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Wichita Royalty Co. v. City Nat'l Bank, 306 U.S. 103 (1939)

Wichita Royalty Co. v. City National Bank of Wichita Falls

No. 314

Argued January 6, 1939

Decided January 30, 1939

306 U.S. 103


1. The opinion of the Supreme Court of Texas at an earlier stage of this case, defining the liability of a bank for trust funds transferred by a trustee from the trust account to a personal account, and checked out and misappropriated by him after the bank had accepted payment of his personal debts to the bank or an officer thereof, with notice that the payments had their source in trust funds, was not modified by the opinion of that court in Quanah, Acme & Pacific Ry. Co. v. Wichita State Bank & Trust Co., 127 Tex. 407. P. 306 U. S. 108.

The earlier opinion must be accepted as stating the law of Texas, and it affords the appropriate guide for the federal court so far as it may be applicable to the facts which have been developed on the trial there.

2. Decision on first appeal is not res judicata in subsequent hearing of the case. P. 306 U. S. 107.

3. Upon removal of a case for retrial after an appeal to and reversal by a state supreme court, it is the duty of the federal court to determine and apply the state law to local questions as the state court would have done, and, where the state court holds itself free to modify or recede from its own opinions, the federal court is free to examine later opinions of the state court in order to ascertain the applicable state law. P. 306 U. S. 107.

4. The Circuit Court of Appeals properly directed remand of this case to the District Court for findings of fact and conclusions of law in accordance with Equity Rule 70 1/2. P. 306 U. S. 110.

95 F.2d 671; 97 id. 249, affirmed.

Certiorari, 305 U.S. 587, to review the reversal of a decree in a case removed from a state court. The District Court had denied recovery on certain claims and counterclaims which were involved in the original suit. This Court affirms the judgment of the court below in remanding the case for findings of fact and conclusions of

Page 306 U. S. 104

law, but differs from that court in respect of principles applicable in disposition of the case.

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