Mercantile Nat’l Bank at Dallas v. Langdeau – Oral Argument – February 27, 1962

Media for Mercantile Nat’l Bank at Dallas v. Langdeau

Audio Transcription for Oral Argument – February 28, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau
Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Earl Warren:

Number 90, Mercantile National Bank at Dallas, Appellant, versus C.H. Langdeau, Receiver and Number 91, Republic — Republic National Bank of Dallas, Appellant, versus C.H. Langdeau, Receiver.

Mr. Johnson.

Hubert D. Johnson:

Mr. Chief Justice, may it please the Court.

The two cases appeals by the two banks have been consolidated same issues involved.

I will, as the attorney for appellant in number 90, held the opening — opening fully rebuttal period used by Mr. Leachman representing the appellants in Number 91.

This case — or these cases present an issue that does not seem to have been before the Supreme Court of United States in recent years.

A suit was brought in a state court in Travis County, Texas by the receiver of ICT Insurance Company.

Many defendants of 144 the pleading indicates, two of them or two national banks with offices established in Dallas, Texas, Dallas County, Texas approximately 200 miles away from Travis County, which Travis County is a state capital.

The two banks thought that they had a right to have venue of actions against them in the state court in their home county where they were established.

They each filed the type of pleading that the state practice calls for setting up this claim of right of venue.

In Texas, we call it a plea of privilege so designated.

It’s been called a privilege by — towards allover the country and other town.

We actually have a name for it that we call it a plea of privilege.

It asserts a right of venues.

The receiver of the insurance company controverted said “No, we have a right to maintain venue in the court here in Austin, in the state court here in Austin because there is a state statute that gives venue of actions by or against a receiver of an insolvent insurance company in the state court in Austin, in the state court”.

There’s no question of jurisdiction of a state court.

There’s no argument in this case that it ought to be in a federal court.

The argument pertains to where the venue should be and whether or not the venue right that was contained in the original National Bank Act of 1864 and was apparently inadvertently omitted in 1873 revised statute and then reinstated in the 1875 Act to correct errors and omissions confers that right on these two national banks.

And on the opposite side of that, the receiver Mr. Langdeau says that this state statute is controlling overrides, takes away the right or that the right doesn’t exist which is another way of saying the same thing.

Now, the Court’s notation in this case, noted it was postponing jurisdiction to consideration for the day along with the merits and that outset.

I would like to talk a little bit about the jury — about the jurisdiction phrase.

The venue hearings under our state practice, and I don’t think its uncommon practice, or the issue as to ju — venue here are joined by the filing of a plea of privilege and by the filing of a controverting affidavit and then an issue is drawn and the court hears that and here its first.

It’s a separate venue trial.

There were two.

In this instance, they were heard consolidately because they were the same basic issue.

Both banks, admittedly national banks, both banks owned the offices in Dallas direct clash between the state statute and the federal statute.

That was the issue that was before the Travis County District Court when it was appealed from that court to the Austin Court of Civil Appeals, the intermediate Court of Civil Appeals.

There was a stipulation filed in the record showing that that had been the only issue.

There was no dispute as to the facts.

It was a dispute as to the clash between the two laws.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

The Austin Court of Civil Appeals said that they thought that the federal statute was clear and controlling and said that the venue should be transferred to District Courts in Dallas County Texas.

State District Courts in Texas, by the way by Texas constitution have jurisdiction of all damage suits seeking damages in excess of $ 1000.

So this was a $15,000,000 tort damage suit as the very lengthy pleading shows.

And so that was the order judgment, judgments entered by the Austin Court of Civil Appeals, a single opinion written in the two cases because they presented the same issue.

In the Supreme Court of Texas, took the case, the cases is up, heard them again consolidatedly handed down judgments said that the state statute was controlling.

We say that it leaves the federal statute as meaningless and having no meaning with reference to any proceeding of the state court and that was all court they were then passing on although it has two pieces, both relating to venue one and venue or proceedings in federal courts, one venue in state courts.

Now, the only jurisdictional objection or issue that’s been drawn in issue is this to whether or not the judgments are final within the framework of the introductory phrases to Section 1257 dealing with appeals from final judgments of the state court of last resort.

And we’ve called the state court of last resort, I think, the record clearly shows.

