Mellon Bank v. Southland Mobile Homes of South Carolina, Inc

• Decision Date: 10 October 1978
• Docket Number: No. 78-188,78-188
• Parties: MELLON BANK, N. A., v. SOUTHLAND MOBILE HOMES OF SOUTH CAROLINA, INC., et al
• Court: U.S. Supreme Court

439 U.S. 900

99 S.Ct. 266

58 L.Ed.2d 248

MELLON BANK, N. A.,

v SOUTHLAND MOBILE HOMES OF SOUTH CAROLINA, INC., et al

No. 78-188

Supreme Court of the United States

October 10, 1978

On petition for writ of certiorari to the Supreme Court of South Carolina.

The petition for a writ of certiorari is denied.

Mr. Justice BLACKMUN, dissenting.

This case raises a substantial issue concerning state-court venue of a transitory cause of action asserted against a national bank. For me, the issue merits plenary consideration, and I dissent from the Court's denial of certiorari insofar as the case concerns one of the two respondents.

Petitioner Mellon Bank, N. A., is a national banking association with principal place of business in Pittsburgh, Pa. In 1972 respondent Associates Financial Services Company, Inc. and Mellon executed an agreement under which Associates was to seek out mobile home dealers whose time-sale contracts for retail sales of mobile homes could be financed by Mellon. Respondent Southland Mobile Homes of South Carolina, Inc. operated mobile home retail sales lots in the State of South Carolina and was induced by Associates to enter Mellon's mobile home service program. As a consequence, Mellon directly financed a number of Southland's sales. The program provided for Mellon's release to Southland of something less that the full purchase price of any mobile home so sold, with the balance to be held in reserve for six months, after which only a 2% contingency fund was retained. At Southland's request, the total reserve later was limited to $20,000 in return for a personal guarantee from Southland's president and other security.

Southland subsequently instituted in the Court of Common Pleas for Sumter County, S. C., this breach of contract action against both Mellon and Associates. The latter answered and filed a cross-complaint against Mellon. Mellon, by special appearance as allowed by state law, challenged the state court's jurisdiction over it on the grounds that it was "located" in Allegheny County, Pa., and that, under Rev.Stat. § 5198, 12 U.S.C. § 94 (1976 ed.) ¹ a state-court suit against it could be brought only in Allegheny County.² The court, however, ruled that it had jurisdiction over Mellon. It concluded that branch banking for the benefit of Mellon was taking place at Associates' office; that South Carolina's long arm statute, S.C.Code § 36-2-803 (1976), applied; and that Mellon by its conduct had waived any immunity from suit in South Carolina it may have possessed.

Mellon appealed to the Supreme Court of South Carolina. In an opinion concerning Associates, 270 S.C. 527, 244 S.E.2d 212 (1978), that Court, without considering waiver, affirmed.³

The proliferation of branch banking has produced problems of state-court venue with respect to national banks not envisioned when § 94's predecessor statutes were enacted more than a century ago. Just last Term we considered the application of § 94 to a bank's conduct of banking business at an authorized branch within the State of its "location," and held that venue need not be restricted to the county where the bank's charter had been issued. Citizens & Southern Nat. Bank v. Bougas, 434 U.S. 35, 98 S.Ct. 88, 54 L.Ed.2d 218 (1977). And the Court recently held that § 94 was mandatory, not permissive, in its operation, and, absent waiver, that a national bank with principal place of business in New York and with no office or agent in Utah, and not regularly conducting business in that State, could not be sued in a Utah state court for breach of contract. National Bank v. Associates of Obstetrics, 425 U.S. 460, 96 S.Ct. 1632, 48 L.Ed.2d 92 (1976). See also Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963), and Michigan Nat. Bank v. Robertson, 372 U.S. 591, 83 S.Ct. 914, 9 L.Ed.2d 961 (1963). The latter case on its facts is not dissimilar to the present one, for it concerned notes and lien instruments delivered to a local dealer upon purchases of house...