Citizens and Southern Nat. Bank v. Bougas

• Decision Date: 06 May 1976
• Docket Number: No. 51622,No. 2,51622,2
• Citation: 227 S.E.2d 434,138 Ga.App. 706
• Parties: The CITIZENS & SOUTHERN NATIONAL BANK v. Nick BOUGAS
• Court: Georgia Court of Appeals

Page 434

227 S.E.2d 434

138 Ga.App. 706

The CITIZENS & SOUTHERN NATIONAL BANK v. Nick BOUGAS.

No. 51622.

Court of Appeals of Georgia, Division No. 2.

May 6, 1976.

Rehearing Denied May 21, 1976.

Alston, Miller & Gaines, William C. Humphreys, Jr., Peter Q. Bassett, Atlanta, for appellant.

Hendon, Egerton, Harrison, Glean & Kovacich, Michael J. Kovacich, E. T. Hendon, Jr., Decatur, for appellee.

MARSHALL, Judge.

This appeal arises from a suit filed by Bougas against The Citizens and Southern National Bank in the State Court of DeKalb County complaining that the C. & S. Bank unlawfully redeemed and converted to its own use a savings bond owned and pleadged by Bougas to the bank as security for an indebtedness to the bank, allegedly the responsibility of Bougas' son, claimed by the bank to be overdue. The bank answered the complaint and concerrently therewith filed a motion to dismiss the complaint on grounds of improper venue, maintaining that suit against it would lie only in Chatham County. The trial court denied the motion to dismiss but granted a certificate for immediate review. Additionally, a motion by the bank for an interlocutory appeal was granted by this court. The sole issue pending before the court in this hearing is whether venue of the pending cause of action lies in DeKalb County. Held:

Appellee Bougas asserts that though C. & S. Bank is a national bank, it is located at numerous sites in DeKalb County furnishing full service. He submits that a suit can be prosecuted in any court of competent jurisdiction in any county in which C. & S. is located and operating branch banks. Appellant C. & S. Bank rejoins that as a national bank, venue against it is governed by the provisions of Section 94 of Title 12 of the United States Code Annotated. It contends that under the provisions of that statute, C. & S. may be sued only in Chatham County, the county in which its charter was issued and the location of its principal place of business.

Both parties agree that the focal point of this appeal is the correct interpretation and application of 12 U.S.C.A. § 94. That statute, in pertinent part, 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.'

The parties are further agreed that the C. & S. Bank, as a national bank, is an 'association' within the meaning of the federal statute. There is no dispute that the suit must be brought in a district or a county in which the bank is 'established' or 'located.' Mercantile National Bank v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523. The point of departure occurs when a suit is brought in a state court whether venue lies in the county of 'establishment' or in a county in which the bank is 'located.'

There are cases on each side of the question. It has been concluded that the meaning of 'located,' including the venue of a suit against a national bank, would be in any county of the state in which the bank has branches either on the theory that a branch bank 'locates' the bank in that county or alternatively that by doing business in the county, the bank has waived its exclusive venue. See: Security Mills of Asheville, Inc. v. Wachovia Bank and Trust Co., 281 N.C. 525, 189 S.E.2d 266; Holson v. Gosnell, 264 S.C. 619, 216 S.E.2d 539; Frankford Supply Co. v. Matteo, D.C., 305 F.Supp. 794; Lapinsohn v. Lewis Charles, Inc., 212 Pa.Super. 185, 240 A.2d 90. See also; Malaker Corp., etc., Committee v. First Jersey Nat. Bank, 133 N.J.Super. 462, 337 A.2d 390.

In the federal courts, and in some state courts considering the issue, the question over the years had been settled adversely to the contention advanced by Bougas. See: Mercantile National Bank v. Langdeau, supra; Michigan National Bank v. Robertson, 372 U.S. 591, 83 S.Ct. 914, 9 L.Ed.2d 961; Northside Iron and Metal Co., Inc. v. Dobson and Johnson, Inc., 5 Cir., 480 F.2d 798; First National Bank of Boston v. U.S. District Court for the Central District of California, 9 Cir., 468 F.2d 180; Helco, Inc. v. First National City Bank, 3 Cir., 470 F.2d 883; United States National Bank v. Hill, 9 Cir., 434 F.2d 1019; Levin v. Great Western Sugar Co., 3 Cir., 274 F.Supp. 974; Odette v. Shearson, Hammill and Co., Inc., D.C., 394 F.Supp. 946; Prince v. Franklin National Bank, 62 Misc.2d 855, 310 N.Y.S.2d 390; Schaefer Sons, Inc. v. Watson, 26 A.D.2d 659, 272 N.Y.S.2d 790.

The original National Banking Act of 1863 did not make mention of suits against national banks in state courts. The provisions of the Act relating to suits in state courts were placed in the statute by later legislation. See; Mercantile National Bank v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, supra. Apparently Congress intended a different rule to apply as between suits brought in federal courts (where the bank must be established in the district) and suits brought in state courts (where the bank need only be Located in the county or city of the court having similar jurisdiction in similar cases). Othe...