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

Docket NºNo. 569
Citation309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894
Party NameUnited States v. United States Fidelity & Guaranty Co.
Case DateMarch 25, 1940
CourtUnited States Supreme Court

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

Page 507

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.

Page 509

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

Page 510

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, 1935, the United States, on its own behalf and on behalf of the Indian Nations, filed the present suit in the Eastern District of Oklahoma against the Guaranty Company, as surety on the royalty bond, for the same royalties involved in the Missouri proceedings.

Page 511

After the judgment of the Missouri district court, the Guaranty Company pleaded that judgment as a bar to recovery by the United States. The trustee of Central Coal and Coke Company, and the Central Coal and Coke Corporation, which had taken over certain interests [60 S.Ct. 656] in the assets of the Coal Company, alleged by a petition for leave to intervene, and, upon its allowance without objection, by an intervening petition, that they were necessary and proper parties because each had an interest in the judgment of the Missouri court; they pleaded the Missouri judgment as determinative, and pleaded the merits of the counterclaims by setting up the facts which supported the judgment; they asked for a decree that the Missouri judgment was valid, for a determination of accounts between themselves and the Indian Nations, and for all other proper relief. Replying to the answer of the surety and the petition of the interveners, the United States pleaded that the Missouri judgment was void as to the interveners' cross-claims because the court was "without jurisdiction to render the judgment" against the United States, and denied the cross-claims on the merits. The district court concluded that the Missouri judgment barred the claim against the surety and entitled the interveners to a judgment against the Indian Nations in the amount of the balance found by the Missouri court. This judgment the Circuit Court of Appeals affirmed.5

A. -- By concession of the Government, the validity of so much of the Missouri judgment as satisfies the Indian Nations' claim against the lessee is accepted. This concession is upon the theory that a defendant may, without statutory authority, recoup on a counterclaim an amount equal to the principal claim.6

Page 512

B. -- We are of the view, however, that the Missouri judgment is void insofar as it undertakes to fix a credit against the Indian Nations. In United States v. Shaw,7 we hold that cross-claims against the United States are justiciable only in those courts where Congress has consented to their consideration. Proceedings upon them are governed by the same rules as direct suits. In the Missouri proceedings in corporate reorganization, the United States, by the Superintendent of the Five Civilized Tribes for the Choctaw and Chickasaw Nations, filed a claim on behalf of the Indian Nations. This is authorized to do.8 No statutory authority granted jurisdiction to the Missouri Court to adjudicate a cross-claim against the United States.9 The public policy which exempted the dependent as well as the dominant sovereignties from suit without consent10 continues this...

