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07/22/69 Marcella S. Halstead, v. John Spry Et Al.

July 22, 1969






Bazelon, Chief Judge, Prettyman, Senior Circuit Judge, and Robinson, Circuit Judge.


Elizabeth Jepson Spry died in 1945, while domiciled in Chicago, Illinois. She was survived by three children, Elizabeth Spry, now deceased, John Spry, an appellee herein, and Marcella S. Halstead, the appellant. Elizabeth Jepson Spry, the mother, was intestate, and there was no administration of any estate she may have left. Elizabeth Spry, the daughter, died in 1965, also intestate, and her estate is in administration in the District of Columbia.

In 1968, appellant filed a complaint in the District Court which, as amended, alleged that Elizabeth Spry had "fraudulently, with intent to deprive [appellant] of her lawful inheritance," converted personal property owned by Elizabeth Jepson Spry at death, *fn1 and that the conversion was concealed from appellant until after Elizabeth Spry's death in 1965. The complaint further alleged that Jean Spry Bordley, *fn2 another appellee, became aware of the conversion, and collaborated with Elizabeth Spry in the concealment and participated in the enjoyment of income from the converted assets. The action sought damages and an accounting *fn3 of all property of Elizabeth Jepson Spry which allegedly had been usurped or which had been purchased with the fruits of the alleged usurpation. *fn4

Appellees moved for dismissal of the complaint, and the District Court granted the motion solely on the ground that appellant was not the proper party to sue on the cause of action pleaded. "Such a cause of action, if it exists, can be asserted," the court said, "only by the personal representative of Elizabeth Jepson Spry." The court reasoned that "under the circumstances, the [appellant's] remedy, if any, is to bring an appropriate proceeding in a proper jurisdiction for the appointment of an administrator of the estate and the cause of action here sought to be asserted should be asserted by the administrator when appointed." *fn5

It is undoubtedly true, as a general proposition, that a suit seeking recovery of a decedent's personalty can be brought only by the personal representative of the decedent's estate. *fn6 The rights of beneficiaries and creditors of the estate and the interest in orderly administration of the decedent's worldly goods are best served by such a requirement. The rule, however, is not absolute, *fn7 and the considerations supporting it exert little weight where, as is alleged here, the facts connoting fraudulent conversion and concealment of the property are uncovered many years after the decedent's death, and the converted assets or their fruits have supposedly been removed to a locality far distant from the place of the decedent's domicile at death.

In Nunnally v. Wilder, *fn8 we dealt with a roughly parallel situation. There the executor of a decedent administered and closed the estate without asserting a claim of the estate against a debtor. We held that the sole surviving residuary legatee could institute an action for recovery of the debt. We recognized the general principle that only the personal representative of the estate can sue to collect debts owed the estate, *fn9 but favored an exception after close of the estate and discharge of the personal representative. *fn10 We elucidated:

The reasons which call for an independent administrator have, for the most part, disappeared by the time the exception comes into play. The creditors have been discovered and satisfied; cost of handling the estate has been determined and paid; and the order of distribution of the residuary estate has been determined and the respective sums paid. There is little danger of a fraud on the estate. Moreover, the expense of appointing a new administrator and his costs and fees can be avoided. In short, there seems to be no good reason why the plaintiff, as the sole existing residuary legatee of the estate, should not be permitted to assert a claim which the . . . executor could have brought. *fn11

We reach a similar conclusion here. There never was an administrator for Elizabeth Jepson Spry, who died more than 20 years prior to the time at which appellant states she first came by the information that precipitated this controversy. Appellant would also have us understand that whatever assets her mother left in Chicago at death were converted and brought into the District of Columbia by appellant's now deceased sister. We think it highly unlikely that claims of the mother's creditors, if any, could have survived so long, and it appears that all other interested parties are joined in the litigation. *fn12 In any event, the District Court, in the exercise of its broad equitable powers, is in position to make appropriate orders for the protection of creditors and distributees if need therefor should ever arise. We hold at this juncture *fn13 that, in the circumstances disclosed, appellant has standing to maintain the action she brought, *fn14 and is entitled to an opportunity to prove her allegations.

The judgment complained of is reversed, and the case is remanded to the District Court for further proceedings not inconsistent with this opinion.



Reverse ...

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