199 F. 673 | 9th Cir. | 1912
(after stating the facts as above). This country adopted the equitable jurisdiction of the High Court of Chancery of England when the Constitution was framed, and it is the jurisdiction exercised by the federal courts to the present time, saving such modifications as it has undergone through usage and by action of Congress, and, in practice, through the rules adopted by the Supreme Court. It has been said that the jurisdiction “is subject to neither limitation nor restraint” by state legislation, and is uniform throughout the different states of the Union.” Payne v. Hook, 7 Wall. 425, 430, 19 L. Ed. 260. See, also, Robinson v. Campbell, 3 Wheat. 212, 4 L. Ed. 372; McConihay v. Wright, 121 U. S. 201, 7 Sup. Ct. 940, 30 L. Ed. 932; Arrowsmith v. Gleason, 129 U. S. 86, 9 Sup. Ct. 237, 32 L. Ed. 630. This jurisdiction in its parent country undoubtedly extended to the administration of estates of deceased persons. Says Mr. Pomeroy:
“The relation subsisting between executors and administrators on the one band, and legatees, distributees, and creditors on the other, has so many of the features and incidents of an express active trust that it has been com*679 pletely embraced witbin the equitable jurisdiction in England, and also in the United States, where statutes have not interfered to take away or to abridge the jurisdiction.” 1 Pom. Eq. Jur. § 156.
The states, however, through their statutes and procedure, have vitally encroached upon this special subject of equitable jurisdiction. In a great majority of the states, the original jurisdiction over administrations in all ordinary cases, unless attended with special circumstances, such as fraud, or with some equitable feature/ such as a trust, is either expressly or practically abrogated. Courts of equity, in the absence of such special circumstances or distinctly equitable feature, either do not possess or will not exercise the jurisdiction, but leave the whole matter of administration to the special probate tribunals. In a few of the states only does the full equitable jurisdiction over administrations remain-unimpaired, and in these it is not exclusive, but concurrent with systems of administration conferred upon probate courts. Sections 348, 349, 350, Pom. Eq. Jur.; 16 Cyc. 92-95.
So it is the doctrine of the English chancery that, whenever an infant succeeds to property, that court takes the management of its person and estate. “In this matter, however,” says Mr. Pomeroy, “as in the administration of decedents’ estates, the Legislature has intervened, and the probate courts practically appoint all guardians, and control their official actions. Under their general power in cases of trust and of accounting, the American courts of equity may give all proper relief to wards against their guardians; Dut the peculiar jurisdiction over the persons and estates of infants, possessed by the English chancery, does not, to any extent, exist in the American equity jurisprudence.” Pom. Eq. Jur. § 78. At another place (section 1097) the author further says:
•‘Equity has, therefore, a general jurisdiction, at the suit of the wards or other beneficiaries, to compel a performance of the trust duties, to relieve against violations of these trust obligations, to direct an accounting and final settlements of the quasi trust, and to grant other special relief made requisite by the circumstances.”
It is upon the ground of a trust impressed by law that the equitable jurisdiction over estates primarily rests, and its remedial powers may be exercised as in administration suits, and in creditors’ bills instituted against executors or administrators, or after distribution against legatees, for the purpose of charging them with a liability to apply the assets of the decedent to pay his debts and the like. Borer v. Chapman, 119 U. S. 587, 600, 7 Sup. Ct. 342, 30 L. Ed. 532.
.[4] Whatever good intentions may have prompted Newberry in disposing of his children’s inheritance, the disposition made was a manifest constructive fraud upon their rights, and it is bootless to speculate as to the probability or possibility of the property being lost to the estate in any event by reason of prior incumbrance or financial entanglement. Van Houten became a party to the fraud by lending himself to become guardian of the minor heirs, and by receipting in his official capacity for money which he never actually received, purporting to be the proceeds of the sale at partition of their inheritance. The device enabled Newberry, the father, to possess himself of the inheritance, and afterwards to use it for his own purpose, so that it was lost to the heirs. Being a party to such device, Van Houten by the plainest principles of estoppel by record and in pais, was ever afterwards precluded from denying that he received the money. Neither can his sureties be heard to say that he never received it. Judge of Probate v. Sulloway, 68 N. H. 511, 44 Atl. 720, 49 L. R. A. 347, 73 Am. St. Rep. 619;
“The administrator is the usual and proper person to present the account of the deceased guardian for settlement.” Chapin, Judge, v. Livermore et al., 13 Gray (Mass.) 561, 562.
