Osborn v. U.S. Bank (1824)

In Osborn v. U.S. Bank (1824) 22 U.S. 738, the Supreme Court held that a statute granting the second Bank of the United States the right "to sue and be sued . . . in any circuit court in the United States" was a permissible exercise of the "arising under" jurisdiction authorized in Article III, 2. (Id. at 817.) Chief Justice Marshall wrote: "When a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in the power of congress to give the circuit courts jurisdiction of that cause, although other questions of fact or of law may be involved in it." (Id. at 822.) Although the issues in dispute in Osborn were matters of contract and thus "unconnected" to federal law, id., the Court made clear that it was enough for the purpose of Article III jurisdiction that the anterior question of the Bank's authority in federal law to enter into such a contract must always be presupposed, even if not litigated: The Bank is not only itself the mere creature of a law of the United States, but all its actions and all its rights are dependent on the same law of the United States. . . . The federal question forms an original ingredient in every cause. (Id. at 824.) Chief Justice Marshall stated that a denial of jurisdiction forbids all inquiry into the nature of the case, and a corporation, it is true, can appear only by attorney, while a natural person may appear for himself. The particular problem involved was whether the lawyer for the Bank needed to file evidence of his authority to institute the litigation. Immediately prior to the above quoted sentence the Chief Justice in the same sequence made it plain that he was talking solely of attorneys at law. He said p. 828: "Natural persons may appear in court, either by themselves, or by their attorney. But no man has a right to appear as the attorney of another, without the authority of that other. In ordinary cases, the authority must be produced, because there is, in the nature of things, prima facie evidence that one man is in fact the attorney of another. The case of an attorney-at-law, an attorney for the purpose of representing another in court, and prosecuting or defending a suit in his name, is somewhat different. The power must indeed exist, but its production has not been considered as indispensable. Certain gentlemen, first licensed by government, are admitted, by order of court, to stand at the bar, with a general capacity to represent all the suitors in the court. The appearance of any one of these gentlemen in a cause, has always been received as evidence of his authority; and no additional evidence, so far as we are informed, has ever been required. This practice, we believe, has existed from the first establishment of our courts, and no departure from it has been made in those of any state, or of the Union." The Court stated that: "If the State of Ohio could have been made a party defendant, it can scarcely be denied that this would be a strong case for an injunction. The objection is that, as the real party cannot be brought before the court, a suit cannot be sustained against the agents of that party; and cases have been cited to show that a court of chancery will not make a decree unless all those who are substantially interested be made parties to the suit. This is certainly true where it is in the power of the plaintiff to make them parties; but if the person who is the real principal, the person who is the true source of the mischief, by whose power and for whose advantage it is done, be himself above the law, be exempt from all judicial process, it would be subversive of the best established principles to say that the laws could not afford the same remedies against the agent employed in doing the wrong which they would afford against him could his principal be joined in the suit." Chief Justice Marshall also stated: "Judicial power, as contradistinguished from the power of the laws, has no existence. Courts are the mere instruments of the law, and can will nothing. When they are said to exercise a discretion, it is a mere legal discretion, a discretion to be exercised in discerning the course prescribed by law; and, when that is discerned, it is the duty of the court to follow it. Judicial power is never exercised for the purpose of giving effect to the will of the judge; always for the purpose of giving effect to the will of the legislature; or, in other words, to the will of the law."