335 F.2d 718 (D.C. Cir. 1964), 18145, Union Sav. Bank of Patchogue v. Saxon

Docket Nº:18145.
Citation:335 F.2d 718
Party Name:The UNION SAVINGS BANK OF PATCHOGUE et al., Appellants, v. James J. SAXON, Comptroller of the Currency, et al., Appellees.
Case Date:June 25, 1964
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit

Page 718

335 F.2d 718 (D.C. Cir. 1964)



James J. SAXON, Comptroller of the Currency, et al., Appellees.

No. 18145.

United States Court of Appeals, District of Columbia Circuit.

June 25, 1964

         Argued Feb. 14, 1964.

Page 719

          Mr. John D. Hawke, Jr., Washington, D.C., with whom Mr. Thurman Arnold, Washington, D.C., was on the brief, for appellants.

         Mrs. Pauline B. Heller, Attorney, Department of Justice, with whom Asst. Atty. Gen., John W. Douglas, Messrs. David C. Acheson, U.S. Atty., and Morton Hollander, Attorney, Department of Justice, were on the brief, for appellee, Saxon.

         Mr. Peter Megargee Brown, New York City, of the bar of the Court of Appeals of New York, pro hac vice, by special leave of court, with whom Mr. John S. Walker, Washington, D.C., was on the brief, for appellee, Tinker National Bank of East Setauket.

         Before DANAHER, BASTIAN and BURGER, Circuit Judges.

         BASTIAN, Circuit Judge:

         Appellants are Union Savings Bank of Patchogue, New York, Patchogue Bank, both state-chartered institutions, and Peoples National Bank of Patchogue, a national banking association chartered and existing under the laws of the United States. All appellants have their principal offices in Patchogue, New York. Appellee Saxon is Comptroller of the Currency. Appellee Tinker National Bank, intervenor in the District Court, is a national banking association with its principal office in East Setauket, Long Island, New York.

         On March 15, 1962, Tinker National Bank applied to the Comptroller of the Currency to open a branch office at 307 East Main Street in an unincorporated

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area immediately contiguous to the incorporated village of Patchogue. Notice of the application was given to the appellant banks by the Superintendent of Banks of New York and by the representative of the Comptroller of the Currency. Each of the three appellant banks filed its protest and stated its grounds for opposition to the application. Investigation of the application for the Tinker branch was duly made and, after intermediate reports, 1 approval for the establishment of the branch was given by the Comptroller. Protests again were made by appellant banks, but ultimately approval of the branch application was given.

         After receiving notice of the approval, counsel for appellant banks requested that a hearing be held on the application prior to the actual issuance of the certificate establishing the branch. The hearing was denied by the Comptroller, final permission to open was given, and the branch office was in fact opened July 5, 1962, at a location close to the originally proposed site.

         Subsequently, on August 2, 1962, appellants instituted this suit in the District Court, seeking declaratory judgment and injunctive relief from the Comptroller's granting of Tinker's application. On cross-motions for summary judgment, the District Court granted the motions of appellees and denied the motion of appellants. This appeal followed.

         Appellants raise essentially two questions: (1) whether appellee Saxon violated § 36(c) of the National Bank Act 2 in granting Tinker's application; and (2) whether appellee Saxon denied appellants due process of law, and violated accepted standards of administrative fairness by basing his approval of Tinker's application in whole or in part on representations made to him at an ex parte meeting requested by Tinker. While the second issue raises a substantial problem in this case, we do not reach that question, in view of our disposition of appellants' first contention.

         Appellants argue that the Comptroller violated § 36(c) of the National Bank Act in granting Tinker's application. That statute provides, in pertinent part:

         '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 * * * (2) at any point within the State in which said association is situated, if such establishment and operation are at the time authorized to State banks by the statute law of the State in question by language specifically granting 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. * * *'

          Thus, under this statute the Comptroller may, in his discretion, permit the establishment of a national bank branch if the statutory law of the particular state would permit a state bank to branch in the same location. On the other hand, in the absence of affirmative state legislation required by § 36(c) no branch may be established, even with the approval of the Comptroller, for 'there is no discretion in the Comptroller to approve the establishment of a branch office at a location prohibited by law.' Commercial State Bank of Roseville v. Gidney, 174 F.Supp. 770, 778 (D.D.C.1959), aff'd, 108 U.S.App.D.C. 37, 278 F.2d 871 (1960). Cf. National Bank of Detroit v. Wayne Oakland Bank, 252 F.2d 537, 541 (6th Cir. 1958).

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          Section 105 of the New York Banking Law, the effect of which is in dispute here, provides:

         '1. * * *

         '(b) A bank or trust company may open and occupy a branch office or branch offices in any city or village located in the banking district in which is located its principal office * * * provided in no event shall a branch be opened and occupied pursuant to this paragraph (b) in a city or village * * * in which is already located the...

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