Petition — Mellon Bank, N. A. v. Southland Mobile Homes of South Carolina, Inc.

Goert, U. &.

} FILES

j

AUG & wis

IN THE MICHAEL ROBAK, JRCLERN

Supreme Court of The United States

no. 787188

MELLON BANK, N.A.

| Petitioner,

versus

SOUTHLAND MOBILE HOMES OF SOUTH

CAROLINA, INC.

and

ASSOCIATES FINANCIAL SERVICES COMPANY,

INC.

Respondents.

PETITION FOR WRIT OF CERTIORARI

To The Supreme Court of the

State of South Carolina

CHARLES W. KNOWLTON

OF COUNSEL

FRANCIS P. MOOD

HAMILTON OSBORNE, JR.

ee EEE ee eee

BOYD, KNOWLTON, TATE & FINLAY

12th Floor, SCN Center

1122 Lady Street

Columbia, South Carolina 29201

(803) 779-3080

Counsel for Petitioner

TABLE OF CONTENTS

Page

FES ea

Jurisdiction

Oe eR ee

Es a ee

Statement of the Case

Reasons for Granting the Writ 0.

A.

E.

The South Carolina Courts have asserted juris-

diction over an out-of-state national bank in a

transitory action pursuant to a state long-arm

statute in derogation of the National Bank Act

and also in derogation of the Supremacy Clause

of Article VI of the United States Constitution

. The South Carolina Court's interpretation of

“located” under 12 U.S.C. § 94 conflicts with

prior decisions of this Court ..

. The South Carolina Courts have interpreted the

term “branch” bank in a manner totally incon-

sistent with federal statutes and decisions of this

8 Taster Cyrene 8 0 Sete

. There is no legal or factual basis for holding that

Mellon Bank has in any way waived the pro-

visions of 12 U.S.C. § 94 _ bee

The State Supreme Court decisions are appro-

priate for review at this time - sh vos

Sones Sa be ie

i

a eF. DS WY WY

12

14

TABLE OF CONTENTS (Continued )

Page

Appendix:

A. Opinion No. 20654 filed April 3, 1978 15

B. Opinion No. 20655 filed April 3, 1978 - 17

C. Denial of Petition for Rehearing as to Opinion

No, 20654 filed May 10, 1978... 22

D. Denial of Petition for Rehearing as to Opinion

No. 20655 filed May 10, 1978 0.0 28

E. Special Appearance of Mellon Bank as to Com-

plaint of Southland Mobile Homes, Inc. dated

June 4, 1975 .. 24

F. Special appearance of Mellon Bank as to Cross-

Complaint of Associates Financial Services Com-

pany, Inc. dated June 20, 1975 .._.. EI 25

G. Order of Court of Common Pleas for Sumter

County filed February 16, 1977 ......._ 26

H. S.C. Code § 36-2-803 (1976) ........ 32

TABLE OF AUTHORITIES

Cases

Bank of America vy. Whitney Central

National Bank, 261 U.S. 171 (1923)... 9

Citizens & Southern National Bank vy.

Bougas, 434 U.S. 35 (1977)

Davis v. Elmira er Bank, 161 U.S.

275 (1896)

Dearing, 91 U.S. 29 (1875) _.......

First National Bank in Plant City v.

Dickinson, 396 U.S. 122 (1969) .

Local 438 Construction & General La-

borers’ Union vy. anita 871 U.S, 542

; VaR,

(1963 )

Mercantile National Bank v. Langdeau,

a

871 U.S. 555 (1963)

Michigan National Bank v. Robertson,

372 U.S. 591 (1963)

National Bank of North America vy. As-

sociates of Obstetrics and Female

Surgery, 425 U.S. 460 (1976)

Radzanower v. Touche Ross & Co., 426

Fe 7. |) neers aee aaa

Van Reed vy. People’s National Bank,

198 U.S. 554 (1905)

iii

. §, 18

;

Farmers & Mechanics’ National Bank v.

s7

a

Page

TABLE OF AUTHORITIES (Continued)

| Statutes

McFadden Act, 12 U.S.C. § 36

National Bank Act, 12 U.S.C. § 94...

28 U.S.C. § 1257(8)

28 U.S.C. § 1348

S.C. Code § 32-2-803 (1976)

iv

Page

. 2, 4, 5, 10, 11

2, 4, 5, 8, 9, 12

. 2, 12

. 3, 8

3, 4, 6

IN THE

Supreme Court of The United States

MELLON BANK, N.A,

Petitioner,

versus

SOUTHLAND MOBILE HOMES OF SOUTH

CAROLINA, iNC,

and

ASSOCIATES FINANCIAL SERVICES COMPANY,

INC,

Respondents.

PETITION FOR WRIT OF CERTIORARI

To The Supreme Court of the

State of South Carolina

Petitioner, Mellon Bank, N.A., prays that a writ of cer-

tiorari issue to review the judgment of the Supreme Court

of South Carolina, Opinions Numbers 20654 and 20655,

entered on April 3, 1978, Rehearings were denied on May

10, 1978,

OPINIONS BELOW

The opinions of the Supreme Court of South Carolina

are reported in 244 §.E.2d at 211 and 212 and appear in

the Appendix, infra. (App. 15 & 17) The Order of the

Court of Common Pleas for Sumter County is unreported

and appears in the Appendix. (App. 26)

[1]

2 MeLiLon Bank v. SourHLAND Mos, HoMEs, ET AL,

JURISDICTION

The opinions of the Supreme Court of South Carolina

were entered on April 8, 1978. Timely petitions for re-

hearing were filed and were denied on May 10, 1978,

The jurisdiction of this Court is invoked under 28 U.S.C,

§ 1257(3).

QUESTION PRESENTED

Whether the courts of the State of South Carolina can,

in a transitory cause of action, assert jurisdiction and

venue over Petitioner, a national banking association

chartered under the laws of the United States, headquart-

ered in Allegheny County, Pennsylvania, and having no

offices in the State of South Carolina,

STATUTES INVOLVED

The National Bank Act, 12 U.S.C. § 94, provides as fol-

lows:

Actions and proceedings against any associa-

tion under this chapter may be had in any dis-

trict or Territorial court of the United States held

within the district in which such association may

be established, or in any State, county, or munici-

pal court in the county or city in which said asso-

ciation is located having jurisdiction in similar

cases,

The McFadden Act, 12 U.S.C, § 86, provides in rele-

vant part as follows:

The conditions upon which a national banking

association may retain or establish and operate a”

branch or branches are the following: .. .