We’ve had our motion of rehearing overruled withdraw in the state court on this venue issue.

We — in our brief looked at this, we feel act carefully and they looked clear all due regard to the decisions of this Court on the interpretation of final, both in Section 1257 and in Section 1291.

And we’ve gone back and check as best we can.

And they seem to mean the same thing and the same policy standards of their print.

The case, it seems to us to be most clearly in point was the case of — in the Cohen versus Mutual Benefit that came up under Section 1291.

It was subsequently followed in Swift and Company versus Compania Columbiana whatever.

I can’t pronounce it.

I’m not very good in Spanish.

But it was followed in that.

It’s a rather narrow — narrow aperture.

It’s not open just every time you have a temporary provisional tentative phase of a case.

But there’s nothing temporary or provisional about this under the state court practice, which is where we were in the commissions that we have to deal with.

The venue trial was a separate trial.

There had to be an appeal from it within 20 days from the order or else it was final.

The Supreme Court of Texas holds that it is not appeal from, it’s waived.

The determination is res judicata as to venue.

It’s no longer within the control of the trial court.

They have even po — held that at the end of the term and we just have two-month terms to this courts that the court can’t even on its own motion make the change.

Charles E. Whittaker:

Let me see if I understand that.

After a challenge of the venue has been overruled, there is no way under your law to preserve the point, were you — did you come in, except by appeal, if you come in and defend even though over protest you still have waived venue?

Hubert D. Johnson:

That’s the thrust of these holdings of the Supreme Court of Texas.

It was an exception in the early days that it commented on.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

And I would not be — I’d be less than frank but it mentioned it where you had a case that proceed immediately to trial on the merits disposed them for the same term, you can bring them up together but that was a situation in which you could perfect your appeal from the total within the 20 days.

It’s a very narrow, not available in 144 defendant case, not available in hardly any case.

But conceivably, during might be convene to pass on the venue issue, the court might overruled it, go right ahead to try two or three-daytime could be brought up.

That’s the only condition under which you would be safe in bringing the whole case up together in Texas.

Otherwise, the courts hold that you have a right of appeal.

You must appeal if you want to continue to complain.

Charles E. Whittaker:

In the case you mention, that would be a sort of a dual appeal and both are within the prescribed time.

Hubert D. Johnson:

Both within the prescribed time.

You would have to beat it to the gate.

You’d have — you’d have to stay within the time limits because it’s sort of — of an exception to the statutory.

It was now expressed in court rules but it — it was one time expressed in statute.

John M. Harlan II:

Of course, the fact that this is final under the Texas law, it doesn’t mean that it’s final.

Hubert D. Johnson:

That’s correct.

That is absolutely correct.

And that’s the reason that we have gone to careful consideration.

We think careful consideration of the Radio Station WOW versus Johnson.

The cases that get into this area of certain segregated or partial issues unrelated to other issues such as the Cohen case and the Swift and Company case, cases that went the other ways such as Republic Natural Gas Company versus Oklahoma.

But it seems to me in fairness to say that — that court recog — the court recognized that this was not some sort of an arbitrary of technical matter and that you did have to make a choice between certain realities.

The cases that I find it — have emphasized the fact that it’s a federal court application intended to be cases that where the state court was trying to claim some degree of lack of finality in the appellate process such as the Richfield Oil Company case.

And I believe one of the others Arnold — no, not Arnold case the Marquestry Railroad case where there was a power of review to me that came up in California.

And there was a continued power of review and the question was “Is this really final now or do we have to wait until that last power of review is — is exhausted?”

But I — I think that we — we realize and we say in our brief and we recognized that all this Texas practice is not controlling on its court but it goes to consideration of the finality in fact and the fact that you have complete finality as a completely practical matter and that there is no other way to find out if you can be tried in Dallas County under — under Texas practice except just to go head on in — in Travis County.

And you probably would not have any right of complaint at all in Texas.

I know you would, whether you adhere confront the argument that where you had a final judgment and you didn’t appeal timely that worried in some, too.

And you — you have to be right on — on the timely right.

The — we made a — a very lengthy and critical comparison of it with the standards that were describe in the Cohen case.

The formality, the being a formal judgment, being conclusive of the issue, the being separable from and collateral to and we’re not merged into the judgment distinguishing from the Montgomery Trades Council case involving a temporary injunction where the issue is still before the Court on final injunction hearing as the same set of facts still subject to the provisional review and control of the court.

