Plaintiffs instituted this action seeking to rescind a policy of insurance, designated W.S.-1, which covered vegetable oil allegedly in storage in Bayonne, New Jersey. The named insured in the policy is Allied Crude Vegetable Oil Refining Corporation (hereinafter Allied). Defendants in the action are Allied and various banks, producers of oil and dealers in oil which have been added to the policy by several endorsements. Since the commencement of this action several defendants have respectively noticed motions addressed to service of process and the jurisdiction over the person of those defendants. In addition, two defendants, Irving Trust Company and Continental Grain Company, seek a stay of this action.
I have heretofore disposed of several of the jurisdictional motions by oral opinion in open court. There remain for disposition motions made on behalf of three national bank defendants which have moved to dismiss the action as against them for improper venue. In addition, there is pending, on behalf of all defendants, a motion to dismiss the action on the ground that all indispensable parties to the transactions referred to in the complaint cannot be joined in this action because of conceded lack of jurisdiction. Defendant Irving Trust Company has moved to dismiss on the ground of lack
of jurisdiction over the person and, in the alternative, also has moved as has defendant Continental Grain Company, for the afore-mentioned stay.
MOTIONS BY THE THREE NATIONAL BANKS
Continental Illinois National Bank and Trust Company (Continental), Bank of America National Trust and Savings Association (Bank of America N.T.S.) and Whitney National Bank of New Orleans (Whitney) move to vacate the service of the summons and complaint, and to dismiss the complaint on the ground that each, as national banks, may not be sued in New Jersey by virtue of the provisions of 12 U.S.C.A., § 94.
Continental is a national banking association with its principal place of business in Chicago, Illinois. Bank of America N.T.S. is a national banking association with its principal place of business in San Francisco, California. Whitney is a national banking association with its principal place of business in New Orleans, Louisiana.
Section 94 of chapter 2, Title 12, U.S.C.A. 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."
There is no question but that the provisions of this section, providing for special venue in suits against national banks, are mandatory. See Mercantile National Bank at Dallas v. Langdeau, 371 U.S. 555, 83 S. Ct. 520, 9 L. Ed. 2 d 523 (1963); Michigan National Bank v. Robertson, 372 U.S. 591, 83 S. Ct. 914, 9 L. Ed. 2 d 961 (1963). The section is a venue statute only; it does not confer jurisdiction. Anderson v. First Security Bank of Idaho National Association, 54 F. Supp. 937
(E.D. Idaho 1944); Bachman v. First Mechanics National Bank of Trenton, 69 F. Supp. 739 (D.N.J. 1947); Swift v. Fourth National Bank of Columbus, Georgia, 205 F. Supp. 563 (M.D. Ga. 1962). It has been held merely to be expressive of the Congressional purpose of specifying the precise courts in which Congress consented to have national banks subject to suit. Mercantile National Bank v. Langdeau, supra. The section applies to ordinary transitory actions, but has been held not to apply to local, in rem actions where the suit is one to determine interests in property at its situs. Casey v. Adams, 102 U.S. 66, 26 L. Ed. 52 (1880). The benefits of the section may be found to have been waived by the failure of a national bank to assert the statute in a timely manner. See First National Bank of Charlotte v. Morgan, 132 U.S. 141, 10 S. Ct. 37, 33 L. Ed. 282 (1889); Michigan National Bank v. Robertson, supra.
It must be concluded that the provisions of section 94 will bar the action here as against each of the three defendant national banks, unless this action is to be considered a local action or the benefits of the statute have been found to have been waived by the banks or any of them.
Under our law, local actions are said to be such as require the venue to be laid in the county where the cause of action arose. These embrace all actions in which the subject or thing sought to be recovered is in its nature local. Ackerson v. Erie Railway Co., 31 N.J.L. 309, 311 (Sup. Ct. 1865). Cf. R.R. 4:3-2.
