Kelleam v. Maryland Casualty Co. of Baltimore, 2059.

• Decision Date: 17 July 1940
• Docket Number: No. 2059.,2059.
• Citation: 112 F.2d 940
• Parties: KELLEAM et al. v. MARYLAND CASUALTY CO. OF BALTIMORE, MD., et al.
• Court: U.S. Court of Appeals — Tenth Circuit

112 F.2d 940 (1940)

KELLEAM et al. v. MARYLAND CASUALTY CO. OF BALTIMORE, MD., et al.

No. 2059.

Circuit Court of Appeals, Tenth Circuit.

June 17, 1940.

Rehearing Denied July 17, 1940.

Glenn O. Young, of Sapulpa, Okl. (A. L. O'Bannon, of Okmulgee, Okl., on the brief), for appellants.

W. E. Green and Robert J. Woolsey, both of Tulsa, Okl. (J. C. Farmer, of Tulsa, Okl., on the brief), for appellee Maryland Casualty Co.

Heber Finch, of Sapulpa, Okl. (R. A. Young, Jr., of Fort Smith, Ark., and Pliny Frye, of Wewoka, Okl., on the brief), for appellees Ethel Riddler and others.

Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.

HUXMAN, Circuit Judge.

On August 8, 1936, Leggette D. Kelleam died intestate, a resident of Creek County, Oklahoma. He was survived by E. A. Kelleam and Nell Southard, his brother and sister, and by Fannie Bates and Mrs. Klyde Bates, two half sisters, and by a number of children of prior deceased half brothers and half sisters. On August 25, 1936, E. A. Kelleam and Nell Southard petitioned the County Court of Creek County, Oklahoma, for the appointment of E. A. Kelleam as administrator of the estate of Leggette D. Kelleam, deceased, alleging that they were the sole and only surviving heirs. On the same day E. A. Kelleam was appointed administrator and duly qualified as such by executing a bond in the sum of $12,000, signed by the Maryland Casualty Company as surety. No notice of appointment was published. E. A. Kelleam thereupon took possession of the estate and administered it. He filed his final account and petition for the determination of heirship and for a decree of distribution, again alleging that he and his sister were the sole and only heirs of the deceased.

Evidently, prior to the hearing of the petition for final account, Fannie Bates, a half sister, heard of the probate proceedings and contacted E. A. Kelleam and Nell Southard concerning the same. A contract was then executed by E. A. Kelleam and Nell Southard with Fannie Bates and the surviving husband and children of Mrs. Klyde Bates, now deceased, whereby Kelleam and Nell Southard agreed to deposit $4,000 in the bank, together with the contract, and agreed that this sum should be paid to them for any interest they claimed in the estate, providing none of the heirs of any of the other half brothers or half sisters of deceased came in and filed a claim, but that if, prior to final distribution, any party claiming to be interested in the estate should appear in the County Court and question the right of E. A. Kelleam and Nell Southard to the entire estate, they would be entitled to withdraw the $4,000 in escrow. The contract also provided that it would not constitute entering an appearance in the County Court of Creek County by Fannie Bates or the heirs of Mrs. Klyde Bates.

After the execution of this contract, E. A. Kelleam filed an amended petition for approval of his final account, and for a decree determining heirship and distribution of the estate. He now listed the one living half sister and the children of the deceased half brothers and half sisters, and for the first time claimed for himself and Nell Southard the entire estate as an ancestral estate. The amended petition for approval of the final account, determination of heirship and distribution of the estate, was set for hearing without notice being given to the half sister or any of the children of deceased half brothers or half sisters, other than by publication.

Thereafter, on the day appointed for the hearing, the County Court entered its judgment, order and decree, finding and determining that the estate of Leggette D. Kelleam, deceased, was an ancestral estate, and ordered distribution thereof to E. A. Kelleam and Nell Southard.

On September 21, 1937, a petition to reopen the proceedings was filed and an amended petition was filed on December 28, 1937, by the children of the prior deceased half brothers and half sisters of Leggette D. Kelleam, deceased, setting forth their relationship to deceased and stating that they had no notice of the proceedings; that the distribution of the estate was fraudulently and collusively obtained, and asking that the decree of the County Court be set aside. E. A. Kelleam and Nell Southard demurred to this petition, and on September 15, 1937, the County Court sustained the demurrer. The petitioners then appealed to the District Court of Creek County, where their appeal is now pending.

After the decree of the County Court sustaining the demurrer to the petition to reopen the case was entered, E. A. Kelleam made a conveyance of some of the real estate which he had obtained from the estate to his son, Joe Kelleam, and Nell Southard made a like conveyance of the real estate which she had obtained from the estate to her son, J. R. Southard, Jr. The conveyances were made without consideration.

