Ramsay v. Ramsay , 97 Ill. App. 270 ( 1901 )

Mr. Justice Bigelow

delivered the opinion of the court.

The naked question presented by this record is, whether a claimant, who has received a dividend from an ancillary administration, shall be postponed in the division of assets found in the domiciliary administration, to the extent of the per cent already received by him, the estate being insolvent. It is the contention of plaintiffs in error that by their assumed diligence in having had their claims allowed in the Probate Court of St. Louis, they have gained a preference over other creditors of the estate located in the domicile of the intestate, to the extent of the foreign assets paid over to them, and that this assumed preference exists in the nature of collateral security, so that plaintiffs in error are entitled to the same percentage out of the assets, located in this State that other creditors are, disregarding for the time being the amounts paid them by the Missouri administrator, provided all sums paid do not exceed the amount of their claims. To sustain this contention reference is had to such adjudications as Furness v. Union National Bank, 147 Ill. 570, and Levy v. Chicago National Bank, 158 Ill. 88, where the rule is laid down, that a secured creditor may prove up his claim for the full amount thereof, without reference to the value of his collaterals, and that such creditor is entitled to dividends on his entire claim out of the general fund just the same as unsecured creditors are. It is likewise sought to fortify such position by referring to the statutes quoted from Missouri and further by the general rule in administration of estates that there is no privity between administrations granted in different States. McGarvey v. Darnall., 134 Ill. 367.

We regard each suggestion made and authorities cited, entirely inapplicable to a case of this character.

Collateral security is in the hands of the creditor by the act of a person who has the full dominion of his property. When he dies this dominion passes under control of the laws of the land. By our statutes a person who proves his claim at the end of the second year after letters of administration granted, is as diligent as the person who proves his claim on claim day. Section 71 of Chapter 3, Hurd’s B. S. 1899, provides, that where the estate is insufficient to pay all demands the demands in any one class shall be paid pro rata. Such is and has been the policy of this State for many years in reference to estates administered here. The rule that there is no privity between administrations of different jurisdictions does not sanction the idea that an estate is made up of as many independent funds as there are jurisdictions, so that some creditors may, by a species of equitable attachment, gain a preference over others, if the estate should be insolvent. The rule merely goes to the extent of declaring that an administrator is only answerable to the court which appointed him; that if the estate is solvent in the ancillary administration, debts to home creditors will be paid there, instead of sending such creditors to the domicile, and that judgments recovered against a representative in one jurisdiction are not evidence against a representative holding by appointment in another jurisdiction. Outside of such considerations, as a question of potentiality the estate of a deceased person is in substance one estate, even though it be spread through several jurisdictions where local laws may more or less temporarily disturb this conception. From the same conception flows the rule of law, that the administration at the domicile, is the principal administration, and that all others are but ancillary and more or less subservient thereto, either as a matter of comity or of positive right. Young v. Wittenmyre, 123 Ill. 303; Schouler’s Executors and Administrators, Sec. 175.

From this conception flow many other rules in administration, such as that after the ancillary administrator has paid the debts of local creditors, if the court orders distribution of the residue, such distribution will be made in accordance with the laws of the domicile and not of the forum (Cooper v. Beers, 143 Ill. 25); that payment made to a domiciliary administrator by a non-resident debtor will be a good defense against a suit afterward brought by an ancillary administrator appointed after such payment (1 Woerner’s. Law of Administration, Sec. 161; Bull v. Fuller, 78 Iowa, 20); that the domiciliary administrator succeeds to the title of all the decedent’s personal estate, wherever located, while an ancillary administrator’s title is limited to such assets as are within the jurisdiction which appointed him. Vol. 13, Am. & Eng. Ency. Law (2d Ed.), 931. These rules we mention, not by way of decision, but by way of illustrating the views held by courts and text writers as logical deductions from the conception that a deceased person’s estate is substantially one estate, even though the situs thereof may be in many jurisdictions.

