244 F.Supp. 394 (E.D.Mich. 1965), Civ. A. 23628, Bank of Dearborn v. Saxon

Docket Nº:Civ. A. 23628
Citation:244 F.Supp. 394
Party Name:Bank of Dearborn v. Saxon
Case Date:July 12, 1965
Court:United States District Courts, 6th Circuit

Page 394

244 F.Supp. 394 (E.D.Mich. 1965)

BANK OF DEARBORN, Plaintiff,

v.

James J. SAXON, Comptroller of the Currency, & Manufacturers National Bank of Detroit, Defendants.

Civ. A. No. 23628.

United States District Court, D. Michigan

July 12, 1965

Page 395

Wilber M. Brucker, Wilber M. Brucker, Jr., Detroit, Mich., for plaintiff.

Carson C. Grunewald, of Bodman, Longley, Bogle, Armstrong & Dahling, Detroit, Mich., for defendant Manufacturers Nat. Bank.

Richard S. Beatty, Dept. of Justice, Washington, D.C., John Shepherd, Asst. U.S. Atty., Detroit, Mich., for defendant James J. Saxon.

TALBOT SMITH, District Judge.

This case involves a conflict between a state bank, the Bank of Dearborn, a state banking corporation, a national bank, the Manufacturers National Bank of Detroit, a national banking association, and the Comptroller of the Currency, Mr. James J. Saxon. The controversy is over branch banking.

In the City of Dearborn, Michigan, a new shopping center (Westborn) had been built. Its location was near the intersection of West Michigan Avenue and Outer Drive in the City of Dearborn. Michigan Avenue, the principal business artery of Dearborn, has two commercial focal points. One, the older, is around

Page 396

Mason and Oakwood Avenues, the other, the more recent, is in the area of the Westborn Shopping Center. The latter was characterized in the testimony as 'a tremendous drawing factor' with respect to commercial business.

The defendant Manufacturers Bank had a branch near the intersection of Michigan and Mason Avenues in Dearborn, in or near the older commercial center. It had no branch within a mile of the new commercial center, near Westborn Shopping Center, but, being aware of the business potential of the area, was desirous of having a branch at West Michigan Avenue and Outer Drive. The difficulty with the establishment of a new branch in this area was that it was forbidden by state law. It was known by the defendants that a new branch could not legally be established at the West Michigan and Outer Drive location. This is due to the fact that under Michigan law 'no such branch (could) be established in a city or village in which a state or national bank or branch thereof is then in operation.' 1 And here, in the City of Dearborn, there was not one but were four branches of the state Bank of Dearborn already in operation. Consequently the following plan to place a branch in the desired location was devised by the officials of the defendant bank and acquiesced in and knowingly implemented by the Comptroller: One of the defendant bank's branches (hereafter called the Carlysle branch) would be 'relocated' a short distance away, across the city line, in the township. This would be done at once, for the area's incorporation as a city was in process, after which defendant bank could not establish there a branch. Since this would 'theoretically' (such is the terminology found in defendant Saxon's files) 2 be a new branch (we will call it the Dartmouth branch hereafter) it would leave the old one free to 'move' (according to defendants) to the area of the new shopping center.

Thus the 'technically' new branch would retain substantially all of the business of the old branch, leaving the old one free to 'move' into the new Westborn shopping area, where it could not lawfully have been established in the first place, because of the fact (as defendant bank put it) that 'Existing antiquated state banking regulations will not permit us to open another branch in the City of Dearborn. ' 3

Defendants urge to us that these were two separate and independent transactions, each act legal (which plaintiff denies), each to be considered on its own merits. The argument is belied in clearest terms by the record. The defendant bank considered the two proposals together, successively, and its own resolutions made the 'move' to the shopping center area 'contingent upon' the establishment of the Dartmouth branch. The applications for certificates were made the same day. They were investigated together and reported upon together. Far from being bona fide separate transactions, each treated on its own merits, the proposals were interrelated, intertwined, and interdependent. Mr. Lutz

Page 397

himself, the Chief National Bank Examiner, Chicago, in commenting upon the proposals to defendant Saxon described them as a 'package proposal' 4 which, in truth, they were. Looking at the realities of the situation, there was never any intention on the part of anyone that the 'new' Dartmouth branch would be other than a simple move of the Carlysle branch a short distance down the street, within the same economic area of small homes and modest businesses. In fact, in answer to a request of the Comptroller for an estimate of the deposits and loans of the new Dartmouth branch, the defendant bank furnished, to the penny, the corresponding figures for the Carlysle branch. Nor do we overlook the defendant bank's representations to defendant Saxon that the 'customers of the already successful Telegraph-Carlysle office would be transferred to the proposed new office, which will offer larger and more modern quarters, in the vicinity of Telegraph and Lehigh. The new branch would obviously be profitable immediately.' Even conceding defendant's elaborate explanation that what they really meant by this was that all of the customers themselves who wanted or desired to transfer would be allowed by the bank to transfer, the statement made is revealing as to the intent and expectations of the parties. What was intended was a move. The business of the Dartmouth branch, Mr. Lutz reported to defendant Saxon 'will come from customers formerly served by that (Carlysle) branch. 5

