American State Bank, Pierre, Application of, No. 12028

CourtSupreme Court of South Dakota
Writing for the CourtHALL; ZASTROW and MORGAN, JJ., and WUEST and WILDS; HALL, Circuit Judge, sitting for DUNN; WUEST, Circuit Judge, sitting for WOLLMAN; WILDS, Circuit Judge, sitting for PORTER
Citation254 N.W.2d 151
Docket NumberNo. 12028
Decision Date02 June 1977
PartiesApplication of the AMERICAN STATE BANK, PIERRE, South Dakota, for a Bank Charter.

Page 151

254 N.W.2d 151
Application of the AMERICAN STATE BANK, PIERRE, South
Dakota, for a Bank Charter.
No. 12028.
Supreme Court of South Dakota.
Argued March 24, 1977.
Decided June 2, 1977.

Page 152

David A. Gerdes, of May, Adam, Gerdes & Thompson, Pierre, for appellants Interested Party Banks.

William J. Srstka, of Duncan, Olinger & Srstka, Pierre, for respondent American State Bank.

R. Van Johnson, Asst. Atty. Gen., Pierre, for State Banking Commission; William J. Janklow, Atty. Gen., Pierre, on the brief.

HALL, Circuit Judge.

The State Banking Commission (Commission), after hearing, granted a charter to the American State Bank, Pierre, South Dakota, to operate a state bank at Pierre. Existing banking institutions in the Pierre area appealed to the Circuit Court of the Sixth Judicial Circuit from the Commission's decision to grant the charter, and the circuit court affirmed the Commission. The appellants have appealed to this court from the decision of the circuit court. This court affirms the circuit court's decision.

Appellants advance two contentions: (1) Applicant failed to produce substantial evidence on which to base a finding as to the need for a bank in the Pierre-Fort Pierre area; and (2) Due process was denied appellants by the ruling of the Commission admitting the written report of the Director of the Division of Banking.

I.

The Commission, in deciding whether to grant an application for a bank charter, is bound by the Administrative Procedure Act, SDCL 1-26. Valley State Bank of Canton v. Farmers State Bank, 1973, 87 S.D. 614, 621, 213 N.W.2d 459, 463 (hereinafter referred to as Valley State Bank). To be sustained, the Commission's ruling must be supported by substantial evidence. Valley State Bank, 87 S.D. at 624, 213 N.W.2d at 465.

As provided by SDCL 1-26-36, this court may not substitute its judgment of the weight of the evidence for that of the Commission, and may reverse only if the findings, inferences, conclusions, or decisions are:

" * * *ed

(1) In violation of constitutional or statutory provisions;

(2) In excess of the statutory authority of the agency;

Page 153

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Unsupported by substantial evidence on the whole record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion."

Appellants' first contention rests on two conclusions. First, they say a proper reading of Valley State Bank requires the production of substantial evidence on all factors set forth in SDCL 51-17-15, and that if any one of those factors is not established, the decision of the Commission must be reversed. Second, appellants say that there is a lack of substantial evidence in the record to establish the inadequacy of existing facilities, and hence there is no "need" of the community for additional banking facilities (SDCL 51-17-15(4)), and, therefore, the decision of the Commission should be reversed. Both conclusions are erroneous under the guidelines established in Valley State Bank.

As stated in Valley State Bank, SDCL 51-17-15 sets forth factors which must be considered by the Commission in deciding whether to grant a charter. The statutory requirement is for the Commission to consider each of these factors in arriving at a decision based upon the evidence as a whole.

Whether the failure to adduce substantial evidence as to any one factor will prove fatal to an application can be determined only on a case by case basis, reviewing overall policy objectives and viewing the evidence as to all factors to decide whether the application is supported by substantial evidence. This decision must first be made by the Commission.

Among the relevant governing principles is the clear directive that banking is affected with a "public interest." Valley State Bank, supra, citing Wall v. Fenner, 1956, 76 S.D. 252, 76 N.W.2d 722. The overriding purpose of our banking laws is the protection and security of a bank's depositors and creditors. An application for an additional facility must be evaluated by weighing the possibility that an additional banking facility could so adversely affect the existing banking structure of the relevant area as to endanger the security of a significant group of depositors and creditors, against the policy of promoting beneficial competition in a free enterprise economy. If there is substantial evidence to support the decision of the Commission as to this evaluation,...

