American Bank & Trust Company v. Saxon

• Decision Date: 28 February 1967
• Docket Number: No. 17140.,17140.
• Citation: 373 F.2d 283
• Parties: AMERICAN BANK & TRUST COMPANY, a Michigan Banking Corporation, Plaintiff-Appellant, v. James J. SAXON, Comptroller of the Currency of the United States, the Dart National Bank of Mason, a National Banking Association, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

373 F.2d 283 (1967)

AMERICAN BANK & TRUST COMPANY, a Michigan Banking Corporation, Plaintiff-Appellant, v. James J. SAXON, Comptroller of the Currency of the United States, the Dart National Bank of Mason, a National Banking Association, Defendants-Appellees.

No. 17140.

United States Court of Appeals Sixth Circuit.

February 28, 1967.

Richard B. Foster, Lansing, Mich. (Foster, Campbell, Lindemer & McGurrin, Theodore W. Swift, Richard B. Foster, Jr., Edmund E. Shepherd, Lansing, Mich., on the brief), for appellant.

John P. O'Brien, Lansing, Mich. (Marshall, O'Brien & Skehan, Lansing, Mich., on the brief), for appellee Dart Nat. Bank.

David L. Rose, Atty., Dept. of Justice, Washington, D. C. (John W. Douglas, Asst. Atty. Gen., Edward Berlin, Atty., Dept. of Justice, Washington, D. C., Harold R. Beaton, U. S. Atty., Grand Rapids, Mich., on the brief), for appellee Saxon, Comptroller.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Maurice M. Moule, Asst. Atty. Gen., Lansing, Mich., on the

brief for Michigan Attorney General, amicus curiae, on behalf of State Banking Commissioner.

Before O'SULLIVAN and CELEBREZZE, Circuit Judges, and CECIL, Senior Circuit Judge.

O'SULLIVAN, Circuit Judge.

On March 20, 1964, the Dart National Bank, a national bank of Mason, Michigan, filed application with the Comptroller of the Currency for authority to establish a branch bank in the unincorporated village of Holt in Delhi Township, Ingham County, Michigan. The application was opposed by American Bank & Trust Company, a Michigan Banking Corporation, which was already operating a branch bank in that village. The relevant Federal and Michigan statutes forbade Darts opening a branch in the same village as American's existing branch. 12 U.S.C.A. § 36(c) (2); M.S.A. § 23.762, Comp.Laws 1948, § 487.34. At the suggestion of the Comptroller, Dart amended its application so as to adopt a location across the street from that set out in its original application. Thereupon, on July 14, 1964, the Comptroller, upon his determination that Dart's secondly chosen location was in a village separate from the village of Holt, issued the desired authorization.

Plaintiff-appellant, American Bank & Trust Company, brought this suit for declaration of the illegality of, and to enjoin Dart from operating under, the certificate issued to Dart by the Comptroller. If Dart's new branch and American's existing branch are in the same village, American is entitled to the relief sought. After a trial on the merits, the District Judge sustained the Comptroller's finding and dismissed the complaint. We reverse.

The law of the case is clear. In Michigan the question of whether an area is a village is primarily one of fact. Wyandotte Savings Bank v. State Banking Commissioner, 347 Mich. 33, 47, 78 N.W.2d 612, 620 (1956). And a determination by the Comptroller that a particular location within the state constitutes a village is beyond judicial interference, absent a holding that such determination is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, Community National Bank of Pontiac v. Saxon, 310 F.2d 224, 226, 227 (CA 6, 1962); we will not, therefore, set aside a finding by a District Judge that an involved determination by the Comptroller is supportable, so tested, unless we conclude that such finding is clearly erroneous.

The Comptroller has of necessity broad discretion in determining what is and what is not a village, for the concept of a village, as announced by the Michigan court, suggests the difficulties presented to him and the various factors he must weigh:

"The word `village\' is not a technical word, or one having a peculiar meaning, but it is a common word in general usage with an ancient lineage. It is merely an assemblage or community of people, a nucleus or cluster for residential and business purposes, a collective body of inhabitants, gathered together in one group." Wyandotte Savings Bank v. State Banking Commissioner, supra, 347 Mich. at 41, 78 N.W.2d at 617.

"It is a settlement, a centralized populous area having a general common residential and business activity serving the particular area or district * * *. It has been analyzed as a `trading area\' distinct from that assigned to `municipality\'." Bank of Dearborn v. State Banking Commissioner, 365 Mich. 567, 571, 114 N.W.2d 210, 212 (1962).

