Forrest v. Jack
Headline: Court rules that bank-stock assessment cannot be charged after an estate was fully closed, shielding the administrator and distributees from liability under state probate law.
Holding: The Court held that because the decedent’s estate had been finally distributed and extinguished under Utah law before the bank’s insolvency and the Comptroller’s assessment, the administrator and distributed property are not liable.
- Stops bank-assessment claims against property after probate distribution under Utah law.
- Protects administrators from personal liability once an estate is finally closed.
- Makes heirs’ exposure depend on state probate rules and distribution timing.
Summary
Background
A receiver for an insolvent national bank sued the former administrator of a deceased shareholder to recover a Comptroller assessment on six shares. The shareholder died in 1917; the administrator (his son) distributed the estate in 1920 and the widow received the stock. The administrator was discharged in 1931. The bank failed in December 1931 and the Comptroller assessed $100 per share in March 1932. The receiver sought to reach property that had been distributed years earlier.
Reasoning
The Court addressed whether a federal bank-stock assessment made by the Comptroller can be enforced against property that a probate court had already distributed and thereby extinguished as an estate under Utah law. Applying the federal statutes on national-bank stock liability and Utah probate rules, the Court held that once the estate was finally closed and distributed in 1920, the estate ceased to exist and could not be held for an assessment made later. The administrator was not personally liable, and land the son received was not subject to the assessment.
Real world impact
This ruling protects administrators and heirs in states like Utah where probate law treats a completed distribution as extinguishing the estate: claims that arise after distribution cannot reach property already transferred. It clarifies that liability for national-bank stock turns on the timing of distribution and local probate law, so heirs in different states may face different outcomes depending on state statutes. Executors should check state rules when distributing estate property.
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