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8 practice notes
  • State of S.D. Water Management Bd. Approving Water Permit No. 1791-2, Matter of, No. 14296
    • United States
    • Supreme Court of South Dakota
    • 27 Junio 1984
    ...are not raised before the administrative agency at the hearing, they are not preserved for appeal. Application of Am. State Bank, Pierre, 254 N.W.2d 151 (S.D.1977). Accord, Buchholtz v. Iowa Dept. of Public Instr., 315 N.W.2d 789 (Iowa 1982); Amoco Production Co. v. N.D. Indus. Com'n., 307 ......
  • Southern Hills Bank of Edgemont, Application of, Nos. 13738
    • United States
    • Supreme Court of South Dakota
    • 26 Octubre 1983
    ...factors in favor of Southern Hills Bank's application before the Commission. These factors were critical in In re Am. State Bank, Pierre, 254 N.W.2d 151 (S.D.1977) and Valley State Bank of Canton v. Farmers State Bank, 87 S.D. 614, 213 N.W.2d 459 Evidence at the hearing convincingly establi......
  • First National Bank v. South Dakota State Banking Commission, No. 24911.
    • United States
    • Supreme Court of South Dakota
    • 15 Julio 2009
    ...are adequate does not mean that justification for another bank may not exist." Application of American State Bank, Pierre, 254 N.W.2d 151, 153 (S.D.1977) (citation omitted). [¶ 12.] First National challenges the factual findings of the Commission with 769 N.W.2d 852 respect to subsecti......
  • South Lincoln Rural Water System Application for Permit No. 4300-3, Matter of, No. 12997
    • United States
    • Supreme Court of South Dakota
    • 20 Agosto 1980
    ...was not litigated either at the administrative level or on appeal to the circuit court. In Application of American State Bank, Pierre, 254 N.W.2d 151 (S.D.1977), the appellants urged for the first time on appeal a violation of due process. Their only claim to making a timely objection consi......
  • Request a trial to view additional results
8 cases
  • State of S.D. Water Management Bd. Approving Water Permit No. 1791-2, Matter of, No. 14296
    • United States
    • Supreme Court of South Dakota
    • 27 Junio 1984
    ...are not raised before the administrative agency at the hearing, they are not preserved for appeal. Application of Am. State Bank, Pierre, 254 N.W.2d 151 (S.D.1977). Accord, Buchholtz v. Iowa Dept. of Public Instr., 315 N.W.2d 789 (Iowa 1982); Amoco Production Co. v. N.D. Indus. Com'n., 307 ......
  • Southern Hills Bank of Edgemont, Application of, Nos. 13738
    • United States
    • Supreme Court of South Dakota
    • 26 Octubre 1983
    ...factors in favor of Southern Hills Bank's application before the Commission. These factors were critical in In re Am. State Bank, Pierre, 254 N.W.2d 151 (S.D.1977) and Valley State Bank of Canton v. Farmers State Bank, 87 S.D. 614, 213 N.W.2d 459 Evidence at the hearing convincingly establi......
  • First National Bank v. South Dakota State Banking Commission, No. 24911.
    • United States
    • Supreme Court of South Dakota
    • 15 Julio 2009
    ...are adequate does not mean that justification for another bank may not exist." Application of American State Bank, Pierre, 254 N.W.2d 151, 153 (S.D.1977) (citation omitted). [¶ 12.] First National challenges the factual findings of the Commission with 769 N.W.2d 852 respect to subsecti......
  • South Lincoln Rural Water System Application for Permit No. 4300-3, Matter of, No. 12997
    • United States
    • Supreme Court of South Dakota
    • 20 Agosto 1980
    ...was not litigated either at the administrative level or on appeal to the circuit court. In Application of American State Bank, Pierre, 254 N.W.2d 151 (S.D.1977), the appellants urged for the first time on appeal a violation of due process. Their only claim to making a timely objection consi......
  • Request a trial to view additional results

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