Mercantile National Bank At Dallas v. Langdeau Republic National Bank of Dallas v. Langdeau, s. 14

Decision Date21 January 1963
Docket NumberNos. 14,15,s. 14
PartiesMERCANTILE NATIONAL BANK AT DALLAS, Appellant, v. C. H. LANGDEAU. REPUBLIC NATIONAL BANK OF DALLAS, Appellant, v. C. H. LANGDEAU. Re
CourtU.S. Supreme Court

Hubert D. Johnson and Marvin S. Sloman, Dallas, Tex., for appellants.

William E. Cureton, Waco, Tex., and Quentin Keith, Beaumont, Tex., for appellee.

Mr. Justice WHITE delivered the opinion of the Court.

Appellee, the receiver for a Texas insurance company in liquidation in the Ninety-eighth District Court of Travis County, Texas, brought an action in that court against the two national banks who are appellants here and against 143 other parties, alleging a conspiracy to defraud the insurance company and claiming damages jointly and severally in the amount of 15 million dollars. Each appellant filed a plea of privilege, as provided by the Texas Rules of Civil Procedure, asserting that it was located in Dallas County, Texas, and was therefore immune from suit in Travis County under the provisions of Rev.Stat. § 5198 (1878), 12 U.S.C. § 94, which provides:

'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.'1 Appellee, on the other hand, relied upon Texas Insurance Code, Art. 21.28, Section 4, V.A.T.S. of which provides:

'(f) 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 action or proceedings instituted after the commencement of delinquency proceedings by or against the insurer or receiver.'

The pleas of the banks were overruled and they appealed, it being agreed that the only issue for review was whether 12 U.S.C. § 94 entitled appellants to have the action transferred to the state court in Dallas County or whether the state venue provision contained in § 4(f) of the Insurance Code was controlling. The Court of Civil Appeals reversed and sustained the pleas of privilege on the ground that 12 U.S.C. § 94 required an action against a national bank to be brought in the county of its location. The Texas Supreme Court, however, refused to accept § 94 as prohibiting a suit against petitioners in Travis County when a state venue statute expressly permitted it. 161 Tex. 349, 341 S.W.2d 161. On the one hand, the court interpreted § 94 as permissive only, not mandatory, and on the other, as having been repealed by an omnibus repealing clause in an 1882 statute2 subsequently absorbed into 28 U.S.C. § 1348.3 Appellants brought the cases here under 28 U.S.C. § 1257(2) and, because of the finality question, we postponed ruling upon our jurisdiction until the merits were considered. 368 U.S. 809, 82 S.Ct. 32, 7 L.Ed.2d 19.

I.

The question of our appellate jurisdiction is quite similar to the one considered in Local No. 438 Const. and General Laborers' Union, AFL—CIO v. Curry, 371 U.S. 543, 83 S.Ct. 531, although there the jurisdiction of any and all state courts was at issue and here the inquiry is only as to which state court has proper venue to entertain an action against two national banks. Nonetheless, a substantial claim, appealable under state law, is made that a federal statute, rather than a state statute, determines in which state court a national bank may be sued and, as in Curry, prohibits further proceedings against the defendants in the state court in which the suit is now pending. This is a separate and independent matter, anterior to the merits and not enmeshed in the factual and legal issues comprising the plaintiff's cause of action. Moreover, we believe that it serves the policy underlying the requirement of finality in 28 U.S.C. § 1257 to determine now in which state court appellants may be tried rather than to subject them, and appellee, to long and complex litigation which may all be for naught if consideration of the preliminary question of venue is postponed until the conclusion of the proceedings. Accordingly, we note our jurisdiction to hear this appeal under § 1257(2) and turn now to the question of whether appellants may be sued in the Travis County court.

II.

The roots of this problem reach back to the National Banking Act of 1863, 12 Stat. 665, replaced a year later by the Act of 1864, 13 Stat. 99.4 National banks are federal instrumentalities and the power of Congress over them is extensive. 'National banks are quasipublic institutions, and for the purpose for which they are instituted are national in their character, and, within constitutional limits, are subject to the control of Congress, and are not to be interfered with by state legislative or judicial action, except so far as the lawmaking power of the government may permit.' Van Reed v. People's Nat. Bank, 198 U.S. 554, 557, 25 S.Ct. 775, 776, 49 L.Ed. 1161. Unquestionably Congress had authority to prescribe the manner and circumstances under which the banks could sue or be sued in the courts and it addressed itself to this matter in the 1863 Act.