And frankly, on the basis of what we consider a fairly careful analysis of this matter, we believe this Court that this is — these are final judgments that the necessary element of finality is present.

And this Court does have jurisdiction.

Now, we approach the question discussing many of these landmark cases with some fair accreditation because they’re the court’s own cases.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

And they interpret them in a way but we tried to put things out and put together we think the cases in our brief that are pertinent to the issue.

We believe that they established the finality that’s required.

Turning briefly to the interpretation of a statute, the question of whether we have the right, the statute which we quote in our brief was Section 57 of the National Bank Act 1864.

And it deals with actions and proceedings against national banks in specified federal courts and in specified state courts.

The 1863 Act, which just had a tenure of a little bit more than a year which authorized the formation of national banking associations took a completely different approach to it and referred to a proceedings by or against national banking associations in specified federal courts.

You’ll find a complete divergence of change in approach in the 1864 Act.

The 1873 revision, for some reasons that is not apparent, did not include this particular Section 57 of the National Bank or anything — Bank Act or anything like it but there were a number things that were left out in the 1873 revision.

And couple years later, in 1875, they were — an act was passed to correct errors and omissions.

And this was put back some potentially the same language that it had before.

It’s probably not necessary to say whether or not it was ever dropped out the law or not, it’s been referred to frankly as having been a part of the law since 1864 without — without interruption.

The first case that came along to construe this was a state court case.

A case up in New York Court, Cook case which is cited in our brief about 1867 and it said, well this is just permissive.

You can sue anywhere in the state notwithstanding what it said on the statute.

Couple of years later, the Massachusetts Court, they wrote a case called Crocker versus Marine National Bank.

In the Crocker case, arrived to just the exact opposite result of the New York Court said that this had to mean must under this context and otherwise it did not mean anything.

So, purpose meaningless if you put in the period of permissive form.

And about 1871, there was a case that called Bank of Bethel versus Pahquioque Bank which was a suit in a state court in Connecticut that went on up and came to this United States Supreme Court.

And in that case, the court adverted to the statute said that the suit had been brought in a proper state court, state court had jurisdiction.

It would mention that is was a court that was a court of competent jurisdiction simply apply the statute verbatim.

In 1880, this came before this Court again in Casey versus Adams, which was a case that came up to the state courts in Louisiana.

It came and arose under the Louisiana form of statute that dealt with determining priorities or classifying rates — ranks of privileges the way they use it in the civil code statute where a mortgage foreclosure had occurred.

The money was in the court.

Who was to get the money?

The state statute there said that it — this court was the only one that had the power or jursisdiction to make this determination and only on this national bank said that the New Orleans Court was the only one with jurisdiction.

It came to the United States Supreme Court and United States Supreme Court in Casey versus Adams apparently look at the statute, gave it a construction said that this was a typical interim proceeding, an action which was classified as a local action which was old as action themselves.

And that, it was their opinion that this statute was not designed to apply to such typically local actions as this.

In the next case that came before this Court and the key case as we see it is First National Bank of Charlotte, North Carolina versus Morgan.

Opinion was written in 1889 by Mr. Justice Harlan, the first Mr. Justice Harlan.

It’s a very interesting opinion.

The — a bank, national bank in North Carolina was sued in a state court in North Carolina which was not in the county in which the court maintains this business.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

They were sued and for them to recover this double penalty for exacting your jury’s interest.

The bank defendant lost his lawsuit on — in the — on the appeal in the Supreme Court of North Carolina.

For the first time, it said wait.

They couldn’t say it sue us there anyway jurisdiction.

The court had no jurisdiction void judgment.

The — or one of their contentions they are making was that only a federal court would have jurisdiction.

They were basing it on exclusive jurisdiction section of the Judiciary Act of 1789 dealing with suits to recover penalties under federal laws.

First they said that’s wrong because the subsequent statute dealing with national banks was a later statute and modified that feature of it.

Then they said this state court was not the right state court.

The Supreme Court of United States had to decide what was the nature of this right.

They cited the Crocker case, the early Massachusetts case.

They cited the Bethel case.

They said that it was a personal privilege.

It was written years before the (Inaudible) case, but it sounded a great deal of lacking.

