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Malaker Corp. v. First Jersey National Bank

Decided: April 18, 1975.

THE MALAKER CORPORATION STOCKHOLDESS PROTECTIVE COMMITTEE, STEPHEN F. MALAKER, JEROME B. MALAKER AND ROMAYNE MALAKER, PLAINTIFFS-RESPONDENTS,
v.
FIRST JERSEY NATIONAL BANK, DEFENDANT-APPELLANT, AND FIRST JERSEY NATIONAL CORP., THOMAS STANTON, MERTON CORN, RAY E. MAYHAM, JR., ALBERT MULLER, A.J. WILLNER & CO., AMORSAG REALTY CO., INC., AND WASHINGTON KNITTING MILLS, INC., DEFENDANTS



Collester, Lora and Handler. The opinion of the court was delivered by Lora, J.A.D.

Lora

Pursuant to leave granted, defendant First Jersey National Bank appeals from an interlocutory order of the Law Division denying the bank's motion to dismiss plaintiffs' complaint on the ground that the venue of the action (Union County) was improper under the provisions of 12 U.S.C.A. § 94 (Federal Venue Act). The principal office of the bank is located in Hudson County.

12 U.S.C.A. § 94 pertaining to venue of an action brought against a national bank or association provides as follows:

Venue of suits --

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.

While these venue provisions are mandatory, Mercantile Nat'l Bank v. Langdeau, 371 U.S. 555, 561-562, 83 S. Ct. 520, 9 L. Ed. 2d 523 (1963); Michigan Nat'l Bank v. Robertson, 372 U.S. 591, 83 S. Ct. 914, 9 L. Ed. 2d 961 (1963), they are not jurisdictional and may be waived by implication by conduct or untimely assertion of the venue privilege. First Nat'l Bank of Charlotte v. Morgan, 132 U.S. 141, 10 S. Ct. 37, 33 L. Ed. 282 (1889); Michigan Nat'l Bank v. Robertson, supra.

The trial judge, in denying the motion to dismiss, held that the bank had waived the benefits of the federal statute. In reaching this conclusion, he considered three factors, although basically he was impressed with two of these factors, i.e., that the bank, by invoking judicial process in Union County (levying upon certain patents and trade marks of plaintiff corporation in aid of execution of a judgment obtained against the Malaker Corporation and the individual plaintiffs in Hudson County) and by conducting some business (administering trust accounts domiciled in 19 states throughout the country, including the northern sections of New Jersey), had waived the venue requirements of the federal statutes and in effect voluntarily agreed to suits in Union County.

In his opinion the trial judge also considered the fact that the bank had applied for and received Comptroller of the Currency approval for a branch in Union County, but he noted that he did not consider this significant in itself in light of the holding in Helco, Inc. v. First Nat'l City Bank, 470 F. 2d 883 (3 Cir. 1972), that branch banking activity does not constitute a waiver of a national bank's clear right to be sued only in the county of its home office in the absence of any evidence or inferences of such intention. He did, however, consider it important "for discovering the overall relationship which existed between Union County and the Bank."

The question of what constitutes a sufficient waiver has been the subject of various lower federal court and state court

decisions, with divergent results. See generally, Annotation, "Waiver By National Bank of Statutory Right To Be Sued in District Where Established or In Which Located," 1 A.L.R 3d 904 (1965). See also, Insurance Co. of N. America v. Allied Crude Veg. Oil, etc., 89 N.J. Super. 518 (Ch. Div. 1965).

In our view none of the grounds relied on by the trial judge are in any way persuasive on the point that the defendant bank waived federal venue restrictions. Michigan Nat'l Bank v. Superior Court, 23 Cal. App. 3d 1, 99 Cal. Rptr. 823 (Ct. App. 1972); Reaves v. Bank of America, 352 F. Supp. 745 (S.D. Cal. 1973), relied upon by the trial judge, and the other cases cited by plaintiffs involved ...


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