Langdeau v. Republic National Bank of Dallas, s. A-7728

• Decision Date: 23 November 1960
• Docket Number: Nos. A-7728,A-7729,s. A-7728
• Parties: C. H. LANGDEAU, Receiver for I. C. T. Ins. Co., Petitioner, v. REPUBLIC NATIONAL BANK OF DALLAS, Respondent. C. H. LANGDEAU, Receiver for I. C. T. Ins. Co., Petitioner, v. MERCANTILE NATIONAL BANK AT DALLAS, Respondent.
• Court: Texas Supreme Court

Page 161

341 S.W.2d 161

161 Tex. 349

C. H. LANGDEAU, Receiver for I. C. T. Ins. Co., Petitioner, v. REPUBLIC NATIONAL BANK OF DALLAS, Respondent.

C. H. LANGDEAU, Receiver for I. C. T. Ins. Co., Petitioner, v. MERCANTILE NATIONAL BANK AT DALLAS, Respondent.

Nos. A-7728, A-7729.

Supreme Court of Texas.

Nov. 23, 1960.

Rehearing Denied Dec. 21, 1960.

Cecil C. Rotsch, Austin, Keith, Mehaffy, McNicholas & Weber, Beaumont, Cureton & Lanham, Waco, for C. H. Langdeau.

Dan Moody, Austin, Leachman, Gardere, Akin & Porter, Dallas, for Republic Nat. Bank of Dallas.

Carrington, Johnson & Stephens, Dallas, for Merchantile Nat. Bank at Dallas.

SMITH, Justice.

These venue cases present but a single question of law which may be disposed of in one opinion.

(1) The question presented is: Does Title 12 U.S.C.A. § 94, ⁱ give a national bank, regardless of the provision of the Texas Venue Statutes, especially the provivisions of Article 21.28, Section 4(f) ² of the Insurance Code, the right to have an action against it tried in the county of its domicile?

The Court of Civil Appeals in its opinion reported in Vol. 331 S.W.2d 349, answered the question in the affirmative. The opinion, in effect, sustained the bank's position: (1) that federal statutes are paramount on matters affecting such federal instrumentalities as national banks, and that state statutes in conflict therewith must yield to the federal statutes, and (2) that the decisions of United States Courts involving the construction of federal statutes relating to national banks are binding on state courts and that the state venue statutes are not applicable.

The record reveals that delinquency proceedings were filed in the 98th District Court against I.C.T. Insurance Company and petitioner, C. H. Langdeau, was appointed receiver under the provisions of Section 2(a) of Article 21.28, supra, of the Insurance Code.

Thereafter, petitioner instituted this suit against a number of defendants, including the two respondent national banks, charging a conspiracy to defraud the insurance company, its policyholders, stockholders, and creditors, and sought a judgment against all defendants, jointly and severally. In effect, it is a suit for the recovery of assets of the delinquent insurance company. In this connection, in determining the venue question here involved, we are not passing upon the merits, and nothing said herein shall be so construed.

(2) The respondents' pleas of privilege to be sued in Dallas County, Texas, the county of the residence and location of each bank, were overruled by the trial court, but sustained by the Court of Civil Appeals as already stated. We deem it necessary to take note of the respondents' challenge to the jurisdiction of this court, which is to the effect that when, as here, a conflict of decisions is made the basis of Supreme Court jurisdiction, it is essential that such conflict appear on the face of the opinions themselves, and that petitioner has failed to meet such test. This test is laid down in the case of State v. Wynn, 157 Tex. 200, 301 S.W.2d 76. We believe that the decision in the present case is sufficiently in conflict with the decision in the case of Guerra v. Lemburg, Tex.Civ.App., 22 S.W.2d 336, er. dism. to give this court jurisdiction.

In the case of Guerra v. Lemburg, supra, the Commercial State Bank of Sinton, San Patricio County, Texas, and the City National Bank of Corpus Christi, Nueces County, Texas, were sued in Hidalgo County, the residence of a co-defendant. The National Bank of Corpus Christi, filed a plea of privilege to be sued in its home county claiming, as the respondents claim in the present case, that under the provisions of 12 U.S.C.A. § 94, a national bank can only be sued in a state court in the county of its domicile, regardless of the fact that under the provisions of the Texas venue statutes, the suit could have been brought in Hidalgo County where alleged fraudulent representations were made. The trial court sustained the plea of privilege. The Court of Civil Appeals reversed, holding that the bank was not entitled to a change of venue, ³ thereby holding directly opposite to the holding in the present case. The Court of Civil Appeals in the present case quotes at length from the case of Monarch Wine Company v. Butte, 1952, 113 Cal. App.2d 833, 249 P.2d 291. That case refers to the case of Guerra v. Lemburg, supra, and the case of Leonardi v. Chase National Bank of City of New York, 2 Cir., 81 F.2d 19. The Court of Civil Appeals cites this latter case in support of its holding that the federal statute controls. The Monarch Wine Company case, supra, held that the decision in the Guerra v. Lemburg case, supra, is contrary to the decision in Leonardi, supra, and the opinion of the Court of Civil Appeals in the present case holds that the Guerra case was erroneously decided, and that it agrees with the Leonardi case. We are convinced that the specific conflicting holdings in the two cases create a jurisdictional conflict. The holdings are so far upon the same state of facts that the decision of one of the cases is necessarily conclusive of the decision in the other. See Dockum v. Mercury Ins. Co., 134 Tex. 437, 135 S.W.2d 700. Accordingly, the application for writ of error presents a case within the jurisdiction of this court.

