Gully v. First National Bank

299 U.S. 109 (1936)

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Nature of the Case

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Facts

P sued First (D) in a state court to recover a money judgment. The assets of the First National Bank of Meridian were conveyed to D under a contract whereby the debts and liabilities of the grantor, insolvent at the time and in the hands of a receiver, were assumed by the grantee, which covenanted to pay them. P’s money was part of the deal. P was the State Collector of Taxes. The new bank failed to pay the taxes of the old bank, which it had assumed. D removed the cause to federal court on grounds that the suit was arising under the Constitution or the laws of the United States. The federal District Court denied a motion to remand. After a trial upon the merits, the complaint was dismissed. The Court of Appeals affirmed the judgment of dismissal, overruling the objection that the cause was one triable in the courts of Mississippi. The court reasoned that the power to lay a tax upon the shares of national banks has its origin and measure in the provisions of a federal statute and that by necessary implication a plaintiff counts upon the statute in suing for the tax. The Supreme Court granted certiorari.