Bank of America v. Whitney Central National Bank

261 U.S. 171 · Supreme Court of the United States · 1923

Facts

Bank of America, a New York corporation, sued Whitney Central National Bank, which is based in New Orleans, Louisiana. Service of process was made by delivering a summons to Whitney Central's president while he was temporarily in New York. Whitney Central maintained active deposit accounts and conducted numerous varied and extensive transactions in New York through six independent correspondent banks. These transactions included paying drafts, handling securities, making payments, holding securities, and cashing checks. However, Whitney Central itself had no physical place of business, officers, or employees resident in New York.

Procedural history

Bank of America initiated the action in the federal court for the Southern District of New York. The defendant challenged jurisdiction and moved to set aside service, leading to a special master's report. The district court set aside the service, finding the defendant not amenable to process. The case then came before the Supreme Court under § 238 of the Judicial Code, with the question of jurisdiction duly certified.

Issue

The legal question is whether Whitney Central National Bank was doing business within the Southern District of New York in such a manner as to warrant the inference that it was present there, thereby making it amenable to process.

Holding

The court held that Whitney Central National Bank was not doing business in New York in a manner that established its actual presence. Therefore, the service of process was properly set aside, and the lower court's decision was affirmed.

Rule

Jurisdiction over foreign corporations, absent statutory requirement or express consent, requires that the corporation itself does business in the state or district in such a manner and to such an extent that its actual presence there is established. The court reasoned that business conducted by independent correspondent banks, even if extensive, does not constitute the corporation's own business for establishing actual presence. The relationship of the correspondent banks to the defendant was comparable to that of a factor acting for an absent principal, not the defendant itself doing business.

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Case brief last reviewed 2026-09-05. Prepared by CaseReader from the published opinion.