(- Okla. 145 Pac. 767), the su- 1 shelter behind the state for the abuse of [477] Mr. Justice Pitney, with whom preme court of Oklahoma decided, citing the Cockrell Case, that the defendants in error in the case composing the banking board were "executive officers of the state, and in performing their duties in administering the law under consideration [the guaranty fund act] do so as such officers, and the property intrust-concurred Mr. Justice Day, Mr. Justice ed to their control and management by Van Devanter, and Mr. Justice Lamar, the law is property owned by the state, or dissenting: property in which the state has an interest," and that therefore a suit against them to compel their administration of the depositors' guaranty fund "is, in fact, a suit against the state; and in the absence of the consent of the state, the same cannot be maintained." The court further said that "the law has specifically confided to the banking board and the bank commissioner the duty and authority to determine the validity of claims against the depositors' [476] guaranty fund," and also that "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 Okla. 404, 130 Pac. 278." 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 & T. Co. v. United States Fidelity & G. Co. 33 Okla. 535, 126 Pac. 556, give special emphasis to the principje announced. Both were suits to recover deposits respectively of county and state moneys deposited as general or special deposits. The question upon which we are divided is whether this action brought by a depositor in an insolvent state bank of Oklahoma, and asserting the right to compel payment of his deposit by the state banking board out of the depositors' guaranty fund, or, if this be insufficient, then by the issuance of a certificate of indebtedness of the kind known as depositors' guaranty fund warrants, is in effect a suit against the state, and therefore within the inhibition of the 11th Amendment to the Federal Constitution, or whether it is merely an action against state officers to compel the performance of duties of a nonpolitical nature clearly prescribed by a statute of the state, so that the officers, in refusing to obey that law, do not represent the state. I agree that the question depends upon the true intent and meaning of the law, and that in determining it we are to assume that the commands of the law are disobeyed by the defendants-appellants; so much, indeed, having been adjudged, upon their confession, in the present case. There is, I think, no controlling decision. Murray v. Wilson Distilling Co. 213 U. S. 151, 53 L. ed. 742, 29 Sup. Ct. Rep. 458, 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. 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 Murray v. Wilson Distilling Co. and there is a later example in Hopkins v. Clemson Agri. College, 221 U. S. 636, 55 L. ed. 890, 35 L.R.A. (N.S.) 243, 31 Sup. Ct. Rep. 654. We are referred to certain cases in the The foundation of appellee's argument is, state court of last resort, one of which, and as we have said, that the Oklahoma statute a very recent one, bears [478] directly upon imposed the duty upon the bank commis- the question; and it is frankly conceded sioner of paying depositors of insolvent that proper deference should be paid to banks, and that "this suit, therefore, in- them. At the same time, it is not to be stead of being against the state, is against forgotten that this action was brought in its servants. to compel the performance of the district court of the United States beduties which, by their acceptance of the cause of the diverse citizenship of the paroffice, they obligated themselves to per-ties, a ground of jurisdiction especially form." A duty being prescribed, it is fur- provided for in the Constitution (art. 3, ther contended, the officers "cannot seek § 2). And, however desirable it may be positors. The state, it is true, through the banking commissioner, holds the bare legal title to the fund, and enforces in the name of the [481] state the liabilities of the failed banks, but this is done for the sole benefit of the fund. Thus, the state has title only, but without real ownership. to preserve harmony of decision between [479] It seems to me clear that, by the the Federal and the state courts, we cannot, language and evident meaning of this law, with due regard to our duty, fail to exer- the state has no property interest in the cise an independent judgment respecting the guaranty fund. No part of it is raised true intent and meaning of the statute, in through general taxation, nor can any part the absence of an authoritative adjudication of it be lawfully placed in the treasury of to the contrary previous to the time that the state, or devoted to any of the [480] orthe cause of action arose. For this plain-dinary purposes of the government, or to tiff-appellee is entitled to the enforcement any purpose other than the payment of deof 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. Burgess v. Seligman, 107 U. S. 20, 33, 34, 27 L. ed. 359, 365, 2 Sup. Ct. Rep. 10; East Alabama R. Co. v. Doe, 114 U. S. 340, 353, 29 L. ed. 136, 140, 5 Sup. Ct. Rep. 869; Gibson v. Lyon, 115 U. S. 439, 446, 29 L. ed. 440, 442, 6 Sup. Ct. Rep. 129; Anderson v. Santa Anna Twp. 116 U. S. 356, 362, 29 L. ed. 633, 635, 6 Sup. Ct. Rep. 413; Baltimore & O. R. Co. v. Baugh, 149 U. S. 368, 372, 37 L. ed. 772, 775, 13 Sup. Ct. Rep. 914; Folsom v. Township 96, 159 U. S. 611, 625, 40 L. ed. 278, 283, 16 Sup. Ct. Rep. 174; Stanly County v. Coler, 190 U. S. 437, 444, 47 L. ed. 1126, 1131, 23 Sup. Ct. Rep. 811; Kuhn v. Fairmont Coal Co. 215 U. S. 349, 357, 360, 54 L. ed. 228, 233, 234, 30 Sup. Ct. Rep. 140. 