Byers v. McAuley/Opinion of the Court

by David Josiah Brewer

United States Supreme Court

149 U.S. 608

Byers  v.  McAuley

It is obvious from the decree which was entered that the circuit court of the United States assumed full control of the administration of the estate. That decree disposed of and distributed the entire estate among all the persons interested therein, citizens and noncitizens of the state. It did not stop with an adjudication of the claims of citizens of other states against the estate, but assumed to determine controversies between citizens of the same state, for the two corporations named in the first paragraph were both citizens of Pennsylvania, and yet the decree determined their rights as against the estate, as well as between themselves. Not only that, of both the first and second cousins, between whom, as shown by the last paragraph, distribution was made, some were citizens of the state of Pennsylvania and some of other states, and yet all their claims, as between themselves and as against the state, were disposed of by this decree.

Indeed, the decree as a whole cannot be sustained, unless upon the theory that the federal court had the power, on the filing of this bill, to take bodily the administration of the estate out of the hands of the state court, and transfer it to its own forum. It was not a judgment against the estate, but a decree binding personally the administrator, and compelling him, subject to the penalties of disobedience of a decree of a court of chancery, to administer the estate according to the orders of the federal, rather than those of the state, court, which had appointed him. If we look back of the decree to the proceedings which were had in the circuit court intermediate the filing of the bill and the decree, it will be perceived that that court proceeded as though the entire administration of the estate had been transferred to it from the state court. Thus, on December 3, 1887, the administrator filed in the circuit court a petition, commencing as follows: 'The petition of A. M. Byers, administrator of all and singular the goods and chattels of Mary McAuley, late of the county of Allegheny, deceased, respectfully shows that this honorable court has taken jurisdiction of your petitioner as administrator, and of the assets of the decedent which your petitioner has in his hands,' setting forth the ownership of 250 shares of railway stock, and praying for an order as to its disposal. Upon the filing of such petition the court directed that notice by given to all counsel of record, and on December 10th made an order for the disposition of the stock. So, on December 24, 1888, the administrator having filed a petition for leave to sell the real estate, the circuit court made an order directing the sale, 'report of such sale to be made to this court for confirmation, and the proceeds to be held subject to the decree of this court.' It is true that the administrator presented like applications to the state court, and obtained like orders, except that in the order for the sale of the real estate there was, in terms, no command to report the sale for conflrmation, and hold the proceeds subject to the decree of that court. Evidently the administrator did not know which court, had the power to control in these matters the actual administration of the estate; and so, for prudential reasons, applied to and obtained similar orders from both. So, both by the terms of the final decree and by the proceedings in the circuit court, preliminary thereto, it is clear that the question is fairly presented to us as to the power of the circuit court of the United States to interfere with the administration of an estate in a state court. Such a question is of importance. No officer appointed by any court should be placed under the stress which rested upon this administrator, and compelled for his own protection to seek orders from two courts in respect to the administration of the same estate.

In order to pave the way to a clear understanding of this question, it may be well to state some general propositions which have become fully settled by the decisions of this court; and, first, 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. The doctrine has been affirmed again and again by this court. Hagan v. Lucas, 10 Pet. 400; Taylor v. Carryl, 20 How. 583; Peck v. Jenness, 7 How. 612, 625; Freeman v. Howe, 24 How. 450; Ellis v. Davis, 109 U.S. 485-498, 3 Sup. Ct. Rep. 327; Krippendorf v. Hyde, 110 U.S. 276, 4 Sup. Ct. Rep. 27; Covell v. Heyman, 111 U.S. 176, 4 Sup. Ct. Rep. 355; Borer v. Chapman, 119 U.S. 587, 600, 7 Sup. Ct. Rep. 342. In Covell v. Heyman, supra, the matter was fully discussed, and in the opinion by Mr. Justice Matthews, on page 179, 111 U.S., and page 356, 4 Sup. Ct. Rep., the rule is stated at length: 'The point of the decision in Freeman v. Howe, supra, is that, when property is taken and held under process, mesne or final, of a court of the United States, it is in the custody of the law, and within the exclusive jurisdiction of the court from which the process has issued for the purposes of the writ; that the possession of the officer cannot be disturbed by process from any state court, because to disturb that possession would be to invade the jurisdiction of the court by whose command it is held, and to violate the law which that any diction is appointed to administer; that any person, not a party to the suit or judgment, whose property has been wrongfully, but under color of process, taken and withheld, may prosecute, by ancillary proceedings, in the court whence the process issued, his remedy for restitution of the property or its proceeds while remaining in the control of that court, but that all other remedies to which he may be entitled, against officers or parties, not involving the withdrawal of the property or its proceeds from the custody of the officer and the jurisdiction of the court, he may pursue in any tribunal, state or federal, having jurisdiction over the parties and the subject-matter. And, vice versa, the same principle protects the possession of the property while thus held, by process issuing from state courts, against any disturbance under process of the courts of the United States, excepting, of course, those cases wherein the latter exercise jurisdiction for the purpose of enforcing the supremacy of the constitution and laws of the United States.'

