1. The liability of a decedent's estate to be assessed as
stockholder of a national bank for the debts of the bank depends
upon the federal law, Title 12 U.S.C. §§ 64, 66, and a ruling of a
state court against such liability necessarily depends upon a
construction of that law and is reviewable under § 237(b) of the
Judicial Code. P.
294 U. S.
168.
2. For want of capacity, a minor is not subject to assessment on
national bank shares sought to be distributed to him as part of a
decedent's estate, though in form they were transferred to his name
on the books of the bank. The estate continues to be liable as
stockholder under Title 12 U.S.C. § 66. P.
294 U. S.
168.
Page 294 U. S. 166
3. Under Title 12 U.S. § 66, a decedent's estate is liable for
assessments on national bank shares left by the decedent and which
have not been validly assigned by final distribution or otherwise,
including assessments made after the stockholder's death, and the
liability is not limited to property actually in the hands of the
personal representative when the bank became insolvent and when the
assessment was made, but may be enforced against property which has
been distributed and is held by distributees. P.
294 U. S.
168.
4. Discharge of the executor did not, in this case, extinguish
the estate. P.
294 U. S. 169.
5. The enforcement of liability imposed by § 66,
supra,
may not be thwarted or impeded by state law. P.
294 U. S. 169.
173 S.C. 235, 175 S.E. 639, reversed.
Certiorari, 293 U.S. 549, to review the reversal of a judgment
recovered by the Receiver of a national bank on an assessment made
by the Comptroller of the Currency.
MR. JUSTICE BUTLER delivered the opinion of the Court.
March 17, 1927, Moses Green of Sumter County, S.C., died
testate. He left three sons, a daughter, and a deceased son's three
minor children. His will was established in probate court; the
executor qualified and entered upon his duties. The residuary
estate contained 20 shares of stock of the City National Bank of
Sumter which were distributed by the executor and transferred on
the books of the bank: four shares to each of testator's children
and four to the three minors. The executor was discharged. The bank
continued for several years thereafter to carry on as a going
concern. Then it closed because of insolvency, and was put in the
hands of a receiver, the petitioner. The Comptroller made an
assessment of $100 a share. No payment having been made on account
of the
Page 294 U. S. 167
four shares in the names of the minors, an administratrix
de
bonis non with the will annexed was appointed. She refused to
pay the assessment. The undivided interest in real estate received
by the distributees under the testator's will is worth more than
$2,000, the par value of the 20 shares, and the minors' interest is
worth more than $400.
Claiming under title 12, U.S.C. §§ 64 and 66, petitioner brought
this suit in the Common Pleas court of Sumter County against the
administratrix, the sons and daughter, the minors, and their
guardian. He made no demand and asserted no claim against the
executor. The complaint prayed judgment against the administratrix
for $400 with interest, and that the property taken under the will
and held by the other defendants be subjected to the claim. The
trial court, following
Rutledge v. Stackley, 162 S.C. 170,
held the minors not personally liable because legally incapable of
assuming the obligation; that, if living, the testator would be,
and therefore his estate is, liable, and that petitioner is
entitled to judgment against the administratrix; that the property
taken by the minors under the will should be subjected to the
payment of the debt, and, if not sufficient, the property
distributed to and held by the testator's sons and daughter. It
gave judgment for petitioner in accordance with these rulings. The
administrator and minors appealed. The Supreme Court reversed. 173
S.C. 235, 175 S.E. 639, 641. It held the will did not direct
distribution of bank stock to the minors, but the executor allotted
it to them in what he considered an orderly and authorized division
of the estate; that, as they could not assume the obligation, their
property is not liable, and that, as the transfer to them was not
directed by the will and the executor had no power to bind the
estate, it was not liable. In support of its conclusion the court
suggested that, during administration, there existed
Page 294 U. S. 168
against testator's estate no claim in favor of the bank's
creditors; that all debts of the estate were paid, and that the
executor was discharged without objection. And it said:
"We can see no reason why a claim which did not exist during the
orderly administration of the estate should now be brought up years
after the estate closed. . . . It does not seem that either the act
of Congress or the state statute imposing liability on stockholders
in banks is sufficient to cover the very peculiar facts existing in
this case."
Respondent maintains that no federal question is involved. To
the extent the opinion implies that liability of stockholders of
national banks is a creature of or depends upon a statute of South
Carolina, the assumption is so plainly without foundation as to
suggest that it must have been inadvertently made. The court's
ruling that the estate is not liable for the assessment necessarily
depends upon its construction of § 66. The judgment is reviewable
here under § 237(b), Judicial Code.
For the want of capacity, the minors are not subject to the
assessment. The shares, though in form transferred to their names
on the books of the bank, actually continued to be and still are a
part of the testator's estate.
Early v. Richardson,
280 U. S. 496,
280 U. S. 499.
Cf. McNair v. Darragh, 31 F.2d 906. And the estate
continued to be liable as a stockholder under § 66. The liability
was not by the Congress intended to be limited to property actually
in the hands of the personal representative when the bank became
insolvent or when the comptroller's assessment was made. Section 64
imposes liability upon the stockholder while living. Section 66
lays the same burden upon his estate. The purpose of the latter is
to make the estate liable for the comptroller's assessment made
after the stockholder's death, just as it is liable for decedent's
indebtedness arising before he died.
Zimmerman v.
Carpenter, 84 F. 747, 751.
Cf. 176 U.
S. Dent, 176 U.S.
Page 294 U. S. 169
521. The obligation continues unimpaired until valid assignment
of the shares by final distribution of the estate, if not by an
earlier transfer.
Forrest v. Jack, decided this day,
ante, p.
294 U. S. 158. Our
attention has not been called to any South Carolina statute
purporting to, and the state supreme Court did not hold that any
law of the state does, bar the enforcement of the assessment on the
ground it was not made before the discharge of the executor. The
decree of the court by which he was discharged, while having the
effect of vacating the office, did not operate to extinguish the
estate, and so the administratrix
de bonis non with the
will annexed became the personal representative of the testator,
and is liable as the testator would be if he were living and owned
the stock. As suggested in
Forrest v. Jack, supra, the
enforcement of liability imposed by § 66 may not be thwarted or
impeded by state law. The state court failed to enforce that
liability. It should have held that petitioner is entitled to
judgment against the administratrix for the indebtedness owing by
the estate on account of the four shares standing in the names of
the minors, and that the judgment be enforced against property
owned by testator when he died and now held by his children and
grandchildren.
Matteson v. Dent, supra; McNair v. Howle,
123 S.C. 252, 268, 116 S.E. 279;
Columbia Theological Seminary
v. Arnette, 168 S.C. 272, 277
et seq., 167 S.E.
465.
Reversed.