They say it was a waivable personal privilege.

If it had been claimed it must have been granted by the court — the state court in which it had been brought.

Now, that case continues to be and is the key case.

Charles E. Whittaker:

What was that?

Hubert D. Johnson:

First National Bank versus Morgan.

We refer to it all the way through as the Morgan case.

They used afraid that if there was an exception that statute was an exception that it was an immunity.

Pretty strong language has said no use speculating as to why Congress granted it so far as that it did grant it.

The Austin Court of Civil Appeals felt that that case was fully controlling on this federal statute.

The Supreme Court of Texas said we are not going to follow it.

We consider that dictum.

We don’t think it was dictum.

We think that it was right straight to answering the issue.

The issue was what sort of a right does this statute grant?

And the answer would agree, not jurisdiction, venue, a waivable right but if asserted it must be granted, must be recognized.

And thus, the (Inaudible) case, the key case that we feel has been disregarded by the Texas Court.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

It’s been disregarded in a number of other states, a lot of collection of state court cases in the briefs.

We didn’t do anything set put and in the appendix because we felt that only served to illustrate was the confusion among the various states and the almost extremes to which they have gone to try to make a clear statute into something that they could not apply and that’s about all that they — they seem to me to show.

There’s a California case, the Monarch Wine Company case that we make particular reference to because it has such a thorough review of both state and federal court cases.

The cases that have construed and applied this statute as to venue in the federal courts, which as I say is the first part of it have without exemptions said that it’s — unless there’s a waiver or consent to be sued elsewhere the venue right in the federal court says is provided for since against the national banks has provided for right here in this Section and those cases come right on down to very recently.

The argument is — has been made just briefly the subsequent after 1889.

There was a case in 1917 it — before this Court.

First National Bank versus Fellows ex rel. Union Trust Company, a quo warranto proceeding brought on relation in the state capital in Michigan against the Bank — National Bank having trust powers under Section 11 (k) of the Federal Reserve Act.

And that — in that case the banks actual office, the place of business was not in the state capital.

In the state courts, there were no argument, no — no point made of that.

It was not urged.

It was not even urged in the United States Supreme Court although a dissenting opinion went back and say we can consider a jurisdiction when it could — should have been in — in this particular situation would.

Most the argument there was about whether not a Colorado type of proceeding — was a type of proceeding that ought to be brought in the state court and whether it ought to be brought against the national bank or whether it ought to be brought exclusively in a federal court.

In 1923 in Bank of Whitney versus Bank in America case, a national bank with offices in New Orleans was sued in a federal court in the State of New York.

They attacked jurisdiction that they weren’t there and weren’t doing business there and couldn’t be sued there.

It did not raise this venue right provide for under R.S. 5198 or Section 57 or is codified as 12 U.S.C. 94.

It didn’t raise that.

And so, in the United States Supreme Court, I think its Mr. Justice Brandeis wrote the opinion as I recall.

Are those — excuse me, he concluded saying that we do not have to reach this question.

It’s not before this Court.

The jurisdiction point was there from the beginning was raised there such the absence of it’s being present in the Federal District Court in New York, footnote to the opinion sites the statute R.S. 5198 cites First National Bank v. Morgan.

But it seems to me rather than declining to discuss it, he simply says there’s another ground here that we do not have to go into.

That’s the only — that’s the only thing as so I read the case to me.

As far as I can tell and I think we made a careful search other than one or two cases where there’s been advertence to the section in federal court cases Cope versus Anderson as I recall made advertence to the 12 U.S.C. 94.

But that’s the — that’s the case law on it.

The — in 1875, the United States — the Congress made a very material amendment to the Judiciary Act conferring jurisdiction on federal courts in the area of so-called federal question.

Apparently, prior to them and I was not aware that until I begin studying this.

Diversity had been the basis of it and sole basis of it except where there had been special statutes.

That also put provision and therefore removal on federal question — basis.

And of course, in the light of some cases as had drawn the great deal of support from Osborn versus Second Bank of United States, you run in the situations where by virtue of federal origin, there was a basis for saying that any case involving brought by or against the National Bank was one that the bank could bring in the federal court if it wanted to and if it was sued as a defendant, it could be remove the federal court.