(c) A national banking association may, with

the approval of the Comptroller of the Currency,

establish and operate new branches: (1) Within

the limits of the city, town or village in which

said association is situated, if such establishment

PETITION FOR Writ OF CERTIORARI

and operation are at the time expressly autho-

rized to State banks by the law of the State in

question; and (2) at any point within the State

in which said association is situated, if such es-

tablishment and operation are at the time autho-

rized to State banks by the statute law of the

State in question by language specifically grant-

ing such authority affirmatively and not merely

by implication or recognition, and subject to the

restrictions as to location imposed by the law of

the State on State banks. . . .

(f) The term “branch” as used in this section

shall be held to include any branch bank, branch

office, branch agency, additional office, or any

branch place of business located in any State or

Territory of the United States or in the District

of Columbia at which deposits are received, or

checks paid, or money lent,

28 U.S.C, § 1848 provides as follows:

The district courts shall have original jurisdic-

tion of any civil action commenced by the United

States, or by direction of any officer thereof,

against any national banking association, any

civil action to wind up the affairs of any such

association, and any action by a banking associa-

tion established in the district for which the court

is held, under chapter 2 of Title 12, to enjoin the

Comptroller of the Currency, or any receiver act-

ing under his direction, as provided by such

chapter,

All national banking associations shall, for the

purposes of all other actions by or against them,

be deemed citizens of the States in which they

are respectively located.

S.C, Code § 36-2-808 (1976) appears in the Appendix

(App. 32)

4 MeELLon Bank v. SouTHLAND Mos. HOMEs, ET AL.

STATEMENT OF THE CASE

This case, alleging breach of contract, was brought by

Southland Mobile Homes of South Carolina, Inc. (“South-

land”). against Associates Financial Services Company,

Inc. (“Associates”) and Mellon Bank, N.A. (“Mellon

Bank”) in the Court of Common Pleas for Sumter County,

South Carolina. Associates answered and asserted a cross-

complaint against Mellon Bank. Pursuant to South Caro-

lina procedure Mellon Bank made a special appearance

to challenge the jurisdiction of the court. (App. 24-25) The

Court of Common Pleas for Sumter County entered its

order dated February 16, 1977, asserting that it had juris-

diction over Mellon Bank pursuant to the South Carolina

long-arm statute despite the provisions of 12 U.S.C. § 94.

(App. 26)

Mellon Bank appealed to the Supreme Court of South

Carolina. Although this case involves a single lawsuit, the

South Carolina Supreme Court rendered two opinions, one

dealing with the appeal as to Associates and one dealing

with the appeal as to Southland. In the opinion dealing

with the appeal as to Associates, the South Carolina

Supreme Court in Opinion No. 20655 (App. 17) af-

firmed the Court of Common Pleas for Sumter County,

holding (1) that the state court had jurisdiction over

Mellon Bank pursuant to the state long-arm statute, S.C.

Code § 36-2-803 (1976) (App. 32); (2) that Mellon

Bank was “located” in the State of South Carolina within

the meaning of 12 U.S.C. § 94; and (3) that Mellon Bank

was operating a branch bank in Sumter County, South

Carolina, within the meaniag of 12 U.S.C. § 36 because

it purchased commercial (chattel) paper from Associates,

which had acquired the paper from Southland, which in

turn had previously acquired the paper from its customers.

In a separate opinion dealing with the appeal as to

Southland the South Carolina Supreme Court held that

the then attorney for Mellon Bank was several days late

in perfecting the appeal against Southland and affirmed

PETITION FOR Writ OF CERTIORARI 5

the dismissal of the appeal in Opinion No. 20654. (App.

15) Rehearings of these decisions were denied on May

10, 1978. (App. 23-24)

Since no further review of the decisions is possible un-

der South Carolina law, Petitioner seeks review by this

Court of the important federal questions decided. Pur-

suant to subsection 5 of Rule 23 of this Court, it is ap-

propriate to consolidate review ef both decisions into one

Petition for Certiorari.

REASONS FOR GRANTING CERTIORARI

This case presents novel and important questions in-

volving the application of federal jurisdictional and venue

statutes pertaining to transitory actions against national

banks in state courts.

The case involves an attempt by the state courts of

South Carolina to assert jurisdiction over an out-of-state

national bank pursuant to a state long-arm statute and

contrary to the provisions of the National Bank Act and

the Supremacy Clause of Article VI of the United States

Constitution.

The latest decision of this Court involving 12 U.S.C. §

94 was Citizens & Southern National Bank v. Bougas, 434

U.S. 35 (1977). However, that case addressed itself only

to an intra-state application of the statute. The question

decided was whether a national bank having its principal

office in one county of the State of Georgia could be sued

in another county of the same state in which it maintained

an authorized branch. Here, Mellon Bank is headquartered

and chartered as a national bank in Allegheny County,

Pennsylvania, but the South Carolina courts have asserted

jurisdiction over it, even though it has no offices within

the State of South Carolina and can have none under the

McFadden Act, 12 U.S.C. § 86(c). The South Carolina

courts have applied a state statute in derogation of federal

statutes and have done violence to the interpretation of

federal statutes. This precedent should not be permitted

to stand.

6 MELLON BANK v. SOUTHLAND Mos. HOMES, ET AL.

A. THE SOUTH CAROLINA COURTS HAVE ASSERT-

ED JURISDICTION OVER AN OUT-OF-STATE

NATIONAL BANK IN A TRANSITORY ACTION

PURSUANT TO A STATE LONG-ARM STATUTE

IN DEROGATION OF THE NATIONAL BANK ACT

AND ALSO IN DEROGATION OF THE SUPREM-

ACY CLAUSE OF ARTICLE VI OF THE UNITED

STATES CONSTITUTION.

In asserting jurisdiction over Mellon Bank, the South

Carolina courts have relied upon the South Carolina long-

arm statute, S. C. Code § 32-2-803 (1976). (App. 32)

Without conceding that jurisdiction would be obtained

under this statute if it were applicable, Petitioner asserts

that such a state statute cannot be applied in derogation

of federal statutes to reach an out-of-state national bank.

