Mercantile Nat. Bank at Dallas v. Langdeau

• Decision Date: 09 December 1959
• Docket Number: Nos. 10711,10712,s. 10711
• Citation: 331 S.W.2d 349
• Parties: MERCANTILE NATIONAL BANK AT DALLAS and Republic National Bank of Dallas, Appellants, v. C. H. LANGDEAU, Receiver, Appellee.
• Court: Texas Court of Appeals

Page 349

331 S.W.2d 349

MERCANTILE NATIONAL BANK AT DALLAS and Republic National Bank of Dallas, Appellants, v. C. H. LANGDEAU, Receiver, Appellee.

Nos. 10711, 10712.

Court of Civil Appeals of Texas, Austin.

Dec. 9, 1959.

Rehearing Denied Jan. 13, 1960.

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

Carrington, Johnson & Stephens, Dallas, for Mercantile National Bank at Dallas.

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

HUGHES, Justice.

These are venue cases in which the parties have stipulated to the controlling facts and issues.

The controlling facts are that the appellants, Mercantile National Bank at Dallas and the Republic National Bank of Dallas, are, and were at all material times, national banking associations organized and existing under the laws of the United States of America (National Bank Act) with each having its principal and only place of business in Dallas, Dallas County, Texas, and appellee, C. H. Langdeau, Receiver (and his predecessors), ¹ was at all such times the duly appointed, qualified and acting Receiver for and had taken charge of all the assets of ICT Insurance Company in receivership proceedings in the 98th District Court of Travis County, as court of competent jurisdiction, and who had been designated as Liquidator for such company by the Board of Insurance Commissions of Texas and who, under the laws and orders of the 98th District Court was authorized to maintain this action for the alleged wrongful acts committed by appellants against ICT Insurance Company. ²

The question of law presented was stipulated to be:

'The only issue involved in said plea of privilege hearing was the issue of whether the provisions of the federal statutes entitled said Defendants to have said plaintiff's action against them transferred to the state court in Dallas County, Texas, or whether state statutes on venue of such action are controlling.'

The federal statutes referred to in this stipulation are, and we quote them:

'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.' Sec. 94, Title 12 U.S.Code Annotated. ³

'The district courts shall have original jurisdiction of any civil action commenced by the United States, or by direction of any officer thereof, against any national banking association, any civil action to wind up the affairs of any such association, and any action by a banking association established in the district for which the court is held, under chapter 2 of Title 12, to enjoin the Comptroller of the Currency, or any receiver acting under his direction, as provided by such chapter.

'All national banking associations shall, for the purposes of all other actions by or against them, be deemed citizens of the States in which they are respectively located.' 28 United States Code Annotated, Sec. 1348. ⁴

The State statute referred to is Section 21.28, Subsection 4(f) of the Texas Insurance Code, V.A.T.S., which we quote:

'New Lawsuits. The court of competent jurisdiction of the county in which the delinquency proceedings are pending under this Article shall have venue to hear and determine all actions or proceedings instituted after the commencement of delinquency proceedings by or against the insurer or receiver.'

There can be no doubt that if venue of these cases is fixed in Dallas by Federal laws the State statute is of no avail. We quote from Van Reed v. People's National Bank, 198 U.S. 554, 25 S.Ct. 775, 776, 49 L.Ed. 1161:

'National banks are quasi-public institutions, and for the purpose for which they are instituted, are national in their character and within constitutional limits subject to the control of Congress, and are not to be interfered with by State legislative or judicial action, except so far as the law making power of the government may permit.'

In Citizens' National Bank of Stamford v. Stevenson, Tex.Com.App., 231 S.W. 364, 366 (opinion by Judge Powell) it is stated:

'It is well settled that, if the federal and state provisions upon any point with reference to national banks conflict, the state rules must yield.'

Mr. Justice Hart in Paddock v. Siemoneit, 147 Tex. 571, 218 S.W.2d 428, 434, 7 A.L.R.2d 1062, stated this rule for construing Federal statutes:

'In determining the meaning of Federal laws, this Court is controlled by the decisions of the Supreme Court of the United States. * * * In this instance, however, there does not appear to be any decisions by the United States Supreme Court which is directly in point, and we have to try to arrive at the meaning of the statute from that Court's opinions in more or less analogous cases.'