Secondly. 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 court. It is the possession of the court, and it is a possession which cannot be disturbed by any other court. Upon this proposition we have direct decisions of this court. in Williams v. Benedict, 8 How. 107, 112, it was said: 'As, therefore, the judgment obtained by the plaintiffs in the court below did not entitle them to a prior lien, or a right of satisfaction in preference to the other creditors of the insolvent estate, they have no right to take in execution the property of the deceased which the probate court has ordered to be sold for the purpose of an equal distribution among all creditors. The jurisdiction of that court has attached to the assets. They are in gremiolegis. And if the marshal were permitted to seize them under an execution, it would not only cause manifest injustice to be done to the rights of others, but be the occasion of an unpleasant conflict between courts of separate and independent jurisdiction.' And in Youley v. Lavender, 21 Wall. 276. it was held that where the statute of a state places the whole estate, real and personal, of the decedent within the custody of the probate court of a county, a nonresident creditor may get a judgment in the federal court against the resident executor or administrator, and come in under the law of the state for such payment as that law marshaling the rights of creditors awards to creditors of his class; but he cannot, because he has obtained a judgment in the 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 the lands, the sale is void. And in the course of the opinion, on page 280, it was observed: 'The administration laws of Arkansas are not merely rules of practice for the courts, but laws limiting the rights of parties, and will be observed by the federal courts in the enforcement of individual rights. These laws, on the death of Du Bose and the appointment of his administrator, withdrew the estate from the operation of the execution laws of the state, and placed it in the hands of a trustee for the benefit of creditors and distributees. It was thereafter, in contemplation of law, in the custody of the probate court, of which the administrator was an officer, and during the progress of administration was not subject to seizure and sale by any one. The recovery of judgment gave no prior lien on the property, but simply fixed the status of the party, and compelled the administrator to recognize it in the payment of debts. It would be out of his power to perform the duties with which he was charged by law if the property intrusted to him by a court of competent jurisdiction could be taken from him, and appropriated to the payment of a single creditor to the injury of all others. How can he account for the assets of the estate to the court from which he derived his authority if another court can interfere and take them out of his hands?' See, also, Vaughan v. Northup, 15 Pet. 1; Peale v. Phipps, 14 How. 368.

