Bank of Belton v. State Banking Bd.

• Decision Date: 31 May 1977
• Docket Number: No. KCD,KCD
• Citation: 554 S.W.2d 451
• Parties: BANK OF BELTON and Frank Blair, Jr., Appellants, v. STATE BANKING BOARD and State of Missouri, et al., Respondents. 27817.
• Court: Missouri Court of Appeals

Page 451

554 S.W.2d 451

BANK OF BELTON and Frank Blair, Jr., Appellants, v. STATE BANKING BOARD and State of Missouri, et al., Respondents.

No. KCD 27817.

Missouri Court of Appeals, Kansas City District.

May 31, 1977.

Motion for Rehearing and/or Transfer Denied June 27, 1977.

Application to Transfer Denied Sept. 12, 1977.

James L. Swarts, Jack C. Terry, Independence, for appellants.

Irven L. Friedhoff, Gen. Counsel, Tony K. Vollers, Asst. Gen. Counsel, Div. of Finance, Jefferson City, for respondents.

Before SHANGLER, P. J., and O'LEARY, SMITH and HANNA, Special Judges.

SHANGLER, Presiding Judge.

This appeal presents a wattlework of bank regulation statutes in apparent conflict.

The litigation stems from an order of the Commissioner of Finance to grant the United Missouri Bank of Hickman Mills (UMB) a facility at Highway 150 and U. S. Highway 71 in Kansas City, Missouri. The grant of application was preceded by the response to the questionnaire from the Commissioner of Finance by the Bank of Belton and its president (appellants here) that they opposed the UMB application. After the grant of the facility by the Commissioner, the Bank of Belton and president gave timely notice of appeal to the State Banking Board but were refused review on the general conclusion that the Board was without jurisdiction under § 361.094 to determine by appeal the grant by the Commissioner of Finance of an application for a bank facility. ¹

The appellants then brought a petition for judicial review of the Banking Board order of dismissal before the circuit court. That attempt at review was also dismissed on the grounds (1) that the Bank of Belton, as a mere competitor of bank facility granted UMB lacked standing to maintain an appeal before the circuit court, and (2) the Banking Board was without authority under § 362.107 to review the approval of a facility application by the Commissioner of Finance. ²

I STANDING OF A COMPETITOR BANK FOR JUDICIAL REVIEW

The orders of the State Banking Board are made "subject to judicial review as provided by law". § 361.095, RSMo 1969. The provisions of law (§ 536.100 of the Administrative Procedure Act) accord standing for judicial review from a final administrative order to:

(a)ny person . . . who is aggrieved by a final decision in a contested case, whether such decision is affirmative or negative in form . . . unless some other provision for judicial review is provided by statute.

The clear language of the full text of § 536.100 spells out two conditions precedent to a standing for judicial review of an administrative order: (1) exhaustion of all administrative remedies provided by law and (2) aggrievement by a final administrative decision. Kostman v. Pine Lawn Bank and Trust Co., 540 S.W.2d 72, 75 (Mo. banc 1976). This statute accommodates the constitutional requirement that final decisions of a judicial nature by an administrative body which affect private rights shall be subject to direct review by the courts. Article 5, § 22 of the Missouri Constitution (1945).

Bank of Belton has exhausted all available administrative remedies, so the question remains whether appellants are aggrieved by the decision of the Board within the meaning of § 536.100. There can be little question that a bank is aggrieved by a decision to allow a competitor facility to operate within the same trade area. The position of Belton Bank falls within the definition in Hertz Corporation v. State Tax Commission, 528 S.W.2d 952 (Mo. banc 1975), l. c. 954(2) that a party is aggrieved when the judgment operates prejudicially and directly with immediate consequence upon a personal or property right or interest. See, also, State ex rel. Pruitt-Igoe Dist. Com. Corp. v. Burks, 482 S.W.2d 75, 78(2) (Mo.App.1972). The economic interest Belton Bank seeks to protect against the administrative order which allows UMB a facility in competition falls within the zone of interests protected by Article 5, § 22 of the Missouri Constitution as defined in § 536.100. Association of Data Processing Service Org., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970).

The petition for judicial review by Belton Bank in the circuit court reveals that from the outset of the Commissioner of Finance questionnaire, appellants opposed the grant of the bank facility to UMB. The petition leaves no doubt that the opposition rests on the ground that the grant of the facility application will result in an increased competition for banking business custom. The law favors free competition among banks, but within a system of regulation. Suburban Bank of Kansas City v. Jackson County State Bank, 330 S.W.2d 183, 187 (Mo.App.1959). That principle is best served by the grant of standing to a competitor adversely affected by new competition authorized by administrative decision. Davis, Administrative Law Treatise, § 22.11 (1958); State ex rel. Consumers Public Service Co. v. Public Service Commission, 352 Mo. 905, 180 S.W.2d 40, 46(6-8) (banc 1944).

