287 N.W. 477 | Mich. | 1939
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Except as hereinafter noted the factual background of this case will be found in Re McLouth's Estate,
Another claim against the McLouth estate in the amount of $40,165.48 in favor of the United States government was reduced to judgment in the Federal courts. Shaw v. United States (C. C. A.),
After our former decision the administrator, on November 20, 1937, petitioned the probate judge, acting in the place of commissioners on claims, for the ascertainment and allowance of the excess of the Ingram-Day Lumber Company claim over and above the government's claim as a claim in favor of the McLouth estate and against the United States government. The uncontroverted difference in amount between those claims, allowance being made for accrued interest, is $23,628.97. By reason of the above-noted judgments, as embodied in this record, the amount of the damage to the estate was fixed or liquidated in case of failure of performance of the indemnity settlement agreement (outlined in our former decision) which failure is shown to have occurred. From the probate court's order granting the administrator's petition and allowing this claim in the amount of $23,628.97 as of December 8, 1937, in favor of the estate, the government appealed to the circuit court. On hearing in the circuit court the allowance of the claim was affirmed; although this result instead of being reached after a full hearing on the merits was reached because of a seeming abandonment of the proceedings in the circuit court by the government's representatives. From the judgment entered in the circuit court the government has brought the instant appeal. As stated in appellant's brief:
"But a new question is presented on this appeal, namely, whether the probate judge, acting as commissioner of claims, possessed jurisdiction to allow an affirmative judgment against this appellant — a question that was not presented on the former appeal [i. e., the appeal in Re McLouth Estate, supra].
"Appellant's challenge to the jurisdiction of the probate judge rests not alone upon the immunity of the sovereign, but also rests upon the contention that *317 the same statute that created the right to apply a set-off in favor of the estate and provided the remedy, also imposed a condition which affected the existence of the right and prohibited the special tribunal in which the right might be asserted from giving any consideration to a set-off which was invalidated by the condition imposed, i. e., if the set-off was barred by the Michigan statute of limitations (3 Comp. Laws 1929, § 13976 [Stat. Ann. § 27.6061). This last contention might have been but was not raised on the former appeal."
At the oral argument appellant definitely took the position that the only questions presented by this appeal are:
1. Did the probate court have jurisdiction to allow the claim of $23,628.97 in favor of the estate and against the government?
2. As to this claim, has there been due process of law so that the government is bound by the adjudication?
It is appellant's contention that each of these questions should be answered in the negative.
In presenting its contention that the probate court was without jurisdiction to allow the claim of $23,628.97 against the government, appellant in its brief has framed the issue as follows:
"Since decedent's claim against the Emergency Fleet Corporation for breach of contract accrued to decedent or to decedent's estate more than six years prior to the date decedent's administrator exhibited said claim in offset to the claim of appellant against the estate and hence was barred by [the statute of] limitations (3 Comp. Laws 1929, § 13976), did the probate judge, acting either as commissioners of claims or as a probate court, possess jurisdiction to allow the claim exhibited in favor of the estate, as a set-off or otherwise, in view of the prohibition in *318 3 Comp. Laws 1929, § 15682, against allowance of any claim barred by the statute of limitations?"
We quote the statute under which the probate court asserted its jurisdictional right to adjudicate the issue.
"When a creditor against whom the deceased had claims shall present a claim to the commissioners, the executor or administrator shall exhibit the claims of the deceased in off set to the claims of the creditor, and the commissioners shall ascertain and allow the balance against or in favor of the estate, as they shall find the same to be; but no claim barredby the statute of limitations shall be allowed by thecommissioners in favor of or against the estate, as set-off orotherwise." 3 Comp. Laws 1929, § 15682 (Stat. Ann. § 27.2829).
JURISDICTION. The issue as to jurisdiction is presented by the italicized portion of the above-quoted statute. Appellant contends that (1) since its obligation to pay the Ingram-Day Lumber Company claim had outlawed, the probate court, acting solely under authority of the statute just quoted, was without jurisdiction to render judgment in favor of the estate; and (2) that the question of jurisdiction may be raised at any time pending final adjudication. As to the first of the above contentions, appellant cites Davis v. Mills,
If a statute creating a new right of action contains within itself limitation of jurisdiction over subject matter or express limitation of time within which the new right of action must be presented, failure of compliance with such limitation defeats the right of action.
