Osborn v. Bank of the United States

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Osborn v. Bank of the United States

Argued March 10, 1824
Decided March 19, 1824

Full case name:	Ralph Osborn and others, Appellants v. The President, Directors, and Company of the Bank of the United States, Respondents

Citations:	22 U.S. 738; 22 U.S. (9 Wheat.) 738; 6 L. Ed. 204; 1824 U.S. LEXIS 409

Prior history:	Appeal from the Circuit Court of Ohio

Holding

Upheld that the federal court was right in ruling against the state of Ohio, thus not violating the Eleventh Amendment nor Article III of the Constitution.

Court membership

Chief Justice: John Marshall
Associate Justices: Bushrod Washington, William Johnson, Thomas Todd, Gabriel Duvall, Joseph Story, Smith Thompson

Case opinions

Majority by: Marshall
Joined by: Washington, Todd, Duvall, Story, Thompson
Dissent by: Johnson

Laws applied

U.S. Const. amend. XI

Osborn v. Bank of the United States, 22 U.S. 738 (1824), was case set in the Banking Crisis of 1819, during which many banks, including the Bank of the United States, demanded repayment for loans which they had issued on credit that they did not have. This led to an economic downturn and a shortage of money. In 1819, Ohio passed a law which put a tax on the Bank of the United States, the theory being that if a bank were taxed it would allow the state government to receive and distribute the scarce money. On September 17, 1819, Ohio Auditor Ralph Osborn was given permission to seize $100,000 from a branch of the Bank of the United States. However, his agents mistakenly took $120,000, the extra $20,000 of which he promptly returned. The bank chose to sue Osborn for the return of the additional $100,000, and a federal court ruled that Osborn violated a court order prohibiting the taxing of the bank. Osborn argued that he had never been properly served with this order, but still had to return the money. A problem arose when Osborn could only pay back $98,000, as the other $2,000 had been used to pay the salary of Osborn's tax agents. In 1824, the Supreme Court of the United States ruled in favor of the Bank of the United States, ordering the return of the disputed $2,000.