In Casey v. Adams, supra, the Supreme Court of the United States held that local actions are in the nature of suits in rem, and are to be prosecuted where the thing on which they are founded is situated. Plaintiffs argue in defense of the banks' motions that this court has jurisdiction over the bank defendants because the instant action is one classifiable as quasi in rem. In support of this position they cite Cameron v. Penn Mutual Life Insurance Co., 111 N.J. Eq. 24 (Ch. 1932). Of course, if this action should be construed to be quasi in rem, it does not follow that it is automatically exempt
from the mandate of section 94. Rather, the question is one of characterization and issue analysis. An action may be either local or transitory as to the place where it is to be tried, but as to its object, it may be either in personam or in rem. The problem of characterization hinges on the nature of the particular issue to be resolved -- here, the place where the action is to be tried. Clearly, under our law this cannot be classified as a local action. Hence, it is not within the exclusion carved out of section 94 by the decisions in Casey v. Adams and Michigan National Bank v. Robertson, supra.
This conclusion does not mean that it need not be determined whether this action is one quasi in rem insofar as its object is concerned. If it is held to be such and the res is within the jurisdiction of the court, defendant national banks, if given sufficient notice and opportunity to be heard, would certainly be bound by any determination as to the extent of the interest of each in the res over which this court has jurisdiction.
The test for deciding whether an action is quasi in rem is whether the judgment sought will affect the interests of particular persons in designated property. Hanson v. Denckla, 357 U.S. 235, 246, 78 S. Ct. 1228, 2 L. Ed. 2 d 1283 (1957); Amparo Mining Co. v. Fidelity Trust Co., 74 N.J. Eq. 197 (Ch. 1908), affirmed 75 N.J. Eq. 555 (E. & A. 1909); Restatement, Judgments, § 3, comment (b), p. 15; § 32, comment (a), pp. 127-128 (1942). The test does not turn upon whether the relief prayed for seeks to control defendants' conduct, although in a quasi in rem action a defendant may be preliminarily restrained from engaging in certain activities with respect to the res. See e.g., Buchman v. Smith, 136 N.J. Eq. 246 (Ch. 1945), affirmed 137 N.J. Eq. 215 (E. & A. 1945). In such an action final relief will not require any personal decree or judgment against the defendant, since the court has control over the res. See e.g., Solomon v. Yudkin-Krell, Inc., 2 N.J. Super. 315 (Ch. Div. 1949). Certain types of actions, not quasi in rem, require in personam jurisdiction, even though they do not seek a money judgment from
the defendant or an order for him to do or refrain from doing any act. See e.g., Densby v. Acacia Mutual Life Association, 64 App. D.C. 319, 78 F.2d 203, 101 A.L.R. 863 (D.C. Cir. 1935) (rescission of insurance policy); Maryland Casualty Co. v. Martin, 88 N.H. 346, 189 A. 162 (Sup. Ct. 1937) (declaratory judgment as to coverage of insurance policy); New York Life Insurance Company v. Dunlevy, 241 U.S. 518, 36 S. Ct. 613, 60 L. Ed. 1140 (1916) (interpleader of proceeds under insurance policy).
There are, broadly, two types of actions quasi in rem. In one, plaintiff seeks to secure a preexisting claim in the property which is the subject matter of the action, and to extinguish or establish the nonexistence of similar interests of particular persons. In the other, plaintiff seeks to apply what he concedes to be the property of the defendant to the satisfaction of a claim against him. Hanson v. Denckla, supra; Restatement, Judgments, § 32, p. 128 (1942). This action is clearly not one for attachment or garnishment, and cannot, therefore, be held to be in the second category described.
As I have noted, plaintiff relies on Cameron v. Penn Mutual Life Ins. Co., supra. Cameron involved a suit to reform a life insurance policy. Plaintiff was the widow of the insured and the defendants were the insurance company and the two sisters of the insured. Plaintiff sought to substitute a clause in the policy which would make the proceeds payable to her if she survived the insured for a clause which made the proceeds payable to the sisters. The insurance company and one of the sisters were served within this State. The other sister was a nonresident and was served by publication; she appeared specially to challenge the jurisdiction. The policy which was the center of the controversy was in the possession of complainant. The issue, as framed by the vice-chancellor, was whether the proceeding was in personam or quasi in rem. He determined that the action was ...