It is true that the quoted statute vests commissioners on claims with power to adjudicate set-offs, *319
which power would not exist except for the statutory provision; but subjecting and limiting the exercise of this power by mere reference to our general statute of limitations, which is commonly applicable to all courts, did not add to or constitute in the statute a jurisdictional element. This provision only specifies that commissioners on claims in deciding set-off issues, like our courts, are governed by the provisions of our general statute of limitations. Without this directory provision the operation of the statute would have been the same. A like provision is not contained in the statutory provisions for general hearing of claims by commissioners, but nonetheless a claim barred by the statute cannot be allowed by commissioners. A special or distinct limitation of time for asserting a set-off before commissioners is not embodied in this statute; such, for example, as the express limitation of two years for bringing a statutory action under the blue sky law. See Bigelow v. Otis,
"A positive distinction seems to be made between cases in which the limitation of time for bringing suit is contained in the statute which creates the liability and right of action and general statutes of limitations of rights of action existing under other statutes or under the common law." Bement v.Railway Co.,
We think it follows that appellant can claim in this proceeding the benefit of the statute of limitations, if at all, only in the same sense it might in an ordinary law suit.
DEFENSE OF THE STATUTE OF LIMITATIONS. Except as incident to its challenge to the jurisdiction of the probate court, we do not understand that appellant in this appeal relies upon the statute of limitations as a defense to the estate's claim. Nor could it do so. Such a claim was not made in the probate court so far as disclosed by this record and it was not assigned *320
as a reason in support of the appeal to the circuit court. It cannot now be injected as an issue on appeal to this court. The proceedings now before us originated in the probate court, having been instituted in that tribunal by appellant. When litigation instituted in the probate court is taken by appeal or certification to the circuit court, the latter court exercises appellate jurisdiction only and is restricted to the issues presented by reasons assigned in support of the appeal. 3 Comp. Laws 1929, § 15958 (Stat. Ann. § 27.3158). In re Beers,
It follows that the question of the effect of the statute of limitations, if any, on the controversy brought to us by this appeal is not open to consideration.
JURISDICTION TO RENDER AFFIRMATIVE JUDGMENT — SOVEREIGN IMMUNITY. As a second challenge to the jurisdiction of the probate court and the circuit court, appellant asserts:"
"The probate judge did not possess jurisdiction to enter an affirmative money judgment against this appellant."
This contention is based upon the assertion of the government's sovereign immunity from suits in State and Federal courts. We quote from appellant's brief:
"The United States cannot be sued in any court, Federal or State, without express authority of Congress, *321
and when it consents to be sued the act is jurisdictional and must be strictly followed (United States v. Pfitsch,
There is some seeming conflict in Federal decisions as to jurisdiction of State or Federal courts to render affirmative judgments against the government in suits wherein the government has voluntarily appeared. Appellant citesIllinois Central R. Co. v. Public Utilities Commission ofIllinois,
"No doubt there are situations in which a cross bill against an ordinary suitor may be considered and dealt with in virtue of the jurisdiction over the principal suit, even though as an original bill it could not be entertained (see City and Countyof Denver v. New York Trust Co.,
But the applicability of the above quotation to the instant suit is seriously impaired, if not wholly nullified, by the fact that the United States was not originally a party to theIllinois Central Railroad Company Case; but instead an unsuccessful attempt was made to interplead the United States. The instant *322
case is decidedly different in that the government has voluntarily brought its claim into the State courts. A like distinguishing feature exists in the recent Federal case cited in appellant's reply brief. Minnesota v. United States,
In others of the cases cited by appellant, affirmative judgment against the government based on set-off or counterclaim was denied because of controlling statutory provisions which restricted the jurisdiction of the forum in which suit was brought. See United States v. Nipissing MinesCo., 124 C.C.A. 313 (206 Fed. 431). We forego specifically pointing out the quite obvious inapplicability of numerous Federal decisions cited by appellant because of our understanding that the more recent Federal decisions hold adversely to appellant's contention that State or Federal courts do not have jurisdiction to render affirmative judgments against the United States, even in cases to which the government has voluntarily made itself a party. In the instant controversy the government as the moving party voluntarily appeared in the probate court and asserted a claim for upwards of $40,000 against the McLouth estate. It is now faced with a counterclaim in the same proceedings. On the former appeal Mr. Justice BUTZEL, speaking for the Court, said:
"The tendency of the United States supreme court is to allow a set-off against the government when the latter brings suit."In re McLouth's Estate, supra.