The respondent contends, nevertheless, that the banking laws deny a mere competitor even though otherwise aggrieved status for judicial review of a final determination of the State Banking Board. The authorities cited by the parties on this point do not bear on the issue.

Belton Bank relies on Marshfield Community Bank v. State Banking Board, 496 S.W.2d 17 (Mo.App.1973) for the assertion that a competitor bank has the right to appeal a Banking Board decision. That case, however, involved the right of a dissatisfied applicant rather than a competitor for judicial review from such a decision, and does not apply to these facts (l. c. 22(6)).

State Banking Board relies on State ex rel. Rouveyrol v. Donnelly, 365 Mo. 686, 285 S.W.2d 669 (banc 1956) and State ex rel. Belle-Bland Bank v. Donnelly, 287 S.W.2d 872 (Mo.1956) for the view that a competitor bank has no right to judicial review from an administrative issuance of a new bank charter, much less a new facility. These cases were both decided under banking laws which were replaced in 1955 by the legislation now in effect. Each case involves an application for a writ of certiorari by a competitor bank for judicial review of the grant of new bank charter by the Board of Appeals. ³ Under the ante-1955 laws, provisions for judicial review of Board of Appeals decisions were expressly governed by § 386.510 RSMo 1949 and incorporated the review procedures of the Public Service Commission into the banking statutes. That statute provided:

The commission and each party to the action or proceeding before the commission shall have the right to appear in the review proceedings (in the circuit court).

In Rouveyrol, the proposed incorporators of a bank appealed denial by the Commissioner of Finance of the charter and University Bank intervened before the Board of Appeals to oppose the grant of charter. The Board reversed the order of the Commissioner and allowed the new charter. University Bank moved for rehearing before the Board but was denied. University Bank then applied in the circuit court for review by writ of certiorari, but was denied because under the banking laws then extant only an applicant was a party to such proceedings within § 386.510 and there was no provision for intervention by those with other interests. 285 S.W.2d at 676(12-14). Belle-Bland, supra, relies on Rouveyrol to reach the same conclusion on a similar state of facts. These cases do not preclude a competitor bank standing for judicial review on the basis of lack of an interest, but rather on lack of legal authority.

As we have shown, § 536.100 now controls the right to review, and that section has been construed to accord that right to "any person, party or not, who can show himself to be aggrieved by the decision". State ex rel. Pruitt-Igoe Dist. Com. Corp. v. Burks, 482 S.W.2d 75, 78(1) (Mo.App.1972).

The respondent State Banking Board contends nevertheless that the law has less concern for the right of a competitor bank to review an order to operate a limited service facility within the trade area than a grant of a full service bank. This contention refers to the limited services which a facility may provide. When enacted in 1959, the facility statute limited these services to payment of checks, receipt of deposits, withdrawal of deposits, and making change. § 362.107(2)(1) (L.1959 H.B. No. 568 §§ 1, 2). The statute was later amended to allow the facility to make exchange, issue money orders, maintain safe deposit boxes and receive loan payments. § 362.107(1) RSMo Supp.1975. The position of the State Banking Board is that the competitive impact of a limited facility is too slight to justify judicial review of the administrative decision to allow its operation. This argument is refuted by the express language of § 362.107(3)(3) which requires the Commissioner ⁴ in evaluation of a facility application to consider "(w)hether other banking institutions will be seriously injured by the approval of the application for the facility at the location specified".

We conclude that Belton Bank is a person aggrieved under § 536.100 and if otherwise authorized by the banking laws is entitled to judicial review of the grant of the facility to competitor UMB.

II JURISDICTION OF STATE BANKING BOARD

The second ground upon which the circuit court dismissed the Belton Bank petition for review was that the State Banking Board was without authority under § 362.107 to hear an appeal from the decision of the Commissioner of Finance to grant an application for a facility. The text of § 362.107(4) (Amended by Laws 1971) relied on by the circuit court to deny jurisdiction to the review sought by Belton Bank presents the first statutory incongruity:

If the director of finance is not satisfied and denies the application (for facility), the action of the director in granting or denying any such application may be appealed from and be reviewed in the same manner as action by him pursuant to ...