Bata v. CENTRAL-PENN NATIONAL BANK OF PHILADELPHIA

• Decision Date: 01 November 1963
• Docket Number: Civ. A. No. 33961.
• Citation: 223 F. Supp. 91
• Parties: Thomas J. BATA v. CENTRAL-PENN NATIONAL BANK OF PHILADELPHIA and Jan A. Bata.
• Court: U.S. District Court — Eastern District of Pennsylvania

223 F. Supp. 91

Thomas J. BATA v. CENTRAL-PENN NATIONAL BANK OF PHILADELPHIA and Jan A. Bata.

Civ. A. No. 33961.

United States District Court E. D. Pennsylvania.

November 1, 1963.

Lewis H. Van Dusen, Jr., of Drinker, Biddle & Reath, Philadelphia, Pa., George M. Brodhead, of Rawle & Henderson, Philadelphia, Pa., for Central-Penn National Bank of Philadelphia.

Harold E. Stassen of Stassen, Kephart, Sarkis & Scullin, Philadelphia, Pa., for Jan A. Bata. Peaslee, Brigham, Albrecht, & McMahon, New York City, of counsel.

JOSEPH S. LORD, III, District Judge.

On March 27, 1962, attorneys for Thomas J. Bata, a Canadian citizen, and attorneys for Jan A. Bata, a citizen of Brazil, executed an escrow agreement. This agreement was one segment of a comprehensive agreement settling conflicting claims of Thomas and Jan. Central-Penn National Bank was selected by the parties as the escrow agent.

The comprehensive settlement agreement consisted of payment by Thomas to Jan of $3,400,000 in exchange for share certificates and documents delivered by Jan A. Bata. The parties agreed that interpretation of the settlement agreement would be governed by the laws of the Commonwealth of Pennsylvania.

Under the escrow letter Thomas' attorneys deposited $500,000 with Central-Penn to be held for Jan Bata as a portion of the $3,400,000 in cash paid by Thomas to Jan under the comprehensive settlement agreement. Jan Bata delivered to the escrow stock certificates of the British Bata Shoe Company, Ltd., and certain letters. After an order of the High Court of Justice in London concluding litigation pending in that court was obtained and bearer shares of the corporation Nederlandshe Schoen-en-Lederfabrihen Bata Best N. V. of the Netherlands (Dutch Bata) were registered, the $500,000 in cash was to be delivered to Jan Bata and the documents were to be delivered to Thomas Bata's attorneys.

Plaintiff instituted suit in the Philadelphia Court of Common Pleas joining Jan Bata and Central-Penn as defendants. The complaint alleges that plaintiff has performed all obligations capable of performance without the cooperation of Jan, but that Jan wrongfully refused to cooperate in obtaining an order from the High Court of Justice in London and to take the necessary steps to permit registration of the bearer shares of the Dutch Bata company. The cause of action is plaintiff's claim of right to immediate delivery to him of the documents in escrow based on the defendant's alleged wrongful prevention of the fulfillment of the terms of the escrow agreement.

Defendants Central-Penn and Jan A. Bata filed a joint petition for removal based upon 12 U.S.C. § 632. Title 12 of the United States Code relates to banks and banking. Section 632 is a part of a chapter which pertains to foreign banking and provides in part as follows:

"Notwithstanding any other provision of law, all suits of a civil nature at common law or in equity to which any corporation organized under the laws of the United States shall be a party, arising out of transactions involving international or foreign banking, * * * or out of other international or foreign financial operations, * * * shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits; and any defendant in any such suit may, at any time before the trial thereof, remove such suits from a State court into the district court of the United States for the proper district by following the procedure for the removal of causes otherwise provided by law. * * *"

We have before us plaintiff's motion to remand to the Court of Common Pleas. Plaintiff has urged several reasons supporting his claim that § 632 does not give this court jurisdiction. Our treatment of one of these will be dispositive of the motion.

Plaintiff argues, inter alia, that in order to be a "party" within the meaning of § 632 the national bank must be more than a formal party, and that Central-Penn is only a stakeholder.

Defendants argue that the bank has some sort of an interest in the contractual obligation of the escrow agreement. We cannot agree. Central-Penn, as escrow, is nothing more than a disinterested stakeholder. In Security Trust & Savings Bank v. Carlsen, 205 Cal. 309, 271 P. 100, 60 A.L.R. 630 (1928), an interpleader action, the Supreme Court of California defined the position of an escrow bank. The court said, at pages 102-103 of 271 P.:...