Estate of Hanreddy

176 Wis. 570 | Wis. | 1922

The following opinion was filed February 7, 1922:

Eschweiler, J.

The questions presented on the appeals here are substantially these:

Administration of the estate of a deceased person being instituted in the state wherein was his domicile at the time of his death, and ancillary administration being had in a sister state where assets exist and creditors reside, and the combined assets in the two jurisdictions being insufficient to pay the total of the just claims allowed in the two jurisdictions, shall the assets in the respective jurisdictions be considered as one fund to be distributed pro rata to all the creditors in both jurisdictions of the estate of the deceased, or shall the funds in the' ancillary administration be distributed to the resident claimants or claimants therein, the surplus only, after paying such claimants in full, to be subject to distribution in the jurisdiction of the domicile?

Can the county court of this state, having but ancillary jurisdiction, consider and allow the claims of nonresident creditors ?

In some respects.ancillary and domiciliary administrations are entirely independent and separate proceedings; in other ways the ancillary, as its name implies, is subordinate or auxiliary to the primary administration at the domicile. As illustrative of their being independent, it may be noted that the time within which claims must be filed in order to be subject to allowance is fixed by the law of the place of administration and filing (Davis v. Davis, 137 Wis. 640, 647, 119 N. W. 334; Fields v. Estate of Mundy, 106 Wis. 383, 386, 82 N. W. 343; Winter v. Winter, 101 Wis. 494, 498, 77 N. W. 883) ; and again, a judgment against an administrator in one jurisdiction is not binding in the other. Price v. Mace, 47 Wis. 23, 26, 1 N. W. 336; Brown v. Fletcher’s Estate, 210 U. S. 82, 94, 28 Sup. Ct. 702; Ingersoll v. Coram, 211 U. S. 335, 362, 29 Sup. Ct. 92; Nash v. Benari, 117 Me. 491, 105 Atl. 107, 3 A. L. R. 61, and note at p. 64, cited in Ruling Case Law, 2 Supp. p. 1249.

The broader scope of the domiciliary jurisdiction is well recognized in such cases as Rackemann v. Taylor, 204 Mass. 394, 403, 90 N. E. 552, to the effect that, though the court of ancillary jurisdiction has power to first probate a wi.ll, it should, in the absence of special circumstances, refuse to do so; and those holding that the final accounting is at the domicile. Bedell v. Clark, 171 Mich. 486, 137 N. W. 627. That the domicile is the primary jurisdiction has been recognized here (Price v. Mace, 47 Wis. 23, 27, 1 N. W. 336), the construction of the will being for the domicile rather than for the court of ancillary jurisdiction. Will of Harker, 172 Wis. 99, 102, 178 N. W. 246, and cases cited.

Where the assets of a deceased, though found in several jurisdictions, are sufficient to pay the debts allowed against his estate in the several jurisdictions, ordinarily each of the separate jurisdictions proceeds to adjust claims and provide for their payment out of the assets in their control, each independently of the other; but where, as here, the entire assets of the deceased are insufficient to pay all his just obligations, there is such an interdependence between the various jurisdictions as to require the application of the old maxim that “Equality is equity;” and the 'several courts administering the affairs of the deceased, each being apprised of that situation, must no longter consider the assets within their respective controls as separate and distinct funds for distribution to the creditors within such jurisdictions, but as one entire fund in which all creditors of the deceased having just claims of equal standing shall share’ pro rata. It makes no material difference by whom or how the situation is brought to the knowledge of the court. In this case the petition of the executrix alone was sufficient. It is the fact of insolvency that raises the equity. It then becomes the duty of the court itself, administering the assets, to subordinate the demands of the local creditors to be paid in full or to the exhaustion of the assets to the broader rights of the creditors as a whole to share on an equal footing in the assets as a whole.

