United States Fidelity Guaranty Company v. Oklahoma/Opinion of the Court

by James Clark McReynolds

United States Supreme Court

250 U.S. 111

United States Fidelity Guaranty Company  v.  Oklahoma

 Argued: April 17, 1919. --- Decided: May 19, 1919

May 18, 1909, plaintiff in error became surety upon a bond to secure repayment of funds to be deposited by commissioners of the land office of Oklahoma with the Columbia Bank & Trust Company. After receiving more than $50,000 the Trust Company became insolvent, and in September, 1909, refused to honor a proper demand therefor. The state sued the surety in one of its own courts, December 24, 1909, and judgment there for full amount of the bond was affirmed by the Supreme Court October 9, 1917. 168 Pac. 234.

The cause is here on writ of error, and jurisdiction of this court is challenged upon the ground that the suit is not one 'where is drawn in question the validity of a treaty or statute of, or an authority exercised under the United States, and the decision is against their validity; or where is drawn in question the validity of a statute of, or an authority exercised under any state, on the ground of their being repugnant to the Constitution, treaties, or laws of the United States, and the decision is in favor of their validity.' Judicial Code (Act March 3, 1911, c. 231) § 237, 36 Stat. 1156, as amended by Act Sept. 6, 1916, c. 448, § 2, 39 Stat. 726 (Comp. St. 1918, § 1214). We think the point well taken, and the writ must be dismissed.

'The case is properly here by writ of error because it involves the validity of legislation of the state of Oklahoma alleged by the plaintiff in error to impair the obligation of its contract.'

But we have often held that mere assertion of a claim in respect of some constitutional right is not sufficient; there must be a real and substantial controversy of the required character which deserves serious consideration. Ennis Waterworks v. City of Ennis, 233 U.S. 652, 658, 34 Sup. Ct. 767, 58 L. Ed. 1139.

Counsel for plaintiff in error further say:

'Our position is that under this bond and the statutes in force at the time it was executed a contract was created between the state, the Columbia Bank & Trust Company, and the United States Fidelity & Guaranty Company, pursuant to which the Guaranty Company was liable to the state for such loss as it might sustain by reason of the failure of the Trust Company; that the Guaranty Company was entitled to exoneration from the Trust Company and to contribution from the guaranty fund; and that this contract was impaired by the Act of March 6, 1913.' Section 9, c. 22, Session Laws 1913.

'No deposit in a state bank, otherwise secured, shall be protected by, or paid out of, the depostitors' guaranty fund created under the laws of the state of Oklahoma, nor included in the computation of average daily deposits as a basis for assessments. No deposit in any state bank, on which a greater rate of interest is allowed or paid, either directly or indirectly, than is permitted by the rules of the bank commissioner, shall participate in the benefits of the guaranty fund.'

The opinion of the Supreme Court makes no reference to the Act of March 6, 1913, and we can discover no plausible basis for the argument that, notwithstanding such omission, force and effect was really given thereto-that it must have been the basis of the decision. The court approved, and undertook to support its conclusion by former opinions, commencing with Columbia Bank & Trust Co. v. United States Fidelity & Guaranty Co., 33 Okl. 535, 126 Pac. 556, decided in 1912, which, it declared, show a consistent view contrary to the position maintained by plaintiff in error. And an examination of these opinions leaves no doubt that they are relevant and tend to uphold the doctrine applied in the present cause. We find nothing to indicate a purpose to give effect to the specified act.

Dismissed.

Notes