McBride's Estate, In re

• Decision Date: 14 May 1969
• Docket Number: Gen. No. 52491
• Citation: McBride's Estate, In re, 249 N.E.2d 266, 110 Ill.App.2d 200 (Ill. App. 1969)
• Parties: , 69-2 USTC P 9576 In the Matter of the ESTATE of Ernest J. McBRIDE, Deceased. UNITED STATES of America, Appellee, v. Shirley I. McBRIDE, Administrator, Appellant.
• Court: Appellate Court of Illinois

Page 266

249 N.E.2d 266

110 Ill.App.2d 200, 69-2 USTC P 9576

In the Matter of the ESTATE of Ernest J. McBRIDE, Deceased UNITED STATES of America, Appellee, v. Shirley I. McBRIDE, Administrator, Appellant.

Gen. No. 52491.

Appellate Court of Illinois, First District, Fourth Division.

May 14, 1969.

Rehearing Denied June 16, 1969.

Cummings & Wyman, Chicago, Stanley M. Cahn, Chicago, of counsel, for appellant.

Thomas A. Foran, U.S. Atty., Chicago, George E. Faber, Asst. U.S. Atty., of counsel, for appellee.

DRUCKER, Presiding Justice.

This appeal is taken by the administrator of the the estate of Ernest J. McBride from an order of the Probate Division of the Circuit Court granting leave to file and allowing the supplemental claim of the United States for unpaid federal income taxes, interest and penalties. The facts are not in dispute.

Ernest J. McBride died on September 26, 1963. His widow, Shirley McBride, was appointed administrator of the estate on October 15, 1963, and letters of administration were issued to her on that date. The administrator's original inventory was filed and approved on January 22, 1964, listing assets of $3,600.

The Internal Revenue Service filed a claim on July 8, 1964, for $19,426.18 for income and social security taxes due from the decedent for the year 1963, together with interest. The claim was allowed in full on August 24, 1964. After a subsequent challenge by the administrator and after a hearing, the claim of the United States was allowed, upon stipulation, in the amount of $5,545.20, on April 25, 1967.

In the interim, on January 27, 1965, the administrator filed a Supplemental Inventory listing assets known to be of a value of $5,278.46 and other assets of unknown value but presumed to be minor. On December 7, 1965, the administrator filed a Second Supplementary Inventory listing assets of an additional value of $20,883.08; the inventory was approved as of that date.

Publication for claims was ordered and notice published in the Chicago Daily Law Bulletin on December 15, 22 and 29, 1965. The notice designated the first Monday in February 1966 as the last day for the filing of claims. On April 25, 1967, the United States sought leave to file its 'Supplemental Claim No. 'I,' for unpaid federal income taxes, interest and penalties due from decedent for the years 1956 through 1962 in the aggregate amount of $553,516.51. On June 1, 1967, over the objections of several creditors of the estate, an order was entered granting leave to the United States to file its 'Supplemental Claim No. I,' and allowing same against previously inventoried assets as a third class claim in the amount of $545,085.83. It is from this order that the administrator appeals.

Opinion

It is undisputed that the Supplemental Claim of the United States was filed after the expiration of the claim date in the publication notice.

Section 191 of Title 31 of the United States Code provides:

Whenever * * * the estate of any deceased debtor, in the hands of the executors or administrators is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied; * * *.

Section 204 of Chapter 3 of the Illinois Revised Statutes provides:

If after 9 months from the issuance of letters testamentary or of administration, the executor or administrator files an inventory ventory listing estate not previously inventoried and thereafter the clerk of the court publishes once each week for 3 successive weeks a notice informing all persons that claims may be filed against the estate of the decedent on or before a date as designated in the publication (the designated date to be the first Monday in the second month following the month in which the first publication is made), all claims not filed on or before the designated date are forever barred as to the estate listed in such inventory.

The administrator argues that Section 191 of Title 31, U.S.C., is unconstitutional as being in violation of the Tenth Amendment of the Constitution of the United States ¹ if it is interpreted as extending the time for filing a claim of the United States after the expiration of the time limits of a state statute.

It is undisputed that the State has the power under the Tenth Amendment to control and regulate the administration of decedents' estates. Petition of Worcester County National Bank of Worcester, 263 Mass. 444, 162 N.E. 217 (1928), aff'd 279 U.S. 347, 49 S.Ct. 368, 73 L.Ed. 733 (1929); People ex rel. First National Bank of Joliet v. Brady, 271 Ill. 100, 110 N.E. 864 (1915). But Congress has the power to lay and collect taxes 'to pay the Debts and provide for the common Defence and general Welfare of the United States.' (Constitution of the United States, Art. 1, Sec. 8.) Section 191 of Title 31 has been held to be constitutional, under that clause, as creating a preference even when contrary to state statutes classifying claims, In re Kuhn's Estate, 146 Pa. Super. 1, 21 A.2d 513 (1941). Further, in United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283, the United States had a claim against an estate of which Summerlin was the ancillary administrator. The Florida Statute provided that any claim not filed within eight months of the first notice of publication was void. In reversing the judgments of the state courts disallowing the claim because of late filing, the United States Supreme Court stated at page 416, 60 S.Ct. at page 1020:

It is well settled that the United States is not bound by state statutes of limitation or subject to the defense of laches in enforcing its rights. United States v. Thompson, 98 U.S. 486, 25 L.Ed. 194; United States v. Nashville, Chattanooga & St. Louis R(y). Co., 118 U.S. 120, 125, 126, 6 S.Ct. 1006, 1008, 30 L.Ed. 81; Stanley v. Schwalby, 147 U.S. 508, 514, 515, 13 S.Ct. 418, 420, 421, 37 L.Ed. 259; Guaranty Trust Company (of New York) v. United States, 304 U.S. 126, 132, 58 S.Ct. 785, 788, 82 L.Ed. 1224; Board of County Commissioners (of Jackson County) v. United States, 308 U.S. 343, 351, 60 S.Ct. 285, 288, 84 L.Ed. 313. The same rule applies whether the United States brings its suit in its own courts or in a state court. Davis Director General of Railroads v. Corona Coal Co., 265 U.S. 219, 222, 223, 44 S.Ct. 552, 553, 68 L.Ed. 987.

In Illinois, the case of Harrison v. Deutsch, 294 Ill.App....