Federal statutes govern exclusively where a national

bank may be sued on a transitory cause of action. For a

century decisions of this Court have consistently held that

national banks are creatures of federal statutes and that

their regulation and amenability to suit are governed ex-

clusively by federal law. The following quotations will

suffice to illustrate this point:

The right of Congress to determine to what

extent a state court shall be permitted to enter-

tain actions against national banks, and how far

these institutions shall be subject to state control,

is undeniable. National banks are quasi-public

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

PETITION FOR Writ OF CERTIORARI

National banks are instrumentalities of the

Federal government, created for a public purpose,

and as such necessarily subject to the paramount

authority of the United States. It follows that

an attempt by a state to define their duties or

control the conduct of their affairs is absolutely

void, wherever such attempted exercise of au-

thority expressly conflicts with the laws of the

United States, and either frustrates the purpose

of the national legislation, or impairs the effici-

ency of these agencies of the Federal govern-

ment to discharge the duties for the performance

of which they were created. These principles

are axiomatic, and are sanctioned by the repeated

adjudications of this court. Davis v. Elmira Sav-

ings Bank, 161 U.S. 275, 283 (1896).

Being such means, brought into existence for

this purpose, and intended to be so employed,

the States can exercise no control over them

[national banks], nor in anywise affect their op-

eration, except in so far as Congress may see

proper to permit. Anything beyond this is “an

abuse, because it is the usurpation of power

which a single State cannot give.” Against the

national will “the States have no power, by taxa-

tion or otherwise, to retard, impede, burthen or

in any manner control the operation of the con-

stitutional laws enacted by Congress to carry into

execution the powers vested in the General Gov-

ernment.” Farmers’ & Mechanics’ National Bank

v. Dearing, 91 U.S. 29, 34 (1875) (citations

omitted ).

so far as the lawmaking power of the government

may permit. Van Reed v. People’s National Bank,

198 U.S. 554, 555 (1905); quoted in part in

Mercantile National Bank v. Langdeau, 371 US.

555, 558-9 (1963).

Controlling is Mercantile National Bank v. Langdeau,

371 U.S, 555 (1963). In Langdeau an action was brought

_ in Travis County, Texas, against a national bank which

was located in Dallas County, Texas. The Texas court

relied upon venue provisions in the Texas Rules of Civil

8 MELLON BANK v. SOUTHLAND Mos. HOMES, ET AL.

Procedure. This Court reversed. The Langdeau decision

is absolutely clear on two points: (a) the federal venue

and jurisdictional statutes are mandatory and not permis-

sive, and (b) state jurisdictional and venue statutes do

not control suits brought in state court against national

banks.

Analogous is Radzanower v. Touche Ross & Co., 426

U.S. 148 (1976). That case held that the venue provisions

of the Securities Exchange Act of 1934 did not supersede

the provisions of 12 U.S.C. § 94 in a suit brought against

an out-of-state national bank alleging violation of the

Securities Exchange Act. If an apparently conflicting fed-

eral statute cannot override the provisions of the National

Bank Act, a fortiori a state statute cannot.

Thus, the attempts of the Supreme Court of South

Carolina and the Court of Common Pleas for Sumter

County to invoke state court jurisdiction over Mellon Bank

pursuant to the South Carolina long-arm statute are com-

plete nullities. To allow this decision to stand would

emasculate the forum requirements of the National Bank

Act, both as to its plain language and as interpreted by

this Court.

B. THE SOUTH CAROLINA COURTS INTERPRE-

TATION OF “LOCATED” UNDER 12 U.S.C.°$§ 94

CONFLICTS WITH PRIOR DECISIONS OF THIS

COURT.

In no way and in no sense of the word can Mellon Bank

be deemed “located” in the State of South Carolina as

that term is used in 12 U.S.C. § 94 and 28 U.S.C, § 1348.

As shown in an affidavit in the record in support of the

special appearance of Mellon Bank to contest jurisdiction,

Mellon Bank had no offices, employees, subsidiaries or

affiliates in the State of South Carolina. Basically, all

Mellon Bank did was purchase chattel paper from Associ-

ates, which had acquired the paper from Southland, which

in turn had acquired it from customers of Southland who

PETITION FOR WRIT OF CERTIORARI 9g

had purchased mobile homes. The same situation was

presented in Michigan National Bank v. Robertson, 372

U.S. 591 (1963), where a national bank headquartered

in Michigan purchased installment paper from a house

trailer dealer in Nebraska. Like the petitioner in Robert-

son, Mellon Bank cannot be sued outside its home state

without its consent. To the same effect is National Bank

of North America v. Associates of Obstetrics and Female

Surgery, 425 U.S. 460 (1976). There, an attempt was

made in state court in Utah to sue a national bank head-

quartered in New York. Like the Michigan bank and like

Mellon Bank, the New York bank had no offices or agents

in the state of the attempted forum. This Court vacated

the judgment of the Utah Supreme Court, restating the

doctrine that the provisions of 12 U.S.C. § 94 are man-

datory, not permissive, and do not permit a state court

to reach beyond its boundaries to assert jurisdiction over

a national bank in another state.

Although it does not reach the statutory interpretation

questions, Bank of America v. Whitney Central National

Bank, 261 U.S. 171 (1923), held that jurisdiction could

not be had over a national bank under factual circum-

stances similar to the case at bar. The Whitney Central

National Bank was sued in district court in New York

although its headquarters and banking offices were lo-

cated in New Orleans, Louisiana. Whitney had corre-

spondent relationships with six banks in the State of New

York where it maintained deposit accounts. These corre-

spondent banks, among other things, paid drafts drawn

on Whitney against letters of credit of Whitney issued in

New Orleans, received securities on behalf of Whitney,

and made payment for such securities. This Court held

that Whitney was not “found” within New York State

where it was sued.

C. THE SOUTH CAROLINA COURTS HAVE INTER-

PRETED THE TERM “BRANCH” BANK IN A

MANNER TOTALLY INCONSISTENT WITH FED-

10 MELLON BANK v. SOUTHLAND Mos. HOMES, ET AL.

ERAL STATUTES AND DECISIONS OF THIS

COURT.

The holding by the trial and appellate courts of South

Carolina that Mellon Bank, by purchasing chattel paper

from respondent Associates in South Carolina, created a

branch bank of Mellon Bank in South Carolina is ridicu-

lous on its face. 12 U.S.C. § 36(f) defines a branch bank

as follows:

The term “branch” as used in this section shall be

held to include any branch bank, branch office,

branch agency, additional office or any branch

or place of business located in any State or Terri-

tory of the United States or in the District of

Columbia at which deposits are received, or

checks paid, or money lent. (Emphasis added )

There is nothing in the record below to suggest that Mel-

lon was in any way conducting a banking operation or

operating a branch bank in the State of South Carolina.

There is nothing to indicate that it received deposits, paid

checks or loaned money in that state.

This Court discussed this definition in First National

Bank in Plant City v. Dickinson, 396 U.S. 122 (1969).

