Source: https://www.legalcrystal.com/case/92257/lankford-vs-platte-iron-works-co
Timestamp: 2017-03-28 00:35:10
Document Index: 205889307

Matched Legal Cases: ['§ 2', '§ 300', '§ 7943', '§ 3', '§ 6', '§ 6', '§ 298']

Lankford Vs Platte Iron Works Co - Citation 92257 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Lankford Vs. Platte Iron Works Co. - Court Judgment	LegalCrystal Citationlegalcrystal.com/92257CourtUS Supreme CourtDecided OnJan-05-1915Case Number235 U.S. 461AppellantLankfordRespondentPlatte Iron Works Co.Excerpt:
lankford v. platte iron works co. - 235 u.s. 461 (1915)
the state courts of oklahoma having held that the statute creating the state banking board intended to give the state a definite title to the depositors' guaranty fund, the fact that the fund is to be..... Judgment:
The state courts of Oklahoma having held that the statute creating the State Banking Board intended to give the state a definite title to the Depositors' Guaranty Fund, the fact that the fund is to be used to satisfy claims of beneficiaries does not take its administration from the officers of the state or subject them to judicial control. This Court will not assume that the fund will not be faithfully managed and applied.
. A suit by a depositor in a bank in Oklahoma against members of the State Banking Board and the Bank Commissioner of Oklahoma to compel payments from, distribution of, and assessments for the Depositors Guaranty Fund is a suit against the state, and, under the Eleventh Amendment, cannot be maintained in the federal court.
, sustained the constitutionality of the act as an exercise of the police power of the state. The law, in its general purpose, was there presented and passed on. The relation of the state to the fund did not come up for consideration, but necessarily this is but a detail in administration, not one affecting legality of the law. The creation of the fund was said to be justified by its purpose, and the power of the state was declared adequate to accomplish it. "The purpose of the fund," it was said, "is shown by its name. It is to secure the full repayment of deposits."
, there is analogy to the case at bar. The State of South Carolina in the year 1892 assumed the exclusive management of all traffic in liquor. It subsequently abandoned the scheme and passed an act called "the state dispensary act" to provide for the disposition of all property of the instrumentality it had created and to wind up its affairs. A commission was appointed for that purpose. A part of the duties of the commission was to dispose of the property, collect all debts due, and pay "from the proceeds thereof all just liabilities at the earliest date practicable." Any surplus was to be paid to the state treasury. A duty therefore was imposed upon the commission to collect the assets of the dispensary and pay its debts, and it was as directly expressed as was the duty imposed upon the Banking Board in the pending case.
The Wilson Distilling Company contended that the winding-up act of the state created a trust, and the funds in the hands of the commission were a trust fund held for the benefit of the creditors of the state dispensary, and the suit a plain suit in equity brought by a
to compel a trustee holding property for his benefit
State v. Cockrell,
27 Okl. 630, the Supreme Court of Oklahoma had occasion to define the duties of state examiner and inspector. It decided that the office was constituted by the constitution of the state and was independent of the control of the governor, and, passing upon the authority of the examiner and inspector over the accounts of the Bank Commissioner, it decided that "the funds and assets" of an insolvent bank are "under the management of the state," and
From this decision, it appears that the law intended to give to the state as definite a title to the Depositors' Guaranty Fund as to the common school fund; as definite therefore as the title of South Carolina to the assets of the state dispensary, which was the subject of decision in
In both cases, there were ultimate beneficiaries -- in the pending case, the bank depositors; in the other case, the creditors of the dispensary. And the purpose of the law -- or, if you will, the command of the law -- in each case was or is the satisfaction of the claims of those beneficiaries. The fund, having this ultimate destination, does not take its administration from the officers of the state, or subject them to judicial control. We cannot assume that it will not be faithfully managed and applied.
Lovett et al., County Commissioners of Creek County v Lankford, et al.
composing the Banking Board of the State of Oklahoma, 145 P. 767, the Supreme Court of Oklahoma decided, citing the
case, that the defendants in error in the case composing the Banking Board were
"it is not only their duty to determine when a claim is valid against the bank, but they must further determine whether such claim is protected and required to be paid from the Depositors' Guaranty Fund.
Lankford v. Oklahoma Engraving & Printing Co.,
35 Okl. 404."
Any other view, the court in effect said, would not only substitute the judgment of a court for that of the officials, "but would harass and create confusion, the effect of which would destroy the efficiency of such board." The case and
Columbia Bank and Trust Company v. United States Fidelity and Guaranty Company,
33 Okl. 535, give special emphasis to the principle announced. Both were suits to recover deposits respectively of county and state moneys deposited as general or special deposits.