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.1 1 Extracts from bank depositors' guaranty fund act, as found in Revised Laws of Oklahoma, 1910 (Harris and Day), §§ 298 et seq., and in subsequent Session Laws. Section 3 (299 and 300, as amended by Laws 1911, p. 54): "There is hereby levied an assessment against the capital stock of each and every bank and trust company organized or existing under the laws of this state, for the purpose of creating a depositors' guaranty fund, equal to 5 per centum of its average daily deposits during its continuance in business as a banking corporation. Said assessment shall be payable one fifth during the first year of existence of said bank or trust company, and one twentieth during each year thereafter until the total amount of said 5 per centum assessment shall have been fully paid. After the 5 per centum assessment, hereby levied, shall have been fully paid, no additional assessment shall be levied or collected against the capital stock of any bank or trust company, except emergency assessments, hereinafter provided for, to pay the Not even is the credit of the state pledged for the success of the re shall distinctly specify the sum appropridepositors of failed banks, and except assessments that may be necessary by reason of increased deposits to maintain such funds at 5 per centum of the aggregate of all deposits in such banks and trust companies, doing business under the laws of this state. "Whenever the depositor's fund shall become impaired or be reduced below said 5 per centum by reason of payments to depositors of failed banks, the state banking board shall have the power and it shall be its duty to levy emergency assessments against capital stock of each bank and trust company doing business in this state to restore said impairment or reduction, but the aggregate of such emergency assessments shall not, in any one calendar year, exceed 2 per centum of the average daily deposits of all such banks and trust companies. If the amount realized from such emergency assessments shall be insufficient to pay off the depositors of all failed banks having valid claims against said depositors' guaranty fund, the state banking board shall banks in favor of the depositors of each and every bank, the bank commissioner and the banking board being charged with the management of it as public trustees, with duties owing to a limited class of persons having financial, and not political, interests. ated and the object to which it is to be are not to bear interest during the time applied, and it shall not be sufficient for they are so held. In short, the act, as such law to refer to any other law to fix I read it, simply establishes a plan for such sum." It cannot, I think, be reason-enforced co-operative insurance by all the ably contended that the guaranty fund was intended to be a state fund, or a fund under the management of the state, within the meaning of the Constitution. To so hold would render the act violative of the section quoted, since its provisions are plainly inconsistent with the slow and formal process of legislative appropriations. Again, by article 10, § 15, of the state Constitution, "The credit of the state shall not be given, pledged, or loaned to any individual, company, corporation, or association The promise held out to bank depositors is clear and unequivocal. By §§ 5 and 6, in the event of the insolvency of any bank, the bank commissioner may take posses;sion of its assets, and in this event "the shall be paid in full, and when the cash available or that can be made immediately available of said bank or trust company is not sufficient to discharge its obligations to depositors, the 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." And by § 3 (300), if the amount realized from emergency assessments shall be insufficient to pay off the depositors, "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 per centum interest ;” these certificates to be consecutively numbered and to be paid in the order of their issue out of future emergency assessments which the banking board is required to levy annually until the certificates of indebtedness, with accrued interest, shall have been fully paid. By the 1913 amendment, the certificates of indebtedness are designated state banking board toward refunding any emergency assessment levied by reason of the failure of such liquidated bank. Provided, that the guaranty fund collected under this act shall be redeposited with the banks from which it was paid, and a spccial certificate, or certificates, of deposit, shall be issued to the bank commissioner by each and every bank and trust company, bearing 4 per centum interest per annum." nor shall the state become an owner or stock-depositors of said bank or trust company holder in, nor make donation by gift, subscription to stock, by tax or otherwise, to any company, association, or corporation." These constitutional limitations explain, I think, why, in the framing of the act, the legislature was so careful to dissociate the state in its organized capacity from all participation in the scheme or responsibility for its success. The act contemplates that the cash constituting the fund is to be in the physical custody of the banks themselves, until actually needed; for by § 3, as amended in 1911, it was provided that the fund should be redeposited with the banks from which it was paid, and a special certificate or certificates of deposit issued to the bank commissioner by each bank, bearing 4 per centum interest per annum; and by the 1913 amendment the [483] annual assessments for that and succeeding years are to be paid by cashier's checks, to be held by the banking board until, in its judgment, it is necessary to collect them; but the checks issue and deliver to each depositor, having such unpaid deposit, a certificate of indebtedness for his unpaid deposit, bearing 6 per centum interest. Such certificate shall be consecutively numbered, and