That case arose in Florida, where branch banking is pro-

hibited. The national bank, which was headquartered and

chartered in Florida, established an off-premises recep-

tacle for deposit of cash and checks. It operated an ar-

mored car service to bring the material left in the re-

ceptacle to the bank itself. This Court correctly held the

receptacle to be a “branch” under the federal statute

and within the prohibition of the Florida law against

branch banking. Thus, the alleged branch in Dickinson

was an off-premises means of receiving deposits.

It is quite apparent that Mellon Bank was not receiving

deposits, paying checks or lending money in South Caro-

lina. The South Carolina courts have asserted that Mel-

lon Bank was lending money in South Carolina, but this

assertion is not correct. Mellon Bank was purchasing in-

PETITION FoR Writ or CERTIORARI ll

stallment paper which had been given b

mobile homes to a South Carolina Rinker. eye

was not lending money either to the dealer or to the per-

sons who had purchased the mobile homes. It was pur-

chasing an investment as it might purchase bonds. The

affidavit of the officer of Mellon Bank given to the court

in a jurisdiction is quite clear on the point. The

ee quoted the following two paragraphs from the

That Mellon Bank, N.A. maintains no office, re-

tail or wholesale, in the State of South Carolina.

That there are no employees or agents of Mellon

Bank, nor are there any employees or agents of

any subsidiary or affiliate in the State of South

Carolina.

That the Defendant, Mellon Bank, N.A. does pur-

chase commercial paper from a number of fi-

nancing institutions throughout the country as a

regular course of business. One of these financial

institutions from which it purchases commercial

paper is Associates Financial Company, Inc., an

Indiana corporation. Associates Financial does

do business in South Carolina and as a result of

this some of the commercial paper which Mellon

Bank has purchased from Associates Financial

did originate in South Carolina. However, this is

a matter of Mellon Bank doing business with a

corporation which in turn does business in the

res of res Carolina ae than Mellon Bank

oing any business in the St -

ary ate of South Caro

There is no factual basis for saying that Mello

was operating a “branch” in South Carolina in ur leone

the McFadden Act, 12 U.S.C. § 36( c), when, indeed, it

yr a resembling an office in the State of South

12 MELLON BANK v. SOUTHLAND Mos. HoMEs, ET AL.

D. THERE IS NO LEGAL OR FACTUAL BASIS FOR

HOLDING THAT MELLON BANK HAS IN ANY

WAY WAIVED THE PROVISIONS OF 12 U.S.C.

§ 94.

The Supreme Court of South Carolina did not treat the

question of waiver, but the trial court held that Mellon

Bank had waived its immunity from suit in South Carolina.

(App. 29) Apparently, this holding was based upon the

relationship between Mellon Bank and Associates and the

fact that Mellon Bank had enforced installment sale con-

tracts in the courts of South Carolina.

Although this Court has not defined waiver under 12

U.S.C. § 94, the cases which have held that a waiver of

jurisdictional objections had occurred have generally based

the holding upon conduct which occurred after the com-

mencement of the lawsuit. Here, Mellon Bank entered a

special appearance to contest jurisdiction (App. 24-25)

and has contested the jurisdiction of the South Carolina

courts throughout this litigation. This case is thus dis-

tinguishable from those which hold there was a waiver.

See Anno., 1 A.L.R.3d 904.

E. THE STATE SUPREME COURT DECISIONS ARE

APPROPRIATE FOR REVIEW AT THIS TIME.

Although the decisions of the South Carolina Supreme

Court do not dispose of the merits of this case, they con-

stitute a final judgment on the jurisdictional and venue

issues, and it would serve no purpose for this Court to

delay review of the federal questions presented. The state

court decisions are final within the meaning of 28 U.S.C.

§ 1257 and are thus now sipe for review. This case is analo-

gous to Local 438 Construction & General Laborers’ Union

v. Curry, 371 U.S. 542 (1963), wherein this Court stated

as follows:

[Wle believe our power to review this case

rests upon solid ground. The federal question

PETITION FoR Writ or CERTIORARI 18

raised by petitioner in the Georgia court, and

here, is whether the Georgia courts had power to

proceed with and determine this controversy.

The issue ripe for review is not whether a Georgia

court has erroneously decided a matter of federal

law in a case admittedly within its jurisdiction

nor is it the question of whether federal or state

law governs a case properly before the Georgia

courts. What we do have here is a question of the

Georgia court finally and erroneously asserting

its jurisdiction to deal with a controversy which

is beyond its power . . . . 371 U.S. at 548 (cita-

tions omitted).

By similar reasoning this Court has reviewed decisions

of state courts holding that jurisdiction and venue existed

as to national banks although the cases had not yet been

determined on the merits. Citizens & Southern National

Bank v. Bougas, 434 U.S. 86 (1977); Mercantile National

Bank v. Langdeau, 371 U.S. 555 (1963).

The jurisdictional and venue questions here are sever-

able from the merits of the case, and a trial on the merits

would add nothing to the record for the determination of

the jurisdictional and venue questions.

14 MeELLON Bank v. SOUTHLAND Mos, HoMEs, ET AL.

CONCLUSION APPENDIX

ecision of the Supreme Court of South Carolina

linn with the National Bank Act and the decisions of THE STATE OF SOUTH CAROLINA

this Court construing that Act. A reversal of this decision In The Supreme Court

is required.

Wherefore, for the foregoing reasons, the petition for

—- snoele, be guanted. Southland Mobile Homes of South Carolina, Inc.,

Respectfully submitted, a South Carolina Corporation Respondent,

CHARLES W. KNOWLTON v.

L Associates Financial Services Company, Inc.,

FL and Mellon Bank, N.A. of which

FRANCIS P. MOOD Mellon Bank, N.A. is Appellant.

HAMILTON OSBORNE, JR.

BOYD, KNOWLTON, LATE & FINLAY Appeal From Sumter County

12th Floor, SCN Center

Dan F. Laney, Judge

Columbia, South Carolina 29201 an ney, Judg

Opinion No. 20654

Filed April 3, 1978

AFFIRMED

Drawdy Law Offices, of Columbia, for appellant.

Donald E. Rothwell, of Columbia, for Associates

Financial Services Company, Inc.

Weinberg, Warner, Brown & McDougall,

of Sumter, for respondent.