There is nothing in any decision of this court controverting the proposition thus stated, that the administrator is the officer of the state court appointing him and that property placed in his possession by order of that court is in the custody of the court. One of the cases specially relied on by counsel for appellees is Payne v. Hook, 7 Wall. 425. The opinion in that case was written by Mr. Justice Davis, who wrote the opinion in the case last quoted from, and in the latter opinion he said that there was nothing in Payne v. Hook to conflict with the views therein expressed; and, indeed, there was not. Payne v. Hook was the case of a bill flled by one of the distributees of an estate against the administrator and the sureties on his official bond, to obtain her distributive share in the estate of the decedent. Plaintiff was a citizen of Virginia, and the defendant a citizen of Missouri, and an administrator appointed by the probate court of one of its counties. Suit was brought in the circuit court of the United States for the district of Missouri. The charge in the bill was gross misconduct on the part of the administrator, and false settlement with the probate court; and that he had, by fraudulent misrepresentations, obtained a settlement with plaintiff for a sum less than she was entitled to. A demurrer to the bill was sustained in the court below, but this court held that the bill was sufficient, and that the demurrer was improperly sustained. In other words, the ruling was that plaintiff, a citizen of another state, could apply to the federal courts to enforce her claim against an administrator arising out of his wrongful administration of the estate. To the objection that the other distributees were not made parties the court replied that it was unnecessary, that it was a proceeding alone against the administrator and his sureties. In the opinion, on page 431, it is said: 'The bill under review has this object, and nothing more: It seeks to compel the defendant, Hook, to account and pay over to Mrs. Payne her rightful share in the estate of her brother, and, in case he should not do it, to fix the liability of his sureties on his bond.' There was no suggestion in the bill that the federal court take possession of the estate, and remove it from the custody of the administrator appointed by the state court; no attempt to settle the claims of citizens of the state, as between themselves; no attempt to take the administration of the estate, but simply to establish and enforce, in behalf of a citizen of another state, her claim to a share of the estate. That this is the true interpretation of that case is also evident from these quotations from subsequent opinions. Thus, in Ellis v. Davis, 109 U.S. 485, 498, 3 Sup. Ct. Rep. 327, it was said: 'In Payne v. Hook, 7 Wall. 425, it was decided that the jurisdiction of the circuit court of the United States in a case for equitable relief was not excluded because, by the laws of the state, the matter was within the exclusive jurisdiction of its probate courts; but, as in all other cases of conflict between jurisdictions of independent and concurrent authority, that which has first acquired possession of the res which is the subject of the litigation is entitled to administer it. Williams v. Benedict, 8 How. 107; Bank v. Horn, 17 How. 157; Youley v. Lavender, 21 Wall. 276; Taylor v. Carryl, 20 How. 583; Freeman v. Howe, 24 How. 450.' And in Borer v. Chapman, 119 U.S. 587, 600, 7 Sup. Ct. Rep. 342, after a quotation from the opinion in Payne v. Hook, it is added: 'The only qualification in the application of this principle is that the courts of the United States, in the exercise of their jurisdiction over the parties, cannot seize or control property while in the custody of a court of the state.' The distinction between that case and this is like that which exists between the cases of Freeman v. Howe, 24 How. 450, and Buck v. Colbath, 3 Wall. 334. In the former of these cases this court held that, when property was in the custody of a United States marshal, under process from a federal court, it could not be taken from him by any process out of a state court; that the possession of the marshal was the possession of the court, and no other court could disturb it; while, in the latter case, it held that an action of trespass could be maintained in a state court against a marshal of the federal court for goods improperly taken possession of, because such an action in no way interfered with the custody of property by the federal court. So here Payne v. Hook established that a citizen of another state could recover from an administrator the share of an estate wrongfully withheld by him, and enforce that recovery by a decree over against the sureties of the administrator's bond; while the opinion of the court below in the present case gives to the federal court power to take possession of property in the hands of an administrator appointed by the state court, and thus dispossess that court of its custody.

Thirdly. The jurisdiction of the federal courts is a limited one, depending upon either the existence of a federal question or diverse citizenship of the parties. Where these elements of jurisdiction are wanting, it cannot proceed, even with the consent of the parties. There is in the controversies growing out of the settlement of this estate no federal question. The jurisdiction, therefore, must depend upon diverse citizenship, and can go no further than that diverse citizenship extends. The fact that other parties may be interested in the question involved is no reason for the federal courts taking jurisdiction of the controversy between such parties.

It is true that when the federal court takes property into its custody, as it does sometimes by a receiver, it may entertain jurisdiction of claims against that property in favor of citizens of the same state as the receiver, or either of the parties. But that is an ancillary jurisdiction; it is in aid of that which it has acquired by virtue of the seizure of the property, and in order, it having possession, that it may make final disposition of the property. Possession of the res draws to the court having possession all controversies concerning the res. It original jurisdiction of the administration of the estates of deceased persons were in the federal court, it might, by instituting such an administration, and taking possession of the estate through an administrator appointed by it, draw to itself all controversies affecting that estate, irrespective of the citizenship of the respective parties. But it has no original jurisdiction in respect to the administration of a decesased person. It did not, in this case, assume to take possession of the estate in the first instance; and it cannot, by entertaining jurisdiction of a suit against the administrator, draw to itself the full possession of the estate, or the power of determining all claims against or to it.

