United States v. Peoples Trust & Savings Co.
Decision Date | 06 June 1938 |
Docket Number | No. 6496.,6496. |
Parties | UNITED STATES v. PEOPLES TRUST & SAVINGS CO. OF FORT WAYNE, IND. |
Court | U.S. Court of Appeals — Seventh Circuit |
F. E. Youngman, Sp. Asst. to Atty. Gen., James W. Morris, Asst. Atty. Gen., J. Louis Monarch, C. Stanley Titus, and W. Croft Jennings, Sp. Assts. to Atty. Gen., James R. Fleming, U. S. Atty., of Fort Wayne, Ind., Luther M. Swygert, Asst. U. S. Atty., of Hammond, Ind., and Alexander M. Campbell, Asst. U. S. Atty., of Fort Wayne, Ind., for appellant.
John Morris and James R. Newkirk, both of Fort Wayne, Ind., for appellee.
Before SPARKS, MAJOR, and TREANOR, Circuit Judges.
This is an action brought by the United States against the Peoples Trust & Savings Company of Fort Wayne, Indiana, executor of the estate of Earl L. Martin, deceased, to recover a judgment for income taxes for the calendar years 1929 and 1930, which was prior to decedent's death.
Defendant demurred to the complaint on the ground that the District Court was without jurisdiction, inasmuch as decedent's estate was being administered in the Probate Court of Indiana. The demurrer was sustained, the court holding that it was without jurisdiction, but even if it had jurisdiction, it was discretionary, and such discretion was exercised by relegating the parties to the State Court having probate jurisdiction. This appeal thus raises solely the jurisdictional question.
Plaintiff relies upon Section 24(1) of the Judicial Code, U.S.C., title 28, § 41(1), 28 U.S.C.A. § 41(1), which confers original jurisdiction upon United States District Courts "of all suits of a civil nature, at common law or in equity, brought by the United States." It is conceded by plaintiff that the Probate Court of Indiana has jurisdiction to entertain the suit in question. On the other hand, it is the contention of defendant that the Federal Court is without jurisdiction and that exclusive jurisdiction is vested in the Probate Court of Indiana. The applicable provision of the Statute of that state is found in footnote1.
Many cases are cited wherein the Federal Courts have considered and determined their jurisdiction to entertain suits against administrators and executors for the purpose of establishing claims against estates and wherein the rights of such persons have been determined, but no case cited and none which we are able to find decides the precise question here involved.
In Byers v. McAuley, 149 U.S. 608, 13 S.Ct. 906, 37 L.Ed. 867, the Court held that an administrator appointed by a State Court might properly be sued in a Federal Court. In discussing the question, however, the court on page 615, 13 S.Ct. on page 908, said:
The court concluded that jurisdiction was in the Federal Court and permitted the recovery of a judgment, yet at the same time found that such judgment gave no prior lien on the property but simply fixed the status of the parties and compelled the administrator to recognize it in the administration of the affairs of the estate.
In Waterman v. Canal-Louisiana Bank Co., 215 U.S. 33, 30 S.Ct. 10, 54 L.Ed. 80, the Court in discussing a similar question, on page 43, 30 S.Ct. on page 12, said:
After citing and discussing a number of cases, the court further said on page 46, 30 S.Ct. on page 13:
In our own Circuit in Crider v. Shelby, C.C., 95 F. 212, Judge Baker, in a suit attacking Federal jurisdiction, brought by a citizen of Iowa against the administrator of the estate of a citizen of Indiana, on page 213 said:
Other cases might be cited to the same effect. It will be noted, however, that all these cases in which it has been held that the Federal Court has jurisdiction to adjudicate claims against the administrator of an estate, are confined to those wherein the Federal Court acquired jurisdiction by reason of diversity of citizenship. It is insisted by defendant that such authorities are not controlling and that a distinction exists between a non-resident plaintiff and the United States as plaintiff. This distinction is predicated upon the theory that a non-resident plaintiff has a right to have its claim adjudicated in a Federal Court and if the State Court be given exclusive jurisdiction, such non-resident would be deprived of such right, as it would have no appeal from such court to a Federal Court, while the United States, as plaintiff, if forced to litigate its claim in the State Court would not be deprived of such right as it could, eventually, appeal to the United States Supreme Court. No authority is cited which sustains such a theory, and in our judgment, it can not be logically sustained.
To uphold such a view is to hold that a State, by legislative enactment may deprive the Federal Court of jurisdiction where the United States is plaintiff, but not where the plaintiff is a non-resident. The authorities referred to hold, and it seems to be the established law, that no such power resides in the State in case of a non-resident plaintiff. We think the State is equally powerless where the United States is plaintiff.
There are numerous authorities to the effect that Federal jurisdiction can not be limited by a state statutory provision. In Penn Co. v. Pennsylvania, 294 U.S. 189, at page 197, 55 S.Ct. 386, at page 390, 79 L.Ed. 850, it is said:
See Pennsylvania v. Williams et al., Receivers, 294 U.S. 176, 182, 55 S.Ct. 380, 383, 79 L.Ed. 841, 96 A.L.R. 1166; Mason v. United States, 260 U.S. 545, 557, 43 S.Ct. 200, 203, 67 L.Ed. 396; Security Trust...
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