Aetna Casualty & Surety Company v. Graves, Civ. A. No. 74-21.

• Decision Date: 25 September 1974
• Docket Number: Civ. A. No. 74-21.
• Citation: 381 F. Supp. 1159
• Court: U.S. District Court — Western District of Louisiana
• Parties: AETNA CASUALTY & SURETY COMPANY v. James W. GRAVES et al., Whitney National Bank and First National Bank of Commerce, Garnishees.

381 F. Supp. 1159

AETNA CASUALTY & SURETY COMPANY v. James W. GRAVES et al., Whitney National Bank and First National Bank of Commerce, Garnishees.

Civ. A. No. 74-21.

United States District Court, W. D. Louisiana, Monroe Division.

September 25, 1974.

Henry B. Bruser, III, Gold, Hall, Hammill & Little, Alexandria, La., for plaintiff.

Lloyd F. Love, Ferriday, La., for Purser Raburn.

Burt W. Sperry, Shotwell, Brown & Sperry, Monroe, La., for Tennessee Life Ins. Co.

Roy S. Halcomb, Halcomb & Cole, Ferriday, La., for United Furniture Co. of Ferriday.

John M. Sturgeon, Jr., Sturgeon & Gore, Ferriday, La., for M. P. Brann.

George L. Wax, Dart & Dart, New Orleans, La., for First Nat. Bank of Commerce.

Walter J. Suthon, III, Monroe & Lemann, New Orleans, La., for Whitney Nat. Bank of New Orleans.

DAWKINS, Senior District Judge.

RULING ON PENDING MOTIONS

Plaintiff, an insurance company incorporated under the laws of Connecticut, with its principal place of business there, has filed an action in this Court against James W. Graves and twelve other defendants, none of whom are citizens of Connecticut, to recover $288,576.09, a sum which it was required to pay pursuant to a fidelity bond issued by it to insure Delta Security Bank & Trust Company of Ferriday, Louisana (Delta Bank), against losses arising out of employee theft and dishonesty.

Plaintiff alleges that an audit of Delta Bank in January of 1973 disclosed that substantial losses had been suffered by that bank due to theft of bank funds by Graves. Plaintiff further alleges that, as a result of the losses mentioned, Delta Bank was closed and placed in liquidation; the Federal Deposit Insurance Corporation then called upon plaintiff for payment under its fidelity bond, resulting in the $288,576.09 payment mentioned. Upon receiving the sum demanded, F.D.I.C. transferred and assigned to plaintiff all of F.D.I.C.'s rights and claims against all persons arising from the losses mentioned.

Plaintiff contends that defendant Tennessee Life Insurance Company (Tennessee), a Texas corporation, received $1,692.00 of the monies allegedly misappropriated by Graves and that Banco Mexicano (whose account at Whitney National Bank of New Orleans, Louisiana (Whitney), has been garnished under a writ of nonresident attachment) erroneously and negligently released $100,000.00 of Delta's funds to James Graves and/or Deborah Graves. Plaintiff thus has named Tennessee and Banco Mexicano defendants in this matter, and, under a writ of nonresident attachment, has attached any assets of Banco Mexicano held by Whitney.

In its present posture, this matter is before us on motions by garnishee Whitney and defendant Tennessee. Whitney has moved to quash and vacate the garnishment served upon it and to dismiss the proceeding against it. Tennessee's motion alleges that this Court lacks subject matter jurisdiction as to the plaintiff's claim against it and prays for dismissal from this action.

We turn first to consideration of Whitney's motion.

Whitney's Motion to Quash and Vacate Writ of Attachment and to Dismiss Garnishment

Plaintiff, believing Whitney to be indebted to or in possession of assets belonging to the nonresident defendant Banco Mexicano, in order to obtain jurisdiction over that bank,¹ caused a garnishment under writ of nonresident attachment to issue, citing Whitney as garnishee. Thus Whitney is not a party defendant in the principal action brought by plaintiff; it merely is garnishee under the writ. Notwithstanding, Whitney has moved to quash the attachment and to dismiss the garnishment on the following grounds: (1) improper venue as to Whitney; (2) alternatively, insufficient service of process; (3) in the further alternative, lack of subject matter and in personam jurisdiction.