Under Michigan law an area's status as a village is not affected by its lack of incorporation or established and precise geographical boundaries, Wyandotte Savings Bank v. State Banking Commissioner, supra; Bank of Dearborn v. State Banking Commissioner, supra. According to the Michigan Attorney General a village does not even need to have a name, Opinion, Attorney General of Michigan, No. 3145 Vol. 1, 1957, p. 503. We, however, do not read this law to mean that any piece of ground is necessarily a village because the Comptroller says it is.

In its initial application, Dart asked for permission to open a branch admittedly in the same village as that wherein the appellant's bank was located — indeed, as the Comptroller's field examiner concluded, in the very "core of the community" of Holt. Under the Act of Congress, 12 U.S.C.A. § 36(c) (2),¹ and the Michigan statute, M.S.A. Sec. 23.762,² this could not be authorized by the Comptroller of the Currency. But a solution to the problem was found. Dart, at the suggestion of the Comptroller, moved its site 66 feet from the east to the west side of Aurelius Road, and some distance to the north of its originally proposed site. The Comptroller then declared that the other side of the street was in a separate village, a village not served by any other branch bank.³

The area involved in this litigation is in Delhi Township which is south of and contiguous to the City of Lansing, Michigan; the only "place" identified within this township was the unincorporated village of Holt. Its population, some 7,000 people, was served by the same school district, the same sewer district, the same postal district and the same telephone exchange. Until its dissection by the Comptroller, this village lay astride Aurelius Road. Business places, schools, churches and other physical structures identified with the village name of Holt were located on both sides of the street. Prior to the beginning of Dart National Bank's activity to establish a branch in Holt, a new shopping center had been projected to be located in the southern half of the triangle comprising the center of the village. The first proposed site for Dart's new bank was on the east side of Aurelius Road and apparently within the area of this shopping center. It is fair to assume that this choice of a site was prompted by Dart's desire to be in the shopping center, which was described in its initial application to the Comptroller as being "the recognized center of this rapidly developing community."

A history of the subsequent administrative proceedings demonstrates why Dart found it necessary to choose another location, and underscores why we must conclude that the Comptroller's decision to approve the new site must be regarded as arbitrary and unjustifiable. On March 17, 1964 the Dart National Bank, in a letter to the Seventh Federal Reserve District at Chicago, expressed its desire to apply for permission to establish a branch within the "confines of an unincorporated village, Vevay (sic) Township, Ingham County, Michigan." This was followed by an application on a Treasury Department form describing the proposed location in Delhi Township at the "N.E. corner of Delhi and Aurelius Roads; 450 feet No of said corner, E side of Aurelius Road," with the comment that "the name `Holt' has come to be given to a central part of Delhi Township. It is nothing but a name * * *. This area has all the characteristics of a city or village, homes, businesses, etc., but it is not." In the summary of information furnished by the Dart bank for approval of its original site, it was reported that the existing branch of the American Bank and Trust Company was the only banking facility "within the service area in which we seek our branch." Additional contents of such summary asserted that "the proposed shopping center location for the new branch near the intersection of Delhi (Holt Road) Avenue and Aurelius Road is fast becoming the recognized center of this rapidly developing community;" and that Aurelius Road was becoming "the main north and south artery for this community." (Emphasis supplied.) Attached to the summary was a letter from the Supervisor of Delhi Township expressing a view that "a branch here in Holt would be a success." (Emphasis supplied.)

The foregoing was followed by a survey of the area of Dart's proposed site by a National Bank Examiner and a Regional Comptroller of the Currency. The report made by these individuals referred to the site as being in the community of Holt and went on to say that the "triangle formed in the near center of Holt by Cedar Street, Delhi Avenue and Aurelius Road is the center of business for the community"; "the proposed branch is to be located within a shopping center yet to be built * * *. The shopping center will be situated on a 15 acre plat of ground which is ideally situated in the heart of the present community of Holt." (Emphasis supplied.) This report was filed April 29, 1964, and in our view clearly established that Dart's proposed branch was to be located in the center of the village of Holt.

Previously, on April 3, 1964, American Bank & Trust, by letter to the Regional Comptroller, objected to the establishment of Dart's proposed branch in the village of Holt on the ground that American's branch was already there. The letter requested a "formal hearing" on its opposition. On May 8 following, representatives of American called at the office of a Deputy Comptroller of the Currency. That office's short memorandum of the conference then had contains no comment or...