The following from American Propeller Manfg. Co. v. UnitedStates,
"We have said (United States v. The Thekla,
Also in deciding the former appeal we cited and quoted fromUnited States v. National City Bank of New York (C.C.A.),
"The next question is whether sovereign immunity from suit bars this set-off. Set-offs against the sovereign United States have been allowed where it was plaintiff. United States v.Wilkins, 6 Wheat. (19 U.S.) 135; United States v. MacDaniel, 7 Pet. (32 U.S.) 1; United States v. Kimball,
"If a sovereign State goes into court seeking its assistance, it is in accord with the best principles of modern law that it should be obliged to submit to the jurisdiction in respect to a set-off or counterclaim properly assertable as a defense in a similar suit between private litigants. The Gloria, 286 Fed. 188. See French Republic v. Inland Navigation Co., 263 Fed. 410, 411. Where a sovereign voluntarily, litigates, he must play the role of a litigant like any other suitor and abide by the consequences. See Richardson v. Fajardo Sugar Co.,
In its still more recent decision the supreme court of the United States has said:
"By voluntarily appearing in the role of suitor it (a foreign sovereign) abandons its immunity from suit and subjects itself to the procedure and rules of decision governing the forum which it has sought. Even the domestic sovereign by joining in suit accepts whatever liabilities the court may decide to be a reasonable incident of that act. United States v. The Thekla,
The extent to which the Federal supreme court by its recent decisions has indicated a proneness to minimize or restrict sovereign immunity from suit is strikingly disclosed by its very recent decision in Keifer Keifer v. ReconstructionFinance Corp.,
In the light of the above-cited decisions, appellant's contention that the probate court did not possess jurisdiction to enter an affirmative judgment against it is not tenable. We are not in accord with appellant's contention that the law as announced in the above-cited cases should be confined in its application to proceedings in admiralty. Neither the context of the decisions nor the reasoning therein employed justifies appellant's contention. It may be noted that neither theAmerican Propeller Company Case, nor the National City BankCase, nor the Guaranty Trust Company Case, from each of which we have just above quoted, involves an admiralty controversy.
"There is no difference between a libel in rem, under which a ship is arrested, and an action in personam against an agent of the sovereign." Kunglig Jarnvagsstyrelsen v. Dexter Carpenter, Inc., 300 Fed. 891.
On the question of jurisdiction we conclude that since the United States of its own volition submitted its claim against the McLouth estate to the courts of his State, its status as a litigant here is no different than that of an individual who has submitted to the jurisdiction of our State courts. In the exercise of jurisdiction thus acquired sovereign immunity is properly disregarded; and as to the asserted counterclaim *326 the court had full power to make final determination of the rights of the litigants including power to render affirmative judgment against the Federal government. That the State court may be powerless to enforce its judgment against the United States by execution is beside the question as to the court's jurisdiction as a final arbiter of the parties' rights.United States v. Eckford, 6 Wall. (73 U.S.) 484. Appellee's position as to this phase of the case is stated in its brief as follows:
"Appellee does not claim that this judicial determination by the probate court constitutes a judgment against the Fleet Corporation within the meaning of the last sentence of 49 Stat. 1987, § 203 (46 USCA, § 1113). The probate court's order is a judicial ascertainment that, on striking a balance of proper demands, the United States as claimant is indebted to the estate (a result and determination which is permitted and dictated by the Eckford Case [6 Wall. (73 U.S.) 4841, as well as by our probate court set-off statute), and the adjudicated obligation must consequently be paid, if at all, by special congressional act."
WAS THERE LACK OF DUE PROCESS? Appellant further contends that the judgment for $23,628.97 entered in the probate court and affirmed on appeal to the circuit court of St. Clair county violated the due process clauses of the State and Federal Constitutions. The basis of this contention is that this affirmative judgment in favor of the McLouth estate arises out of the contractual obligation of the Fleet Corporation, not out of any commitment of the United States; and appellant asserts there has never been an adjudication in any forum fixing the liability of the Fleet Corporation or the United States for this contractual undertaking of the corporation or for the breach thereof. But this contention is not *327
tenable. In the earlier proceedings between these parties which went to final adjudication on the former appeal to this Court, it was determined that the government had placed itself in the shoes of the Fleet Corporation. Throughout the transactions giving rise to this litigation the government has been the principal and the Fleet Corporation merely its self-created agency. It now appears that by voluntary congressional action (Merchant Marine Act, 49 Stat. at L. 1987 [46 USCA, § 1113]) the United States dissolved the Fleet Corporation, took over all of its assets, and assumed its liabilities. That appellant is liable for the undertakings of the Fleet Corporation embodied in its indemnifying contract with McLouth was adjudicated on the former appeal. This determination was essential to decision of that appeal. By reason of our former decision such is now the law of this case. It is in the proceedings had in the courts of this State, to which the government became a voluntary party, that the government has had its day in court. The adjudication adverse to the government was in a proceeding provided by the statute in this State (3 Comp. Laws 1929, § 15682 [Stat. Ann. § 27.2829]). The adjudicating tribunal had power to hear and determine unliquidated claims. Willard, v. Fralick,
Decision herein is only as to the right of appellee to an affirmative judgment fixing the amount of the excess of the estate's claim against the United States over and above its judgment for $40,165.48 against the McLouth estate. The right to set off pro tanto *328
to the extent of the government's judgment was finally adjudicated in the former appeal decided in
BUTZEL, C.J. and WIEST, BUSHNELL, SHARPE, POTTER, CHANDLER, and McALLISTER, JJ., concurred.