That such well grounded equitable principle is. consonant with the proper self-respect which a government should maintain was early declared in the case of Dawes v. Head, 3 Pick. (20 Mass.) 128. That ruling was constantly followed in Massachusetts, and subsequently became the statutory declaration as well (Buswell v. Order of the Iron Hall, 161 Mass. 224, 233, 36 N. E. 1065); and such has been done in other states, as shown in Dow v. Lillie, 26 N. Dak. 512, 144 N. W. 1082, L. R. A. 1915D, 754. It is the rule in the domicile in the instant case. Ramsay v. Ramsay, 196 Ill. 179, 188, 63 N. E. 618. The same is declared elsewhere. Tyler v. Thompson, 44 Tex. 497; Mitchell v. Cox, 28 Ga. 32; 2 Schouler, Wills (5th ed.) §§ 1015a, 1174; 24 Corp. Jur. 1125; 11 Ruling Case Law, 444. It is but the application in another form of the rule that is applied in the distribution of the assets of an insolvent corporation foreign to the distributing jurisdiction where resident and nonresident creditors must share pro rata. Blake v. McClung, 172 U. S. 239, 19 Sup. Ct. 165; Buswell v. Order of the Iron Hall, 161 Mass. 224, 233, 36 N. E. 1065; Thornley v. J. C. Walsh Co. 207 Mass. 62, 66, 92 N. E. 1007.

It is of course proper, that sufficient of the assets belonging to the estate and found in Wisconsin should be held here so that when the proper percentage is ultimately determined in the two jurisdictions the creditors whose claims are filed and allowed in this jurisdiction shall be here paid their proper percentage. '

On the second question suggested it is clear that, there being assets of the deceased and resident creditors within the state of Wisconsin, the county court of Milwaukee county had and properly assumed jurisdiction in the ancillary administration. Sec. 3793, Stats.; Will of Harker, 172 Wis. 99, 178 N. W. 246; Barlass v. Barlass, 143 Wis. 497, 128 N. W. 58. Having such proper jurisdiction, it became the duty of such court to receive, examine, and adjust the claims and demands of all persons against the deceased as provided for in sec. 3838, Stats., which reads as follows:

"On filing a petition for the probate of a will or petition for administration by any county court it shall be the duty of such court to receive, examine, and adjust the claims and demands of all persons against the deceased.”

Under such statute as well as under the general principles governing such matters, no distinction can be made between ancillary administration and domiciliary administration as to the rights of nonresident creditors to file, in accordance with the established practice of this state, their claims against such an estate for adjustment and allowance. That nonresident creditors may prove their claims in an-ciliary administration is the general rule. 11 Ruling Case Law, 443; 24 Corp. Jur. 1124. See note in L. R. A. 1915F, p. 1041; Borer v. Chapman, 119 U. S. 587, 7 Sup. Ct. 342.

We can see no proper ground under our statutes or decisions for drawing any harsh distinction as such a one would be between the rights of nonresident claimants where the administration here is that of the domicile and where it is merely ancillary. The question was not before the court in the recent case of Will of Harker, 172 Wis. 99, 178 N. W. 246, that decision only holding upon the situation there presented that the county court there exceeded its proper functions in attempting to construe a will and the duties of trustees thereunder, that being properly for the Illinois court having domiciliary administration.

In view of the holding now made that creditors filing claims in this jurisdiction of ancillary administration can thereby acquire no preference over creditors whose claims are duly allowed at the domicile, it does not seem necessary to determine the questions presented upon the claim of the executors of the estate of Julius W. Loewenthal, who had commenced an action against Joseph Hanreddy in Illinois and after his death and subsequent revival of the action as against his executrix had obtained judgment against her in that state. There being no advantage to be gained by the filing of such judgment or allowance thereof as a claim in the jurisdiction here over that which they have already acquired in the probate court of Cook county, we do not deem it necessary to now determine whether or not such a judgment, obtained as it was against an executrix in another state, should be considered as such a judgment as may be certified to the county court as provided for in sec. 3846, Stats., or as to whether or not, it not having been presented to the court below until after the time fixed for the presentation of claims, it is thereby barred by sec. 3844, Stats.

The situation, however, would seem to be almost parallel with that presented in the case of Brown v. Fletcher’s Estate, 210 U. S. 82, 28 Sup. Ct. 702, affirming the same case in 146 Mich. 401, 109 N. W. 686. A discussion of the subject is also found in a note in 3 A. L. R. 64, to the case of Nash v. Benari, 117 Me. 491, 105 Atl. 107.

It follows from what has been said that the order and judgment of the county court must be reversed.

In view of the peculiar situation presented in this matter, we deem it best to deny the allowance of costs to any party on this appeal, except that the costs of the clerk of this court are to be paid out of the estate.

By the Court. — Judgment reversed, and the cause remanded with directions to enter judgment in accordance with this opinion.

Doerfler, J., took no part.

A motion for a rehearing was denied, with $25 costs, on April 11, 1922.