Well, that lead to some mandatory legislation.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

In 1882 Act first which was a kind of garble and then in 1887 and 1888 Act to clarify what they meant as four or five cases and if going down the line on that and made very clear and that, that was all addressed to the matter of jurisdiction not venue all addressed to the manner of clarifying the lack of availability of jurisdiction in the federal courts because of federal origin.

The cases discussed the famous Pacific Railroad removal cases which seem to point up the Pandora’s box which had been opened by the 1875 Act at least sets away the — you got a situation in which yes, you have state court jurisdiction but it could be ousted by removal by many of these railroad companies and all of the national banks and that have to be clarified in Petri versus Continental Bank and the Whitmore versus Amoskeag Bank and the Con — Commercial National Bank versus — Continental National Bank versus Buford.

We cite a couple of those cases and they’re all cited in the Petri case and in the Buford case, too, as I recall.

Make it put it clear as to what that amendatory legislation was driving at.

It has never been construed to have any other effect in the 1948 rewriting of the Judicial Code.

The statute contained a lot of — of things that were expressly repealed.

And it stated among those expressly reapeal was this 1882, 1887, 1888 legislation that dealt with the same subject.

It’s now in 28 U.S.C. 1348 as I recall.

And that is not to me indicative of any change in the clearer meaning of the statute.

The local action thing, I’ll revert to that a little bit more.

This action here then exert contain in the pleading that takes up the first 321 pages of this record for which I would like to apologize in making the record so lengthy but I couldn’t figure out how to present a case without pleading and I couldn’t also figure out how to condense it because it was so difficult to — to do that sort of thing.

But if you turn to the prayer portion of it, you’ll see that it is a tort action based on a claim grand conspiracy, fraudulent conspiracy extending over from 1950 to 1957.

144 parties and some of them apparently coming in and off the scene at one time and another seeking joint and several liability a claim for some $15 million, some special claims on special acts against the different defendants which are covered in the part b of the prayer.

There’s certainly nothing about it that suggests that it’s anything other than the normal tort action, transitory in nature, be brought wherever you — wherever you want to, nothing local in that nature.

The statute that they refer to here that the State Supreme Court of Texas seem to rely so heavily on was this 1955 statute.

There’s nothing but a venue statute.

It refers to courts of competent jurisdiction.

It was not planned to give any new jurisdiction.

Our jurisdiction is given by constitutional provision in Texas, District Courts, all land suits, all damage suits over a thousand dollars, the courts under $500, between $200 and $500 they had to be our county court wasn’t changing any of that.

There’s been a state court case in Texas holding.

And it was purely a venue statute that it even applied to existing facts and that it did not violate the provisional ex post facto theory because it was a procedural venue statute.

And it just took right over and applied a lawsuit.

It was brought after even those based on facts that are ruled before.

The — there’s nothing that I can’t see in the statute that purports to create any kind of an action or to make it local.

If you have an action against the receiver on a rejected claim, there is a section of the statute, Section 3 (h) of Article 21.28 that like so many instances and receivership statute says that you present your claim, one is denied then you sue in the receivership court but this is not that kind of an action.

It is just exactly the opposite.

The receiver who is suing the banks and many others for things that happened to the insurance company from 1950 to 1957 long prior to the receivership suing 28 or 30 parties that by the pleadings, allegations live outside the State are foreign corporations has not doing business in the State to get in personam jurisdiction is not going to be impossible in all probability to do it in the state district court there in Austin.

I don’t think that the local action claim stands on the basis of any common law.

The definition of local is transitory by its very nature by the definitions of this Court in some cases that we’ve cited by the definitions of the Texas Courts in cases that we’ve cited there and by all the literature that you could see on it.

The statute, this Insurance Code does not purport to create any locality of action.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

And the Supreme Court of Texas say we don’t pass on whether this is a local or transitory action.

No indication that they were much impressed with that.

If I could just use a minute or two to summarize the opening, it is the position of the appellants in these cases which are here consolidated that the right given to them by the federal statute has been finally determined against them that the validity of the state statute is contracting with the applicability of the federal statute has been appealed, that it comes clearly within Section 1257 if it’s final then it’s final.

It’s final under all practical tests.

It’s comes clearly within the test outlined in the Cohen case.

And it’s, therefore, we feel that this is a case where jurisdiction of this Court can attach, should attach the — there’s no other place, no other way that this determination whether this right exist can be made.

