Bank of Haw River v. Saxon

Decision Date18 August 1966
Docket NumberNo. C-124-G-65.,C-124-G-65.
Citation257 F. Supp. 74
CourtU.S. District Court — Middle District of North Carolina
PartiesBANK OF HAW RIVER, Plaintiff, v. James J. SAXON, Comptroller of the Currency of the United States, Defendant, and First National Bank of Eastern North Carolina, Intervener.

Jordan, Morris & Hoke, Raleigh, N. C., for plaintiff.

William H. Murdock, U. S. Atty., for Middle Dist. of North Carolina, and Richard S. Beatty, Atty., Dept. of Justice, Washington, D. C., for defendant.

Carl V. Venters, Jacksonville, N. C., and Ross, Wood & Dodge, Graham, N. C., for intervener.

FINDINGS OF FACT, CONCLUSIONS OF LAW AND OPINION

EDWIN M. STANLEY, Chief Judge.

The plaintiff, Bank of Haw River, instituted this action on July 14, 1965, seeking a preliminary and permanent injunction against the defendant, James J. Saxon, Comptroller of the Currency of the United States, from issuing a certificate authorizing the First National Bank of Eastern North Carolina to establish and operate a branch in Graham, Alamance County, North Carolina. First National Bank of Eastern North Carolina was allowed to intervene and file answer.

The case was tried to the Court without a jury on April 25 and 26, 1966. At the conclusion of the trial, the parties were given specified times within which to file requests for findings of fact and conclusions of law and briefs.

After giving due consideration to the evidence offered by the parties, including exhibits, requests and briefs filed, and argument of counsel, the Court makes and files herein its Findings of Fact and Conclusions of Law, separately stated:

1. The plaintiff, Bank of Haw River, is a State bank organized and existing under the laws of the State of North Carolina, with its principal office in Haw River, an unincorporated community in Alamance County, North Carolina. In addition to its principal office, plaintiff operates a branch in what is known as the Cum-Park Plaza Shopping Center in the City of Burlington, Alamance County, North Carolina, and a branch in Glen Raven, adjacent to the City of Burlington.

2. The defendant, James J. Saxon, is the Comptroller of the Currency of the United States.

3. The intervener, First National Bank of Eastern North Carolina, hereinafter referred to as "First National," is a national banking association organized and existing under the laws of the United States, with its principal office in New River Shopping Center, Jacksonville, Onslow County, North Carolina. In addition to its principal office, it operates seventeen branches throughout eastern North Carolina, one branch in the Town of Boone, Watauga County, in western North Carolina, and a depository facility on the United States Marine Corps Base Air Facility, New River, North Carolina.

4. The Bank of Haw River was organized in 1911 with a capital of $10,000.00. On April 5, 1966, the bank had a capital of $600,000.00, deposits of $4,500,000.00, loans of $3,075,000.00 and total resources of $5,375,000.00.

5. First National was organized in 1952 with a capital of $10,000.00, surplus of $25,000.00, and undivided profits of $25,000.00. At the end of 1965, the bank had a capital of $1,900,000.00, deposits of $35,311,362.00, and loans of $23,203,519.00.

6. On June 17, 1965, First National made application to the Comptroller for permission to operate a branch bank in the City of Graham, North Carolina. Graham is approximately 165 miles from the home office of First National.

7. On July 7, 1965, the Bank of Haw River filed with the Comptroller a request that it be furnished with certain information with respect to the application of First National, and that it be heard in opposition to the application. It further requested that a record be made of the hearing and that the decision on the application contain findings of fact and conclusions of law.

8. On July 14, 1965, this action was filed seeking to preliminarily and permanently enjoin the Comptroller from issuing a certificate authorizing First National to establish and operate a branch in Graham. Accompanying the complaint was a motion for preliminary injunction.

9. On July 16, 1965, an order was entered allowing the First National to intervene and file answer.

10. On August 26, 1965, the parties filed with the Court a stipulation that the Comptroller would notify the plaintiff of his intention to issue a certificate authorizing First National to establish and operate a branch in Graham, if he decided to issue such certificate, and that the Comptroller would not issue such certificate until the Court had heard the pending motion for a preliminary injunction.

11. On October 14, 1965, the parties stipulated that all further proceedings in this action be stayed pending a decision by the Court of Appeals for the Fourth Circuit in the case of First National Bank of Smithfield, North Carolina v. Saxon.

12. On January 21, 1966, plaintiff applied to the Court for a hearing on its motion for preliminary injunction, stating that the Comptroller had, on January 19, 1966, given notice of his intention to issue a certificate authorizing First National to establish and operate a branch in Graham.

13. On February 18, 1966, First National filed a motion to dismiss or, in the alternative, for summary judgment. A similar motion was filed by the Comptroller on February 21, 1966.