shall be payable, upon the call of the state banking board, in like manner as state warrants are paid by the state treasurer in the order of their issue, out of the emergency levy thereafter made; and the state banking board shall from year to year levy emergency assessments, as hereinbefore provided, against the capital stock of all the banking corporations and trust companies doing business in this state, until such certificates of indebtedness, with the accrued interest thereon, shall have been fully paid. As rapidly as the assets of failed banks are liquidated and realized upon by the bank commissioner, the same shall be applied first, after the payment of the expenses of liquidation, to the repayment of the depositors' guaranty fund of all money paid out of said fund to the depositors of such failed bank, and shall be applied by the By § 5 (302) in the event of the insolvency of any bank, the bank commissioner "may, after due examination of its affairs, take possession of said bank or trust company and its assets, and proceed to wind up its affairs and enforce the personal liability of the stockholders, officers, and directors." Section 6 (303): In the event that the bank commissioner shall take possession of any bank or trust company which is subject to the provisions of this chapter, the depositors of said bank or trust company shall be paid in full, and when the cash available or that can be made immediately on reading it may learn that, in the event of insolvency, "the depositors of said bank or trust company shall be paid in full," etc. as "depositors' guaranty fund warrants," | to be readily understood by all, and free and are to constitute a charge upon the from cavil or question in any quarter. It guaranty fund when collected, as well as a constitutes a clear and unequivocal tender lien against the capital stock, surplus, and of a benefit to every person who might con[484] undivided profits of every bank to template becoming a depositor of a state the extent of its liability to the fund. bank in Oklahoma. Under § 8 every bank The entire scheme is carefully devised to is permitted to advertise that its depositors give assurance to every bank and to every are protected by the depositors' guaranty bank depositor not merely of ultimate pay-fund. Every would-be depositor is thus diment of the amount of the deposits, but rectly referred to the terms of the law, and of immediate payment in cash or in certificates salable for cash, in case the bank becomes insolvent. A winding up of the bank's affairs, with a liquidation of its assets and enforcement of the liabilities of It was said upon the argument that this stockholders, officers, and directors, is pro- promisc, however unequivocal, is a "politvided for, and the proceeds are to be de-ical" promise, and therefore not enforcevoted to restoring the guaranty fund and repaying to the solvent banks the amount of the emergency assessments; but the depositors are not to await the outcome of the process. A main purpose of the act, as I read it, is to relieve them not merely from the hazard of ultimate loss, but from the hardships normally incident to the delays of winding-up proceedings, and for which, as everybody knows, an ultimate allowance of interest is very often an inadequate compensation. able by suit. If it is a promise of the state of Oklahoma, it, of course, is a "political" promise; otherwise not. But does not § 8 show most plainly that it is not [485] at all a promise of the state, and is enforceable out of, and only out of, a fund kept upon deposit in the banks themselves, and controlled by trustees whose salaries are, indeed, paid from the public treasury, but who are charged with no political function, and whose duties are owing solely to the banks and to depositors and others inter } The law was intended, as I think, to ren-ested in the banks? der the rights of depositors so clear as available of said bank or trust company is not suflicient to discharge its obligations to depositors, the 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: and the state shall have, for the benefit of the depositors' guaranty fund, a first lien upon the assets of said bank or trust company, and all liabilities against the stockholders, officers, and directors of said bank or trust company, and against all other persons, corporations, or firms. Such liabilities may be enforced by the state for the benefit of the depositors' guaranty fund." The failure of the statute to make any who shall advertise their deposits as guaranteed by the state of Oklahoma shall be guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding $500, or by imprisonment in the county jail for thirty days, or by both such fine and imprisonment." By act of March 6, 1913 (Sess. Laws, chap. 22, pp. 27-29), the 3d section was amended so as to provide for the issuance of certificates of indebtedness to be known as "depositor's guaranty fund warrants of the state of Oklahoma,” in order to liqui date the deposits of failed banks or other indebtedness properly chargeable against the fund; the warrants to bear 6 per cent Section 8 (305): "The bank commis- interest, and to constitute a charge and first sioner shall deliver to each bank or trust lien upon the depositors' guaranty fund company that has complied with the provi- when collected, as well as a first lien against sions of this chapter a certificate stating the capital stock, surplus, and undivided that said bank or trust company has com- profits of every bank operating under the plied with the laws of this state for the banking laws of the state to the extent of protection of bank depositors, and that its liability to the fund; and that "all warsafety to its depositors is guaranteed by rants heretofore issued by the banking the depositors' guaranty fund of the state board