltimore & Susquehanna Railroad Company was chartered by an act of the legislature of Maryland in 1827, with authority to construct a railroad from the city of Baltimore to the Susquehanna river. The charter contained a provision declaring that the "shares of the capital stock of the company should be deemed and considered personal estate, and should be exempt from the imposition of any tax or burden." It was conceded by both parties in the discussion at bar that the effect of this provision, as interpreted by the settled adjudications of the state of Maryland, was to forever ex-1 empt the company and it property from tax-i