On June 8, 1938, The Maryland Casualty Company filed its bill of complaint in the United States District Court for the Northern District of Oklahoma, making the full blood heirs, as well as the half blood kinsmen of deceased, Leggette D. Kelleam, defendants, seeking exoneration on its bond, and asking that a receiver be appointed to preserve the decedent's property pending the outcome of the dispute between the heirs, and that the property be impressed with an equitable lien to satisfy and discharge any final judgment that might be obtained between the litigating parties. By cross petition the defendants who had been excluded from heirship by the decree of the County Court filed their answer and counter claim asserting their claim to an interest in the estate and joined in the application for the appointment of a receiver, June 27, 1938, J.M. Scott was appointed receiver of the property of the estate. E. A. Kelleam, Joe E. Kelleam, Nell Southard and J. R. Southard, Jr., all filed special pleas to the venue and the jurisdiction of the court, and upon such pleas being overruled, they moved to strike the cross petition for want of jurisdiction of the subject matter. The motion to strike was overruled and they thereupon filed their answer and plea in abatement and answer to the cross petition. Issues were joined, the cause was tried to the court, and findings of fact and conclusions of law were made by the court.

The court found that the estate of Leggette D. Kelleam was not an ancestral estate; that the decree of the court was obtained by fraud and was therefore void; that the half sister and the children of prior deceased half brothers and half sisters were heirs and entitled to share in the estate; that E. A. Kelleam and his surety were liable to the defrauded heirs; that the surety company was entitled to exoneration and to have the assets impressed with a trust. A decree in conformity with the conclusions of the court was entered, providing for an accounting; that if no accounting be rendered, that then the lien on the property in the hands of the receiver be foreclosed. From this decree an appeal has been taken.

Appellants assert: First, that the District Court was without jurisdiction for the following reasons:

(a) Because a diversity of citizenship was neither alleged nor established.

(b) Because residence in the Northern District was neither alleged nor established.

(c) Because the United States District Court has no jurisdiction in probate to review or set aside decrees of the County Court exercising probate jurisdiction, nor to determine heirship.

(d) Because the United States District Court is without authority to divest an administrator appointed by the County Court in probate of the decedent's estate or to direct such administrator in the discharge of his duties.

(e) Appointment of a receiver without notice, at the instance of a surety upon the bond of an administrator who has been twice exonerated, is beyond the jurisdiction of the United States District Court.

Second, that the evidence of appellees was insufficient to establish fraud or other grounds warranting vacation of the decree of the County Court.

The controversy as to the diversity of citizenship centers around the citizenship of the Kelleams and the Southards. The complaint alleges that E. A. Kelleam and Joe Kelleam are residents of Arizona; that Nell Southard and J. R. Southard, Jr., are residents of Oklahoma; and that all of the remaining defendants are residents and citizens of Arkansas and Oklahoma.

Jurisdiction of the United States District Court between citizens is based on diversity of citizenship, and an allegation that a party defendant is a resident of a state is not equivalent to an allegation of citizenship in that state. Such an allegation is insufficient to confer jurisdiction upon the District Court. Realty Holding Co. v. Donaldson, 268 U.S. 398, 45 S.Ct. 521, 69 L.Ed. 1014; Wolfe v. Insurance Co., 148 U.S. 389, 13 S.Ct. 602, 37 L.Ed. 493; Robertson v. Cease, 97 U.S. 646, 24 L. Ed. 1057.

The failure to properly allege diversity of citizenship between plaintiff and defendant will not, however, defeat the jurisdiction of the court if, as a matter of fact, such diversity exists. Halsted v. Buster, 119 U.S. 341, 7 S.Ct. 276, 30 L.Ed. 462; Continental L. Ins. Co. v. Rhoads, 119 U.S. 237, 7 S.Ct. 193, 30 L.Ed. 380; Howe v. Howe & Owen Ball Bearing Co., 8 Cir., 154 F. 820; Fidler v. Roberts, 7 Cir., 41 F. 2d 305.

Where a defective averment of diversity of citizenship is made in the bill of complaint, the whole record may be looked to for the purpose of curing such defect, and if the requisite citizenship is anywhere averred in the record, or facts are therein stated which in legal intendment constitute such allegations, that is sufficient. And where the court is satisfied, in the light of all the testimony, that the averment of residence in a designated state was intended to mean, and reasonably construed, must be interpreted as meaning that the party was a citizen of that state, it is sufficient. Sun Printing & Publishing Ass'n v....