We will now undertake a determination of the question presented from the decided cases of the United States Supreme Court either directly in point or 'from that Court's opinions in more or less analogous cases.'

For a better understanding of these opinions we give the following condensed history of Section 94 of Title 12, supra:

The Act of June 3, 1864, known as the National Bank Act (13 Stat. 99) contained the following as a part of Section 57:

'Suits, actions, and proceedings, against any association under this act, may be had in any circuit, 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.'

In the Revised Statutes of the United States, enacted in 1873, there was no statute comparable to Section 57 of the National Bank Act of June 3, 1864. This omission was remedied by the Act of February 18, 1875 (18 Stat. 316, 320) which added a statute identical with present Section 94, Title 12.

When the corrective legislation of 1875 was enacted however it was an amendment, by addition, to Section 5198 of the 1873 revision of the United States statutes, which Section dealt only with penalties for charging usurious interest. These provisions were separated in the United States Code adopted June 1926 and the provision relating to penalties was given Section number 86 and the provision as to venue was given Section number 94.

No other changes were or have been made in Section 94.

The predecessor of Section 94 was construed by the United States Supreme Court in First National Bank of Charlotte v. Morgan, 1889, 132 U.S. 141, 10 S.Ct. 37, 38, 33 L.Ed. 282. There a national bank was sued in a State Court in a county other than the one in which it was located. No objection on this account was made until the case reached the State Supreme Court. In holding that the privilege of being sued in its home county could be waived by the bank the United States Supreme Court, Mr. Justice Harlan speaking, said:

'This exemption of national banking associations from suits in state courts, established elsewhere than in the county or city in which such associations were located, was, we do not doubt, prescribed for the convenience of those institutions, and to prevent interruption in their business that might result from their books being sent to distant counties in obedience to process from state courts. First Nat. Bank of Bethel v. Pahquioque Bank, 14 Wall. 383, 394, 81 U.S. 383, 394 ; Crocker v. Marine Nat. Bank, 101 Mass. 240. But, without indulging in conjecture as to the object of the exemption in question, it is sufficient that it was granted by congress, and if it had been claimed by the defendant, when appearing in the superior court of Cleveland county, must have been recognized. The defendant did not, however, choose to claim immunity from suit in that court. It made defense upon the merits, and, having been unsuccessful, prosecuted a writ of error to the supreme court of the state, and in the latter tribunal, for the first time, claimed the immunity granted to it by congress. This was too late. Considering the object as well as the words of the statute authorizing suit against a national banking association to be brought in the proper state court of the county where it is located, we are of opinion that its exemption from suits in other courts of the same state was a personal privilege that it could waive, and which, in this case, the defendant did waive, by appearing and making defense without claiming the immunity granted by congress. No reason can be suggested why one court of a state, rather than another, both being of the same dignity, should take cognizance of a suit against a national bank, except the convenience of the bank. And this consideration supports the view that the exemption of a national bank from suit in any state court except one of the county or city in which it is located is a personal privilege, which it could claim or not as it deemed necessary.'

In Cope v. Anderson, 1947, 331 U.S. 461, 67 S.Ct. 1340, 1343, 91 L.Ed. 1602, a receiver of an insolvent Kentucky national bank brought suit in Federal District Courts in Ohio and Pennsylvania to enforce stockholders' assessments against Ohio and Pennsylvania stockholders. The question was whether Kentucky statutes of limitation or limitation statutes of Ohio and Pennsylvania controlled, KRS 413.120; Gen.Code, Secs. 11222, 11234; 12 P.S. Secs. 31, 39. In holding that the cause of action arose in Kentucky and its statutes applied, the Court, Mr. Justice Black speaking, stated:

'Many provisions of federal law make national banks, in important aspects peculiarly local institutions. See 12 U.S.C. Secs. 30, 33, 34a, 36, 51, 62, 72, 12 U.S.C.A. Secs. 30, 33, 34a, 36, 51, 62, 72. For jurisdictional purposes, a national bank is a 'citizen' of the...