So far as the alleged 'move' of the Carlysle branch to the new shopping center area is concerned, again we have a mis-labeling. Although the word 'move' is not defined in the statutes its meaning in banking circles is well established. It means the actual physical transport of the usable equipment and the customer account records from the old location to the new, so far as is reasonably compatible with the new location and the possibly newly-constructed building. At least it means taking the bulk of the customer's accounts along. This was not the contemplation here and the defendants frankly recognized it. In fact there is in the record much speculation as to how many of the Carlysle customers would go to the new shopping center area to bank. Percentage estimates varied, depending upon whether the plaintiff's witnesses or the defendants' were testifying. But the mere fact that defendant was concerned, in its planning, over how many of its customers would go with it to its new location was both significant and revealing. There was something here other than a mere move. It was the establishment of a new branch in a substantially different area. Since the new location was some distance from the old, and in a predominantly commercial rather than an area of residential-small business, the defendant bank was concerned as to how

Page 398

many of its old neighborhood customers would make the trip into the new area with it. Cutting through the various percentages tendered and getting to the core of the matter, it is perfectly clear that the defendant bank expected most of its old neighborhood customers to stay in the neighborhood with the Dartmouth branch, not to travel with it on its 'move'. Defendant Saxon was aware of all of this. The Summary of Information furnished him pointed out the tremendous business potential of the expanding area in this part...

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33 practice notes
  • 414 A.2d 914 (Md. 1980), 4, Hamilton v. Verdow
    • United States
    • Maryland Court of Appeals of Maryland
    • May 23, 1980
    ...684, 689-690 (N.D.Ill.1965); United States v. Procter & Gamble Company, 25 F.R.D. 485, 490 (D.N.J.1960); Bank of Dearborn v. Saxon, 244 F.Supp. 394, 402-403 (E.D.Mich.1965), aff'd, 377 F.2d 496 (6th Cir. 1967); Kaiser Aluminum & Chemical Corp. v. United States, 157 F.Supp. 939, 947 ......
  • 520 F.Supp. 414 (N.D.N.Y. 1981), 81-CV-340, Mobil Oil Corp. v. Department of Energy
    • United States
    • Federal Cases United States District Courts 2nd Circuit
    • May 15, 1981
    ...(iv) the role of the government in the litigation, see, e. g., Carl Zeiss Stiftung, 40 F.R.D. at 329; Bank of Dearborn v. Saxon, 244 F.Supp. 394, 401-03 (E.D.Mich.1965), aff'd, 377 F.2d 496 (6th Cir. 1967); and (v) the possibility of future timidity by government employees who will be force......
  • 113 F.R.D. 522 (E.D.Tenn. 1986), Civ. 3-85-674, Delozier v. First Nat. Bank of Gatlinburg
    • United States
    • Federal Cases United States District Courts 6th Circuit Eastern District of Tennessee
    • November 10, 1986
    ...must weigh the interests of the litigants and society in accurate judicial factfinding and due process. Bank of Dearborn v. Saxon, 244 F.Supp. 394, 401-03 (E.D.Mich.1965), aff'd 377 F.2d 496 (6th Cir.1967) (" the real public interest under such circumstances is not the agency's interes......
  • 404 F.Supp. 1306 (W.D.Mich. 1975), K 75-331, State Bank of Coloma v. Smith
    • United States
    • Federal Cases United States District Courts 6th Circuit Western District of Michigan
    • November 11, 1975
    ...processing of the branch bank applications reviewed in American Bank & Trust v. Saxon, supra or in Bank of Dearborn v. Saxon, 244 F.Supp. 394 (E.D. Mich. 1965). In American Bank & Trust, the Comptroller, after disapproving an application for a branch bank in a village where the bank......
  • Free signup to view additional results
33 cases
  • 414 A.2d 914 (Md. 1980), 4, Hamilton v. Verdow
    • United States
    • Maryland Court of Appeals of Maryland
    • May 23, 1980
    ...684, 689-690 (N.D.Ill.1965); United States v. Procter & Gamble Company, 25 F.R.D. 485, 490 (D.N.J.1960); Bank of Dearborn v. Saxon, 244 F.Supp. 394, 402-403 (E.D.Mich.1965), aff'd, 377 F.2d 496 (6th Cir. 1967); Kaiser Aluminum & Chemical Corp. v. United States, 157 F.Supp. 939, 947 ......
  • 520 F.Supp. 414 (N.D.N.Y. 1981), 81-CV-340, Mobil Oil Corp. v. Department of Energy
    • United States
    • Federal Cases United States District Courts 2nd Circuit
    • May 15, 1981
    ...(iv) the role of the government in the litigation, see, e. g., Carl Zeiss Stiftung, 40 F.R.D. at 329; Bank of Dearborn v. Saxon, 244 F.Supp. 394, 401-03 (E.D.Mich.1965), aff'd, 377 F.2d 496 (6th Cir. 1967); and (v) the possibility of future timidity by government employees who will be force......
  • 113 F.R.D. 522 (E.D.Tenn. 1986), Civ. 3-85-674, Delozier v. First Nat. Bank of Gatlinburg
    • United States
    • Federal Cases United States District Courts 6th Circuit Eastern District of Tennessee
    • November 10, 1986
    ...must weigh the interests of the litigants and society in accurate judicial factfinding and due process. Bank of Dearborn v. Saxon, 244 F.Supp. 394, 401-03 (E.D.Mich.1965), aff'd 377 F.2d 496 (6th Cir.1967) (" the real public interest under such circumstances is not the agency's interes......
  • 404 F.Supp. 1306 (W.D.Mich. 1975), K 75-331, State Bank of Coloma v. Smith
    • United States
    • Federal Cases United States District Courts 6th Circuit Western District of Michigan
    • November 11, 1975
    ...processing of the branch bank applications reviewed in American Bank & Trust v. Saxon, supra or in Bank of Dearborn v. Saxon, 244 F.Supp. 394 (E.D. Mich. 1965). In American Bank & Trust, the Comptroller, after disapproving an application for a branch bank in a village where the bank......
  • Free signup to view additional results