Gully v. First National Bank - 299 U.S. 109 (1936)
U.S. Supreme Court
Gully v. First National Bank, 299 U.S. 109 (1936)
Gully v. First National Bank
Argued October 19, 1936
Decided November 9, 1936
299 U.S. 109
1. To constitute a case arising under the Constitution or laws of the United States within the meaning of the removal statute, Jud.Code, § 28, 28 U.S.C. 71, a right or immunity created by the Constitution or laws of the United States must be an essential element of the plaintiff's cause of action; the right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another; a genuine and present controversy, not merely a possible or conjectural one, must exist with
reference thereto, and the controversy must be disclosed upon the face of the complaint, unaided by the answer, by the petition for removal, or by allegations in the complaint itself which go beyond a statement of the plaintiff's cause of action and anticipate or reply to a probable defense. P. 299 U. S. 112.
2. A suit brought upon a state statute does not arise under an Act of Congress or the Constitution of the United States because prohibited thereby or because permitted thereby. P. 299 U. S. 116.
3. In a suit in a state court brought by a state tax collector against a national bank which, in acquiring assets of another national bank, had assumed and covenanted to pay the debts and liabilities of the latter, the complaint alleged that among the debts so assumed were moneys owing by the insolvent bank for taxes assessed upon its shares or capital stock, its surplus and undivided profits, exclusive of the value of its real estate; that, in law, all taxes thus assessed were debts owing by the shareholders of the insolvent bank which that bank was under a duty to pay as their agent out of moneys then in its possession, and that the defendant bank, in violation of its covenant, failed to pay the taxes of the insolvent one, which it had thus assumed and made its own liability. Held not removable as a case arising under the Constitution or laws of the United States, because
(1) The suit is upon a contract having its genesis in the law of the State, enforcement of which has no necessary connection with the existence of a controversy arising under federal law. P. 299 U. S. 114.
(2) While the tax sought to be recovered, to be valid and therefore within the contract sued upon, must be consistent with the federal statute permitting state taxation of national bank shareholders (R.S. § 5219; 12 U.S.C. 548), just as it must be consistent with the Federal Constitution, its basis is a statute of the State. Furthermore, the state statute in this case (Code, Miss., § 3138), is in apparent harmony with the permissive federal Act. If not in accord with the state statute, the tax would be void for that reason, and if, on evidence, it were shown that that statute had been obeyed, there might be no room to contend that the federal law had been infringed. That a federal question may lurk in the background is not enough to warrant removal. P. 299 U. S. 115.
81 F.2d 502 reversed.
Certiorari, 298 U. S. 60, to review the affirmance of a judgment dismissing a suit to recover state taxes. The suit had been removed from a state court.