Gregor J. Schaefer Sons, Inc. v. Watson

• Citation: 272 N.Y.S.2d 790,26 A.D.2d 659
• Parties: GREGOR J. SCHAEFER SONS, INC., Respondent, v. Nora WATSON, etc., et al., Defendants, and Franklin National Bank, Appellant.
• Decision Date: 05 July 1966
• Court: New York Supreme Court Appellate Division

Page 790

272 N.Y.S.2d 790

26 A.D.2d 659

GREGOR J. SCHAEFER SONS, INC., Respondent, v. Nora WATSON, etc., et al., Defendants, and Franklin National

Bank, Appellant.

Supreme Court, Appellate Division, Second Department.

July 5, 1966.

Before BELDOCK, P.J., and UGHETTA, CHRIST, BRENNAN and HOPKINS, JJ.

MEMORANDUM BY THE COURT.

In an action to recover damages arising from an alleged diversion of trust funds under a construction contract, defendant Franklin National Bank appeals from an order of the Supreme Court, Nassau County, entered February 10, 1966, which denied its motion, pursuant to U.S. Code, tit. 12, § 94, to change the venue of the action from Suffolk County to Nassau County.

Order reversed, without costs, and the motion remitted to Special Term for further proceedings consistent herewith.

For the purposes of venue under the statute (U.S. Code, tit. 12, § 94), a national bank is located at the place listed in its certificate of incorporation as its principal place of business or main office, even though it maintains branches in other counties of the state (Michigan Nat. Bank v. Robertson, 372 U.S. 591, 83 S.Ct. 914, 9 L.Ed.2d 961; Mercantile Nat. Bank at Dallas v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523; Buffum v. Chase Nat. Bank, 192 F.2d 58, cert. den. 342 U.S. 944, 72 S.Ct. 558, 96 L.Ed. 702; Leonardi v. Chase Nat. Bank, 2 Cir., 81 F.2d 19, cert. den. 298 U.S. 677, 56 S.Ct. 941, 80 L.Ed. 1398; National City Bank v. Domenech, 1 Cir., 71 F.2d 13). The Michigan Nat. Bank case (supra), and the Buffum case (supra), indicate that a national bank may waive its venue privilege by the nature of its activities in the county wherein venue is sought to be placed. In addition, the venue requirements of the federal statute do not apply to actions that are local in nature (Casey v. Adams, 102 U.S. 66, 26 L.Ed. 52). The determination whether the Franklin National Bank has waived its venue privilege to this action in Suffolk County cannot be determined from the appendix presently before us. Moreover, we find that the record on appeal does not contain sufficient information upon which to make a determination. We, therefore, cannot invoke the procedures suggested in E. P. Reynolds, Inc. v. Nager Electric Co., Inc., 17 N.Y.2d 51, 268 N.Y.S.2d 15. The record on appeal contains a copy of the complaint which reveals that this action grew out of a contract to build a church in Suffolk County. A further hearing is necessary, however, to obtain further information relating to the nature of the agreement made by the bank including, if necessary, a copy of the contract. It is necessary to know just what the bank committed itself to perform within Suffolk County. The bank's waiver of venue, however, may not be determined solely on the basis of its contract. If it was financially active in other phases of the church construction project and knew of and participated in phases of the work that did or could have resulted in lien rights of any nature, then the action deals with a transaction essentially local in nature and the venue privilege...