Federal Deposit Ins. Corp. v. George-Howard, 126.

• Citation: 55 F. Supp. 921
• Decision Date: 26 July 1944
• Docket Number: No. 126.,126.
• Parties: FEDERAL DEPOSIT INS. CORPORATION v. GEORGE-HOWARD et al.
• Court: U.S. District Court — Western District of Missouri

55 F. Supp. 921

FEDERAL DEPOSIT INS. CORPORATION v. GEORGE-HOWARD et al.

No. 126.

District Court, W. D. Missouri, S. D.

July 26, 1944.

Roy Rucker, of Kansas City, Mo., for plaintiff.

B. C. Howard, of Kansas City, Mo., for defendants.

OTIS, District Judge.

1. The question first presented in this case is, has this court jurisdiction? Is the matter in controversy one that arises "under the * * * laws of the United States" within the meaning of 28 U.S.C.A. § 41(1) (a)? Is the declaration of the Congress in Section 264(j) (12 U.S.C.A.) of the Act creating Federal Deposit Insurance Corporation that "all suits * * * to which the Corporation shall be a party shall be deemed to arise under the laws of the United States" of controlling significance?

Disregarding, for the present, the question concerning the effect of the congressional declaration, we initially consider the question of jurisdiction as it is presented by the complaint, having in mind the rule that jurisdiction must affirmatively appear. There is no allegation of diversity of citizenship and could not be.¹ There is no allegation that the controversy does arise under the laws of the United States (only that it "is deemed to arise under the laws of the United States"). What law gives rise to the rights sought to be enforced?

F. D. I. C., under authority of 12 U.S. C.A. § 264 et seq. insured deposits in Nevada Trust Company, a state bank. In accordance with its obligation as insurer the depositors were paid when the bank was taken over for liquidation. F. D. I. C. has been reimbursed out of the Trust Company's assets in the full principal amount of the deposits made good by it. Time elapsed between payment to depositors by F. D. I. C. and reimbursement of F. D. I. C. out of the assets. The present claim is for interest on the amounts paid depositors for the period between payment and reimbursement and is made against the assets of the Trust Company, which, in the amount claimed, are held in escrow for disposal, according to the escrow agreement, "as any court of competent jurisdiction shall adjudge."²

The legal theory of the complaint is that F. D. I. C. has the rights against the assets which depositors assigned it when they were paid.³ It would enforce those rights by this proceeding. A copy of the assignment (one was made by each depositor) is set out in the complaint. It assigns the depositor's claims against the bank.

The claim of a depositor against a bank for the repayment to him of the amount of his deposit (and for interest if there is a legal claim to interest) is under state law for the enforcement of a contractual obligation. So much is obvious. If it were not obvious, it is expressly declared in the Act (12 U.S.C.A. § 264(l) (7)), "that the rights of depositors * * * of any State bank shall be determined in accordance with the applicable provisions of State law."

So the rights assigned to plaintiff arose under state law. But here is this curious provision of Sec. 264(j), that — "All suits of a civil nature * * * to which the Corporation shall be a party shall be deemed to arise under the laws of the United States: * * *." What does that mean? The word "deem" means (it is the only definition in the dictionary which has any relevancy)—"to have an opinion; to judge; believe; suppose." Webster's New International Dictionary, 2nd Edition. The injunction of the statute must be addressed to the judges. (To whom else could it be addressed?) Is Congress then saying to the judges what shall be their opinion, how they shall judge the question of jurisdiction, what they shall believe or suppose? The power of Congress to do that is challenged here by defendants and rightly challenged. Certainly it is a judicial question whether a given controversy arises under a law of the United States. Congress has no more power to instruct the courts how they shall decide judicial questions than the courts have to instruct Congress how it shall legislate.⁴

2. Whether this court has jurisdiction under Sec. 41, 28 U.S.C.A. (we have concluded it does not have), there is good ground for holding it should not exercise jurisdiction from a consideration of comity. We think the learned and admirable opinion of the Court of Appeals for the Eighth Circuit in Federal Deposit Ins. Corp. v. Citizens State Bank of Niangua, 8 Cir., 130 F.2d 102, 105, supports that conclusion. That was a declaratory judgment proceeding involving the right of F. D. I. C. to interest under circumstances very like those of the present case. There, as here, F. D. I. C. had paid depositors in a state bank whose deposits it had insured. There, as here, the bank had been taken over for liquidation under state law. There, as here, F. D. I. C. had filed its claim with the Commissioner of Finance (the liquidating official under state law) for the principal amount of its payment to depositors and also for interest on that amount. There, as here, the Commissioner had approved the claim for the principal amount and rejected the claim for interest. There, as here, the State Circuit Court having jurisdiction of the liquidation approved, in general, the action of the Commissioner. There is only a slight difference between that case and this. In the Bank of Niangua case the Circuit Court did not specifically approve — or specifically disapprove — that part of the Commissioner's order rejecting the claim for interest. In this case the Circuit Court neither approved or disapproved the Commissioner's rejection of interest, but it...