We now proceed to a decision of the principal question. We have concluded to reverse the judgment of the Court of Civil Appeals and affirm that of the trial court for the reasons now to be stated.

If under federal decisions, United States Revised Statute § 5198, 12 U.S.C.A. § 94, is applicable here, then all state statutes in conflict therewith must yield. See Van Reed v. Peoples National Bank, 198 U.S. 554, 25 S.Ct. 775, 49 L.Ed. 1161; Citizens National Bank of Stamford v. Stevenson, Tex.Com.App., 231 S.W. 364. We agree that the issue here also is not one of jurisdiction, but is one as to the proper venue, or proper locality where a state statute has fixed venue. However, we do not agree with respondents' contention that the proper venue of this action is determined by Section 94 of 12 U.S.C.A., supra. See Casey v. Adams, 1880, 102 U.S. 66, 68, 26 L.Ed. 52. The proper venue of this case is determined by Article 21.28, § 4(f), supra, which provides, in effect, that the court of competent jurisdiction of the county in which the delinquency proceedings are pending shall have venue to hear and determine all actions or proceedings instituted after the commencement of the delinquency proceedings.

(3) It was not the intention of the Congress in adopting 12 U.S.C.A. § 94, supra, that it was to control with respect to an action against a national bank commenced in a state court, especially where such action was commenced in a district court located in the county designated by state statute to have venue. This is a matter where the state is exercising powers wholly within the domain of state interest, and is, therefore, insulated from federal judicial review as well as the application of federal venue statutes. It is unnecessary to our decision to determine whether this particular action is local or transitory in nature. Texas has adopted Article 21.28, supra. This is the statute which is applicable to the action here involved. In 92 C.J.S. Venue § 7, p. 678, it is said: 'In many jurisdictions statutory enactments applicable to actions, whether transitory or local, have rendered the distinction between these classes of actions of minor importance, or have done away with it entirely.' Therefore, whether our action properly belongs to one class or the other, it, nevertheless, must be instituted under the conditions prescribed in the state statute. See State ex rel. Gardner v. Hall, 282 Mo. 425, 221 S.W. 708.

However, the courts are in conflict on the question as to whether an action can be brought against a national bank in a state court outside of the county in which the bank is located. U.S.Revised Statute § 5198, 12 U.S.C.A. § 94, supra, has been differently construed by state courts. A majority of the state courts have held that the provisions of 12 U.S.C.A. § 94, quoted above, do not deprive the state courts of jurisdiction of an action against a national bank located and doing business in another state, or in a county or city other than that in which the action is brought. See the annotation 'National Bank as subject to suit outside county of its residence,' 86 A.L.R. 47. The courts so holding apparently proceeded on the theory that the use of the word 'may' in the statute renders it permissive and not mandatory, and, hence, national banks may be sued in any state court of competent jurisdiction, even though the court is outside of the county in which the bank is located. Paton's Digest of Legal Opinions, edited and compiled by the American Bankers Association, under the supervision and direction of Thomas B. Paton, Assistant General Counsel of the Association, Vol. II, p. 2407 et seq., recognizes the rule announced in the case of Curlee v. National Bank of Fayetteville, 1924, 187 M.C. 119, 121 S.E. 194, 195, to be against the contention of the banks in the present case. Paton correctly analyzes the Curlee case: 'In that case it appears that the plaintiffs, residents of Mecklenburg County, North Carolina, sued the defendant, a national bank located in Cumberland County, North Carolina, for alleged damages to the plaintiffs; financial and social standing arising from a wrongful attachment of the plaintiffs' property in Cumberland County. The action was brought in the superior court of Mecklenburg County. The bank thereupon entered a special appearance, asking for a removal of the case to the superior court of Cumberland County, on the principal ground that, under the federal statute, quoted above, a national bank without its consent is not suable in any state court other than a state court located in the county in which it has its place of business. The court, pointing...