shall be paid serially in the order of of Oklahoma. Such certificate shall be con- their issuance from any funds on hand spicuously displayed in its place of busi- when this act takes effect, or provided for ness, and said bank or trust company may by the terms of this act, and all warrants print or engrave upon its stationery and hereafter issued shall be in numerical order advertising matter words to the effect that and retired in like order. As rapidly as its depositors are protected by the deposit- the assets of failed banks are liquidated and ors' guaranty fund of the state of Okla-realized upon by the bank commissioner, homa: Provided, however, that no bank the proceeds thereof, after deducting the shall be permitted to advertise its deposits expenses of liquidation, shall be paid to as guaranteed by the state of Oklahoma; the state banking board, and by said board and any bank or bank officers or employees' credited to the depositors' guaranty fund." express provision for an action against the than as the bank commissioner and bankbanking board at the suit of a depositoring board act therein. It is argued that the board is endowed with discretionary powers in respect to the administration of the fund. I concede that the act implies a considerable latitude of administrative discretion with respect to the care and management of the fund; but it is quite different with the provision for the payment of depositors. Here the plain mandate is: "Pay in cash, so far as you have it, and give certificates of indebtedness or warrants to the extent that the cash falls short." The argument in behalf of appellants goes to the length of saying: "It [the fund] may be used not only to pay the depositors of failed banks, but frequently to aid banks while in a failing condition. All of the fund which may be available at a particular time might, in the judgment of the banking board, be better used to aid disabled banks than to be [487] applied to the immediate payment of depositors of a particular bank which had already been taken into the custody of the bank commissioner. In this way the available funds might be withdrawn by the banking board, in the exercise of its can hardly be deemed significant. This is taken care of in the Constitution, which declares (article 2, § 6): "The courts of justice of the state shall be open to every person, and speedy and certain remedy afforded for every wrong and for every injury to person, property, or reputation." That the fund is established for a public purpose through the exercise of the police power of the state does not, I submit, make the fund itself public property. It is closely analogous, I think, to the surplus of a mutual insurance company. The argument that the fund is public will hardly bear analysis. In one of the briefs it is expressed as follows: "The essence of the law, therefore, is not to establish a private right, but to serve public welfare; and, as such, no justiciable rights in the depositors are presumed to arise; the law was not primarily enacted to return to the depositor his money, but more properly to prevent the public injury by bank panics. Nowhere is there language used showing an intent to give to a depositor the right to sue." But, since bank panics are caused by the fear on the part of depositors that their money-discretion, from the payment of a failed that is, their ability to withdraw the money or otherwise realize upon their deposits is in jeopardy, the argument pretty clearly defeats itself. bank," etc. As showing the results to which the argument for discretionary powers with respect to paying depositors logically leads, this is illuminating; but if anything is clear in the letter and spirit of this enactment, it is that the legislature by no means intended that the fund or any part of it should be subject to use in supporting banks while in a failing condition, or in any other form of hazardous enterprise. ought not to be read into the act by con- Not only has the state no part in the raising of the guaranty fund nor property in it, nor interest or responsibility in the distribution of it, nor even the remotest [486] reversionary right should the scheme prove a failure, but the act contains no expression of a purpose that the public trustees are to be clothed And it would seem plain enough that an with that immunity from private suit interest on the part of the state or a diswhich is one of the prerogatives of sov-cretion on the part of the banking board ereignty. There is nothing to suggest any participation by the state in the transaction, except that § 6 declares that "the state shall have, for the benefit of the depositors' guaranty fund, a first lien upon the assets of said bank," etc., and that "such liabilities may be enforced by the state for the benefit of the depositors' guaranty fund." But does not this plainly show that the state is to be a merely nomi-pretation of the statute or for its connal party, and that the fund alone is the struction, if construction be needed—we real beneficiary? It seems to me the lan- should observe the fundamental rules that apply to contracts; for while there is disguage naturally imports the familiar action brought in the name of one, but for state is a party to it, we all agree that the agreement upon the question whether the the sole use of another; an action in which act prescribes a contract, and one of wide the nominal plaintiff at the same time importance, between the banks and the deavows that he has no interest in the pro- positors, and that the public interest is ceeds. I cannot find in § 6, or elsewhere, as much concerned in seeing it carried out anything to suggest that the state is to and enforced according to its true intent be an active agent in the matter, otherwise and meaning as in requiring that the con proper inter |