In re the Estate of McClellan

| S.D. | May 24, 1913

SMITH, J.

James S. McClellan and others, claiming to be heirs at law of John McClellan, deceased, have filed in this court a verified petition alleging that John McClellan died intestate in Minnehaha county on or about August 3, 1899; that on the 6th clay of November, 1911, upon the petition of said James S. McClellan, claiming to be the son and heir at law of decedent, letters of administration were issued ho one George T. Blackman; that on the 9th day of February, 1912, said administrator filed his final account of administration, together with a petition for final distribution of the estate; that, at the hearing upon the petition for final settlement and distribution, the county court of Minnehaha county permitted and allowed the state of South Dakota t'o appear, through the Attorney General, and take part in said hearing, over the objections of petitioners, and permitted the state to oppose the petition for distribution to these petitioners as heirs of the deceased, and on May 4th, 1912, entered a decree that petitioners were not heirs at law or next of kin of deceased; that petitioners have perfected an appeal from said decree of the county court to the circuit court of Minnehaha county, which appeal is now pending and on the calendar of -said circuit court for trial; that said circuit court, over the objections of petitioners, has made and filed an order permitting and allowing the state of South Dakota to appear upon the tidal of said appeal, and to contest and offer evidence in opposition to the claims of petitioners as heirs at law of decedent, and to participate therein as a party. The alternative writ recites and alleges that the state of South Dakota has not and never has had any interest in the estate of John McClellan, deceased. Petitioners pray a writ of prohibition restraining said court from allowing the state to participate in any manner in the proceedings on appeal. In the petition for the writ is given an extended history of preceding litigation which gave rise to the present pfoceeding. The facts recited are somewhat voluminous and complicated, but, if deemed material to a proper understanding of this decision, a full statement of facts may be found in the decision of this court reported in 27 S. D. 109, 129 N.W. 1037" court="S.D." date_filed="1911-02-15" href="https://app.midpage.ai/document/mcclellan-v-state-6687701?utm_source=webapp" opinion_id="6687701">129 N. W. 1037.

[1] Upon the return day of this writ, the state of South Dakota, by Royal C. Johnson, Attorney General, and other counsel representing the state, filed an answer, the particular allegations of which need not be referred to further than to state that they are sufficient to present the questions we are called upon to decide in this proceeding. Briefly stated, the petition and answer disclose that the present petitioner, James S. McClellan, at one time filed in the county court of Minnehaha county a petition for letters of administration, founding 'his right thereto upon an allegation that he is a son and heir of John McClellan, deceased; that thereafter such proceedings were had in the county and circuit 'courts of Minnehaha county that the state of South Dakota, through its Attorney General, was permitted to appear and contest the allegation that James S. McClellan is a son of the decedent; and a decree was finally entered in the circuit court adjudging that James S. McClellan was- not a son of John McClellan. At all stages of the proceedings leading up to this final judgment, the petitioner, James S. McClellan objected to the appearance of the state, and denied its right to participate therein, on the ground that it was not a party interested in the estate.

An appeal was taken from the final judgment of the circuit court, to this court, upon whicih appeal the only question determined was as to the rigiht of the state to- appear and contest the application for appointment of an administrator upon the petition of James S. McClellan, wherein he claimed such right as son of the decedent. In re McClellan’s Estate, 27 S. D. 109, 129 N.W. 1037" court="S.D." date_filed="1911-02-15" href="https://app.midpage.ai/document/mcclellan-v-state-6687701?utm_source=webapp" opinion_id="6687701">129 N. W. 1037. The contention of the state is, and at all times has been that John McClellan died intestate without heirs, and that his property escheated to the state. Upon that appeal it was held: That the Legislature had authority to confér the exclusive right to become petitioners for letters of administration, upon certain classes of persons named in the statute, and to prescribe the order of precedence in which such right might be exercised by persons of the different classes, that, upon a petition filed -by a person included within one of the classes named in the statute, the only persons “interested” in the matter of the appointment of an administrator are those belonging to'one of the classes named in the statute, who are themselves entitled to and do make application for letters of administration; that the state is not designated as belonging to any one of the classes entitled to petition for letters, and in fact, had not attempted to claim such right, and therefore had no interest in the appointment of an administrator, and could' not contest such application ; that the right of the state to an escheat was not involved in that proceeding, for the reason that such right could not in any manner be affected by the usual and ordinary proceedings in administration, which involve only the conservation of the estate and payment of the just debts of the decedent; and that-the right of the state to an escheat, if such right existed, was operative as to the residue of the estate remaining for distribution at the close of administration. The full effect of the decision is that the state has no interest' in administration proceedings, except as might affect the final disposition of the estate. It is apparent that the ruling in that case is not decisive of the question involved in this proceeding.