It will serve no purpose to review the cases cited by appellee in which state officers were enjoined from doing unlawful acts, prescribed, it may be, by unconstitutional laws, or commanded by valid laws to perform specific duties. Examples of such cases are reviewed and distinguished in
and there is a later example in
, seems plainly distinguishable. That case dealt with transactions in which the State of South Carolina had a direct property interest and a direct responsibility as a contracting party, and it was upon this ground that the court held the action brought against the agents of the state was in effect a suit against the state. This will appear by a reference to the opinion, pp. 168, 170, etc. It will be my endeavor to show that, under the Oklahoma statute, there is no such interest or responsibility on the part of the state.
directly upon the question, and it is frankly conceded that proper deference should be paid to them. At the same time, it is not to be forgotten that this action was brought in the district court of the United States because of the diverse citizenship of the parties -- a ground of jurisdiction especially provided for in the Constitution (Art. III, § 2). And, however desirable it may be to preserve harmony of decision between the federal and the state courts, we cannot, with due regard to our duty, fail to exercise an independent judgment respecting the true intent and meaning of the statute, in the absence of an authoritative adjudication to the contrary previous to the time that the cause of action arose. For this, plaintiff appellee is entitled to the enforcement of its contract as it was made, and it invokes a federal jurisdiction that was established for the very purpose of avoiding the influence of local opinion.
East Alabama Ry. v. Doe,
114 U. S. 353
116 U. S. 362
Railroad v. Baugh,
149 U. S. 372
159 U. S. 625
215 U. S. 360
The statute in question is the so-called bank Depositors' Guaranty Fund act of Oklahoma, first enacted December 17, 1907, and several times amended, but not in essential respects. The portions pertinent to the discussion, as they stood upon the statute book when the present cause of action arose (in the year 1912) are set forth in the margin, followed by an amendment adopted in 1913, shortly before the action was commenced.
the depositors of said bank or trust company shall be paid in full,
and when the cash available or that can be made
of said bank or trust company is not sufficient to discharge its obligations to depositors, to said Banking Board shall draw from the Depositors' Guaranty Fund and from additional assessments, if required, as provided in § 300, the amount necessary to make up the deficiency."
"The State Banking Board
shall issue and deliver to each depositor, having such unpaid deposit, a certificate of indebtedness for his unpaid deposit, bearing 6 percentum interest,
would have been placed and presumably was placed upon the statute by ordinary bankers and bank depositors in advance of judicial interpretation; reading it according to the fair import of its terms, without resort to legal subtlety in order to overthrow or weaken it, but seeking rather to uphold it and give it effect, "
Ut res magis valeat quam pereat;
" and if construction be needed, adopting that meaning which the promisor had reason to believe the promisee relied upon in accepting the offer. 2 Kent, Com. *557;
70 U. S. 74
Ewing v. Howard,
7 Wall. 499,
74 U. S. 506
Empire Rubber Mfg. Co. v. Morris,
73 N.J.L. 602, 610;
Gunnison v. Bancroft,
11 Vt. 490;
Jordan v. Dyer,
34 Vt. 104;
Barlow v. Scott,
24 N.Y. 40, 42;
Tallcot v. Arnold,
61 N.Y. 616;
White v. Hoyt,
73 N.Y. 505;
Chamberlain v. Painesville & Hudson R. Co.,
15 Ohio St. 225, 246;
Clinton County v. Ramsey,
20 Ill.App. 577, 579.
(1910), 27 Okl. 630. This was an action for a writ of mandamus instituted upon the relation of the "state examiner and inspector" (a constitutional officer with large powers, in the performance of which he is independent of the chief executive), to require the State Bank Commissioner to permit relator to examine the records and accounts pertaining to the collection and disbursement of the Depositors' Guaranty Fund and the assets of failed or insolvent banks. Relator invoked a statute which declared:
the accounts of the latter were subject to examination by the examiner and inspector by the terms of the statute that defined his duties. Treating it as a decision that the
of the fund is in the state, within the meaning of that statute, this is very far from holding that the
of the fund is in the state, so as to clothe the managers of the fund with immunity from suit in a controversy raised by one of the stated beneficiaries. The decision, rather, puts the Bank Commissioner in a subordinate position than in one that entitles him to participate in the sovereign's immunity from responsibility to action in the courts of justice.
Columbia Bank & Trust Co. v. United States Fidelity & Guaranty Co.
(1912), 33 Okl. 535. The Bank Commissioner applied to a state court for orders in connection with the administration of the affairs of an insolvent bank of which he was in possession, and prayed that the creditors and depositors be granted all relief to which they might be entitled. The Fidelity & Guaranty Company filed its petition in intervention, alleging that it had signed, as surety for the bank, a bond to the State of Oklahoma for the sum of $50,000 to protect the state against loss by reason of a deposit in the bank of certain funds in possession of the commissioners of the land office, and that the Bank Commissioner, since taking charge of the assets of the bank, had acted under the direction and control of the State Banking Board, and had paid the claims of other depositors in full without in any way protecting the deposit for which the intervening petitioner was surety. The trial court rendered a decree directing the Bank Commissioner to treat the amount due the commissioners of the land office as a deposit, and pay over to said depositors their
share of the assets. The supreme court, upon a review of other legislation (Comp.Laws 1909, § 7943) relating to the custody and investment of the permanent school
funds of the state in the hands of the commissioners of the land office, which provided (
) that they might be deposited in bank upon security being given, held that such a deposit of the state's money was not within the purview of § 3 of the guaranty fund law, and hence that the surety was not entitled to relief. In the course of reaching this conclusion, the court held (p. 540) that the surety, having responded to the invitation implied in relator's prayer for relief in behalf of creditors and depositors, was entitled to
Lankford, Comm'r v. Oklahoma Eng. & Ptg. Co.
