Northside Iron & Metal Co., Inc. v. Dobson & Johnson, Inc., 73-1200 Summary Calendar.

• Decision Date: 05 July 1973
• Docket Number: No. 73-1200 Summary Calendar.,73-1200 Summary Calendar.
• Citation: 480 F.2d 798
• Parties: NORTHSIDE IRON AND METAL COMPANY, INC., et al., Plaintiffs-Appellants, v. DOBSON AND JOHNSON, INC., and The Third National Bank, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

480 F.2d 798 (1973)

NORTHSIDE IRON AND METAL COMPANY, INC., et al., Plaintiffs-Appellants, v. DOBSON AND JOHNSON, INC., and The Third National Bank, Defendants-Appellees.

No. 73-1200 Summary Calendar.^*

United States Court of Appeals, Fifth Circuit.

July 5, 1973.

R. Elliott Dunn, Jr., Gainesville, Ga., for plaintiffs-appellants.

John T. Marshall, Gary N. Ackerman, Atlanta, Ga., for Third National Bank.

Ronald L. Reid, William C. Humphreys, Jr., Atlanta, Ga., for Dobson and Johnson, Inc.

Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.

THORNBERRY, Circuit Judge:

The district court dismissed, on authority of the bank venue statute, 12 U.S.C.A. § 94, plaintiffs' action against defendant Third National Bank for fraud and deceit and denied plaintiffs' motion to remand the case to a Georgia state court. On this appeal, plaintiffs contend that the bank venue statute violates the Due Process Clause of the Fifth Amendment, that in the alternative the defendant bank waived whatever immunity from suit in Georgia which the bank venue statute conferred on it, and that the case was improperly removed from a state court to the federal district court. Finding each contention to be without merit, we affirm.

Plaintiffs are eight subcontractors who were engaged to supply labor and materials for construction of a government warehouse in Duluth, Georgia. Defendant Third National Bank, a national bank established in Davidson County, Tennessee, was to provide construction financing for the warehouse. A dispute developed with regard to the financing arrangements, and the plaintiffs sued Third National and one other defendant for fraud and deceit in the Superior Court of Gwinnett County, Georgia. Defendants removed the case to the Federal District Court for the Northern District of Georgia. The district court granted Third National's motion to dismiss as to it, denied plaintiffs' motion to remand the case to state court, and certified its order as a final judgment under Fed.R.Civ.P. 54(b).

The basis of the dismissal was the bank venue statute, 12 U.S.C.A. § 94, which provides:

Actions and proceedings against any association under this chapter may be had in any district or Territorial court of the United States held within the district in which such association may be established, or in any State, county, or municipal court in the county or city in which said association is located having jurisdiction in similar cases.

A national bank is "established" or "located" "only in the place where its principal office and place of business is as specified in its organization certificate." Buffum v. Chase National Bank, 7th Cir. 1951, 192 F.2d 58, 60, cert. denied 342 U.S. 944, 72 S.Ct. 558, 96 L.Ed. 702 (1952). Even establishment of a branch office in another district will not suffice to "locate" the bank there for venue purposes. United States National Bank v. Hill, 9th Cir. 1970, 434 F.2d 1019. In essence the statute confers on national banks immunity from suit outside the district, territory, county, and city where it is located. Although the language of the statute is permissive — specifying that actions against national banks "may be had" in the district where it is located — it is now authoritatively settled that the effect of the statute is mandatory; national banks may be sued only on their home ground. Mercantile National Bank v. Langdeau, 1963, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523; Michigan National Bank v. Robertson, 1963, 372 U.S. 591, 83 S.Ct. 914, 9 L.Ed.2d 961.

It is undisputed that Third National is established in Tennessee and had a right under the bank venue statute to decline to be sued outside its district in Tennessee. The only question as to the applicability of the venue statute in this case is raised by appellants' argument that the bank waived its § 94 immunity from suit in Georgia by committing fraudulent acts there. A bank may waive the protection of § 94, Michigan National Bank v. Robertson, supra, either by express declaration or by failing to assert the privilege when sued outside its district. First Charlotte National Bank v. Morgan, 1889, 131 U.S. 141, 10 S.Ct. 37, 33 L.Ed. 282. Further, a waiver may be inferred from conduct inconsistent with the assertion of the privilege. In order to constitute a waiver, the declaration or conduct relied on must demonstrate "a voluntary and intentional relinquishment or abandonment of the privilege." Buffum v. Chase National Bank, supra, 192 F.2d at 61; Helco, Inc. v. First National City Bank, 3rd Cir. 1972, 470 F.2d 883. Merely doing business in a foreign district, even through a branch bank or a wholly owned subsidiary located there, does not constitute a waiver of the privilege. Helco, Inc. v. First National City Bank, supra; Fisher v. First National Bank, S.D.Iowa 1972, 338 F.Supp. 525, appeal dismissed, 8th Cir. 1972, 466 F.2d 511. We think it clear that commission of a tort in a foreign district is also an insufficient basis for inferring waiver of the venue privilege.

Appellants attack the constitutionality of the bank venue statute under the Due Process Clause of the Fifth Amendment and the Equal Protection principle embodied in it arguing that the statute is patently arbitrary, unreasonable, and discriminatory. While the statute does confer a special benefit on national banks, we cannot agree that it lacks a rational basis. "National banks are federal instrumentalities and the power of Congress over them is extensive. . . . Unquestionably Congress had authority to prescribe the manner and circumstances under which the banks could sue or be sued in the courts." Mercantile National Bank v. Langdeau, supra, 371 U.S. at 558, 83 S.Ct. at 522. In all cases which have dealt with the statute, including each of the...