[2] Section 307 of^the Probate Code provides: “Upon the final settlement of the accounts of the executor or administrator' * * * the court must proceed to distribute the residue of the estate in the hands of the executor or administrator, if any, among the persons who by law are entitled thereto. * * * ”

Upon the hearing of the petition for distribution, the matter to be ascertained and determined by the county court is, What persons are entitled by law to the residue of the estate? Upon the filing of the petition the law requires notice to be given by posting or publication as the court may direct, and for such time as may be ordered. Probate Code, § 310. The purpose of this notice and of the hearing upon the petition is to afford all persons having or claiming an interest in the final disposition of the residue of the estate an opportunity to appear at that time and make known their claims. The precise object of the hearing is to ascertain and determine any conflicting rights of claimants. It is apparent, therefore, that any person claiming to be an 'heir of the decedent or entitled to the estate or some portion thereof (unless estopped by participation in some prior proceeding in -the course of administration) has such an interest in the estate as entitles him to contest the right of any other person who claims to be an heir of the decedent. Upon this hearing, the facts constituting alleged heirship may be put in issue and presented to the court for determination. But it is the contention of petitioners that the state, claiming a right by escheat, is not an “interested party” within the meaning of the' Probate Code, until the right of the state has been determined in an escheat action, and is not entitled to contest the claim of an alleged heir at such hearing. We are inclined to the view that petitioners are wrong in this contention.

Our statute relating to escheat is almost exactly like that of the state of Illinois. In Wallahan v. Ingersoll, 117 Ill. 124, 7 N.E. 519" court="Ill." date_filed="1886-05-15" href="https://app.midpage.ai/document/wallahan-v-ingersoll-6963058?utm_source=webapp" opinion_id="6963058">7 N. E. 519, a case cited by petitioners, it was held that: “When the owner of real property dies intestate, without heirs capable of inheriting it, the title thereof devolves, hy operation of law, upon the state. Yet, when thus acquired, the state cannot malee its- title available without first establishing it in the manner prescribed by law.” Section 1111 of our Civil Code provides: “If there is no one capable of succeeding under the preceding sections, and the title fails from a defect of heirs, the prbperty of a decedent devolves and escheats to the state; and an action for the recovery of such property, and to reduce it into the possession of the state, or for its sale and conveyance, may be brought by the state’s attorney in the circuit court of the county or judicial subdivision in which the property is situated.” We think it clear, under this statute, if it be a fact that there are no heirs when the owner dies, the title to his property instantly vests in the state, but that the state is not given the right to recover the property and reduce it into possession of the state or sell and convey i't, except through an action of es-cheat. The title which vests in the state is not created or vested by the judgment in the action. But the judgment becomes evidence of the facts upon which the state’s title rests, and renders effective the right to recover and reduce the property into possession of the state.

Petitioners further contend that the interest of the state in escheated property is merely a contingent interest, dependent upon the existence or non-existence of heirs, and that a contingent interest is not such an interest in the estate as entitles the state to contest the claims of alleged heirs. The case of Halde v. Schultz, 17 S. D. 465, 97 N.W. 369" court="S.D." date_filed="1903-12-02" href="https://app.midpage.ai/document/halde-v-schultz-6686356?utm_source=webapp" opinion_id="6686356">97 N. W. 369, is cited as sustaining this contention. That case is not in point here. It involved the possible or contingent right of the father to inherit property belonging to a divorced wife, which might descend to a child of the marriage upon the death of the mother, and thence to the father, upon the death of the child. ! It was held in effect; that the father had no present interest in the estate, and that any contingent interest of the father would not be affetíted '¡by the probate proceedings, and he was therefore not a party interested. The interest of the state in escheated property is no more contingent than is the interest of an heir of a certain class, whose rights depend upon the existence or nonexistence of other heirs of a different or higher class, whose rights take precedence over those of the claimant. The right to< inherit in such case, as does the right of the state ho an escheat, depends upon the existence of heirs zohose rights are superior to those of the claimant, and the right is no more contingent where it is claimed by the state as an escheat than where it is claimed by one as an heir. The only “contingency” in either case is as to what may be the decision of the court upon a question of fact, namely, the existence of heirs.

