Reconstruction Finance Corp. v. Dingwell

278 N.W. 281, 224 Iowa 1172
Supreme Court of Iowa·Decided March 15, 1938·No. No. 44084.·Published·Cited by 3 cases

Opinion

Riohards, J.

The petitioner, Reconstruction Finance Corporation, claims that on June 10, 1936, it filed in the office of the clerk of the district court of Iowa in and for Marion County three claims against the executor of the estate of M. Yerros, deceased. The estate was in the course of administration in that court, and the court was exercising the probate jurisdiction with which it was vested. The statutes of Iowa provide that claims filed against an executor or administrator of an estate during the first six months following the first publication or posting of the notice of the appointment are entitled to priority of payment with respect to claims subsequently filed. Petitioner claims that the date mentioned, June 10, 1936, was within such six months’ period. On February 10, 1937, the Reconstruction Finance Corporation filed in the United States District Court for the Southern District of Iowa a petition against the executor and others as defendants, seeking to adjudicate in that court the validity of, and. amount due upon, these claims. Notice of the pendency of the petition in the federal court was served upon the executor. Thereafter, he entered a special appearance to the petition alleging that the United States District Court was without jurisdiction to hear or determine the issues as to the validity or the amount of these claims. Upon a hearing the federal court overruled the special appearance and retained jurisdiction. After claimant had filed its petition in the federal court it filed in the district court of Marion County an objection to further proceedings in that court with respect to such issues. An amendment to this objection was filed later, in which were set out the proceedings in the federal court upon the executor’s special appearance. Upon the objection as amended there was a hearing in the district court of Marion County. That court overruled the objection and held that it had jurisdiction to try *1174 the validity of the claims and the amounts due thereon. To review this ruling a writ of certiorari was granted by this court. Return thereon has been made and the parties have been heard upon the certified record, proceedings, and facts.

The contention of petitioner is that the Marion County district court exceeded its proper jurisdiction and was acting or threatening to act illegally in the premises, in that, upon the institution of the proceedings in the federal court and the acceptance and retaining of jurisdiction by that court, it became vested with exclusive jurisdiction to try and determine the particular issues that were involved in the petition filed in that court by petitioner.

That the petitioner may institute suits in the United States courts is one of the provisions found in the act of Congress that created this corporation, and respondents raise no question upon that proposition. What respondents urge is that the filing of the claims in the state court, accompanied as in this ease by service of notice on the executor of such filing, amounts to a demand for payment, and is the commencement of an action; that the commencement of such an action, followed by two postponements of the time for the hearing upon the claims in the state court, the postponements having been agreed upon by petitioner, is an election by petitioner of the court in which the proceeding's are to be had, binding upon petitioner as an election in such manner that petitioner may not deny the exclusive jurisdiction of the state court to adjudicate the entire controversy, while the action is still there pending.

In Farmers Bank v. Wright, C. C., 158 Fed. 841, it was held that the filing of a claim against a decedent’s estate with the clerk of the state court, within the prescribed time necessary to save it from the bar of the statute of limitations or to fix its classification, is but a reasonable precaution to fix its status, and does not defeat the jurisdiction of the proper circuit court of the United States to determine its validity or the amount due thereon. It was held that the proceedings to establish or prove the claim against the executor is essentially an independent suit inter partes and not a matter of pure probate jurisdiction as defined in In re Broderick’s Will, 21 Wall. 503, 22 L. Ed. 599, and again in Farrell v. O’Brien, 199 U. S. 89, 25 S. Ct. 727, 50 L. Ed. 101; and see Cooley v. Smith, 17 Iowa 99; McCrary v. Demming, 38 Iowa 527, 531; Clough v. Ide, 107 *1175 Iowa 669, 671, 78 N. W. 697. In Hess v. Reynolds, 113 U. S. 73, 5 S. Ct. 377, 378, 28 L. Ed. 927, a claim filed in a Michigan probate conrt was removed to the United States Circuit Court. In the opinion the United States Supreme Court had this to say:

“It may be convenient that all debts to be paid out of the assets of a deceased man’s estate, shall be established in the court to which the law of the domicile has confided the general administration of these assets. And the courts of the United States will pay respect to this principle, in the execution of the process enforcing their judgments out of these assets, so far as the demands of justice require. But neither the principle of convenience, nor the statutes of a State, can deprive them of jurisdiction to hear and determine a controversy between citizens of different States, when such a controversy is distinctly presented, because the judgment may affect the administration or distribution in another forum of the assets of the decedent’s estate. The controverted question of debt or no debt is one which, if the representative of the decedent is a citizen of a State different from that of the other party, the party properly situated has a right, given by the Constitution of the United States, to have tried originally, or by removal in a court of the United States, which cannot be defeated by State statutes enacted for the more convenient settlement of estates of decedents. ’ ’

In Clark v. Bever, 139 U. S. 96, 11 S. Ct. 468, 470, 35 L. Ed. 88, it is said:

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Reconstruction Finance Corp. v. Dingwell, 278 N.W. 281, 224 Iowa 1172 (iowa 1938).

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