Moreland v. Rucker Pharmacal Co.

59 F.R.D. 537, 1973 U.S. Dist. LEXIS 13665
CourtDistrict Court, W.D. Louisiana
DecidedMay 11, 1973
DocketCiv. A. No. 18105
StatusPublished
Cited by9 cases

This text of 59 F.R.D. 537 (Moreland v. Rucker Pharmacal Co.) is published on Counsel Stack Legal Research, covering District Court, W.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Moreland v. Rucker Pharmacal Co., 59 F.R.D. 537, 1973 U.S. Dist. LEXIS 13665 (W.D. La. 1973).

Opinion

RULING

DAWKINS, Chief Judge.

This action is brought pursuant to Rule 23 of the Federal Rules of Civil Procedure as a class action seeking declaratory and injunctive relief and, incidentally, damages. Jurisdiction is based upon diversity and more than $10,000 being in controversy, exclusive of interest and costs.

Defendant Bank of the Southwest has filed a motion to dismiss for lack of jurisdiction over the person, insufficiency of service of process, and, alternatively, for improper venue. Defendant Rucker Pharmacal Company, Inc., filed a motion to dismiss the suit as a class action and, of course, reserves its rights under Rule 12(b). Subsequently, plaintiff filed a motion for an order to show cause and decree fixing liability of defendant Rucker for attorney’s fees.

This ruling concerns only the defendant Bank of the Southwest’s motion, pretermitting the class action and attorney fees issues until a later date. Accordingly, any reference to plaintiff as not being a true representative of the class allegedly involved should not be [539]*539considered as a projection of the outcome of the motion to dismiss the suit as a class action. Thus restricted, we therefore shall not refer to the plaintiff as a class but only as to named plaintiff himself.

Plaintiff formerly was an employee of defendant Rucker and was the owner of 148 shares of its Class C common stock. Through stock dividends and stock splits by corporate action taken by Rucker, the original 143 shares had increased to 688 shares as of March 9, 1972.

Allegedly as a condition for continued employment, May 3, 1969, Moreland was required to enter into an agreement with Rucker whereby he would purchase stock from the company and the company would sell the stock to the employee with the right to reacquire the stock upon the “happening of certain events.”

In the fall of 1971, Rucker began initial inquiries and preparations to sell its stock to the public, the initial sale to consist of newly issued stock and one-fourth the amount of stock owned by each of Rucker’s stockholders. In connection therewith plaintiff executed a power of attorney to Johnny B. Rucker, Rucker’s President, or his wife, Cornelia A. Rucker, an officer and director of Rucker. Additionally, a letter of transmittal and custody agreement was forwarded to the Bank of the Southwest presumably on behalf of all employees contributing one-fourth of their stock. Plaintiff received a letter from Rucker acknowledging receipt of 172 shares of Rucker stock. An underwriting agreement was entered into with du Pont, Glore, Forgan, Inc., as representative of the several underwriters named therein.

One hundred seventy-two shares of common stock of Rucker, owned by plaintiff, was sold to the underwriters for a price of $15.71 per share. The net amount received by plaintiff from the bank, after deduction of his proportionate share of expenses of the sale, was $2,639.88. Thereafter, plaintiff left Rucker’s employ and subsequently Ruck-er tendered an offer to purchase from plaintiff the remaining shares of common stock owned by him then, and now presumably still in possession of the Bank of the Southwest in accordance with the custody agreement. Plaintiff has requested the bank to return said stock (i. e., the certificates evidencing plaintiff’s ownership of the shares). The bank, however, has refused to return such certificates, totaling 516 shares. Plaintiff contends this is a violation of the custody agreement; and the bank’s refusal is predicated upon direction from Rucker not to return said stock certificates to plaintiff.

We pretermit any disposition of the jurisdictional question because our disposition of the venue issue satisfies us that this action has been brought in an improper forum as concerns the bank.

Special venue provisions have been enacted concerning suits against national banks. They are found at Title 12 U.S.C. § 94:

“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.”

Although the language is permissive, the jurisprudence that has evolved thereunder strictly and narrowly has construed this provision to make no exception save one, see Helco, Inc., v. First National City Bank, 470 F.2d 883 (3rd Cir., 1972) and the jurisprudence cited therein. This exception was carved out in Casey v. Adams, 102 U.S. 66, 26 L.Ed. 52 (1880). Addressing the quoted statute, the Court stated:

“This, we think, relates to transitory actions only, and not to such actions as are by law local in their character. Sect., 5136 subjects the banks to suits [540]*540at law or in equity as fully as natural persons, and we see nowhere in the banking act any evidence of an intention on the part of Congress to exempt banks from the ordinary rules of law affecting the locality of actions founded on local things. . . . 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. To give the act of Congress the construction now contended for would be in effect to declare that a national bank could not be sued at all in a local action where the thing about which the suit was brought was not in the judicial district of the United States within which the bank was located. Such a result could never have been contemplated by Congress.”

The Court went on to say that State law is determinative of whether the action is local or transitory.

It is obvious that we must determine whether or not this action is local or transitory as concerns this bank. A cursory glance at Moreland’s complaint reveals that he seeks damages from both defendants. Clearly, this is of a transitory nature; however, in his brief, plaintiff has conceded this and desires this Court to allow him to amend, deleting all reference to damages, thereby reducing the complaint against the bank to one solely for possession or ownership of the stock certificates involved in this action which are in possession of the bank. Accordingly, we approach this problem in the manner requested by plaintiff, as though the complaint had made no reference to damages.

“The distinction with respect to venue as between local and transitory actions has been said to be as old as actions themselves, and the rules distinguishing between them are well settled, although as a practical matter it is not always easy to ascertain whether an action is one or the other.” 92 C.J.S. Venue § 7.

A transitory action may be brought in any court of general jurisdiction in any district wherein defendant can be found and served with process, whereas in a local action the plaintiff must bring suit in the court designated, if not statutorily required to do otherwise.

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Cite This Page — Counsel Stack

Bluebook (online)
59 F.R.D. 537, 1973 U.S. Dist. LEXIS 13665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moreland-v-rucker-pharmacal-co-lawd-1973.