[3] Petitioners further contend that the appointment of the administrator having been made upon the petition of James S- MeClellan, alleging that he is a son and heir of John McClellan, his right as a son to inherit is res adjudicata and cannot be contested upon the hearing on the petition for distribution. Whether the right of James S. McClellan to inherit as a son of the deceased may be deemed res adjudicata as to claimants who, by the ■statute, are given the right to appear and contest the appointment of an administrator, and who do in fact contest, or whether his rights should be deemed res adjudicata as to those who are given the right to contest but fail to appear, it is not necessary for us Jo determine in this case. It is an elementary principle of law that no righ can be deemed adjudicated in any proceeding wherein the law denies a person the privilege, right, and opportunity to be heard. This court, upon the former appeal, held that the state did not have the legal right to appear and contest the appointment of an administrator, no matter to what class of .persons the petitioner might belong. It follows that the heirship of James S. McClellan is not res adjudicata as against the state.

[4] Petitioners further contend that the state cannot contest the petition for distribution, claiming by escheat, because the probate court has no jurisdiction in matters of escheat. In this connection petitioners further contend that chapter 104, Laws of 1909, is unconstitutional, because section 20, art. 5, of the state Constitution, confers exclusive original jurisdiction in all' matters of probate and settlement of estates of deceased persons upon the county court, and -the Legislature is without power to withdraw any part of the jurisdiction vested by the Constitution in the county court and confer it upon the circuit court.

In the view we take of this case, it is unnecessary to consider or decide the question of the constitutionality of chapter 104, Laws 1909. If it be held that the state, though .possessing a present vested interest in escheated property, may not contest the claims of alleged heirs, either upon the petition for appointment of an administrator or upon the petition for final distribution' of the estate, and may not maintain an escheat action pending administration proceedings, it would follow that the estate is without power to resist the claims of alleged heirs, no matter how false or fraudulent, at least until after the property has been distributed to such claimants. If the claim of the state to escheated property be well founded in fact, the state is certainly an interested party, entitled to protect its rights against wrongful or fraudulent cjaims of any person whomsoever. If it be conceded, which we do not decide, that the escheat law of 1909 -is unconstitutional, and if it be conceded that -the -state may not exercise its right to reduce escheated-property 'to possession, or to sell or dispose of it, pending administration proceedings, -and the probate court may not by its decree upon distribution award escheated property to the state, certainly we think the state is an interested party, at least to an extent which permits- it to appear and contest the alleged rights of other claimants to- escheated property.

[5] Upon such contest, a -decision of the county court in favor of claimants as heirs, would doubtless be final and decisive of the right of the -state to an escheat until reversed on appeal. On the other hand, if the decision of the county court be adverse to those who claim as heirs, and that court be held to be without jurisdiction to award the property to' the state as an escheat, the -only effect of such decision would be to leave the property in the hands of the administrator, subject to the jurisdiction of that court. In such case the state, for the purpose of establishing its right to possession of the property remaining in the hands of the administrator, could maintain an escheat action, either under the provisions -of section mi. of the -Civil Code or chapter 104 of the Caws of 1909, if held constitutional. In other words, the right of the state to appear at the hearing upon the petition for distribution, and to resist the claims of alleged heirs, is entirely distinct from and independent of the right or jurisdiction of the county court to try an action of escheat. Whether a decision of the county court adverse to those claiming as heirs, upon the hearing for final distribution, would become res adjudicata as again-st such -claimants, should -they attempt to again assert the sa'me right against the ■state in an escheat action, we- do not need to consider.

We have examined with much interest the able and elaborate briefs of counsel, but do- not deem it necessary to further review the questions discussed or the many authorities cited. We are 'convinced that the circuit court was within its jurisdiction in making the qrcler permitting the state to appear and contest the claims of petitioners at the hearing upon the petition for distribution, and that the writ of prohibition should be denied. It will be so- ordered.