[15]

16 MeELLon BANK v. SOUTHLAND Mos, HoMEs, ET AL.

GREGORY, A. J.: This action was brought by South-

land Mobile Homes of South Carolina, Inc. [Southland]

against Associates Financial Services Company, Inc. [Asso-

ciates Financial] and Mellon Bank, N.A. [Mellon Bank]

to recover damages for breach of contract. Associates Fi-

nancial cross-claimed against its co-defendant, Mellon

Bank. Mellon Bank challenged the circuit court’s jurisdic-

tion by special appearance and the Honorable Dan F.

Laney held the court had jurisdiction.

Mellon Bank filed notice of intention to appeal on Feb-

ruary 26, 1977. The proposed case and exceptions were

served on counsel for Associates Financial within thirty

days thereafter. The proposed case and exceptions were

mailed to counsel for Southland on March 30, 1977, more

than thirty days after the notice of intention to appeal was

filed.

On motion of Southland, Judge Laney dismissed Mellon

Bank’s appeal as to Southland for failing to serve the pro-

posed case and exceptions within the time allowed by

Section 18-9-70, 1976 Code of Laws of South Carolina,

and Circuit Court Rule 49. Mellon Bank appeals from

Judge Laney’s order dismissing its apneal.

Where, as here, the appellant gave timely notice of in-

tention to appeal to this Court but failed to serve its pro-

posed case and exceptions within the time provided by the

statute and Circuit Court Rules, it was the duty of the cir-

cuit judge to dismiss the appeal. Associated Petroleum

Carriers v. Mutual Properties, Inc., 235 $.C. 195, 110

S.E.2d 861 (1959).

AFFIRMED.

LEWIS, C. J., LITTLEJOHN, NESS and RHODES,

J. J., concur.

APPENDIX 17

THE STATE OF SOUTH CAROLINA

In The Supreme Court

Southland Mobile Homes of South Carolina, Inc.,

a South Carolina Corporation, Plaintiff,

V.

Associates Financial Services Company, Inc.,

and Mellon Bank, N.A. of which

Associates Financial Services Company, Inc. is

Respondent,

”

and

Mellon Bank, N.A. is Appellant.

Appeal From Sumter County

Dan F. Laney, Judge

Opinion No. 20655

Filed April 3, 1978

AFFIRMED

Drawdy Law Offices, of Columbia, for appellant.

Weinberg, Bryan, Warner, Brown & McDougall, of

Sumter, for plaintiff.

Donald E. Rothwell, of Columbia, for respondent.

18 Metion Bank v. SOUTHLAND Mos. HoMEs, ET AL.

GREGORY, A. J.: This action was brought by Southland

Mobile Homes of South Carolina, Inc. [Southland] against

Associates Financial Services Company, Inc. [Associates

Financial] and Mellon Bank, N.A. [Mellon Bank] to re-

cover damages for breach of contract. Associates Financial

cross-claimed against its co-defendant, Mellon Bank. Mel-

lon Bank challenged the circuit court’s jurisdiction by

special appearance, and appeals the lower court's order

finding the circuit court has jurisdiction over Mellon Bank.

Mellon Bank served both Southland and Associates Fi-

nancial with notice of its intention to appeal the lower

court’s jurisdictional finding. On the subsequent motion

of Southland, however, the lower court dismissed Mellon

Bank's appeal as to Southland for failing to serve the pro-

posed case and exceptions within the time allowed by

Section 18-9-70, 1976 Code of Laws of South Carolina,

and Circuit Court Rule 49. We affirmed that order in

Southland Mobile Homes of South Carolina, Inc. v. Asso-

ciates Financial Services Company, Inc. and Mellon Bank,

N. A., ..... S.C, ....., ...... §.E.2d ...... (1978) (Op. No.

20654, filed April 8, 1978).

Mellon Bank’s appeal as to Associates Financial was

submitted without oral argument under Rule 29 of our

Rules of Practice.

The sole question presented by this appeal is whether

the circuit court has jurisdiction over Mellon Bank.

On appeal from an order of the lower court finding it

has jurisdiction, this Court will affirm the lower court’s

finding unless it is unsupported by the evidence or influ-

enced by error of law. Jacobs v. Association of Indepen-

dent Colleges and Schools, 265 S.C. 459, 219 S.E.2d 837

(1975).

Mellon Bank is a national banking association organized

under the provisions of Title 12 of the United States Code.

Its principal place of business is located in Allegheny

County, Pennsylvania.

APPENDIX 19

Both jurisdiction and venue in actions against national

banks are governed by federal statutes.

28 U.S.C.S. § 1348 (1977) controls jurisdiction:

The district courts shall have original jurisdic-

tion of any civil action commenced by the

United States, or by direction of any officer

thereof, against any national banking association,

any civil action to wind up the affairs of any such

association, and any action by a banking associa-

tion established in the district for which the

court is held, under chapter 2 of Title 12 [12

U.S.C.S, §§ 21 et seq.], to enjoin the Comptroller

of the Currency, of any receiver acting under his

direction, as provided by such chapter.

All national banking associations shall, for the

purposes of all other actions by or against them,

be deemed citizens of the States in which they

are respectively located.

12 U.S.C.S. § 94 (1977) controls venue:

Suits, actions, and proceedings against any as-

sociation under this title may be had in any dis-

trict, or Territorial court of the United States held

within the district in which such association may

be established, or in any State, county, or munic-

ipal court in the county or city in which said as-

sociation is located having jurisdiction in similar

cases.

Under 28 U.S.C.S. § 1348 Mellon Bank is deemed a citi-

zen of South Carolina and thus subject to the jurisdiction

of our courts if it is located here.

Under 12 U.S.C.S. § 94 venue is proper in “any State,

county, or municipal court . . . having jurisdiction in sim-

ilar cases” where Mellon Bank is located.

In Holson v. Gosnell, 264 S.C. 619, 216 S.E.2d 5389

(1975), cert. denied 423 U.S. 1048, 96 S.Ct. 774, 46

20 MELLON BANK v. SOUTHLAND Mos. HoMEs, ET AL.

L.Ed.2d 636, this Court held that a national bank is

located in any county in this State in which it has a branch

bank. The United States Supreme Court affirmed the prin-

ciple of that holding in Citizens and Southern National

Bank v. Bougas, ...... U.S. _..., 98 S.Ct. 88, 54 L.Ed.2d 218

(1977).

For purposes of national banking association, branch

banks are defined in 12 U.S.C.S. § 86 (1977). Subsection

(£) of that section provides as follows:

The term “branch” as used in this section shall

be held to include any branch bank, branch of-

fice, branch agency, additional office, or any

branch place of business located in any State or

Territory of the United States or in the District

of Columbia at which deposits are received, or

checks paid, or money lent.

The United States Supreme Court discussed 12 U.S.C.S.