14. On March 17, 1966, following a hearing, orders were entered (1) restraining the Comptroller, pending a de novo hearing, from issuing a certificate evidencing his approval of First National to establish and operate a branch in Graham, (2) granting the plaintiff a de novo hearing on the application of First National to establish a branch bank in Graham, and (3) denying the motions of the Comptroller and First National to dismiss or, in the alternative, for summary judgment.

15. Pursuant to the request of the plaintiff that the Comptroller hold a hearing on the application of First National, the Comptroller wrote counsel for plaintiff on September 30, 1965, advising that the hearing would be held on October 11, 1965, in the Main Treasury Building, Washington, D.C.

16. At the opening of the hearing, the Comptroller announced that no witness would be subject to cross examination without the consent of the witness and that no witness would be sworn, and First National announced that it would offer no evidence in support of its application. Plaintiff then presented six witnesses and a number of exhibits, all to the effect that there was no public interest, need or necessity for additional bank facilities in Graham. This is the only hearing of any type ever conducted in connection with the application.

17. On January 13, 1966, the Comptroller wrote First National a letter advising that its application to establish a branch at Graham had been approved. The letter did not recite any facts whatever justifying the action of the Comptroller.

18. On February 21, 1966, the Comptroller following his approval of the application of First National, filed with the Court a certified copy of his administrative file. The file contains nothing more than the application of First National to establish a branch at Graham, supplemental information furnished by First National, a protest filed by the National Bank of Alamance, a commercial bank in Graham, the report of an investigation conducted by the Comptroller, supplemental information developed by the Comptroller, and documents furnished by the plaintiff in connection with its protest. The report of the investigation conducted by the Comptroller contains little information, if any, bearing on the question before him. Among other things, the report observed that First National had been establishing branches quite rapidly in view of its size and earnings, but that its branches were believed to be on a profitable basis, except for the branch most recently opened. It was further observed that the information submitted by First National appeared to be reasonably accurate since it was generally taken from brochures of the Burlington-Alamance County Chamber of Commerce. The examiner was unable to obtain a satisfactory explanation as to why there had been a substantial decrease in retail and wholesale trade in the Graham area between 1958 and 1963. It was estimated that First National would earn a profit of $10,000.00 during its first year of operation, and that this would increase to $50,000.00 during the third year. One of the unfavorable factors found was the disadvantage of First National operating a branch office a distance of 165 miles from its home office, together with such problems as might be presented by local competition. The summary and recommendations of the investigator were deleted or blocked out before the file was transmitted to the Court, and is thus not available. The supplemental information developed by the Comptroller, which contains the...

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8 cases
  • Saxon v. Georgia Ass'n of Independent Ins. Agents, Inc.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • October 28, 1968
    ...v. Saxon, 261 F.Supp. 247 (D.D.C.1966); Marion National Bank of Marion v. Saxon, 261 F. Supp. 373 (N.D.Ind.1966); Bank of Haw River v. Saxon, 257 F.Supp. 74 (M.D. N.C.1966); Bank of Sussex County v. Saxon, 251 F.Supp. 132 (D.N.J.1966); Citizens Bank of Hattiesburg v. Saxon, No. 1998 (S.D.Mi......
  • Ramapo Bank v. Camp, 18022 and 18117.
    • United States
    • U.S. Court of Appeals — Third Circuit
    • April 17, 1970
    ...391 U.S. 904, 88 S.Ct. 1652, 20 L.Ed.2d 418 (1968); Peoples Bank of Trenton v. Saxon, 373 F.2d 185 (6 Cir. 1967); Bank of Haw River v. Saxon, 257 F.Supp. 74 (M.D.N.C.1966). 38 Opinion of Shaw, J., supra, pp. 39 See, e. g., First National Bank of Smithfield, North Carolina v. Saxon, 352 F.2d......
  • Wyoming Bancorporation v. Bonham, 4363
    • United States
    • Wyoming Supreme Court
    • October 16, 1974
    ...F.Supp. 643, 647, and Howard Savings Institution of Newark v. Howell, 32 N.J. 29, 159 A.2d 113, and the case of Bank of Haw River v. Saxon, D.C.No.Car., 257 F.Supp. 74, 79. The judgment of the trial court is McCLINTOCK, Justice (dissenting). As I understand the majority opinion, it holds th......
  • First National Bank of Crown Point v. Camp
    • United States
    • U.S. District Court — Northern District of Indiana
    • May 10, 1971
    ...the Comptroller were unilateral and arbitrary. See Bank of Dearborn v. Saxon, 244 F.Supp. 394 (E.D.Mich., 1965); Bank of Haw River v. Saxon, 257 F.Supp. 74 (M.D. N.C., 1966); and Peoples Bank of Trenton v. Saxon, 373 F.2d 185 (6th Cir. 1967). Neither of these situations is present Cases in ......
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