It’s been — we’ve gone the gamut in Texas and we’ve haven’t been able to make it get into recognition.

As to the merits phrase of it, we have a very clear statute.

It’s a venue statute.

It’s a valuable venue right.

It’s been denied.

And we feel that there isn’t really a great deal of doubt about the fact that in First National Bank versus Morgan, the Court correctly construed the statute and that the Texas Supreme Court was completely erroneous in saying that this was a matter that was — I think the use of phrase insulated from federal judicial review.

Well, when the interpretation of a federal statute and the decision as to whether or not that right is available to us is not a matter that can be brought for federal judicial review then we have completely repealed Section 1257, I think.

Felix Frankfurter:

Before you — before you sit down, may I ask you unless you referred to it and I didn’t hear it, do you agree with the lineup of ca — state cases in the appellee’s brief?

Is it true that —

Hubert D. Johnson:

No —

Felix Frankfurter:

— federal state court has gone one way, has gone against you on these two cases, two state courts?

Hubert D. Johnson:

No, sir.

I did not —

Felix Frankfurter:

Have you — have you marshaled the state decisions?

Hubert D. Johnson:

Yes, sir, I — I have.

I have not put them in my brief now.

I did that although the state courts but I — I do and I have a complete disagreement with them.

I cited them in the — in the appendix there but I don’t agree with the lineup of them at all.

Felix Frankfurter:

Are they — where’s the appendix in your brief?

Hubert D. Johnson:

The appendix to the brief in — Brief Appellant Number 90 has a list of them over pages 53 — I’ll put my glasses on.

I can’t see the numbers — page 53, Appendix C.

I believe that that’s an exhausted list of the state court decision and 53, 54, 55 —

Felix Frankfurter:

You got 20 and years 12, is that right?

Hubert D. Johnson:

That’s right.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Hubert D. Johnson:

There may be one or two.

They’re not in that list but I — I don’t think so.

We made a pretty exhausting search of them and we don’t agree with them at all.

Many other cases were — like in the Morgan case, it was waived not presented.

Others are cases of strictly local action.

Felix Frankfurter:

Does a Morgan case in — before this Court?

That — it’s urging on —

Hubert D. Johnson:

I have —

Felix Frankfurter:

— was that — I don’t mean — I don’t mean contested or — or canvas but has there any been reference (Voice Overlap) —

Hubert D. Johnson:

The only reference that I can recall, Mr. Justice Frankfurter, is in the footnote in the Whitney Bank case which said we don’t have to reach this question.

Felix Frankfurter:

But does that mean that they left open?

Hubert D. Johnson:

I didn’t interpret it that way.

I didn’t interpret the —

Felix Frankfurter:

Where’s that case?

Hubert D. Johnson:

— Court’s elusion to it.

Felix Frankfurter:

Where’s that case?

Hubert D. Johnson:

Whitney case appears at — in this brief number 90, Bank of America versus Whitney at page 36.

Felix Frankfurter:

What’s the citation, the volume?

Hubert D. Johnson:

It’s 261 U.S. 171.

Felix Frankfurter:

That’s the one right now.

Oh, yes.

Hubert D. Johnson:

That’s the one it was in a federal court in New York on a bank that did its business in New Orleans and went up on the jurisdictional point for no — nothing was made of the other point.

It seems to me all the Court was saying that there’s another thing that this thing could’ve going up and we don’t have to write about it because it wasn’t brought before the Court.

Thank you very much.

Quentin Keith:

Mr. Chief Justice, may it please the Court.

Earl Warren:

Mr. Keith.

Quentin Keith:

It might be helpful if I would give to Your Honors just a little background on the factual aspects of this matter because unlike most cases that you have before you, this case has never been tried.

We have been through all of the Courts of Texas.

And there, there hasn’t a court union yet the trying to file in we’re going to try this lawsuit.

The two banks here are on the two defendants that were involved in a — in a large case.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Quentin Keith:

There was a man by the name of Ben Jack Cage, a certainly co-conspirator whom we allege conceive the idea of forming a labor union, by forming an insurance company to be owned by labor unions which was an excellent idea except that Ben Jack Cage apparently had large in his heart rather than a public spirited undertaking.

