SECURITY TRUST CO. v. DENT, 104 F. 380

THAYER, Circuit Judge, after stating- the case as above, delivered the opinion of the court. From the foregoing statement it will be observed that the present action against the administrator, of S. W. Matteson to recover a judgment on the notes executed by him in his lifetime was not brought until after the expiration of the six months limited by the order of the probate court of Ramsey county, Minn., for the filing, examination, and allowance of claims against Matteson’s estate, nor until after the examination and allowance of flu* administrator's final account.

It is accordingly contended in behalf of the administrator that by virtue of sections 4509 and 4511 of the Minnesota Statutes, heretofore quoted, the right to a judgment on the notes in controversy was forever barred, although they were owned by a nonresident of tiie state, and a recovery was sought in the federal court. This contention raises the principal question that we are called upon to consider and determine.

By reference to the aforesaid sections of the Minnesota Statutes, it will be observed that the several probate courts of that state have been vested with the power to determine for what period of time the creditors of a deceased person -whose estate is undergoing administration therein shall be given an opportunity to establish their demands against the estate: the only limitation upon that power being that the time granted shall not be less than (S months, nor more than 18 months.

In the first instance it seems that they cannot allow more than 1 year for the establishment of demands, but, for cause shown, which they deem adequate, they may audit and allow claims within 18 months from the date of the original order fixing the period for allowance, and before a final settlement. It is furthermore manifest that the local administration law was framed with a view of requiring all demands against the estates of decedents to be established in the local probate courts, and not elsewhere, since

section 4509 directs those courts to make an order fixing the time and place when they will examine and adjust claims and demands of all persons against the deceased, and

section 4511 declares that all claims arising upon contracts “must be presented to the probate court within the time limited in said order,” and that any claim not thus presented is barred forever. Moreover,

section 4514 declares that “no action at law for the recovery of money only shall be brought in any of the courts of this state against any executor, administrator or guardian upon any claim or demand which may be presented to the probate court, except as provided in this Code.” In some states the administration laws provide, in substance, that the commencement of a suit in any court, state or federal, against an administrator or executor to establish a demand against a decedent, shall be deemed the lawful exhibition of the demand from the time process is served, and that, if such an action is instituted within a certain period after the administrator or executor gives notice of his appointment or files his bond, the judgment eventually recovered in such action shall be entitled to payment out of the assets of the estate in the administrator’s hands.

Gen. St. Mo. 1889, §§ 184-186, both inclusive; Sand. & H. Dig. Laws Ark. §§ 109-112, both inclusive; Gen. St. Kan. 1889, § 2890; Mills’ Ann. St. Colo. § 4792. The administration law of the state of Minnesota contains no similar provisions, but plainly requires all creditors, whether domestic or nonresident, to file such demands as they may have against the estate of a decedent in the appropriate probate court within such period, not less than 6 nor more than 18 months, as it may see fit to grant, and to prosecute them to judgment in that court, or else be barred of the right of recovery.

It is well settled by repeated adjudications 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 relative to the administration and settlement of decedents’ estates do in terms limit the right to establish such demands to a proceeding in the probate courts of the state. President, etc., v. Vaiden, 18 How. 503, 507, 15 L. Ed. 472; Green’s Adm’x v. Creighton, 23 How. 90, 107, 108, 16 L. Ed. 419; Suydam v. Broadnax, 14 Pet. 67, 10 L. Ed. 357.

This is but another form of saying that no state legislature can deprive the federal courts sitting therein of a jurisdiction which is vested in them by the constitution and laws of the United States. It follows, of course, that, in 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 by a proceeding in the probate court of the state, it is ineffectual to accomplish that object.

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 anj claim against a decedent’s estate, absolutely, until after the lapse of 18 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

section 4.509, when conferring the discretionary power to allowr claims within 18 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 (section 4523, supra.) 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 1 year and 6 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 18 months, which is conferred upon the probate courts of the state; and we are furthermore of opinion that the right of a nonresident creditor to sue for the establishment of his demand in the federal court cannot be made to depend on the length of time that the probate court happens to allow for making a final settlement.

If the federal court gives effect to laws limiting the period for establishing claims in the probate courts of the state which differ essentially from the general statute of limitations, it should only be required to apply the absolute bar arising from lapse of time which the legislature has erected.

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.

For these reasons, we conclude that the case in hand — the same having been brought within less than 18 months alter the order fixing the period for the allowance of claims was made — was lawfully entertained by the trial court. 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 winch the decree of April 27, 1896, wás 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 administrator; that it was still subject to its orders as to all matters pertaining to the estate, and would remain so until it had fully executed its decree, and was formally discharged as administrator by an order made to that effect. And this assumption on which the probate court appears to have acted, in our opinion, was entirely correct.

The order of distribution that was made on April 27, 1896, required certain acts to be done and performed by the trust company in its capacity as administrator; and until they had been done and' performed, and the court had approved of the administrator’s acts in that behalf, it was clearly subject to the orders of the probate court, and its functions as administrator had not ceased.

The view contended for by the administrator is entirely untenable, since it would deny to the probate courts of the state the right to enforce such orders relative to the distribution of estates as they may see fit to make, leaving administrators, when final settlements are approved, in full possession of all the property then in their hands, and at liberty to deal with it as they please until they are called to account by some other tribunal than that from which they originally derived their authority.

We are satisfied, therefore, that under the laws of the state of Minnesota the approval of a final settlement, and an order of distribution made thereon, does not operate forthwith to discharge the administrator, but that its effect is to give the distributees a right to the possession of the property that has been assigned to them, and a right to invoke the power of the probate court, as against the administrator, to compel obedience to its orders. Finding no error in the record, the judgment below is ac: cordingly affirmed.