Under the present law of congress, a receiver appointed by a federal court, and in possession of property, may be subjected to suits in the courts of the state without leave obtained in the first instance from the federal court. 25 Stat. 436. Would it be tolerated for a moment that the commencement of such a suit in the state court against a receiver enabled the state court to draw to itself the entire administration of the receivership, and oust the federal court from the possession and custody of the property? The mere statement of the question carries its own answer. While the validity of a claim against the receiver may be established in the state court, the administration of the property in the hands of the receiver remains with the federal court, whose officer he is; and the amount the claimant will receive from the proceeds of the property in the hands of the receiver is not settled by the state court, which only determines the validity and extent of the demand, but rests upon the result of the administration, as ordered by the federal court. The fact that the federal court entertaining the suit of one claimant against an estate may entertain a different view of the law controlling the rights of that claimant from that entertained by the court of the state in a suit brought by a claimant, citizen of the state, holding a like character of claim, is no ground for enlarging the jurisdiction of the federal court beyond that given to it by the constitution of the United States.

A citizen of another state may establish a debt against the estate, (Youley v. Lavender, 21 Wall. 276; Hess v. Reynolds, 113 U.S. 73, 5 Sup. Ct. Rep. 377;) but the debt thus established must take its place and share of the estate as administered by the probate court, and it cannot be enforced by process directly against the property of the decedent, (Youley v. Lavender, supra.) In like manner, a distributee, citizen of another state, may establish his right to a share in the estate, and enforce such adjudication against the administrator personally, or his sureties, (Payne v. Hook, supra,) or against any other parties subject to liability, (Borer v. Chapman, supra,) or in any other way which does not disturb the possession of the property by the state court. (See the many cases heretofore cited.)

Our conclusion, therefore, is that the federal court erred in taking any action or making any decree looking to the mere administration of the estate, or in attempting to adjudicate the rights of citizens of the state, as between themselves. The state court had proceeded so far as the administration of the estate carries it forward to the time when distribution may be had. In other words, the debts of the estate had been paid, and the estate was ready for distribution, but no adjudication had been made as to the distributees, and in that exigency the circuit court might entertain jurisdiction in favor of all citizens of other states, to determine and award their shares in the estate. Further than that it was not at liberty to go. In that determination it made two rulings, in respect to both of which we think the court was correct: First. In holding that the distributees had no interest in the real estate specially described in the first paragraph of the decree. Indeed, the ruling of the court in this respect is not seriously challenged. It is true that there is an assignment of error, in the first appeal, to the action of the court below in treating the provision in the will of Mary McAuley, that the proceeds of sale of the real estate on Duquesne way should be divided between the Home for the Friendless and the Home for Aged Protestant Women as a valid declaration of a trust, and in decreeing accordingly. But this assignment seems to have been abandoned, or, at all events, is not contended for in the appellants' brief. We content ourselves, therefore, with saying that we see no error in the judgment of the court below in that particular. It needs no argument to show that a written instrument, though inefficacious as a will, from a want of compliance with statutory requisitions, may yet operate as a declaration of a trust. 1 Perry, Trusts, § 91.

The other ruling was that the first cousins were entitled to take the estate to the exclusion of the second cousins. In this the circuit court of the United States had to deal with a question of local law. The state statutes prescribed the scheme of distribution, and, if the meaning of those statutes was disputable, the construction put upon them by the state courts was binding upon the circuit court.

Our inquiry is, therefore, restricted to the question whether the circuit court correctly applied the statute law of Pennsylvania as interpreted by the courts of that state.

The supreme court of Pennsylvania, in Brenneman's Appeal, 40 Pa. St. 115, construed the statute law, as it then stood, as preferring first cousins to the entire exclusion of second cousins; and this case was approved in the subsequent case of Hayes' Appeal, 89 Pa. St. 256. Some statutory changes were made in the law, but in the recent case of Rogers' Appeal, 131 Pa. St. 382, 18 Atl. Rep. 871, where the opposite view of the case was presented by the same counsel who represents the appellants in the present appeal, in an argument termed by that court ingenious and able, it was held that Brenneman's Appeal should not be overruled or even modified.

The court below, therefore, in sustaining the claim of the first, to the exclusion of the second, cousins, followed the law as construed by the state supreme court.

The decree of the circuit court must be reversed, and the case remanded, with instructions to enter a decree in favor of those citizens of other states than Pennsylvania, who have petitioned the circuit court for relief, and who are first cousins of the decedent, for their shares of the estate other than the real estate described in the declaration of trust, the amount of such shares being determined by the fact that the first cousins only inherit; and an order that they recover from the administrator such sums thus found to be due. No decree will be entered in favor of the two corporations named in the first paragraph, and none in favor of the parties to the suit who are citizens of the state of Pennsylvania.

Mr. Justice JACKSON did not hear the argument, and takes no part in the decision of the case.

Notes