By § 11 of that Act the banking associations were given general corporate powers, among them the power to 'sue and be sued * * * in any court of law or equity as fully as natural persons.'5 This section, if the teaching of Bank of the United States v. Deveaux, 5 Cranch 61, 3 L.Ed. 38, is observed, conferred no jurisdiction upon the courts but merely endowed the banks with power to sue and be sued in the courts as corporations. Congress, however, had more to say about this subject. Section 59 of the 1863 Act6 provided that suits by and against any association under the Act could be had in any federal court held within the district in which the association was established. No mention was made of suits in state courts. If the law had remained in this form, there might well have been grave doubt about the suability of national banks in the state courts, as this Court noted in First Nat. Bank of Bay City v. Fellows ex rel. Union Trust Co., 244 U.S. 416, 428, 37 S.Ct. 734, 739, 61 L.Ed. 1233.7 The next year, however, Congress expressly exercised its power to permit national banks to be sued in certain state courts as well as in federal courts. Section 57 of the 1864 Act8 carried forward the former § 59 and also added that 'suits * * * may be had * * * in any state, county, or municipal court in the county or city in which said association is located, having jurisdiction in similar cases * * *.' 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 we believe Congress intended that in those courts alone could a national bank be sued against its will.

We would not lightly conclude that a congressional enactment has no purpose or function. We must strive to give appropriate meaning to each of the provisions of Title 12 and its predecessors. See United States v. Menasche, 348 U.S. 528, 539, 75 S.Ct. 513, 520, 99 L.Ed. 615; Inhabitants of Montclair v. Ramsdell, 107 U.S. 147, 152, 2 S.Ct. 391, 394, 27 L.Ed. 431. Appellee, however, would have us hold that any state court could entertain a suit against a national bank as long as state jurisdictional and venue requirements were otherwise satisfied. Such a ruling, of course, would render altogether meaningless a congressional enactment permitting suit to be brought in the bank's home county. This we are unwilling to do, particularly in light of the history of § 57. That section was omitted from Title 62 (National Banks) of the Revised Statutes of 1873, but at the same time, there were included in Title 13 (The Judiciary) provisions granting the federal courts jurisdiction over suits by and against national banks brought in the district of their residence.9 These express provisions relating to the jurisdiction of the federal courts apparently did not solve the entire problem, for § 5198 of Title 62, Revised Statutes, was amended in 1875 by adding to it provisions substantially identical to § 57 of the 1864 Act.10 Thus for a second time Congress specified the precise federal and state courts in which suits against national banks could be brought.

All of the cases in this Court which have touched upon the issue here are in accord with our conclusion that national banks may be sued only in those state courts in the county where the banks are located.11 Notable among these is First Nat. Bank of Charlotte v. Morgan, 132 U.S. 141, 10 S.Ct. 37, 33 L.Ed. 282, which involved a suit against a national bank brought in a county other than that in which the bank was located. This Court stated that § 57 conferred a personal privilege on the banks exempting them from suits in state courts outside their home counties. However, since the bank in that case had not objected at the trial to the location of the suit but raised the issue for the first time on appeal, the Court held that the § 57 privilege had been waived. 12

Thus, we find nothing in the statute, its history or the cases in this Court to support appellee's construction of this statute. On the contrary, all these sources convince us that the statute must be given a mandatory reading.13

The consequence of our decision, appellee says, is that a litigant will be unable to join two national banks in the same action in the state courts if they are located in different counties or in the federal courts if they are located in different districts. But aside from not being presented by these cases, such a situation is a matter for Congress to consider. Cf. 28 U.S.C. §§ 1391(a), (b), 1401; Greenberg v. Giannini, 140 F.2d 550, 552, 152 A.L.R. 966 (C.A.2d Cir.). See also, Bankers Life & Casualty Co. v. Holland, 346 U.S....

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