(1913), 35 Okl. 404. The court simply held that a "merchandise creditor" of a defunct bank was not entitled to share
with the depositors in the distribution of the assets.
Another case, decided not only after the cause of action accrued, but
after this Court acquired jurisdiction
by the taking of the appeal, is
Lovett et al. v. Lankford
(September 29, 1914, 145 P. 767). Here, the Supreme Court of Oklahoma has distinctly held that a petition for mandamus brought by a depositor against the State Banking Board to require payment of the deposit
is in effect a suit against the state, and that the Board is a part of the executive branch of the government, charged with the exercise of judgment and discretion in the administration of the law, so that their acts cannot be controlled by mandamus. This, of course, is directly in favor of the contention of the present appellants. Ought it to control our decision? What are the grounds upon which the state court proceeded? (a) Citing the language of the act that gives to the state a first lien upon the assets of the bank, and invoking the authority of
State ex Rel. Taylor v. Cockrell,
27 Okl. 630, 633, 112 P. 1000 (
), the court holds that a judgment in favor of the depositor
This treats the word "title" as equivalent to "ownership." I have endeavored to show that this is inconsistent with the language and purpose of the act, and that state ownership renders the act, in its other and essential provisions, inconsistent with the limitations found in the state constitution. (b) The court cites
. For reasons already indicated, it seems to me this case is clearly distinguishable. (c) It is said that the failure of the legislature to make specific provision for review in the courts of the action of the Banking Board concerning claims against the guaranty fund tends to prove a legislative purpose to give exclusive jurisdiction to the Board. As already shown, it would be a work of supererogation for the legislature to specifically provide for an action in the courts, for, if the statute confers a right upon the depositor, Article 2, § 6 of the state constitution provides a remedy. And I find nothing in the act that expressly or by reasonable implication confers any judicial jurisdiction upon the Board. Exclusive jurisdiction in that body seems plainly inconsistent with the same constitutional
provision. (d) After quoting from the first section of the act, which gives to the Banking Board supervision and control of the fund, with power to adopt necessary rules and regulations, not inconsistent with law, for its management and administration, and after quoting the other pertinent sections that are set forth in the marginal note,
Lankford v. Oklahoma Engraving & Printing Co. supra,
as authority for holding that, under § 6 (303), it is the duty of the Banking Board and the Bank Commissioner to determine the validity of claims against the fund, and that,
We are referred by appellant's counsel to
N.Y. Guaranty Co. v. Steele,
, and similar cases. But there is a broad distinction, uniformly recognized by this Court, which, as it seems to me, takes the present action out of the prohibition of the Eleventh Amendment. It was well expressed in
, where the Court, by Mr. Justice Bradley, said:
case, 107 U.S. at p.
case, 109 U.S. at p.
, Mr. Justice Miller, in describing
Rolston v. Missouri Fund Comm'rs,
120 U. S. 411
"It is next contended that this suit cannot be maintained because it is in its effect a suit against the state, which is prohibited by the Eleventh Amendment of the Constitution of the United States, and
, is cited in support of this position. But this case is entirely different from that. There, the effort was to compel a state officer to do what a statute prohibited him from doing. Here, the suit is to get a state officer to do what a statute requires of him. The litigation is with the officer, not the state. The law makes it his duty to assign the liens in question to the trustees when they make a certain payment. The trustees claim they have made this payment. The officer says they have not, and there is no controversy about his duty if they have. The only inquiry is therefore as to the fact of a payment according to the requirements of the law. If it has been made, the trustees are entitled to their decree. If it has not, a decree in their favor, as the case now stands, must be denied; but, as the parties are all before the court, and the suit is in equity, it may be retained so as to determine what the trustees must do in order to fulfill the law, and under what circumstances the governor can be compelled to execute the assignment which has been provided for."
, where it was objected that the suit was in effect a suit against the State of Texas, the court, by Mr. Justice Brewer, said:
Finally, this is an equitable action brought to establish and enforce a trust in favor of plaintiff, with only an incidental prayer for a mandatory decree. It is not an original proceeding by mandamus, of which the federal courts have no jurisdiction.
13 Wall. 244;
3 Dill. 185, Fed.Cas. No. 7,517;
95 U. S. 370
Greene County v. Daniel,
102 U. S. 195
105 U. S. 242
* Extracts from bank Depositors' Guaranty Fund Act, as found in Revised Laws of Oklahoma, 1910 (Harris and Day), §§ 298
and in subsequent Session Laws.