Capital National Bank v. First National Bank/Opinion of the Court
The writ of error from this court to revise the judgment of a state court can only be maintained when within the purview of section 709 of the Revised Statutes.

If the denial by the state court of a right under a statute of the United States is relied on as justifying our interposition, before it can be held that the state court thus disposed of a federal question the record must show, either by the words used, or by clear and necessary intendment therefrom, that the right was specifically claimed, or a definite issue as to the possession of the right must be distinctly deducible from the record, without an adverse decision of which the judgment could not have been rendered.

Moreover, even though a federal question may have been raised and decided, yet if a question not federal is also raised and decided, and the decision of that question is sufficient to support the judgment, this court will not review the judgment.

In our opinion no federal right was specially set up or claimed in this case at the proper time or in the proper way, nor was any such right in issue and necessarily determined, but the judgment rested on nonfederal grounds entirely sufficient to support it.

The record discloses no federal question asserted in terms, save in the application to the supreme court for a rehearing, when the suggestion came too late.

The petition did, indeed, allege that the Capital National Bank was organized under the banking act, and that a receiver was appointed, who took possession of the bank's assets, and of all trusts and moneys held by it in a fiduciary capacity, and the answer admitted these averments, respecting which there was no controversy; yet no right to appropriate trust funds was claimed by defendant under any law of the United States, nor was it asserted that any judgment which might be rendered for plaintiff would be in contravention of any provision of the banking act.

The motion for new trial pursued a common formula, and one of the grounds assigned was that the judgment was 'contrary to law'; but this cannot be construed as having a single meaning, and distinctly referring to the denial of a right claimed under an act of congress, consistently with the requirements of section 709 of the Revised Statutes, as expounded by numerous decisions of this court.

Bank v. Kennedy, 167 U.S. 362, 17 Sup. Ct. 831, is not to the contrary, as counsel seem to suppose. There the question was whether a national bank could purchase or subscribe to the stock of another corporation; and the answer averred that, if the stock in question appeared to have been issued to the national bank, it was 'issued without authority of this corporation defendant, and without authority of law.' The grounds presented on motion for new trial, and in the specifications of error which formed the basis of the appeal to the supreme court of the state, asserted the want of power under the laws of the United States; and the California supreme court said in its opinion that the bank appealed on the ground 'that, by virtue of the statutes under which it is organized, it had no power to become a stockholder in another corporation.' The general rule was not questioned that, if the alleged right was not claimed before judgment in the highest court of the state, it could not be asserted in this court.

This rule was not complied with here, nor was any federal question in terms decided, while on the contrary the judgment was explicitly rested on nonfederal grounds.

The contention of plaintiff was that the Capital National Bank had money in its hands which belonged to plaintiff, did not belong to the bank, had never formed part of its assets, and was held by the bank in trust for plaintiff.

The right to the money was considered by the trial court in the light of general equitable principles applicable on the facts, and the court adjudged that the money constituted a trust fund to which plaintiff was entitled.

The decision did not purport to affect the assets of the bank, or attempt to direct the distribution thereof, or in any way to interfere with the disposition of assets actually belonging to the bank; nor did it affect the receiver as receiver, or his appointment or authority under the banking act. As the trial court found that certain moneys held by the bank in trust for plaintiff had come into the receiver's hands, he was directed to return them, for he had no stronger title to the trust fund as against the plaintiff than the bank had.

When the case came to the supreme court, that court, finding no reversible error in the record, affirmed the judgment of the district court, and filed an opinion (49 Neb. 795, 69 N. W. 1151) stating: 'This case is of the same general nature as Capital Nat. Bank v. Coldwater Nat. Bank, 49 Neb. 786, 69 N. W. 115. It was submitted upon the same argument, and, governed by the result reached in that case, this is affirmed.' From the opinion in the case thus referred to, it appears that that case, now on our docket, and numbered 73, was submitted to the supreme court of Nebraska with this case, numbered 72, and with three others, also brought here, and numbered 74, 75, and 76, and that the five cases were disposed of by the opinion in No. 73.

The supreme court there held that: 'A fund which comes into the possession of a bank with respect to which the bank had but a single duty to perform, and that is to deliver it to the party thereto entitled, is a trust fund, and is therefore incapable of being commingled with the general assets of such bank subsequently transferred to its receiver.

'Under the circumstances above indicated, the receiver of the bank is merely substituted as trustee, and its funds in his hands should be devoted to discharging such trust before distribution thereof is made to the general creditors of the bank.'

Among other things, the court said: 'It is conceded by the plaintiff in error that the relief granted by the district court was in conformity with the views expressed more or less directly by this court in Wilson v. Coburn, 35 Neb. 530, 53 N. W. 466; Association v. Morris, 36 Neb. 31, 53 N. W. 1037; Griffin v. Chase, 36 Neb. 328, 54 N. W. 572; and State v. State Bank, 42 Neb. 896, 61 N. W. 252; but it is urged that a re-examination of the principles involved should satisfy us that these cases proceeded upon an erroneous view of the law as now settled. A very careful examination has been made of all cases cited in respect to the pivotal question which has already been sufficiently indicated as having been acted upon by the district court.' And after reviewing these cases the court announced that it was not convinced that it should recede from the line of its former decisions.

We know of no provision of the banking act which assumes to appropriate trust funds in the possession of insolvent banks, or other property in their possession to which they have no title, and it is clear that the state courts had jurisdiction to determine whether this money was or was not a trust fund belonging to plaintiff.

The receiver made no effort to remove the litigation to the circuit court, contested the issues on a general denial, and set up no claim of a right under federal statutes withdrawing the case from the operation of general law.

In these circumstances the result is that this court has no jurisdiction to revise the judgment of the supreme court of Nebraska, and we, necessarily, intimate no opinion in respect of the views on which the case was disposed of. 

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