The chief object of ancillary letters is the protection of local creditors; when these have been paid, it is the duty of the ancillary representative to transmit the balance to the principal administrator for disposition by the courts of the domicile. Young v. Wittenmyre, supra; 1 Woerner’s Law of Administration, Sec. 167. But this rule holds only in case the estate, as a whole, is solvent; if insolvent, local creditors are only entitled to a pro rata dividend, measured by all assets and all liabilities, although the ancillary representative has sufficient funds in his hands to pay such creditors. Dawes v. Head, 3 Pick. 128; Davis v. Estey, 8 Pick. 475; 1 Woerner’s Administration, supra; 2 Kent’s Commentaries, Sec. 434. The law of Missouri found in the quoted sections 264 and 265 is only a statutory rule in recognition of this principle, as Mr. Woerner observes in the paragraph above quoted. In the aim at the principle of equality in distribution of insolvent estates some courts have denied the right of domiciliary creditors to prove their claims in the ancillary administration. Barry’s Appeal, 88 Pa. St. 131; Churchill v. Boyden, 17 Vt. 319. Other courts permit non-resident as well as resident claimants to prove their claims against the ancillary estate, leaving the question of payment of claims to be dealt with afterward, when the solvency or insolvency of the whole estate is to be scrutinized. Miner v. Austin, 45 Iowa, 221. (In Rosenthal v. Renick, 44 Ill. 202, the Supreme Court of this State follows the latter rule; however, the question of distribution was not up for consideration.) The facts in Miner v. Austin were: The intestate died in Illinois and letters of administration were issued on his property here. He also left property in Iowa to the amount of $6,000, and letters of administration were issued there. The claimants who wrnre residents of Massachusetts filed a claim to the amount of $60,000 against the estate in Illinois, which was allowed here. A claim by a resident of the State of Iowa for the sum of $2,000 had already been allowed against the ancillary estate. The Massachusetts claimants asked the allowance of their claim in Iowa; the lower court refused to allow the claim. This order was set aside by the Supreme Court. The court said:

“ But the case we have before us is one where the an- • ciliary administration is insolvent (or will be, if the plaintiff’s claim is allowed, as we held it should be), and there is no evidence as to whether the principal estate is solvent or insolvent. If it is solvent, it is clear that plaintiffs whose claim has been allowed against it should receive their payment from it. But if it is insolvent and can not pay as large a percentage as the ancillary estate could pay if no claims were allowed against it except those which are allowed against it alone, then the plaintiffs would be entitled to share in the ancillary estate; and inasmuch as this may happen, we hold that the Circuit Court erred in disallowing the claim. But justice would seem to require that they should not, in the aggregate, receive a larger percentage than those whose claims have been allowed against the ancillary estate alone.”

This language is as applicable to a principal administration, as to an ancillary one.

We have no means of knowing the precise grounds upon which the Probate Court of St. Louis awarded the 12.44 per cent to plaintiffs in error; nor do we regard this fact as important. The estate was insolvent in both jurisdictions as a matter of fact, whether the Missouri court knew it or not. In no view can the order of the Missouri court bind assets of the Eamsay estate further than assets under its control; it may be, if the Illinois estate could not have paid all of the claimants except plaintiffs in error as large a per ' cent as was paid to plaintiffs in error in Missouri, that they would be entitled to hold what they received by virtue of the order of a court of competent jurisdiction; on that

question we express no opinion. But so long as the estate was insolvent in both jurisdictions, the true legal effect of the order of payment to plaintiffs in error was this : By reason of the insolvency of the entire estate, there was due plaintiffs in error only a pro rata dividend when the final report was made by the Missouri administrator, and the 12.44 per cent was part payment of this share. Such is the precise import of the Missouri law (quoted in the statement of facts); from its provisions no intended' preference ’ on behalf of any claimant can be gathered, not even on behalf of resident creditors. Equality among all creditors is the aim of that law. The insolvency of the estate in Illinois was, without question, brought to the attention of the Missouri court by the defendant in error; that court, perhaps, being unable to say that the 12.44 per cent would do more than pay plaintiffs in error their pro rata share in the entire estate, ordered distribution of the amount on hand to the persons who were before the court. This payment had in view, as far as it was practicable at that time, the condition of the entire estate, wheresoever located; but if that be not so, we hold with the Iowa court, that in the distribution of the assets within our own jurisdiction, justice would seem to require that a person who proves up a claim against an ancillary estate and receives a dividend from such estate is to be postponed to the extent of that dividend in the distribution of the assets in the principal administration, the entire estate being insolvent. 13 Am. & Eng. Ency. of Law (2d Ed.), 937, 938; Hays v. Cecil, 16 Lea (Tenn.), 160; Lawrence v. Elmendorf, 5 Barb. 73.

The ruling of the Circuit Court being in accordance with the views herein expressed the judgment is affirmed.