Buffum v. Chase Nat. Bank of City of New York

• Decision Date: 24 October 1951
• Docket Number: No. 10456.,10456.
• Citation: 192 F.2d 58
• Parties: BUFFUM v. CHASE NAT. BANK OF CITY OF NEW YORK.
• Court: U.S. Court of Appeals — Seventh Circuit

192 F.2d 58 (1951)

BUFFUM v. CHASE NAT. BANK OF CITY OF NEW YORK.

No. 10456.

United States Court of Appeals Seventh Circuit.

October 24, 1951.

Harry G. Fins, Erving S. Sternberg, Chicago, Ill., for appellant.

Kenneth F. Burgess, Howard Neitzert and Walter J. Cummings, Jr., all of Chicago, Ill. (Sidley, Austin, Burgess & Smith, Chicago, Ill., Milbank, Tweed, Hope & Hadley, New York City, of counsel), for appellee.

Before MAJOR, Chief Judge, FINNEGAN and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

Plaintiff's amended complaint averred that plaintiff is a citizen of Illinois, defendant, a national banking association in New York; that the amount in controversy exceeds $3,000; that defendant has been authorized to do business in Illinois as a foreign corporation; that, in reliance upon defendant's representation that it was holding letters of allocation for 175,000 tons of cold rolled sheet steel, which it was willing to sell, plaintiff obtained an order for purchase of the steel and tendered it to defendant but that the latter refused to consummate the sale, to the damage of plaintiff in excess of $3,000,000. Plaintiff filed a further amendment to the complaint in which he averred that defendant maintains a Chicago office, is a Chicago telephone subscriber and maintains a Chicago teletype station.

Defendant moved to dismiss upon the ground, amongst others, that under Title 12 U.S.C.A. § 94, an action against defendant may be brought only in the Southern District of New York where it is located; that, in complying with the foreign corporation laws of Illinois and consenting that it might be sued there, defendant had limited its consent to transaction of business in Illinois only "in connection with its acceptance and execution of trusts and to receive deposits of trust funds in Illinois." In its annual report to the Illinois Secretary of State in 1942 and thereafter defendant listed its Illinois registered agent only "in connection with the acceptance and execution of trusts and receipts of deposits and trust funds in Illinois."

Only one question was considered by the District Court, which concluded that "the venue of this action is only in the Southern District of New York. The defendant has not consented to be sued in Illinois except `in connection with the acceptance and execution of trusts and receipts of deposits of trust funds in Illinois' and such matters are not involved in this action." Thereupon the court entered an order dismissing the suit for want of proper venue. The parties agree that the ultimate issue here is as to the propriety of this order.

So far as the jurisdiction of the court over the subject matter is concerned, there is no question but that if the venue was properly laid the court had jurisdiction on the grounds of diversity, for a national banking association is by statute placed "before the law in this respect the same as a bank not organized under the laws of the United States." Leather Manufacturers Nat. Bank v. Cooper, 120 U.S. 778, 781, 7 S.Ct. 777, 778, 30 L.Ed. 816. See also Ex parte Jones, 164 U.S. 691, 693, 17 S.Ct. 222, 41 L.Ed. 601; Petri v. Commercial National Bank of Chicago, 142 U.S. 644, 12 S.Ct. 325, 35 L.Ed. 1144; American Surety Co. v. Bank of California, 9 Cir., 133 F.2d 160. The issue here then is not one of jurisdiction of the subject matter, but one as to the proper venue, the proper locality. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, at page 168, 60 S.Ct. 153, 84 L.Ed. 167.

It seems clear that the proper venue, in the absence of waiver or consent, is determined by Section 94 of 12 U.S.C.A. Under this section "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 within the meaning of this act only in the place where its principal office and place of business is as specified in its organization certificate. Leonardi v. Chase National Bank of City of New York, 2 Cir., 81 F.2d 19, 22. It was expressly held in that case that a suit against such a bank may be maintained only in the place of its establishment, i. e., its location. There the bank was sued in a district other than where it was established. The court said: "The defendant's charter recites that its home office and principal place of business is in the Southern District. * * the district in which the national bank has its principal place of business and which contains the place recited in its charter should be taken as the proper district for suits against a national bank. The court in the Eastern District of New York was without jurisdiction". As recently as 1947 the Supreme Court has ruled likewise. Thus in Cope v. Anderson, 331 U.S. 461, 467, 67 S.Ct. 1340, 1343, 91 L.Ed. 1602, the court said: "Many provisions of federal law make national banks, in important aspects peculiarly local institutions. * * For jurisdictional purposes, a national bank is a `citizen' of the state in which it is established or located, * * * and in that district alone can it be sued. 12 U.S.C. § 94, 12 U.S.C.A. § 94 * * *." State courts, called upon to entertain actions against national banks, of which they have jurisdiction, have ruled similarly. See Crocker et al. v. Marine National Bank of New York, 101 Mass. 240; Burns v. Northwestern Nat. Bank of Minneapolis, Minn., 1935, 65 N.D. 473, 260 N.W. 253; Rabinowitz v. Kaiser-Frazer Corp., 1950, 198 Misc. 312, 96 N.Y. S.2d 638; Crofoot v. Giannini, 1949, 192 Misc. 213, 92 N.Y.S.2d 191. It follows that, aside from other questions involved, the trial court properly held that the proper venue for this suit was only in the Southern District of New York.

However, plaintiff further contends that defendant has consented to be sued in Illinois and has thereby waived its personal privilege to be sued only in New York. The right to be sued in a certain place only may be waived or lost by failure to assert it. Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 166, 169, 60 S. Ct. 153, 84 L.Ed. 167. The right of defendant growing out of Section 94 does not differ from other similar rights to be sued only in certain places. It is a personal right and, obviously, may be waived by the conduct of the one to whom it belongs. Waiver is a voluntary and intentional relinquishment or abandonment of a known existing right or privilege, which, except for such waiver, would have been enjoyed. 67 C.J. 289. It may be expressed formally or it may be implied as a necessary consequence of the waiver's conduct inconsistent with an assertion of retention of the right. It must be proved by the party relying upon it. And if the only proof of intention to waive rests on...