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481 practice notes
  • 207 F.Supp. 216 (S.D.N.Y. 1962), United States v. Frank
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • July 25, 1962
    ...authority, recoup on a counterclaim an amount equal to the principal claim.' United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 511, 60 S.Ct. 653, 84 L.Ed. 894 (1940); United States v. Wessel, Duval & Co., 115 F.Supp. 678, 687 (S.D.N.Y.1953.). 'This is because rec......
  • 246 F.2d 293 (4th Cir. 1957), 7418, Haile v. Saunooke
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Fourth Circuit
    • July 13, 1957
    ...308; Turner v. United States, 248 U.S. 354, 358, 39 S.Ct. 109, 63 L.Ed. 291; United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 60 S.Ct. 653, 656, 84 L.Ed. 894. In the case last cited the Supreme Court said: 'The public policy which exempted the dependent as well as t......
  • 293 B.R. 34 (Bkrtcy.D.Ariz. 2003), 02-06628-PHX, In re Russell
    • United States
    • Federal Cases United States Bankruptcy Courts Ninth Circuit
    • May 15, 2003
    ...its immunity. Cf. Arizona v. Bliemeister (In re Bliemeister), 296 F.3d 858 (9th Cir.2002). [6] United States v. U.S. Fid. & Guar. Co., 309 U.S. 506, 512, 60 S.Ct. 653, 84 L.Ed. 894 (1940)("These Indian tribes are exempt from suit without Congressional [7] Oklahoma Tax Comm'n v. Cit......
  • 370 F.2d 529 (8th Cir. 1967), 18231, Twin Cities Chippewa Tribal Council v. Minnesota Chippewa Tribe
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Eighth Circuit
    • January 17, 1967
    ...of the United States are not subject to suit without the consent of Congress, United States v. United States Fidelity & Guar. Co., 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894 (1940); Iron Crow v. Oglala Sioux Tribe of Pine Ridge Res., 231 F.2d 89 (8th Cir. 1956), and 28 U.S.C.A. § 1331, 28......
  • Request a trial to view additional results
465 cases
  • 207 F.Supp. 216 (S.D.N.Y. 1962), United States v. Frank
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • July 25, 1962
    ...authority, recoup on a counterclaim an amount equal to the principal claim.' United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 511, 60 S.Ct. 653, 84 L.Ed. 894 (1940); United States v. Wessel, Duval & Co., 115 F.Supp. 678, 687 (S.D.N.Y.1953.). 'This is because rec......
  • 246 F.2d 293 (4th Cir. 1957), 7418, Haile v. Saunooke
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Fourth Circuit
    • July 13, 1957
    ...308; Turner v. United States, 248 U.S. 354, 358, 39 S.Ct. 109, 63 L.Ed. 291; United States v. United States Fidelity & Guaranty Co., 309 U.S. 506, 60 S.Ct. 653, 656, 84 L.Ed. 894. In the case last cited the Supreme Court said: 'The public policy which exempted the dependent as well as t......
  • 293 B.R. 34 (Bkrtcy.D.Ariz. 2003), 02-06628-PHX, In re Russell
    • United States
    • Federal Cases United States Bankruptcy Courts Ninth Circuit
    • May 15, 2003
    ...its immunity. Cf. Arizona v. Bliemeister (In re Bliemeister), 296 F.3d 858 (9th Cir.2002). [6] United States v. U.S. Fid. & Guar. Co., 309 U.S. 506, 512, 60 S.Ct. 653, 84 L.Ed. 894 (1940)("These Indian tribes are exempt from suit without Congressional [7] Oklahoma Tax Comm'n v. Cit......
  • 370 F.2d 529 (8th Cir. 1967), 18231, Twin Cities Chippewa Tribal Council v. Minnesota Chippewa Tribe
    • United States
    • Federal Cases United States Courts of Appeals Court of Appeals for the Eighth Circuit
    • January 17, 1967
    ...of the United States are not subject to suit without the consent of Congress, United States v. United States Fidelity & Guar. Co., 309 U.S. 506, 60 S.Ct. 653, 84 L.Ed. 894 (1940); Iron Crow v. Oglala Sioux Tribe of Pine Ridge Res., 231 F.2d 89 (8th Cir. 1956), and 28 U.S.C.A. § 1331, 28......
  • Request a trial to view additional results
4 firm's commentaries
  • Mohawk Nation Exercises Sovereign Immunity in Inter Partes Review
    • United States
    • JD Supra United States
    • September 26, 2017
    ...436 U.S. 49, 58 (1978); Puyallup Tribe, Inc. v. Dep't of Game, 433 U.S. 165, 172-73 (1977); and U.S. v. U.S. Fid. & Guar. Co., 309 U.S. 506, 512 (1940). In somewhat of an understatement, this long line of consistent precedent shows that the Tribe's sovereign immunity is "firmly One......
  • Allergan Avails Itself of Sovereign Immunity
    • United States
    • JD Supra United States
    • September 14, 2017
    ...U.S. 354 (1919), and has been applied both to state action and private suit. United States v. United States Fidelity & Guaranty Co., 309 U.S. 506 (1940); Puyallup Tribe, Inc. v. Department of Game of State of Washington, 433 U.S. 165 (1977); and Kiowa Tribe of Oklahoma v. Mfg. Technolog......
  • More Instances of Tribal Sovereign Immunity Shielding Patents from PTAB Invalidation
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    • JD Supra United States
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    ...U.S. 354 (1919), and has been applied both to state action and private suit. United States v. United States Fidelity & Guaranty Co., 309 U.S. 506 (1940); Puyallup Tribe, Inc. v. Department of Game of State of Washington, 433 U.S. 165 (1977); and Kiowa Tribe of Oklahoma v. Mfg. Technolog......
  • Siting Energy and Transmission Line Projects in Arizona - An Irreverent Primer - 2020 Edition
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    • JD Supra United States
    • October 27, 2020
    ...in a facility located on tribal lands requires exceedingly careful lawyering.66 See United States v. U.S. Fidelity and Guaranty Co., 309 U.S. 506 (1940).67 See Pan American Co. v. Sycuan Band of Mission Indians, 884 F.2d 416 (9th Cir. 1989).68 E.g., OMG Apex, Inc. v. Acting W. Regional Dire......
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