§ 36(f) in First National Bank vy. Dickinson, 396 U.S. 122,

90 S.Ct. 337, 24 L.Ed.2d 812 (1969), reh. denied 396 U.S.

1047, 90 S.Ct. 677, 24 L.Ed.2d 693:

Although the definition [12 U.S.C.S. § 36(f)]

may not be a model of precision, in part due to its

circular aspect, it defines the minimum content

of the term “branch”; by use of the word “in-

clude” the definition suggests a calculated in-

definiteness with respect to the outer limits of

the term. However, the term “branch bank” at

the very least includes any place for receiving

deposits or paying checks or lending money apart

from the chartered premises; it may include

more. It should be emphasized that, since § 36(f)

is phrased in the disjunctive, the offering of any

one of the three services mentioned in that defi-

nition will provide the basis for finding that

“branch” banking is taking place. Thus not only

the taking of deposits but also the paying of

APPENDIX 21

checks or the lending of money could equally

well provide the basis for such a finding. 396

U.S. at 185, 90 S.Ct. at _... , 24 L.Ed.2d at 320-

321.

Thus, if Mellon Bank has received deposits, paid checks,

or lent money in a county in this State it will have branch

banked in that county and will be considered located

there.

Based on the affidavit of Bruce Gordon, Associates Fi-

nancial’s operations manager in Sumter County, and an

attached contract between Associates Financial and Mel-

lon Bank dated December 20, 1972, the lower court made

the following findings:

Without question the exhibits and evidence

presented establish that the Associates’ office in

Sumter, South Carolina, received checks made

payable to the Mellon Bank, that it loaned money

of the Mellon Bank and conducted all business

necessary to be completed with the receipt of the

funds and the disbursement of them pursuant to

explicit directions of the Mellon Bank as to all

places of procedure, Upon a review of all of the

facts it would appear that branch banking was

in fact taking place at the Associates’ office for

the benefit of Mellon throughout the tenure of

the contract between these defendants.

The lower court found Mellon Bank had received and

loaned money in Sumter County through Associates Fi-

nancial and thus was branch banking in Sumter County

within the meaning of 12 U.S.C.S. $ 36(f). Additionally,

the lower court found Mellon Bank had sufficient contacts

with this State to permit the exercise of State court juris-

diction under Section 36-2-803, 1976 Code. Since these

findings are supported by, the evidence and were not in-

fluenced by error of law, they are binding on this Court

on appeal. Jacobs, supra.

22 MELLON BANK Vv. SOUTHLAND Mos. HoMEs, ET AL.

Clearly the Sumter County Court of Common Pleas

would have jurisdiction over this action unless Mellon

Bank is granted an exemption by the cited federal statutes.

Under 12 U.S.C.S. § 36(£) Mellon Bank was branch bank-

ing in Sumter County through Associates Financial and

thus is located there. Holson, supra. Accordingly, Mellon

Bank is a citizen of this State and subject to the jurisdic-

tion of our courts under 28 U.S.C.S. § 184, and venue is

proper in Sumter County under 12 U.S.C.S. § 94.

Finding no error in the order of the lower court, we

affirm.

LEWIS, C. J., LITTLEJOHN, NESS and RHODES,

J. J., concur.

DENIAL OF PETITION FOR REHEARING AS TO

OPINION NO. 20654

Petition Denied

S/ J. Woodrow Lewis

S/ Bruce Littlejohn

S/ J. B. Ness

S/ Wm. L. Rhodes, Jr.

S/ George T. Gregory, Jr.

May 10, 1978

[Note: The Petition for Rehearing was denied by the fore-

going order endorsed on the cover of the petition by the

justices of the South Carolina Supreme Court.]

APPENDIX 23

DENIAL OF PETITION FOR REHEARING AS TO

OPINION NO. 20655

Petition Denied

S/ J. Woodrow Lewis

S/_ Bruce Littlejohn

S/ J. B. Ness

S/ Wm. L. Rhodes, Jr.

S/ George T. Gregory, Jr.

(Note: The Petition for Rehearing was denied by the fore-

going order endorsed on the cover of the petition by the

justices of the South Carolina Supreme Court.]

24 MELLON BANK Vv. SOUTHLAND Mos. HOMES, ET AL.

STATE OF SOUTH CAROLINA

County of Sumter

IN THE COURT OF COMMON PLEAS

Southland Mobile Homes of South Carolina, Inc.,

a South Carolina Corporation, Plaintiff,

vs.

Associates Financial Services Co., Inc.,

and The Mellon Bank, Defendants.

SPECIAL APPEARANCE

The Defendant, The Mellon Bank, by and through its

undersigned attorneys, does herewith make a Special Ap-

pearance for the sole purpose of asserting the lack of juris-

diction of this Court over this said Defendant in this

action,

The ground of this objection being, inter alia, that

whereas this Defendant is a National Banking Association

organized under the Provisions of Title twelve (12) of

the United States Code; and whereas this said Defendant

is located in the County of Allegheny, in the State of Penn-

sylvania; and whereas Federal Law requires that suits

against this said Defendant can only be had in a State

Court in the state and county in which the said Defendant

is located, this Court is without jurisdiction over this said

Defendant in this action,

WHEREFORE, this Defendant requests that this Court

determine that this said Defendant is not subject to the

jurisdiction of this Court in this action.

DRAWDY & NICHOLSON

S/ BY: William J. Nicholson

Columbia, South Carolina

June 4, 1975

APPENDIX 25

STATE OF SOUTH CAROLINA

County of Sumter

IN THE COURT OF COMMON PLEAS

Southland Mobile Homes of South Carolina, Inc.,

a South Carolina Corporation, Plaintiff,

vs.

Associates Financial Services Co., Inc.,

and The Mellon Bank, Defendants.

SPECIAL APPEARANCE

The Mellon Bank, by and through its undersigned at-

torneys, having already made a Special Appearance with

respect to the Summons and Complaint of the Plaintiff

for the sole purpose of asserting the lack of jurisdiction

of this Court over The Mellon Bank in this action, does

herewith make a Special Appearance with respect to the

Cross-Complaint of the Associates Financial Services Co.,

Inc., for the sole purpose of asser.ing the lack of juris-

diction of this Court over The Meilon Bank in this action.

The ground of this objection being, inter alia, that

whereas this Defendant is a National Banking Association

organized under the Provisions of Title Twelve (12) of

the United States Code; and whereas this said Defendant

is located in the County of Allegheny, in the State of

Pennsylvania; and whereas Federal Law requires that suits

against this said Defendant can only be had in a State

Court in the State and County in which the said Defend-

ant is located, this Court is without jurisdiction over this

said Defendant in this action.

