This is an appeal from a decree obtained in an equity action instituted by appellees September 13, 1935, to recover from appellant the sum of $20,909.99, being the escheated estate of Mary Bulewicz, deceased, and paid to appellant in conformity with a decree of the county court of
Appellant is a creature of the Wisconsin statute and is required to hold in trust all property turned over to it for “the benefit and supрort of certain enumerated orphans designated by said statute.
Relying upon the above statute, a part of the appellees (referred to as foreign heirs), on February 25, 1931, filed a petition in the county court asking for refund of said escheated estate. A hearing was had upon said petition and the' same taken under advisement. Prior to the announcement of a decision, the Supreme Court of Wisconsin (In re Lillian Payne’s Estate,
October 14, 1932, the county court dismissed both of said petitions; the first bеcause of the decision of the Supreme Court decreeing the above-quoted provision unconstitutional, and the second because the state of Wisconsin did not have the funds in question ia its possession. This ruling was, on September 12, 1933, affirmed by the Supreme Court of Wisconsin. In re Estate of Mary Bulewicz, deceased,
The issues raised by this appeal are:
(1) Is the final decree entered by the county court of Milwaukee county on February 26, 1926, finding that Mary Bulewicz died without heirs, res adjudicata as to the appellees аnd immune from collateral attack ?
(2) Is there any right of refund to the escheated estate of Mary Bulewicz, under either state or federal law?
(3) Has the statute of limitations run as to any rights claimed by the appellees ?
(4) Did the court err in permitting the appellees to use in this case, depositions which were taken-for use in proceedings in the county court of Milwaukeе county ?
(5) Was Mary Gorny, who was born in 1862 in Gross Schoenbrueck, Poland, the same person as Mary Bulewicz, who -died in Milwaukee, Wis., 1920 ?
Appellant cites a number of authorities in support of its theory that the judgment of the county court on February 26, 1926, is res adjudicata as to the appellees and immune from collateral attack. That such is the case in so far as the judgment escheats the estate, there seems to be no
We do not understand this conclusion to be contrary to the holding of the Supreme Court of Wisconsin. In re Trustees of Milwaukee County Orphans’ Board, supra. There, it is truе, the court held the judgment of the county court res adjudicata as to the state. The judgment referred to must have been that which determined the estate to be escheat and not a judgment determining that no heirs existed. Assume the state had been successful in that case and the funds turned over to the state treasurer, or assume the funds had been originally paid to the state treasurеr, could any one contend that the judgment of the county court was res adjudicata on the question of heirship when the very statute under which the judgment of escheat, and under which the funds were paid into the state treasury, likewise made provision for heirs making claim for refund ?
The question as to whether a right of refund exists under the perplexing situation presented, and, if so, whether barred by thе statute of limitations, are so interwoven they will be considered together. In doing so, we believe it important to understand both the power to escheat and the rights of heirs to claim a refund in such property. The following statement from appellees’ brief is pertinent: “The power to escheat is a sovereign power and when the sovereign escheats he may do so absolutely or conditionally, with or without reservation of right of refund; or he may refuse to enact an escheat law at all, as is the policy of the state of New York. If no law authorizes a refund there can be no «refund enforced. There is no common law right of refund, nor is there any general Federal escheat law, applying to the states, and it is beyond the power of congress to enact such a law.”
As bearing upon the matter, we also quote from Corpus Juris 21, page 862: “ * * * While the state may as a matter of grace agree to reimburse the rightful owner of escheated property subsequently appearing, it is not bound to do so, and it may exact conditions on which it will make reimbursement and limit the time within which reimbursement will be made, providеd such limitation does not interfere with vested rights.”
In discussing an escheat state, the court in Commonwealth v. Thomas’ Adm’r,
It therefore seems apparent that an heir can have no greater or different right in escheated property than provided by the laws of the state. It is peculiarly a matter within its sovereign power, unknown to the common law, and one over which the federal government has no jurisdiction оr control. Likewise, any right of refund can only exist by grace of the state, and if provided for is allowable only in conformity with its laws, both as to the manner and time of making such claims. It is urged, however, that, this being an equitable proceeding, this court may determine the merits of the matter and this independent of the state laws and the decisions of its courts, construing such laws. The court below, in a vеry able opinion (Gorny et al. v. Trustees of Milwaukee County Orphans Board [D.C.]
