Gillespie v. Schram
| Citation | 108 F.2d 39 |
| Decision Date | 07 December 1939 |
| Docket Number | No. 7974.,7974. |
| Parties | GILLESPIE v. SCHRAM. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Leon R. Jones, of Detroit, Mich. (H. L. Lyster and Wiley, Streeter & Ford, all of Detroit, Mich., on the brief), for appellant.
Roy G. Holmes, of Detroit, Mich. (Robert S. Marx, Carl Runge, and Roy G. Holmes, all of Detroit, Mich., on the brief), for appellee.
Before HICKS, SIMONS, and HAMILTON, Circuit Judges.
Appellant appeals from orders of the lower court granting an interlocutory injunction and overruling her motion to dismiss appellee's bill of complaint.
The First National Bank-Detroit, a National Banking Association of Detroit, Michigan, ceased business February 11, 1933, and on March 13, 1933, was, by the Comptroller of the Currency, placed in the hands of a Conservator who on May 11, 1933, was succeeded by B. C. Schram, receiver, also appointed by the Comptroller, in which position he has since continued.
On May 16, 1933, the Comptroller of the Currency, pursuant to the provisions of R.S. § 5151, 12 U.S.C.A. § 63, levied a one hundred percent assessment against the stockholders of the defunct bank. Its stock was owned by the Detroit Bankers Company, a Michigan corporation, a holding company, the charter of which provided that the holder of each share of its common stock should be individually and severally liable for its ratable and proportionate part based on their respective stockholdings of the total issued, and outstanding stock of the corporation because of its ownership of shares of the capital stock of other corporations and, by the acceptance of the certificates, they severally agreed that such liability could be enforced against each of them in the manner and to the extent that such statutory liability is usually enforced against banks or trust companies under the laws under which organized and operating.
Appellant's intestate, Harry B. Gillespie, died February 15, 1935, at which date and prior thereto, he was the registered owner of 187 shares of the Detroit Bankers Company stock, which corporation had no substantial assets except the stock of its units and, pursuant to its charter provisions, appellee demanded of Gillespie that he pay as his proportionate part of the assessment against the stockholders of the First National Bank-Detroit, $14.055775 per share representing his ownership, through the Detroit Bankers Company, of .14055775 shares of the First National Bank-Detroit stock.
In April, 1934, it was decreed by the United States District Court for the Eastern District of Michigan, Southern Division, in the case of Barbour et al. v. Thomas, Receiver, et al., 7 F.Supp. 271, that the stockholders of the Detroit Bankers Company were liable in proportion to their stock ownership to the receiver of the First National Bank-Detroit for the Comptroller's assessment on its capital stock. This decision was affirmed by this court in 6 Cir., 86 F.2d 510, and a review by certiorari was denied by the Supreme Court March 8, 1937, 300 U.S. 670, 57 S.Ct. 513, 81 L.Ed. 877. Gillespie was not personally a party to this action, although it was a representative suit.
Appellant, Emily (Emelie) N. Gillespie, was duly appointed by the Probate Court of Wayne County, Michigan, and qualified as Administratrix of the estate of Harry B. Gillespie. Pursuant to the provisions of the Compiled Laws of Michigan, Section 15681, the Probate Court appointed Harry L. Walker, Commissioner, to receive and decide claims against the estate. On June 26, 1935, appellee, receiver, filed with the Commissioner his claim for the aforementioned assessment, and on December 16, 1936, it not having been passed upon, appellee withdrew it and thereafter the Commissioner filed his report with the court without reference thereto.
On November 20, 1936, appellee instituted this action in which substantially the foregoing facts were stated and that he was apprehensive that before the case could be heard, the appellant-administratrix would distribute the assets of the estate and place them beyond his reach for paying the assessment liability, close her administration and procure her discharge, unless enjoined and restrained from so doing. He prayed that the court order an accounting to determine the proportionate part of the assessment against the stockholders of the First National Bank-Detroit chargeable to the estate of Gillespie on his 187 shares of Detroit Bankers Company stock and that he have judgment against the appellant accordingly.
He further prayed that appellant, her agents, attorneys and employees be enjoined and restrained, pending the action and for such further time as the court might determine, from taking any steps whatsoever to close the administration of said estate, and from distributing or in any manner disposing of its assets without first paying or making provision for the payment of said assessment liability, together with interest thereon from July 31, 1933.
On November 20, 1936, the court issued a show cause order returnable December 7, 1936, and a temporary restraining order as prayed. On January 29, 1938, appellant filed a motion to dismiss appellee's bill and to dissolve the temporary restraining order on the ground that the bill lacked equity and sought to enjoin and interfere with the administration of an estate at that time within the jurisdiction of the Probate Court. On January 31, 1938, this motion was denied and from this order an appeal was prosecuted to this court. Appellee made motion to dismiss the appeal, which was denied without prejudice and the cause remanded to the District Court for the sole purpose of determining the issues raised by the show cause order. On May 21, 1938, the lower court issued its order of injunction as prayed and, from this order and the prior order refusing to dismiss, this appeal is prosecuted.
Appellee had an alleged unsecured and unpreferred claim against appellant and, while based on a Federal Statute, it could be enforced only in conformity with the laws of Michigan for the enforcement of debts of like nature. Pufahl v. Parks' Estate, 299 U.S. 217, 225, 57 S.Ct. 151, 81 L.Ed. 133.
The obligation of the estate to pay the assessment in question, if due, remained unimpaired until discharged or became unenforceable by reason of lapse of time and if, in the meantime, there was a distribution of its assets, the heirs, devisees or legatees would be liable for the indebtedness in proportion to the estate they may have respectively received. Schutz v. Read, 284 Mich. 548, 280 N.W. 45.
The Probate Court of Michigan is a constitutional court of the State (Article 7, Sections 1, 13) and one of record having general jurisdiction of matters relating to the settlement of estates of deceased persons (Section 15519, Michigan Compiled Laws) including the control of administrators. Its jurisdiction under the laws of the State is exclusive except in cases where its remedies are inadequate or where the exercise of equitable jurisdiction is necessary for some auxiliary purpose in aid of such jurisdiction otherwise acquired. Brooks v....
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