Mr. Cage had occasion to appear before the Court of Criminal Appeals of Texas and unsuccessfully appealing his 10-year conviction and is now taking sanctuary in Brazil.

The banks being sued as co-conspirators and being in — we allege that there are stopped to deny that they have not waived their right to the federal venue statute and then let me say at the very outset of this, if I may, sir, that we make no contention here and I’ve never made any contention that this Court cannot review state court action relating to federal statute.

We make no contention or did the State made any contention that the — the national banks here are to be deprived of anything.

I may say I make a further concession here, sir.

I do not say that this — that we can confer jurisdiction on a court by agreement.

But I do agree with counsel that under Texas practice, for all purposes and I emphasize the word all, for all purposes, the determination of a venue issue is now final in Texas.

It is not final should this Court determine it does not have jurisdiction here.

I think that that case can be brought along and eventually reach this Court at the conclusion of a hearing on the merits.

But I say to Your Honors that insofar as Texas Courts are concerned, the venue question will never be litigated regardless of whether this Court takes the jurisdiction assuming it denied the jurisdictional question that they did not take jurisdiction.

So far as Texas law is concern we are through litigating.

Felix Frankfurter:

Mr. Keith.

Quentin Keith:

Yes, sir?

Felix Frankfurter:

I think you’ll have to enlighten me a little bit.

Did I understand you to say that as of this moment, this is a non-relitigable issue in Texas Court?

Quentin Keith:

Yes, sir.

Felix Frankfurter:

But if this Court should, according to its own standard of finality for purposes of taking jurisdiction over a state judgment suppose it has not — does not have the quality of finality for our purposes?

Quentin Keith:

Yes, sir.

Felix Frankfurter:

You say then the question could be litigated in the federal court?

Quentin Keith:

I think so, sir, because what we are — what we have here now is the interlocutory judgment under our practice.

It has settled the venue issue but it is still an interlocutory judgment.

We can only have one final judgment in our — in our practice —

Felix Frankfurter:

If you —

Quentin Keith:

— which will be the one at the end of the road.

Felix Frankfurter:

If you tell me that — that howsoever that go, howsoever that go, if it goes to the merit that on review, the Texas Supreme Court or whatever the court is that has a final to say could not review the question of venue.

Quentin Keith:

No, sir.

Not again —

Felix Frankfurter:

But then — then how do you open it?

Because the Supreme Court of United States says for our purposes, it is not final.

Quentin Keith:

Well, I think it poses a procedural dilemma that I cannot answer and —

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Felix Frankfurter:

But if they — your answer — on your answer may turn —

Quentin Keith:

Well —

Felix Frankfurter:

— that it’s final for our purposes.

Quentin Keith:

I want to be as frank as I can with Your Honors.

Felix Frankfurter:

But you are.

Quentin Keith:

I say in the City of Wichita — the Wichita Falls Railroad case, the McDonnell, its in 141 Texas holds flat out and plainly nonequivocally that the decision of on a hearing, on a plea of privilege by an appellate court and in this case, the last appellate that will review it is final and binding and will not be reviewed upon a subsequent hearing.

It — it then becomes res judicata insofar as venue is concerned.

Felix Frankfurter:

But suppose you don’t — if I may interrupt, suppose no reviews — suppose exception is taken that the seizure of jurisdiction by the local Texas court, suppose the present appellant having made that warrant that the Court has no jurisdiction, it’s ruled against them and they duly may take an exception whatever you call it in Texas and say we’ll reserve the review of that until — until the disposition of the merits because they waived them then they couldn’t raise it there after?

Quentin Keith:

No, sir.


We don’t have business that we waived down there, sir.

Felix Frankfurter:

Well now —

Quentin Keith:

Your venue questions are there.

You file your plea of privilege, it must be controvert, you file what’s known as a controverting affidavit.

That it comes on for hearing if that it adversely determined to either the plaintiff or the defendant, if that is to see if it is transferred over the plaintiff’s objection or if it is retained over the defendant’s objection.

The losing party has 20 days will then which —

Felix Frankfurter:

In which to — in to which to seek a reviewing that just —

Quentin Keith:

In which to appeal for practice appeal.

Felix Frankfurter:

In which — then that is if he doesn’t desire.

Quentin Keith:

If — that is right.

