Osborn v. Bank of the United States

Supreme Court of the United States · 1824 · Federal Courts

22 U.S. 738 (1824)

Updated August 1, 2026

Federal Courtsarising underingredient theoryarising under jurisdictionBank of the United Statesfederal questionCircuit Court jurisdictionEleventh Amendment

Facts

Congress chartered the Bank of the United States and provided that it could sue and be sued in state courts having competent jurisdiction and in any Circuit Court of the United States. Ohio enacted a law imposing a tax on the Bank, and state officers, including Osborn and Harper, took $100,000 in specie and notes from the Bank, of which $98,000 passed into the hands of state treasurers Currie and then Sullivan and was kept separate. The Bank sought an injunction and restitution in federal court, and the appellants argued that the Bank could not sue in federal court and that the suit was effectively against Ohio. The case therefore presented both the Bank's right to invoke federal jurisdiction and the validity of equitable relief against the officers.

Issue

Did the Bank's federally chartered status and charter provision authorize it to sue in the federal circuit courts, and could Congress constitutionally confer that jurisdiction because suits by the Bank are cases arising under the laws of the United States? Also, was the suit barred as one against the State of Ohio, and could equitable relief run against the state officers who seized the Bank's money?

Rule

Congress may give the federal circuit courts jurisdiction over any case in which a question to which the judicial power of the Union extends forms an ingredient of the original cause, even though other issues of fact or law are also involved. A suit by a corporation created and fully empowered by federal law arises under that law where the corporation's right to sue, contract, acquire property, and act at all depends on its federal charter. For Eleventh Amendment purposes, when jurisdiction depends on the party, the relevant party is the one named on the record; a suit against state officers is not a suit against the State if the State is not a party on the record.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress charters Prairie River Finance Corporation, giving it power to make contracts, hold property, and sue in any federal circuit court. Prairie River sues a grain dealer in federal court in Missouri for failing to pay a promissory note, and the dealer argues the dispute is only about whether he already paid the debt.

Is federal jurisdiction proper?

Explanation. Yes. The majority held that Congress may give federal courts jurisdiction whenever a question within federal judicial power forms an ingredient of the original cause. For a federally created corporation whose capacity to contract and sue depends on its charter, the federal charter remains part of the case even if the live dispute is payment, release, or some other nonfederal issue.