Security Trust Co. v. Black River National Bank - 187 U.S. 211 (1902)
U.S. Supreme Court
Security Trust Co. v. Black River National Bank, 187 U.S. 211 (1902)
Security Trust Company v. Black River National Bank
Argued April 21-22, 1902
Decided December 1, 1902
187 U.S. 211
Under the statutes of the State of Minnesota and the decisions of the courts of that state construing and applying them, a creditor cannot maintain a suit in the courts of that state for a debt against a decedent after the expiration 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.
Although it is a well settled principle that a foreign creditor may establish his debt in the courts of the United States against the personal representative of a decedent notwithstanding the fact that the laws of the state limit the right to establish such demands to a proceeding in the probate courts of the state, it is also equally well settled that the courts of the United States, in enforcing such claims, are administering the laws of the the domicile, and are bound by the same rules that govern the local tribunals, and if a foreign creditor of a Minnesota decedent delays proceedings in the federal court until after the time to present claims fixed by the order of the probate court has expired and the final distribution of the estate has been effected, he cannot use the federal courts to devolve a new responsibility upon the administrator and interfere with the rights of other parties, creditors or distributees, which have become vested under the regular and orderly administration of the estate under the laws of the state.
Although, under the state statutes, the probate court may, before final settlement and upon good cause shown, extend the time for presentation of claims, this Court is not called upon to determine in a case where no application for such extension was made before final settlement whether a federal court might or might not, on good cause shown, extend such time. It is obvious and always has been held that the United States circuit court cannot, in the trial of an action at law, exercise the powers of a court of equity.
In January, 1897, the Black River National Bank of Lowville brought an action in the Circuit Court of the United States for the District of Minnesota against the Security Trust Company
of St. Paul as administrator of the estate of Sumner W. Matteson, deceased. The complaint alleged that the plaintiff was a corporation duly organized under the national banking laws of the United States, having its place of business at Lowville, Lewis County, and State of New York; that the defendant was a corporation created by the laws of the State of Minnesota, having its place of business at the City of St. Paul and State of Minnesota, and had been duly appointed administrator of the estate of Sumner W. Matteson, deceased, by the proper probate court of Ramsey County, Minnesota, on or about the 3d day of September, 1895; that the said Matteson had been during his lifetime a resident and citizen of the State of Minnesota.
For a cause of action, the complaint averred that, on the 27th day of February, 1894, the said Matteson had executed his two promissory notes, wherein for value received he promised to pay to the order of James H. Easton & Company at the First National Bank of Decorah, Iowa, the sum of $2,500, four months after date, with interest thereon at the rate of eight percent per annum from date until paid; that thereafter, on March 22, 1894, and before the maturity of said notes, the said James H. Easton & Company, for value received, sold and assigned the same to the plaintiff; that said James H. Easton & Company was a copartnership doing business at Decorah, and that all the members thereof were residents and citizens of the State of Iowa; that no part of said notes has ever been paid except the interest thereon to the 24th day of November, 1894.
The complaint further alleged that the defendant, as administrator of the estate of Sumner W. Matteson, had in its hand and under its control property, money, and effects which belonged in his lifetime to said Matteson, more than sufficient to pay the amount due the plaintiff; that the estate of said Matteson was in process of settlement in the Probate Court of Ramsey County, State of Minnesota, and had not been fully and finally settled and probated, and that said administrator had never been discharged and was still the administrator of the estate of said Matteson, deceased, and plaintiff demanded judgment
against the defendant in the sum of $5,000 and interest thereon from the 24th day of November, 1894.
On February 12, 1897, the defendant appeared and answered, admitting those allegations of the complaint which alleged the making and transfer of said notes and that the same remained unpaid in the hands of the plaintiff, but denying that the defendant had in its hands as administrator of said Matteson any money or property applicable to the payment of said notes. The answer also alleged that the estate of said Matteson had been fully settled, probated, and administered upon and discharged from the probate court long prior to the commencement of plaintiff's action, and that the defendant had long before the commencement of this action turned over all property, money, and effects of said estate remaining in its hands to the persons entitled thereto, and that defendant, long before the commencement of this action, had been discharged as such administrator and was not when said action was brought, and is not now, administrator of the estate of said decedent.
On March 20, 1897, the plaintiff filed a reply, traversing the allegations of the answer. Thereafter and on the 18th day of January, 1899, a stipulation of facts and waiver of jury trial were filed. In the stipulation of facts, it appeared that the estate of Matteson had been settled, administered upon, and discharged from the probate court prior to the commencement of plaintiff's action in the circuit court of the United States.
On April 17, 1899, the cause came on to be heard, on the pleadings and stipulation of facts, and judgment was entered in favor of the plaintiff in the sum of $6,782.89, to be paid and enforced out of the property and effects of the intestate, Sumner W. Matteson, deceased, and it was ordered further that this judgment be duly certified by this Court to the Probate Court of Ramsey County as a claim duly approved, established, and allowed against the estate of Sumner W. Matteson, deceased.
Subsequently the cause was taken to the United States Circuit Court of Appeals for the Eighth Circuit, where, on October 17, 1900, the judgment of the circuit court was affirmed on authority of the case of Security Trust Company v.
Dent, reported in 104 F. 380.