We turn first to the claim of improper venue. Whitney's first, and most substantial, ground in support of its contention as to improper venue is that under the provisions of the National Banking Act, 12 U.S.C. § 94, proper venue of an action or proceeding in a federal district court against a national bank is the judicial district in which the bank is established.² Since Whitney is a national bank with its principal place of business in the Eastern District of Louisiana (New Orleans), if this mandatory³ venue provision is applicable to the circumstances here, we must grant Whitney's motion.

However, the narrow issue presented is whether a mere garnishment, under a writ of nonresident attachment, is an action or proceeding against a national bank, within the meaning of § 94. Both plaintiff's and Whitney's briefs, as well as our own research, indicate that this is an issue of first impression.

Section 94 is a horse-and-buggy statute in a supersonic age. It has been a part of the United States Code for almost a century, even though we long since have moved into an age of high-speed mobility. This section apparently was enacted by Congress for the convenience of national banking institutions and "to prevent interruption in their business that might result from their books being sent to distant counties in obedience to process from state courts." (Citations omitted.) First National Bank of Charlotte v. Morgan (1889) 132 U.S. 141, 145, 10 S.Ct. 37, 38, 33 L.Ed. 282; Mercantile National Bank; Northside Iron & Metal Co., Inc. v. Dobson and Johnson, Inc., 480 F.2d 798 (5th Cir., 1973). Despite the anachronistic nature of § 94, if Congress intended that it should apply where, as here, a national bank's sole connection with the principal action is as garnishee under foreign attachment, required merely to answer garnishment interrogatories propounded by plaintiff, we must hold that § 94 applies (this is so even though defendant Banco Mexicano has neither answered nor objected to venue). Nevertheless, we are of the firm opinion that to hold that § 94 applies here would be to give a liberal, expansive interpretation to that statute and we strongly are not inclined to do so. We cannot say that it would be more inconvenient for Whitney to send its garnishment answers to this Court in the Western District of Louisiana than to send the same material to a District Court in the Eastern District; and we seriously doubt that Whitney's operations will come to a screeching halt if it is required to answer plaintiff's garnishment interrogatories. Congress could not have intended § 94 to apply in the circumstances here presented. We, therefore, hold that § 94 does not apply to this action.

Whitney alternatively argues that venue is improper because, under Louisiana law, venue in a garnishment proceeding, under writ of foreign attachment, would be in the Parish of Orleans, in the Eastern District of Louisiana. We do not decide this question because it properly is an objection for defendant Banco Mexicano to make through its counsel, not through counsel for the garnishee. We, therefore, pretermit decision upon this issue until such time as it properly may be presented to us. Moreover, Whitney's objections of insufficient service of process and lack of subject matter and personal jurisdiction are also matters which properly should be asserted by Banco Mexicano, not Whitney.

For the reasons given, Whitney's motion to quash the garnishment under writ of foreign attachment hereby is denied.

Tennessee's Motion to Dismiss for Lack of Jurisdiction

Plaintiff seeks to join Graves and Tennessee as defendants in this action. Assuming that joinder is permissible under Rule 20(a) F.R.Civ.P. under the circumstances alleged by plaintiff, we still must have subject matter jurisdiction over the claims against each defendant. Tennessee contends that we lack subject matter jurisdiction as to plaintiff's claim against it because the "amount in controversy" is less than $10,000. Plaintiff opposes Tennessee's motion, contending that the claim against the latter may be aggregated with the claim against Graves to attain the jurisdictional amount required. For the reasons given below, we hold that we do have subject matter jurisdiction over the claim against Tennessee.

Plaintiff's complaint...