Felix Frankfurter:

Are you telling me — are you telling me that the trial section law is concerned, that’s final but if this Court, says it isn’t final for purposes of review for — under the original — original article Section 25 of the Judiciary Act that then Texas might set a different review?

Quentin Keith:

No, sir.

Felix Frankfurter:

I don’t understand that.

Quentin Keith:

I don’t say Texas.

William O. Douglas:

What you’re saying is —

Quentin Keith:

I said this Court plea.

William O. Douglas:

When you come to the end of the road, we can still take it and re — review the finding as to venues there.

Quentin Keith:

That’s those — I don’t think that whatever we call it a final judgment down there can’t preclude this Court from eventually reviewing that decision.

I’ll say the —

William O. Douglas:

At the end road in any of that?

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Quentin Keith:


And I say for venue, we’re now at the end of the road.

But —

William J. Brennan, Jr.:

You would have to unscramble an awful lot of eggs though, wouldn’t you?

Quentin Keith:

You — yes, sir.

You would have a record that would be that they can instead of an —

Felix Frankfurter:

I can’t understand but — but the prior — Texas case would come up here from final determination of your appellate court and says we’re — you don’t look at.

Applying statute as to the venue disposition of the Supreme Court of the United States wants to deal with it, that it’s through.

Quentin Keith:

That’s accepts in substance what they would say if there is a remaining federal question, the court — the court in Washington will undoubtedly seize the broad and then review it.

Now sir, I made — did I make myself clear?

I don’t want to create or try to create jurisdiction by agreement but I don’t want to try to talk to this Court into a local practice situation here that will leave us both in doubt as to where we are.

Now, in this case, if I may say to Your Honors, we have concluded here that this Court has before it now for the first time since the National Banking Act was passed nearly 100 ago, the — the final and then the ultimate determination to make whether this is a venue or it’s a jurisdictional or whether it’s a mandatory statute.

First, before we get to that Section 94, I want to call Your Honors’ attention to Section 24 of Article or Section 12 of the U.S. Code.

National banks shall have the right to sue and be sued, complain and defend in any court of law and equity as fully as natural person.

Now, what did the bank seek here?

It’s just exactly what Ben Jack Cage sought in Brazil.

They want sanctuary and in Texas we have no such thing as branch banking.

A bank sets up business in Dallas goes out and tries to do business all over the State.

If this there’s the law as they contend for that you can only sue in the county in which they are a domicile then they have sanctuary but they can go from El Paso to Orange or they can go from Texarkana to El Paso from — from Amarillo to Galveston seeking business but regards to what they tell you, “You got the follow me home before you can sue me.”

I say to Your Honors that that’s the law of sanctuary.

It has no place in our present setup of the relationship between the State and the Federal Government.

Charles E. Whittaker:

Well now, is it true that the statute which gives the right to sue and be used has anything to do with the place where isn’t that left to the other statute namely 94 or am I not wrong?

Quentin Keith:

One is Section 24.

It gets on the right pursuant basis if it is 94 that they weren’t.

Charles E. Whittaker:


Quentin Keith:

Now, I say to Your Honors that a corporation has long since been decided by this Court that the — it’s inherent and the — in the creation of a corporation that they have the right to sue and to be sued.

So that it if it becomes any question of whether or not we’re going to give the national bank something with the state banks who complete whether or not they have.

Felix Frankfurter:

But if the concession of the Congress to allow suit at all in the state courts?

Quentin Keith:

Yes, sir.

That I — yes sir, I’m very re — readily consent to this.

Audio Transcription for Oral Reargument – December 05, 1962 in Mercantile Nat’l Bank at Dallas v. Langdeau


Quentin Keith:

I say to Your Honor this, Congress has not been blind to the fact that national banks are not something that needed protection.

They are not an in — industry any longer.

In facts does the national banks although may not outnumber our state banks later about four other powerful banking institutions in our area.

We are trying to say to Your Honors this, before I get to the — I see we’re practically on the adjournment time, I’m not going to get in too much state statutes yet as to where I say this course of action come from of why it must be brought there and ousted.

I say to Your Honors is this that this national banking statute were passed 1863 and so on down through the several amendments there, too, was designed for the reason of brief to protect the infant industry.

And for 100 years this Court has not passed the point of direct that is to say whether or not now they can be sued as other citizens of the states may be.

Earl Warren:

We’ll recess now.