WHEREFORE, this Defendant requests that this Court

determine that this said Defendant is not subject to the

jurisdiction of this Court in this action.

DRAWDY & NICHOLSON

S/ BY: William J. Nicholson

Columbia, South Carolina

June 20, 1975

96 MELLON BANK v. SOUTHLAND Mos. HoMEs, ET AL.

ORDER OF COURT OF COMMON PLEAS FOR

SUMTER COUNTY FILED FEBRUARY 16, 1977

(Reprinted from transcript of record before Supreme

Court of South Carolina, pp. 6-13)

ORDER (CONFIRMING JURISDICTION )

This matter came before the Court upon the Special

Appearance of The Mellon Bank by and through William

J. Nicholson and Leo A. Dryer, Jr., of the law offices of

J. Wesley Drawdy, on February 18, 1977.

Also present were M. M. Weinberg, Jr., attorney for the

Plaintiff, and Donald E. Rothwell, attorney for Associates

Financial Services Company, Inc.

This action was instituted by Southland Mobile Homes

of South Carolina, a South Carolina corporation, on the

12th day of May, 1975, against Associates Financial Serv-

ices Company, Inc. and The Mellon Bank. Shortly after

service, Associates Financial Services Company, Inc., an-

swered and cross-claimed against The Mellon Bank. The

Mellon Bank then served Notice of Special Appearances

as to the Complainant and the Cross-Complainant.

Mellon takes the position that as a national banking

association organized under the provisions of Title 12 of

The United States Code located in Allegheny County,

Pennsylvania, that Federal Law requires that all actions

against Mellon be brought only in the State and County

in which Mellon is located and that therefore this Court

has no jurisdiction over it.

The Defendant, The Mellon Bank, submitted an affi-

davit of Charles B. Jarrett, Jr., Vice President and Counsel

of Mellon Bank, N.A., dated the 19th day of November,

1976, and the arguments presented by legal counsel for

Mellon basically restated the contents of this affidavit,

and, in addition, set out that Mellon was not subject to

the jurisdiction of this Court due to the immunity pro-

vided by Title 12 of the United States Code.

APPENDIX 27

It is appropriate to make reference to certain portions

of Mellon’s affidavit, as follows:

8. That Mellon Bank, N.A. maintains no office,

retail or wholesale, in the State of South Caro-

lina. That there are no employees or agents of

Mellon Bank, nor are there any employees or

agents of any subsidiary or affiliate in the State

of South Carolina.

9. That the Defendant, Mellon Bank, N.A. does

purchase commercial paper from a number of

financing institutions throughout the country as

a regular course of business. One of these finan-

cial institutions from which it purchases com-

mercial paper is Associates Financial Company,

Inc., an Indiana corporation. Associates Financial

does do business in South Carolina and as a re- |

sult of this some of the commercial paper which

Mellon Bank has purchased from Associates Fi-

nancial did originate in South Carolina. How-

ever, this is a matter of Mellon Bank doing busi-

ness with a corporation which in turn does busi-

ness in the State of South Carolina rather than

Mellon Bank doing any business in the State of

South Carolina.

Both of the paragraphs taken out of the affidavit make

direct reference to the crux of the argument before the

Court.

The Defendant, Associates, submitted an affidavit of

its Operations Manager in Sumter, South Carolina, dated

the 13th day of January, 1977. A review of this affidavit,

together with attachments and exhibits presented con-

clusively shows that the Bank had full control of all ac-

tivities of Associates insofar as any procedures connected

with the Associates’ handling of Mellon’s loans in this

State. It further appears that Associates was merely a

service company and Mellon’s agent for the consummation

298 MELLON BANK v. SOUTHLAND Mos. HoMEs, ET AL.

of the various transactions upon which this action is

founded; and this was buttressed by the deposition testi-

mony of A. H. Henderson, a former manager of Associates

in Sumter. Mr. Henderson fully corroborates the affidavit

submitted by Associates insofar as it relates to the trans-

actions between Mellon and Associates during the entire

tenure of the contract between the parties, and further

shows the relationship between these Defendants as set

out hereinabove.

At the present time the only construction that could be

given to the relationship of the Defendants is that Asso-

ciates was, in fact, the agent of Mellon for the purpose of

buying retail paper on mobile homes and for handling the

transactions with the seller of said mobile home and paper,

all being done subject to the explicit directions of Mellon.

The Defendant, Mellon, apparently relies upon Title 12,

Sec. 94 of the U. S. Code as follows:

“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 es-

tablished, or in any State, County, or municipal

Court in the City or County in which said asso-

ciation is located having jurisdiction in similar

cases. R.S. 5198; Feb. 18, 1875, 80 1, 18 Stat. 320;

Mar. 3, 1911, c. 231, 291, 36 Stat. 1167.”

Therefore, a decision must be made as to whether or

not this particular Section under the facts and circum-

stances as here presented is sufficient to deprive this Court

of jurisdiction.

A construction of this portion of the U.S. Code of Laws

is found in Title 12, Sec. 36(F) of the U.S. Code of Laws:

“The term ‘branch’ as used in this section shall

be held to include any branch bank, branch of-

fice, branch agency, additional office, or any

APPENDIX | 29

branch place of business located in any State or

Territory of the United States or in the District

of Columbia at which deposits are received, or

checks paid, or money lent.”

It is asserted by the Defendant, Associates, and by the

Plaintiff that Mellon’s activities through and by its Agent,

Associates, at the Sumter location did, in fact, constitute

Associates a branch bank of Mellon for the purpose of

this action.

Without question the exhibits and evidence presented

establish that the Associates’ office in Sumter, South

Carolina, received checks made payable to the Mellon

Bank, that it loaned money of the Mellon Bank and con-

ducted all business necessary to be completed with the

receipt of the funds and the disbursement of them pur-

suant to explicit directions of the Mellon Bank as to all

places of procedure. Upon a review of all of the facts it

would appear that branch banking was in fact taking

place at the Associates’ office for the benefit of Mellon

throughout the tenure of the contract between these De-

fendants.

A similar situation was considered by the U. S. Supreme

Court in First National Bank in Plant City, Florida v.

Dickinson, 90 Supreme Court 337 (1969), wherein the

United States Supreme Court decided in a situation very

similar to this that the activities such as conducted by

Associates for and in behalf of Mellon constituted the

establishment of a branch bank. This matter has been

treated in South Carolina in the case of Holsen v. Gosnell,

216 S.E. 2d 539, S.C. decided in 1975 which appears to

adopt the position set out above.