We regard this language as partiсularly applicable to the present situation. This court acquires jurisdiction only by diversity of citizenship. No federal statute regulates the subject, nor is there any federal question involved by which our jurisdiction is invoked. In discussing the effect of state law upon equity actions in the federal courts, the court in Mason v. U. S.,
In the same opinion and on the following page, in discussing a" line of authorities which seem to give the federal courts an enlarged jurisdiction in equitable matters the court said: “But these decisions relate to thе practice, the impairing of jurisdiction, rather than to the determination of the rights of parties after jurisdiction has been acquired.”
In the instant case, while the suit is one in equity, the state statute has nothing to do with general principles of equity or with the federal equity jurisdiction, but merely pertains to the manner and conditions on which a right of refund, if any, exists, and must be determined. However aрpealing the situation may be, the federal court, under the guise of equity principles, can neither create or enforce rights not thus provided.
Appellees sought a refund under section 2 of the Wisconsin statute, chapter 471, Priv. & Loc.Laws 1871, supra, which was denied on account of its unconstitutionality and it is apparent that no relief may be had therefrom. There is, however, another provision of the Wisconsin Statutes (1931) which appellees claim entitles them to relief, as follows: Section 318.01 (2), Stats. “Escheats. In case there shall be no known heir or distributee the personal estate not disposed of by the will shall belong to the state; and all the personal estate of any deceased person,-which shall not be claimed by the legatеe, heir or distributee within three years after the death of the owner thereof, shall, in like manner, belong to the state, subject in both cases only to the debts, funeral charges and the expenses of administration, and shall be paid to the state treasurer and become a part of the school fund.”’
The Supreme Court of Wisconsin in Gorny v. State,
It may be a court of еquity has a right to apply the maxim, “equity regards that as done which ought to be done,” and treat the matter as though the escheated property had been paid into the state treasury, as provided by section 318.01 as it should have been instead of the appellant who was never legally entitled to the same. Indulging in the presumption that we may so treat the matter, but without so deciding, we are then confronted as to what, if any, statute of limitations may be invoked. It will be noted that both the unconstitutional provision and section 318.-03, the latter which must constitute the basis for appellees’ right of refund, if such they have, provide that action for such refund must be commenced within five years from time of payment. Payment of the fund in controversy was made February 26, 1926, and this actiоn was commenced September 13, 1935. It is appellees’ position, sustained by the court below, that, if any limitation provision of the Wisconsin Statutes is applicable, it is section 330.18 (4):
“330.18 Within ten years. * * *
“(4). An action which, on or before the twenty-eighth day of February in the year one thousand eight hundred and fifty-seven, was cognizable by the court of chancery, when no other limitation is prescribed in this chapter.”
It is also urged that no limitation period is binding upon this court in an equitable action. One authority is cited in support of this proposition which we do not regard as applicable. The Supreme Court of Wisconsin in Gottschalk v. Ziegler,
We are forced to the conclusion, however, that no general limitation statute is applicable. Both the unconstitutional provision and section 318.03, providing the right of refund, expressly provide that action must be commenced within five years after payment is made. As heretofore concluded, appellees have no right upon which action may be maintained except as that right is expressly given by the state. Assuming, as we have, that appellees have an equitable right under Section 318.03, we are constrained to hold that such right could only be exercised in the manner and within the time which that act provides. It seems illogical to say that appellees may have the benefit of an aсt without assuming the burdens which it imposes. To hold otherwise amounts to an usurpatioii by the court of the powers of the Legislature, who alone are invested with authority to make provision for such refund, as well as the time and manner in which action therefor must be brought. It is said, however, that no statute of limitations began to run at the time payment was made to appellant, and that nonе could become operative until after the termination of the various proceedings in the state court. No authorities are cited in support of such theory, and we know of none. Unfortunate as it may be that appellees have been unable to obtain relief from the state courts of Wisconsin, we can see no reason, based upon law or logic, why such proceedings should toll the running of a limitation period, especially when that period is one of the expressed conditions with which appellees must comply in order to be entitled to the relief sought.
Decree reversed.