But there is no rule of law of which we are aware rendering the administrator personally liable to the ward for a failure to render such service. Indeed, in the present case, if the account of Van Houten as guardian had been presented, it is evident it would have been of no avail to the ward, as the administratrix had at no time property or funds in her hands in any way applicable to the account. So that, in either view, there could be no personal liability on the part of Mrs. Wilkinson arising from her acts as administratrix. Much less would any personal liability arise on her part, or on the part of Eugene Van Houten, by reason of being heirs of Van Houten’s estate. It is clear, therefore, that the complaint should be dismissed as against Mrs. Wilkinson and Eugene Van Houten.
“Every executor or administrator shall, immediately after his appointment, cause to be published in some newspaper printed in the county, if there be one, if not, then in such newspaper as may be designated by the court, a*682 notice to the creditors of the deceased, requiring all persons having claims against the deceased to present them, with the necessary vouchers, within one year after the date of such notice, to such executor or administrator, at the place of his residence or transaction of business, to be specified' in the notice. Such notice shall be published as often as the court shall deem necessary, but not less than once in a week for four successive weeks.”
And section 1472 that:
“If a claim be not presented within one year after the first publication of ,the notice, it shall be barred.”
The word “claim,” in the sense as used by the statute, has been construed by the Supreme Court of the state of Washington to be of broad significance, and “to include every species of liability which the executor or administrator can be called on to pay, or to provide for the payment of, out of the general fund belonging to the estate.” Barto v. Stewart et al., 21 Wash. 605, 59 Pac. 480, 482. This case expressly overrules the case of Neis v. Farquharson, 9 Wash. 517, 37 Pac. 697, in any bearing it has upon the point so decided. This would seem to include the claim of plaintiff, when it is considered that no funds whatever of his Went into the hands of his guardian, and none, therefore, could have gone into the hands of the administratrix of his guardian’s estate. He could have no other demand, except a personal claim against the estate, occupying the position of a general creditor, for so much money as might have been found due on a proper showing or accounting. It could have been in no sense a claim or demand for a specified fund or specific property traceable as the fund or property of the ward separable from the property of the estate.
The statute is not without its prototype elsewhere,: which has received the like broad construction, and, as remarked by the trial court, is enforced with even greater strictness than general statutes of limitation; its object being to secure an early and final settlement of estates, to the end that what shall remain may be distributed to the heirs or next of kin free from incumbrances or charges which would lead to protracted litigation. Fretwell et al. v. McLemore et al., 52 Ala. 124; Rhodes v. Hannah’s Administrator, 66 Ala. 215; Taylor, Adm’r, v. Robinson, Adm’x, 69 Ala. 269; Walker v. Byers, 14 Ark. 247; Bennett et al. v. Dawson, Adm’x, et al., 18 Ark. 334; Brearly v. Norris, 23 Ark. 169; Patterson v. Mc-Cann, 39 Ark. 577; Purcelly et al. v. Carter, Adm’r, et al., 45 Ark. 299; Fowler v. True, 76 Me. 43; Attorney General v. Brigham, 142 Mass. 248, 7 N. E. 851; Lathrop v. Bampton, 31 Cal. 17, 89 Am. Dec. 141; McGrath v. Carroll, 110 Cal. 79, 42 Pac. 466.
Such statutes are in proper cases given ample effect in the federal courts, and, to illustrate with what scope and strictness they are enforced, we quote from Morgan v. Hamlet, 113 U. S. 449, 451, 5 Sup. Ct. 583, 28 L. Ed. 1043, a case instituted in equity to enforce certain demands against the heirs at law of John G. Morgan, deceased, who came into property of the estate sufficient to satisfy the demands of claimants, where it was answered that the demands were not presented to the administrator within the limita
“It is sought, in argument on behalf of the appellants, to distinguish their case, at least the case of the two infant children of Samuel D. Morgan, from any case within the statute of nonclaim, on the ground that at the death of their father his 1itle to the real estate, which constituted the plantation, descended to them as his heirs at law, and thereafter as to the operations conducted by John Morgan in 1864 and 1865, having no guardian, the latter was in equity their representative and guardian de son tort and trustee, so that upon his death, and until they arrived at age, there was no one competent to make a demand against his administrator, within the terms of the statute. But we are unable to appreciate the force of this supposed distinction. The statute in question contains no exception in favor of claimants under disability, of nonage, or otherwise. The claim of the complainants against John G. Morgan was adverse to his administration, although it may have originated in consequence of a relation of trust; and there is no ground, that we are able to understand, on which it can be excepted out of the operation of the statute in question. Their claim was equally against the administrator of John G. Morgan, whether the latter be considered as the defaulting partner of themselves or of their father. Whatever its description, it was a claim against the estate of John G. Morgan, and for which his personal representativo was in the first instance liable; and the statute is a bar to every such claim, unless presented within the time prescribed.”
