First Nat. Bank of Midland v. Stoutco, Inc., 15452

• Decision Date: 12 November 1975
• Docket Number: No. 15452,15452
• Parties: The FIRST NATIONAL BANK OF MIDLAND, Texas, Appellant, v. STOUTCO, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 619

530 S.W.2d 619

The FIRST NATIONAL BANK OF MIDLAND, Texas, Appellant, v. STOUTCO, INC., et al., Appellees.

No. 15452.

Court of Civil Appeals of Texas,

San Antonio.

Nov. 12, 1975.

Rehearing Denied Dec. 17, 1975.

William R. Simcock, R. Laurence Macon, Cox, Smith, Smith, Hale & Guenther, San Antonio, Charles C. Aldridge, Ken W. Nordeman, Tom C. McCall, Lynch, Chappell, Allday & Aldridge, Midland, for appellant.

James N. Martin, Richard C. Danysh, San Antonio, for appellees.

BARROW, Chief Justice.

Appellant, a national bank located in Midland County, Texas, has perfected its appeal from an order overruling its plea of privilege in appellees' suit to recover damages for wrongful garnishment of its bank accounts in the Brooks Field National Bank located in Bexar County, Texas. The question presented is whether appellant waived its mandatory right under 12 U.S.C. Sec. 94 ¹ to be sued in the county in which said national bank is located.

On October 4, 1973, appellant filed Cause No. 26065 in the 142nd Judicial District Court of Midland County seeking to recover on a debt allegedly owed by appellees, Stoutco, Inc., et al. On the same date, Bank filed Cause No. 26067 in said 142nd Judicial District Court wherein it sought a writ of garnishment from the Brooks Field National Bank. Appellant filed a bond with Western Surety Company as surety, and, on the same date, a writ of garnishment was issued by the District Clerk of Midland County. This writ was mailed by the District Clerk to the Sheriff of Bexar County and served on the Brooks Field National Bank on October 9, 1973. Brooks Field National Bank filed an answer wherein it admit that it was indebted to appellees in the following amounts: Stoutco, Inc.--$2,193.25; Stoutco Mfg. Corp.--$4,931.29; and to Eugene Stout and wife Audie Mae Stout--$4,289.38. On February 27, 1974, the funds were ordered released by the Midland District Court on motion of appellant and a non-suit was taken in Cause No. 26065.

Appellees filed this suit in Bexar County on December 11, 1974, wherein they sought damages against appellant and its surety for the alleged wrongful garnishment of their bank accounts. Appellant timely filed its plea of privilege and asserted its right to be sued in Midland County under the federal statute. Appellees controverted and urged that venue was maintainable in Bexar County under Article 1995, Subdivision 23, Tex.Rev.Civ.Stat.Ann. (1964), in that the cause of action or a part thereof arose in Bexar County. They further alleged that any mandatory right of appellant was waived by appellant's acts in causing the accounts in Bexar County to be wrongfully frozen. The trial court overruled appellant's plea of privilege after a non-jury hearing.

The United States Supreme Court in Mercantile National Bank v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963), after an analysis of the legislative history of the statute, held that the provisions of 12 U.S.C. Sec. 94 are mandatory and overrule any conflicting state venue statutes. This case involved the plaintiff's right to join a national bank in a liquidation suit brought in Travis County as authorized by Texas venue statutes. The bank had sought to change the venue as to it to Dallas County under the authority of Sec. 94. The Supreme Court of Texas concluded that the federal statute was permissive only and held that venue could be maintained in Travis County under the Texas venue statute. The Supreme Court of the United States pointed out in its opinion that prior to the adoption of this section by the 1864 amendment to the National Banking Act, there might be grave doubt as to the suability of national banks in the state courts. Accordingly, it was reasoned that the phrase 'suits . . . may be had' was, in every respect, appropriate language for the purpose of specifying the precise courts in which Congress consented to have national banks subject to suit, and Congress intended that in those courts alone could a national bank be sued against its will. It was therefore held that Sec. 94 must be given a mandatory reading.

Appellees concede that the federal statute gives national banking associations, such as appellant, a mandatory right to be sued in the County or District Court of its residence, but that such right was waived by appellant. The doctrine of waiver of the statutory venue right was first enunciated in First National Bank of Charlotte v. Morgan, 132 U.S. 141, 10 S.Ct. 37, 33 L.Ed. 282 (1889) wherein it was held that the bank had waived its personal privilege by appearing and making defense of a suit without claiming the immunity in the trial court. Under this waiver doctrine, it has been held that if the national bank seeks to enforce obligations which are due it through the use of non-resident courts or self-help repossession laws, it may be subject to countersuit in the non-resident county for matters arising out of that transaction. See Fort Worth National Bank v. Stiff, 482 S.W.2d 337 (Tex.Civ.App.--Eastland), Cert. denied, 410 U.S. 932, 93 S.Ct. 1375, 35 L.Ed.2d 594 (1972); Reaves v. Bank of America, 352 F.Supp. 745 (S.D.Cal.1973); Lichtenfels v. North Carolina National Bank, 260 N.C. 146, 132 S.E.2d 360 (1963); Michigan National Bank v. Superior Court, 23...