Hale v. Coffin

• Decision Date: 13 January 1903
• Docket Number: 441.
• Citation: 120 F. 470
• Parties: HALE v. COFFIN.
• Court: U.S. Court of Appeals — First Circuit

120 F. 470

HALE v. COFFIN.

No. 441.

United States Court of Appeals, First Circuit.

January 13, 1903

William E. Hale, M. H. Boutelle, and E. W. Freeman, for appellant.

Joseph A. Locke and Ira S. Locke, for appellee.

Before COLT, Circuit Judge, and ALDRICH and BROWN, District Judges.

ALDRICH District Judge.

This is a suit in equity to follow the properties of a deceased stockholder, and to charge a legatee, or the property by her received as heir and legatee, to satisfy stockholder liability. The cause was submitted in the court below upon the pleadings and an agreed statement of facts.

The answer of the defendant sets out, and the facts in this respect are not controverted, that the estate, of which she was an heir and a legatee under the will, of Mary A. Ripley a stockholder in the Northwestern Guaranty Loan Company, was finally settled by the executor more than two years before the proceedings were instituted, and that the personal representative of the deceased, Mary A. Ripley, was discharged prior to the filing of the plaintiff's bill.

It was admitted by the plaintiff that no notice of the claim in question was ever given or demand made upon the executor within two years and sic months from the time of giving notice of his appointment, and that the claim was not filed in the probate court within such period of two years and six months. It was also admitted by the plaintiff that the property received by the legatee and devisee under the will came into her hands before August, 1897; that he did not bring any action or make any claim, either within a year after the final decree in which the plaintiff was appointed receiver in the proceeding in Minnesota, or within a year after the distribution of the Mary A. Ripley estate; and the bill herein was filed June 27, 1900. The point was taken in the answer that the claim was barred by the statute of limitations, and we need only consider this question.

The position of the plaintiff is that his right is one enforceable under the principles of original chancery jurisdiction and procedure in the federal courts, and that it is not susceptible of limitation or modification by state law; that the limitation contained in the Marine statute is a statutory limitation of a statutory right, and does not therefore, operate as a bar to this proceeding in equity.

We cannot accept this view, and we will first consider the cases on which the plaintiff relies. The cases cited by the plaintiff in support of the position that the Maine statute does not operate as a limitation upon this proceeding may be fairly enough grouped under two heads: First, those which relate to insolvency proceedings in the state courts, based upon state statutes, where it is held that local law and proceedings in the insolvency courts do not operate to bar the rights of parties outside the state, or proceedings in the federal courts, to enforce such rights. The leading case cited in this group is that of Suydam v. Broadnax, 14 Pet 67. 10 L.Ed. 357. This case and others in that class proceed upon the idea that the rights of parties and the jurisdiction of federal courts cannot be impaired by the insolvency laws of a state. The other group of cases, in which is Payne v. Hook, 74 U.S. 425, 19 L.Ed. 260, speaking generally, sustain the idea that state laws conferring jurisdiction upon certain courts within the state, like probate courts, to the exclusion of courts of law and equity within the state, cannot limit or restrain the law or equity jurisdiction or the remedies conferred upon the federal courts by the constitution and the statutes of the United States.

While some of the general expressions used in the cases referred to, when not considered in connection with the point there under consideration, would seem to sustain the position of the plaintiff, we do not look upon such authorities as applicable to the situation involved in this case. The defense relied upon here is not based upon any limitation growing out of insolvency laws or insolvency proceedings, nor is it based upon the idea that equity jurisdiction of the federal courts is limited to the jurisdiction exercised by the probate courts or the courts of equity in the state of Maine, but upon a statute of limitations, which it is claimed is applicable to all cases within its provisions and to all courts alike. In this view, it is not deemed necessary to inquire with particularity whether a right like the one now asserted by the plaintiff was cognizable in equity, independent of statute, or whether the effect of the statute was to give an additional and cumulative remedy at law.

For the purposes of this case, we may assume, without consideration and without decision, both of these positions as claimed by the plaintiff; for in our view the statute in question should be accepted as a statute of limitations, applicable to all claims of this nature, in whatever court they may be asserted, whether in an action at law, based upon the statutory right of action, or in a proceeding in equity, prosecuted under the rules of chancery. The statutory limitation does not restrict itself to remedy at law. The language of the statute is:

'When such claim has not been filed in the probate office within said two years, the claimant may have remedy against the heirs or devisees of the estate within one year after it becomes due. ' Rev. St. Me. c. 87, sec. 16.

And thus, under reasonable construction, the language is broad enough to include remedy in equity as well as at law.

The usual remedy, and perhaps the uniform remedy in Massachusetts and Maine, for the enforcement, against heirs and devisees, of a claim founded upon a legal right, has been at law; and the statute in question has been accepted as a limitation of the time in which the claim could be asserted. It would be a very strange condition, and one which would offend public policy in respect to estates and properties of a deceased person, if the same legal right, which could only be enforced at law within a year, could be enforced in equity without regard to such limitation.

The liability of heirs and devisees, or of the property distributed to them to be impressed with a trust in behalf of the creditors, speaking generally, is old; but liability upon a contract like the one upon which the plaintiff's right in this case rests is new. The right sought to be enforced is, strictly speaking, a legal one of recent statutory origin. And in this sense the plaintiff employs an equitable remedy in equity to enforce the right of stockholder liability, which is a strictly legal right resulting from modern statutory and contractual relations.

As has already been said in effect, a situation whereby a strictly legal right, which could only be enforced at law if asserted within a year, can be enforced by resort to equity, without regard to the statutory limitation of a year, would present an anomalous condition, and one repugnant to the spirit of a well-understood public policy, which requires that claims against estates and properties of deceased persons should be restricted to narrow limits in respect to time, and it could only be justified by weighty equitable considerations springing from the peculiar and special circumstances of a particular case, clearly and unmistakably calling for equitable interposition. It was manifestly intended, on grounds of public policy, to limit rights of action against heirs and devisees to the period of one year, and...