The doctrine was reaffirmed in Security Trust Co. v. Bank, supra, with even stronger emphasis. It will be observed, also, in the examination of this case, that it is controlled by the decisions of the Supreme Court oí Arkansas in its construction and application of the statute of nonclaim obtaining in that state; the opinion of the court citing the cases of Walker v. Byers, Bennett v. Dawson, and Brearly v. Norris, supra.
Further than this, it is settled that the federal courts will adopt and follow the decisions of the highest courts of the states in construing and applying local statutes of limitation. Bauserman v. Blunt, 147 U. S. 647, 13 Sup. Ct. 466, 37 L. Ed. 316. This statute of nonclaím, unless suspended or barred because of equitable considerations — a matter to be considered later — is effective to extinguish the. liability of the principal, and, that being extinguished, there can exist none against the surety. Spokane County v. Prescott, 19 Wash. 418, 53 Pac. 661, 67 Am. St. Rep. 733.
“All actions against snretios shall be commenced within six years after the revocation or surrender of letters of administration or death of the principal.”
And by section 1633 the provisions of this section are made to “apply to bonds taken of guardians.” Van Houten, the guardian, died January 25, 1904, and this suit was instituted February 2, 1910, so that the six-year limitation of the statute had . clearly run. There is strong authority to the effect that the terms of the statute inhere in the surety’s contract in entering upon the bond of the guardian, and
It is- stoutly urged that neither of these limitation statutes can stand in the way of equitable interposition on account of fraud practiced, and the concealment thereof by the alleged delinquent party, where the fraud remains undiscovered until a recent date prior to the institution of the suit for relief from the effect of such fraud. Counsel's position is that, in a court of equity, these statutes of limitation do not run against one who, because of active fraud' or concealment equivalent thereto, had no notice 'of his rights, and the cause of action will be deemed to have accrued only when he knew, or by reasonable diligence could have known; that such cause existed.
In general, courts of equity, being courts of conscience, are not bound by the rigidity of statutes of limitation, as are courts of - law. When conditions are equal — that is, when the reasons prompting the exercise of judicial power are of equal potency and applicability— no further reasons being present, they will act upon the analogy of, or, to be more exact, rather in obedience to, the limitations of law: Badger v. Badger, 2 Wall. 87, 94, 17 L. Ed. 836. But otherwise they will adopt such reasonable limitations as are prompted by equity and good conscience, in view of the special exigencies of the case. This is not to say that the appropriate legislative authority might not adopt limitations that would be binding upon courts of equity as well as upon courts of lawr; but, as respects the general legislation pertaining thereto, although it may extend to special subjects, courts- of equity have never been inexorably restrained or circumscribed by such legislation or the limitation of actions by general law. This observation bears with peculiar force where the equitable jurisdiction is exercised in the federal courts and the limitations are regulated by state legislation.
“Statutes of limitation form a part of tlie legislation of every government, and are necessary-to the peace and repose of society. When they, are addressed to courts of equity as well as to courts of law, as they seem to he in*685 all cases of concurrent jurisdiction (as in matters of account), they are equally obligatory on each court. In other cases, courts of equity act upon the analogy of limitations at law, and sometimes upon their own inherent doctrine of discouraging, for the peace of society, antiquated demands, by refusing to interfere where there has been gross laches or unreasonable delay. They also interfere in many cases to prevent the bar of the statutes, where it would be inequitable or unjust; as, for example, if a party has perpetrated a fraud which has not been discovered till the statutable bar may apply to it in law, courts of equity will interpose and remove the bar out of the way of the injured party. In cases of mistake, also, as well as fraud, they will not consider the statute as running till after the discovery of the mistake, as laches c-aimot be imputed to the injured party till the discovery of the fraud or mistake has been made. 2 Story’s Eq. § 1520. But as lapse of time necessarily obscures the truth and destroys the evidence of past transactions, courts of chancery will exercise groat caution in sustaining hills which seek to disturb them. They will hold the complainant to stringent rules of pleading and evidence, and require him to make out a clear case.”
