Source: https://openjurist.org/208/us/404
Timestamp: 2019-04-20 08:55:33+00:00

Document:
UNITED STATES FIDELITY & GUARANTY COMPANY of Baltimore Maryland; Sylvester E. Brown, Doing Business as S. E. Brown & Company.; Bryant Lumber & Shingle Mill Company; Carstens Packing Company; E. C. Mac Dougall and H. T. Dinham, Copartners as E. C. Mac-Dougall & Company; W. O. Nelson, E. E. Caine, and the C. B. Smith Company.
Argued December 16, 17, 1907.
Messrs. George E. De Steiguer and W. W. Wilshire for appellants.
Messrs. James B. Murphy, Harold Preston, Carroll B. Graves, and Edward B. Palmer for appellees.
A motion is made to dismiss on the ground that the jurisdiction of the circuit court was invoked solely on the ground of the diversity of citizenship of the parties, and hence the decree of the circuit court of appeals was final. The motion must be overruled. Diversity of citizenship was, it is true, alleged in the bills, but grounds of suit and relief were also based on the statutes of the United States, as from the discussion of the merits will be seen. Those statutes entered as elements into the decision of the circuit court of appeals, and were necessary elements. Howard v. United States, 184 U. S. 676, 46 L. ed. 754, 22 Sup. Ct. Rep. 543; Warner v. Searle & H. Co. 191 U. S. 195, 205, 48 L. ed. 145, 147, 24 Sup. Ct. Rep. 79.
Passing to the merits of the case, the question turns upon the respective equities of the parties. Appellants concede that the bank was not, by the making of the loans to Henningsen, entitled to subrogation to the rights, if any, of the United States or the laborers or materialmen, and also that, if the guaranty company is entitled to subrogation to any right of the United States government arising through the building contract, the bank can make no claim by reason of the assignment.
'Whatever equity, if any, the bank had to the fund in question, arose solely by reason of the loans it made to Henningsen. Henningsen's surety was, upon elementary principles, entitled to assert the equitable doctrine of subrogation, but it is equally clear that the bank was not, for it was a mere volunteer, and under no legal obligation to loan its money. Prairie State Nat. Bank v. United States, supra; AEtna L. Ins. Co. v. Middleport, 124 U. S. 534, 31 L. ed. 537, 8 Sup. Ct. Rep. 625; Sheldon, Subrogation, § 240.' See also United States Fidelity & G. Co. v. United States, 204 U. S. 349, 356, 357, 51 L. ed. 516, 519, 520, 27 Sup. Ct. Rep. 381.

References: v. 
 v. 
 v. 
 v. 
 § 240
 v.