Sterling National Bank of Davie v. Camp

• Decision Date: 27 August 1970
• Docket Number: No. 27988,29424.,27988
• Citation: 431 F.2d 514
• Parties: STERLING NATIONAL BANK OF DAVIE, Plaintiff-Appellant, v. William B. CAMP, Comptroller of the Currency, et al., Defendants-Appellees (2 cases).
• Court: U.S. Court of Appeals — Fifth Circuit

431 F.2d 514 (1970)

STERLING NATIONAL BANK OF DAVIE, Plaintiff-Appellant, v. William B. CAMP, Comptroller of the Currency, et al., Defendants-Appellees (2 cases).

Nos. 27988, 29424.

United States Court of Appeals, Fifth Circuit.

August 27, 1970.

James J. Kenny, Hugo L. Black, Jr., Miami, Fla., for plaintiff-appellant.

John N. Mitchell, U.S.Atty.Gen., Robert W. Rust, U.S.Atty., Lloyd G. Bates, Asst.U.S.Atty., C. Westbrook Murphy, Office of the Comptroller of Currency, Harland F. Leathers, Robert V. Zener, Walter H. Fleischer, Attys., U.S.Dept. of Justice, Washington, D.C., Donald W. Hulmes, Hollywood, Fla., Podhurst & Orseck, Robert Orseck, Aaron Podhurst, Walter H. Beckham, Jr., Miami, Fla., for defendants-appellees.

Before JOHN R. BROWN, Chief Judge, and GOLDBERG and CLARK, Circuit Judges.

GOLDBERG, Circuit Judge:

In this bank charter contest we decline the parties' insistent invitation to resolve a jorum of preliminary issues. Instead, we assume but do not decide that Sterling Bank has standing to raise the issues here involved and proceed directly to the heart of the matter — the validity of the contested bank charter.

The present controversy began in 1968 when a group of individuals sought a charter from the Comptroller of the Currency for a new national bank in Davie, Florida. The Sterling National Bank of Davie protested the application. Hearings were held, and both the proponents and opponents of the new bank presented evidence regarding the propriety of chartering a new bank in Davie. Although several of his subordinates recommended that the charter not be issued, the Comptroller eventually gave preliminary approval for the new charter.

The Sterling Bank, upon learning of this action by the Comptroller, filed this suit seeking to have the charter grant set aside. Sterling asked for various preliminary orders which were denied by the district court, and an interlocutory appeal resulted. Before the matters raised in the interlocutory appeal could be resolved by this court, the district court, upholding the issuance of the charter, granted summary judgment against the plaintiff. Sterling Bank immediately appealed, and this court ordered the two appeals consolidated. Since time has been the solvent of most of the preliminary issues, we relegate to a deserved limbo the whys and wherefores of the preliminary sparring and consider only the main issue — whether or not the Comptroller was authorized to grant the new charter. Agreeing with the district court's holding that the Comptroller acted within his authority, we affirm the decision of that court.

The statutory genesis for chartering a national bank is found in the National Banking Act, 12 U.S.C.A. § 21 et seq. The Act authorizes the Comptroller to grant new certificates of authority to commence banking in the following manner:

"If, upon a careful examination of the facts so reported, and of any other facts which may come to the knowledge of the comptroller, whether by means of a special commission appointed by him for the purpose of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully entitled to commence the business of banking, the comptroller shall give to such association a certificate, under his hand and official seal, that such association has complied with all the provisions required to be complied with before commencing the business of banking, and that such association is authorized to commence such business. But the comptroller may withhold from an association his certificate authorizing the commencement of business, whenever he has reason to suppose that the shareholders have formed the same for any other than the legitimate objects contemplated by this chapter." 12 U.S.C.A. § 27.

It has always been recognized that this legislation confers vast discretion on the Comptroller to approve or disapprove a new charter application. Warren Bank v. Camp, 6 Cir. 1968, 396 F.2d 52; Webster Groves Trust Company v. Saxon, 8 Cir. 1966, 370 F.2d 381; see Ramapo Bank v. Camp, 3 Cir. 1970, 425 F.2d 333; Federal Home Loan Bank Board v. Rowe, 1960, 109 U.S.App.D.C. 140, 284 F.2d 274. As a result of the wide discretion vested in the Comptroller, every court which has considered the matter has concluded that judicial review is limited to determining whether or not the action of the Comptroller was arbitrary, capricious, an abuse of discretion, or otherwise not in accord with the law. Ramapo Bank v. Camp, supra; Warren Bank v. Camp, supra; Citizens Bank of Hattiesburg v. Camp, 5 Cir. 1968, 387 F.2d 375, cert. denied, 391 U.S. 904, 88 S.Ct. 1652, 20 L.Ed.2d 418; Webster Groves Trust Co. v. Saxon, supra.

Evaluating the Comptroller's action in this case, we find not the slightest indication that he overstepped his authority or acted capriciously and arbitrarily. With respect to the question of whether or not there was a reasonable case on the merits for approving a new bank, the district court stated that "the administrative file is replete with evidence which would support either view." We agree. The Comptroller decided that the evidence supported the necessity of the new bank. We are not free to reverse the Comptroller's exercise of discretion and substitute our view of the merits for his. Webster Groves Trust Co. v. Saxon, supra. The administrative file plainly shows that the charter grant involved here was not made arbitrarily, capriciously, or in violation of the law. The grant must therefore be upheld. Citizens Bank of Hattiesburg v. Camp, supra; Webster Groves Trust Co. v. Saxon, supra.

Sterling Bank claims, however, that despite the evidence supporting the Comptroller's action, his award was unlawful because (1) he received ex parte secret information from the charter applicants, and (2) ...