In Williams v. Neely, 134 Fed. 1, 13, 67 C. C. A. 171, 183 (69 L. R. A. 232):
• “In the application of the doctrine of laches, the s.ettled rule is 1hat courts of equity are not hound by, but that they usually act or refuse to act in analogy to, the statute of limitations relating to actions at law of like character. *' ® * The meaning of this rule Is that, under ordinary circumstances, a suit in equity will not he stayed for laches before, and will be stayed after, the time fixed by the analogous statute of limitations at law; but if unusual conditions or extraordinary circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to forbid its maintenance after a longer, period than that fixed by the statute, the chancellor will not he bound by the statute, hut will determine the extraordinary case in accordance with the equities which condition it.”
In Kentucky Coal & Timber D. Co. v. Kentucky Union Co., 187 Fed. 945, 948, 110 C. C. A. 93, 96:
“Slate statutes of limitation are prescribed for the tribunals of the state. They are not, ex propria vigore, of any force in the courts of the United States. They may be, and in many instances have been, adopted by acts of Congress as laws of the United States. There is no generdl statute of limitations in the laws of the United States relating to suits in equity. But, speaking now of the equity courts of the United States, there has been for the sake of conformity a disposition to accept the statutory regulations of the states prescribing the time within which suits may be brought. And this practice has ripened into a rule which will be enforced whenever by observing it the court is not required to abrogate its own principles, in which case it will protect its own jurisdiction. Alsop v. Riker, 155 U. S. 448, 460. 15 Sup. Ct. 162, 30 L. Ed. 218; Patterson v. Hewitt, 195 U. S. 309, 25 Sup. Ct. 35, 49 L. Ed. 214. Instances are found where those courts have enforced the doctrine of laches in favor of defendants where the lapse of time has been shorter than that prescribed by state laws, but where the peculiar circumstances gave rise to an equity which the court was hound to protect. By the same token it would allow a longer period for bringing suit than that prescribed. when by fraud or concealment of the cause of action had not been discovered, or would not by reasonable diligence have been discovered.”
And in 19 Am. & Eng. Enc. of Raw (2d Ed.) 243, it is said:
“It has always been the rule in equity that the defendant’s fraudulent concealment of a cause of action will postpone the running of the statute until such time as the plaintiff discovers the fraud. The defendant having, by his own wrongdoing, prevented the plaintiff from instituting his suit, will not be permitted to take advantage of his own wrong by setting up the statute as ¡i defense.”
As it pertains to the statute of rionclaim, we find cases of marked analogy to the present. Allen v. Conklin, 112 Mich. 74, 70 N. W. 339, cited by plaintiff’s counsel, is one of them. Without reciting the facts, it is sufficient to say that it was held that:
“Where a guardian, since deceased, has fraudulently appropriated funds of the ward' to his own use, equity has jurisdiction to require his executors to account to the ward and to decree a sale of land of the estate to pay the amount found due, though, because of lapse of time, the probate court cannot allow the claim nor decree a sale of land to pay it.”
Another case decided in the federal court is Johnston v. Roe (C. C.) 1 Fed. 692. The debtor having died, his estate was administered under the laws of Missouri and fully settled and closed, and the claim in question was not proven in probate. Certain real and personal property passed to the heirs. The claim sued on was one having its origin in fraud, which was successfully kept concealed from the claimant, and the purpose of the suit was to subject the property of the heirs to the payment of the claim. It was held that a federal court would assume jurisdiction of the suit against the estate of the decedent for the recovery of the debt alleged to have been fraudulently concealed, although the claim was barred by the statute of limitations of the state in which such court had territorial jurisdiction. At the close of his opinion the learned judge said:
“The rule that the statute of limitations does not run in favor of one who perpetrates a fraud while he conceals it from the party injured, as a general doctrine of equity jurisprudence, is too well settled to require the citation of authorities.”
And in a still later case — Chewett v. Moran (C. C.) 17 Fed.. 820— which was to subject real estate in the hands of the heirs to the payment of the debts of their ancestors, jt was held that:
“It is not an absolute bar to the maintenance of such bill in a federal court that the estate of the ancestor was administered in the probate court of the state, that commissioners were appointed to audit claims against the estate, that a time was limited within which all claims must be presented, and that plaintiff did not appear before such commissioners or offer to make proof of her debt, notwithstanding a law of the state declared that all claims against such estate not so presented should be forever barred.”
“A neglect to do what in the law should have been done for an unreasonable or unexplained length of time under circumstances permitting diligence.” 24 Cyc. 840.
