309 U.S. 506 (1940), 569, United States v. United States Fidelity & Guaranty Co.

Docket Nº:No. 569
Citation:309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894
Party Name:United States v. United States Fidelity & Guaranty Co.
Case Date:March 25, 1940
Court:United States Supreme Court
 
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Page 506

309 U.S. 506 (1940)

60 S.Ct. 653, 84 L.Ed. 894

United States

v.

United States Fidelity & Guaranty Co.

No. 569

United States Supreme Court

March 25, 1940

Argued February 27, 1940

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE TENTH CIRCUIT

Syllabus

In a reorganization proceeding in the District Court for the Western District of Missouri under § 77B of the Bankruptcy Act, the United States filed a claim in behalf of the Choctaw and Chickasaw Nations. The court allowed it, but allowed the debtor's cross-claim for a larger amount and decreed the balance in favor of the debtor against the Nations to be "collected in the manner provided by law." The validity of the judgment, to the extent that it satisfied the principal claim was, conceded. In another suit in Oklahoma by the United States for the Indian Nations against the surety on a bond given by the debtor, the debtor pleaded the former judgment as res judicata, and asked for a determination of accounts.

Held:

1. The Indian Nations and the United States acting for them are exempt from suits and also from cross-suits, except when authorized, and in the courts designated, by Act of Congress. P. 512.

2. The judgment, insofar as it undertakes to fix a credit against the Indian Nations, is void, and cannot be given the effect of res judicata in other litigation. P. 512.

3. The immunity from suit of the United States and of Indian Nations in tutelage cannot be waived by official failure to object to the jurisdiction or to appeal from the judgment. In the absence of statutory consent to the suit, the judgment is subject to collateral attack. Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, distinguished. P. 513.

4. Where a judgment in the District Court was entered before the effective date of the Rules of Civil Procedure, questions as to parties are governed by the Conformity Act. P. 516.

Semble that, under the procedure of Oklahoma, a principal in a bond, though he cannot compel his admission as a party defendant in a suit against the surety, becomes such, in effect, if allowed without objection to file his intervening petition.

5. Under the Act of April 26, 1906, which provided that, where suit is brought in any United States court in the Indian Territory by or on behalf of any of the Five Civilized Tribes to recover

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money claimed to be due and owing such Tribe, the party defendants shall have the right to set up and have adjudicated claims against the Tribe, and that any balance that may be found due by the Tribe shall be paid by the Treasurer of the United States out of its funds, etc., the question who are "defendants" is a federal question. P. 516.

106 F.2d 804 reversed.

Certiorari, 308 U.S. 548, to review the affirmance of a judgment of the District Court for the Eastern District of Oklahoma, 24 F.Supp. 961, which, in reliance upon a judgment of the District Court for the Western District of Missouri, rejected a claim made by the United States on behalf of the Choctaw and Chickasaw Nations and allowed against them a counterclaim of interveners.

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REED, J., lead opinion

MR. JUSTICE REED delivered the opinion of the Court.

This certiorari brings two questions here for review: (1) is a former judgment against the United States on a cross-claim, which was entered without statutory authority, fixing a balance of indebtedness to be collected as provided by law, res judicata in this litigation for collection of the balance, and (2) as the controverted former judgment was entered against the Choctaw and Chickasaw Nations, appearing by the United States, does the jurisdictional act of April 26, 1906, 34 Stat. 137, authorizing adjudication of cross demands by defendants in suits on behalf of these Nations, permit the former credit, obtained by the principal in a bond guaranteed by the sole original defendant here, to be set up in the present suit.

Certiorari was granted1 because of probable conflict, on the first question, between the judgment below and Adams v. United States2 and because of the importance of clarifying the meaning of the language in United States v. Eckford3 relating to the judicial ascertainment

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of the indebtedness of the government on striking a balance against the United States where cross-claims are involved. A somewhat similar question arises in United States v. Shaw.4 The second question was taken because its solution is involved in certain phases of this litigation.

The United States, acting for the Choctaw and Chickasaw Nations, leased some coal lands to the Kansas and Texas Coal Company, with the respondent United States Fidelity and Guaranty Company acting as surety on a bond guaranteeing payment of the lease royalties. By various assignments, the leases became the property of the Central Coal and Coke Company, as substituted lessee, the Guaranty Company remaining as surety. The Central Coal and Coke Company went into receivership in the Western District of Missouri, and the United States filed a claim for the Indian Nations for royalties due under the leases. Answering this claim, the Central Coal and Coke Company denied that any royalties were owing, and claimed credits against the Nations for $11,060.90. By order of the court, reorganization of the Coal Company under Section 77B of the Bankruptcy Act was instituted, and the trustee took possession from the receivers. In the reorganization proceedings, the claim of the Nations was allowed for $2,000, the debtor's cross-claim was allowed for $11,060.90, and the court, on February 19, 1936, decreed a balance of $9,060.90 in favor of the debtor, to be "collected in the manner provided by law." No review of this judgment of the Missouri district court was ever sought.

On December 24...

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