In addition to the establishment of the branch bank,

the position was taken by this Plaintiff and this Defendant,

Associates, that the immunity of Mellon was waived by

the actions of Mellon in that during the tenure of the con-

tract between Mellon and Associates, and prior to this

time, Mellon had been conducting business within the

380 MELLON BANK v. SOUTHLAND Mos. HoMEs, ET AL.

State of South Carolina, had been discounting paper, Jend-

ing money and suing on the contracts. It was shown to the

Court that the public records of the State of South Caro-

lina contain several legal actions involving suits upon

security agreements by Mellon against various Defendants

and under the authority of the decision of the First Na-

tional Bank vs. Morgan, cited at 182 U.S. 141 (1889), the

Bank has exhibited conduct which is inconsistent with the

retention of its immunity from the jurisdiction of this

Court. It has waved such immunity, if, in fact, it did have

the same.

Without question, jurisdiction may be established by

waiver, as has been so decided in various cases throughout

this country; Western National Bank of Amarillo vs. Bobby

Lawrence Hix, et al., Tex. Civ. App. 1976, 533 S.W. 2d

859; Bank of America v. Whitney Central National Bank,

961 U.S. 171 (1923); County of Okeechobee et al. vs.

Florida National Bank of Jacksonville, et al., 112 Fla. 309

150 So. 124 (1983), Joseph Lichtenfels, et al. vs. North

Carolina National Bank, et al., 260 N.C. 146, 132 S.E. 2d

360 (1963) and Continental National Bank et al. vs. Fol-

som, 78 Ga. 449, 3 S.E. 269 (1887).

A review of these authorities easily establishes that this

question of waiver has been considered and decided in

numerous jurisdictions, and these courts have held without

exception that National banks are estopped from claiming

the privilege of immunity when they have performed acts

inconsistent with a retention of immunity, exactly as the

conduct of Mellon is exhibited herein.

In addition to the foregoing, it would appear to this

Court that this matter is completely controlled by the Uni-

form Commercial Code as adopted by this State in 1966.

All of the transactions which arose out of the contractual

agreement entered into between Associates and Mellon

Bank, concern security agreements governed by Title 10

of the South Carolina Code of Laws, as amended. The

testimony, arguments, affidavits, and pleadings before me,

ie

APPENDIX $l

clearly indicate that there is sufficient cause to adjudicate

that there is jurisdiction over the Mellon Bank pursuant

to and under South Carolina Code Sections 10.2-801

through 808 10.2. This statute expressly holds that per-

sonal jurisdiction against an out of state Defendant may

be based on a number of different acts by said Defendant

and it appears from the argument of counsel and Memo-

randum submitted that this statute would apply because

of the fact: “(a) that the Defendant was transacting busi-

ness within this state; (c) that the Defendant committed

a tortious act in whole or in part within this state provided

the Plaintiff's view of the facts are correct and, further

(d) that the Defendant regularly did business and solic-

ited business within this state and derived substantial rev-

enue from services and goods furnished within the state;

(e) Defendant appears to have an interest in real property

within this state; (g) the Defendant appears to have en-

tered into a contract to be performed in whole or in part

within this state;”

It clearly appears that the acts of the Defendant have

brought it clearly within the purview of this statute inso-

far as jurisdiction is concerned. This Court, does, in addi-

tion, make substantial note of the cases of Leroy Ellison,

et al. vs. Rock Hill Printing and Finishing Company, et al.,

347 F. Supp. 4386 (1972), William B. Peeler vs. South

Carolina Helicopters, Inc., et al., 211 S.E. 2d 344 (1975),

and The Duplan Corporation v. Deering Milliken, Inc.,

et al., 334 F. Supp. 703 (1971) in coming to its conclusion

that there does exist jurisdiction, in all particulars, over

The Mellon Bank.

IN PASSING, this Court will make note of what appears

to be at least one substantial land transaction within the

jurisdiction of the State of South Carolina which estab-

lishes the active participation in business transactions in

this State by The Mellon Bank and its subsidiaries.

NOW, THEREFORE, it appears to the Court that the

Mellon Bank is subject to suit in this state by virtue of the

32. MELLON BANK v. SOUTHLAND Mos, HOMES, ET AL.

fact that it has, during the time in question, conducted a

system of branch banking within the borders of this State,

and, further, that if it enjoyed any immunity which under

the more recent statutes does not appear to be the case,

that this immunity has effectively been waived by the

conduct of Mellon as exhibited in the deposition of A. H.

Henderson, and the various affidavits presented. It fur-

ther appears that notwithstanding all of the foregoing,

that the Uniform Commercial Code as adopted by the

State of South Carolina completely controls the situation

between the parties hereto and under this Code, Mellon

is subject to suit in the State of South Carolina.

NOW, THEREFORE, it is herewith

ORDERED, ADJUDGED AND DECREED: That the

motion made by the Defendant, The Mellon Bank, in its

special appearance before this Court, be, and the same is

hereby overruled.

AND IT IS SO ORDERED:

Dated February 16, 1977

Sumter, South Carolina

DAN F. LANEY, JR., JUDGE

THIRD JUDICIAL CIRCUIT

S.C. Code § 36-2-803 (1976).

Personal jurisdiction based upon conduct.

(1) A court may exercise personal jurisdiction over a

person who acts directly or by an agent as to a cause of

action arising from the person’s

(a) transacting any business in this State;

(b) contracting to supply services or things in the State;

APPENDIX 33

(c) commission of a tortious act in whole or in part in

this State;

(d) causing tortious injury or death in this State by an

act or omission outside this State if he regularly does or

solicits business, or engages in any other persistent course

of conduct, or derives substantial revenue from goods used

or consumed or services rendered, in this State; or

(e) having an interest in, using, or possessing real prop-

erty in this State; or

(f) contracting to insure any person, property or risk

located within this State at the time of contracting; or

(g) entry into a contract to be performed in whole or

in part by either party in this State; or

(h) production, manufacture, or distribution of goods

with the reasonable expectation that those goods are to be

used or consumed in this State and are so used or con-

sumed,

(2) When jurisdiction over a person is based solely

upon this section, only a cause of action arising from acts

enumerated in this section may be asserted against him,

and such action, if brought in this State, shall not be sub-

ject to the provisions of § 15-7-100(3).

[Note: S.C, Code § 15-7-100(3) authorizes a change of

venue when the convenience of witnesses and the ends of

justice would be promoted by the change.]