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GALLEHER v. GRANT

March 12, 1958

MAURICE D. GALLEHER, AS EXECUTOR OF THE LAST WILL AND TESTAMENT OF MARTHA R. COATES, DECEASED,
v.
HERBERT D. GRANT AND FIRST NATIONAL BANK IN ST. PETERSBURG, AS ADMINISTRATORS WITH THE WILL ANNEXED OF THE ESTATE OF MARTHA R. COATES AND AMERICAN EXPRESS COMPANY, A NEW YORK ORGANIZATION; CHASE MANHATTAN BANK, A NATIONAL BANKING ASSOCIATION; FIRST BANK STOCK CORPORATION, A DELAWARE CORPORATION; NORTHERN MINNESOTA NATIONAL BANK OF DULUTH, A NATIONAL BANKING ASSOCIATION; SOUTHERN COMPANY, A DELAWARE CORPORATION; AND GRAY DRUG STORES, INC., AN OHIO CORPORATION.



The opinion of the court was delivered by: LA Buy, District Judge.

The complaint is brought pursuant to 28 U.S.C.A. § 1655 to remove a cloud upon the title of the plaintiff in and to certain shares of corporate stock held in his possession and to recover accrued dividends upon said shares. The plaintiff is the Illinois ancillary executor and testamentary executor and trustee under the Will of Martha R. Coates and prays that the court order that title to said shares is vested in him as Executor under the Last Will and Testament of Martha R. Coates, Deceased, and the codicils thereto; that the court order the transfer of said shares to plaintiff and enter judgment for plaintiff for the accrued dividends.

All defendants have been personally served in accordance with § 1655, 28 U.S.C.A. The corporate defendants American Express Company, Chase Manhattan Bank, First Bank Stock Corporation and Northern Minnesota National Bank of Duluth have filed answers stating generally they are without knowledge or information sufficient to form a belief as to most of the allegations of said complaint and that they are voluntarily appearing and are willing to transfer said stock and pay the dividends specified to the person determined by this action to be entitled thereto. Corporate defendants Southern Company and Gray Drug Stores, Inc., are in default for failure to appear and plead.

Defendants Herbert D. Grant and First National Bank in St. Petersburg, Florida, have filed their answer and counterclaim asking for declaratory judgment against the plaintiff as Illinois executor and testamentary trustee. In addition, defendants have filed a cross-claim pursuant to 28 U.S.C.A. § 1655 against the corporate defendants and plaintiff as Executor under the Will of Martha R. Coates, demanding transfer of said stock and payment of accrued dividends to them as the properly constituted domiciliary administrators of the decedent's estate.

Pending before the court for determination are the following motions:

I

The defendants, Herbert D. Grant and First National Bank of St. Petersburg have filed their motion for summary judgment on their counterclaim for the reason that no genuine issue of material fact exists and they are entitled to declaratory judgment as a matter of law as to (1) whether the laws of Illinois provide that an Illinois ancillary executor must distribute assets under his control to the domiciliary administrator, and (2) whether the order of the Probate Court of Cook County entered December 28, 1956 ordering distribution of assets by Galleher as ancillary executor was contrary to law, without notice to them, and therefore null and void. It is contended that the Probate Court has no authority to order such a distribution upon the conclusion of ancillary administration and to distribute the same to anyone except the domiciliary administrators of the decedent's estate.

II

Herbert D. Grant and First National Bank of St. Petersburg, defendants, have filed a motion for summary judgment on their cross-claim against the corporations and Galleher requesting determination as a matter of law (1) whether the shares of stock are assets located within the respective domiciles of the corporations issuing the same and that payments of dividends are governed by the laws of such states, and (2) whether the laws of such states require distribution of the shares to the domiciliary administrator of the decedent's estate. The plaintiff, Galleher, urges that said shares are assets having their situs in Illinois pursuant to Section 55 of the Probate Act, Ill.Rev.Stat. 1958, c. 3, § 207 and under the doctrine of Erie R. Co. v. Tompkins, 1938, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, this court must follow the Illinois law that a personal representative, though ancillary, is vested with full legal title to personal property having a situs in this state.

III

The plaintiff, Maurice D. Galleher, has moved to dismiss the counterclaim for the reason this court does not have jurisdiction in that (1) the administration of the estate as to assets located in Illinois and their ultimate distribution is within the sole and exclusive jurisdiction and discretion of the Probate Court of Cook County; (2) that the order of the Probate Court entered December 28, 1956 is not void for lack of notice; (3) the federal district courts have no jurisdiction in probate matters; and, if the court should hold that it does have, such jurisdiction should not be exercised; and (4) the domiciliary administrators lack the capacity to sue on their counterclaim.

On January 13, 1956 a petition for admission of the will to probate, signed by Galleher, was filed, and on January 19, 1956 Heath avers that at the request of Grant, he secured photostatic copies of the testamentary dispositions from the Clerk and mailed them to the defendant, Grant; on January 25, 1956 true copies of these testamentary dispositions were admitted to probate by the Court of the County Judge of Pinnellas County, Florida, and letters of administration with the will annexed were issued to Herbert D. Grant and First National Bank of St. Petersburg, Florida, which administration is not yet completed; that on February 9, 1956 the Probate Court of Cook County upon presentation of the original will and codicils appointed the plaintiff, Maurice D. Galleher, as the Illinois executor; that on December 26, 1956, the Cook County Probate Court records showed no appearance on behalf of Grant and the First National Bank or anyone, and no order had been entered by the Probate Court under Rule 60 of its rules; therefore, no notice was given to anyone prior to the presentation of Galleher's petition for instructions on December 28, 1956, which resulted in an order authorizing him to distribute the estate in accordance with the will and codicils; on January 10, 1957, a true copy of said order, together with a letter from Heath was sent to the attorney for the Florida administrator; on May 10, 1957 Galleher filed his first Account and Report showing he had distributed to himself as residuary trustee a portion of the residuary estate; on July 9, 1957 the Florida administrators filed their objections in the Probate Court of Cook County to said Account and Report stating that approval of said account should be delayed because of the pendency of the instant district court suit, or, in the alternative, that said account be disapproved and Galleher instructed to return to himself all such property and money distributed and thereafter ordered to distribute the same to the objectors as domiciliary administrators of the decedent's estate.

Before considering the defendants' motion for summary judgment on their counterclaim for declaratory judgment, the court will consider the merits of the plaintiff's motion to dismiss such counterclaim. That motion is ultimately premised on two basic concepts: (1) the federal courts have no jurisdiction over probate matters and, in addition, the same issues are pending before the Probate Court of Cook County; and (2) the Florida administrators lack capacity to sue and the counterclaim must be dismissed.

In Waterman v. Canal-Louisiana Bank & Trust Co., 1909, 215 U.S. 33, 43, 30 S.Ct. 10, 12, 54 L.Ed. 80, a general statement of a federal court's jurisdiction in ...


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