It is in large sense a relative term, dependent upon the attendant and peculiar conditions and circumstances of the case in hand. What would be laches in one case would fall short of it in another. It was
“Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party, and cause a balance of justice or injustice in taking one course or the other, so far as relates to the remedy.”
Many cases might be cited illustrating its application. See Alsop v. Riker, 155 U. S. 448, 460, 461, 15 Sup. Ct. 162, 39 L. Ed. 218; Patterson v. Hewitt, 195 U. S. 309, 317, 318, 25 Sup. Ct. 35, 49 LO. Ed. 214; Northern Pac. Ry. Co. v. Boyd, 177 Fed. 804, 823, 824, 101 C. C. A. 18; Wilson v. Wilson, 41 Or. 459, 69 Pac. 923; Miller v. Ash, 156 Cal. 544, 105 Pac. 600.
Counsel for plaintiff contends that this was the first discovery of the fraud, and that suit was timely instituted after such discovery. We are firmly of the view, however, that plaintiff was chargeable with knowledge of this fact from the information given to him by his stepmother. The receipt related to the same matter spoken of by his stepmother, and was found in and constituted a part of the same record which was involved by her suggestion. The record was one which imports constructive notice, and, almost without question, if he had pursued inquiry from his stepmother’s suggestion, with a view to possessing himself of his supposed interest in his mother’s property, he
“It is one of the settled general rules in this class of cases that if the party-seeking to avoid the operation of the statute of limitations, or to excuse the delay which would, in the absence of a sufficient excuse, amount to such laches as would defeat his right of action, possessed information or knowledge of extraneous facts and circumstances, or, in other words, of matters in pais, which, although not directly tending to show the existence of a prior conflicting right, are sufficient to put him, as a prudent person, upon inquiry, he is then charged with constructive notice of all that he might have learned by'an inquiry prosecuted with reasonable diligence. Pom. Eq. Juris. § 610. It is said by the same author that from the existence of such circumstances ‘the legal presumption arises that he has obtained information of what he might thus have learned. In every such case the first question is whether the facts of which the party has information are sufficient to put him upon an inquiry, so as to raise the prima facie presumption. The further question is then presented whether he has made a due inquiry without discovering the truth, so as to overcome the presumption and defeat the notice, or whether he has so neglected this duty that the presumption remains unshaken and the notice effective.’ ”
Again, says the court, in Nash v. Ingalls, 101 Fed. 645, 648, 41 C. C. A. 545, 548:
“The law requires that, in order to relieve himself from the consequence of delay in seeking a remedy for a wrong, the party should have given reasonable attention to his own affairs, and he is chargeable with knowledge of such facts as such reasonable attention would have afforded him.”
So, also, in Foster v. Railroad Co., 146 U. S. 88, 99, 13 Sup. Ct. 28, 32 (36 L. Ed. 899):
“The defense of want of knowledge on the part of one charged with laches is one easily made, easy to prove by his own oath, and hard to disprove; and hence the tendency of courts in recent years has been to hold the plaintiff to a rigid compliance with the law which demands, not only that he should have been ignorant of the fraud, but that he should have used reasonable diligence to have informed himself of all the facts.”
Reasonable attention to an affair peculiarly his own would have led plaintiff, at least soon after his arrival at age, to the possession of all the knowledge he acquired immediately prior to the bringing of the suit.' But he delayed the institution of his suit until the statute of limitations had fully run against him and in favor of the surety. If it be said that the delay has placed the defendant Monaghan in no worse condition than if the suit had been promptly instituted when the plaintiff arrived of age, it may be answered as to this: We cannot say. It is a fact that four sureties signed Van Houten’s bond, and but one is made a party here. All were made parties to the original complaint, but for some reason all have been dropped from the second amended complaint except Monaghan, for what reason we have not been advised. Whether the others have died or become insolvent, or why they are not here, is not explained. It is reasonable to suppose that, if alive and so-lvent, they also would have been retained as parties.
We are of the opinion that, had the suit been seasonably instituted after the plaintiff became of age, the bar of the statute of nonclaim would not have stood in the way of his recovery, and, of course, had the suit been brought but a few days earlier, the statute of limitations respecting sureties on guardians’ bonds would not have run at all. We are impelled to the conviction, however, that the delay suffered by plaintiff after he was in possession of information challenging further inquiry on his part, and after he had arrived at legal age, under the facts and circumstances attending the controversy, amounts to laches on his part, and a court of chancery will not now interpose to remove the bar of either of such statutes of limitation, nor will it afford him the relief prayed.
The decree of the District Court will be affirmed, with costs to the appellees.