Blue Ridge Bank v. State Banking Bd.

• Decision Date: 06 May 1974
• Docket Number: No. KCD,KCD
• Citation: 509 S.W.2d 763
• Parties: BLUE RIDGE BANK, Appellant, v. STATE BANKING BOARD, Respondent, Southeast State Bank, Intervenor. 26346.
• Court: Missouri Court of Appeals

Page 763

509 S.W.2d 763

BLUE RIDGE BANK, Appellant, v. STATE BANKING BOARD, Respondent, Southeast State Bank, Intervenor.

No. KCD 26346.

Missouri Court of Appeals, Kansas City District.

May 6, 1974.

Ilus W. Davis, James E. Cooling, Dietrich, Davis, Burrell, Dicus & Rowlands, Kansas City, for appellant.

Norman O. Sanders, Robert E. Gould, Sheridan, Sanders, Carr, White & Mason, Kansas City, for respondent.

Before DIXON, C.J., and SHANGLER and WASSERSTROM, JJ.

SHANGLER, Judge.

The intervenor Southeast State Bank made application under § 362.325, RSMo 1969, V.A.M.S., to the Commissioner of Finance for relocation of its main banking house from 31st and Prospect to U.S. Highway 40 near the Harry Truman Sports Complex in Kansas City, Missouri. The Commissioner after due investigation issued a Certificate of Authority for relocation of the bank. The Blue Ridge Bank, Noland Road Bank, First National Bank of Independence and the Kansas City Chapter of the NAACP appealed the ruling of the Commissioner to the State Banking Board. NAACP did not proceed further. The Board conducted the hearing required by § 361.094, RSMo 1969, V.A.M.S.--at which extensive testimony, graphs, charts, maps, expert studies and statistical data were received--entered findings of fact and conclusions of law and affirmed the decision of the Commissioner. The Blue Ridge Bank, only, sought review in the circuit court of the determination of the Board, and alone appeals the judgment of the circuit court which has affirmed the decision of the Board. The Southeast State Bank, not designated as a party to the appeal, intervened by leave of the circuit court and is here as a respondent.

The respondent Southeast State Bank was established at 3131 Prospect in Kansas City, Missouri, in 1918 and by the end of 1971 had developed capital surplus and undivided profits accounts amounting to approximately $2,500,000. There was evidence that the area in which Southeast is located is among the most densely populated in the city. It is an area, however, in steady decline. The high incidence of crime has been accompanied by marked deterioration of retail business, construction activity, population, income and homes. Thus, although there are 148,000 people in this area, only 50% of Southeast's deposits are derived from the surrounding community. Analysis of the depositors shows that a large proportion of them have abandoned this neighborhood for areas of more growth and stability. Although Southeast has consistently shown a profit in the past, its rate of growth has been substantially less than that of most other banks in the metropolitan area.

The area to which Southeast seeks to relocate is 4.2 miles east of its present site. The proposed location is 2.3 miles from appellant's bank situated at the Blue Ridge Mall Shopping Center. Immediately south of the proposed site is the Harry Truman Sports Complex, while to the north and west is an extensive underground mining area. The general characteristic of the population of that suburban area was described as of medium and medium-high income, and the housing predominantly single-dwellings. There was evidence of recent construction of apartment complexes and expert prediction of significant development of multi-family units in the future.

The voluminous record contains extensive evidence of the parties, much of it countervailing, concerning the demographic characteristics of the proposed relocation area. This evidence, largely statistical, is not susceptible of easy comparison because the experts for the respective parties, in making their studies and conclusions, defined the service area for the proposed location differently. Southeast's expert worked from an arbitrarily chosen, irregularly shaped area determined, roughly, by major geographical features and existing transportation networks, while appellant Blue Ridge Bank, just as arbitrarily, adopted the area encompassed within a circle of 4000 yards radius. ¹ Southeast presented evidence of existing and projected population growth and economic expansion and development in the area. On the basis of this data and American Banking Association standards, their expert predicted a potential of $55,000,000 in time deposits, $13,500,000 in savings deposits, and $8,700,000 in demand deposits from residents of the relocation area which, if only modestly penetrated by Southeast, would ensure a successful operation. The experts concluded that this could be accomplished without taking present business from existing banks, and that the solvency of Blue Ridge Bank would not be endangered by the proposed relocation.

The appellant Blue Ridge Bank questioned the underlying reliability of these projections and presented evidence to show that much of this deposit potential was already adequately served by appellant and other banks. The president of appellant Bank testified that five to six million dollars in deposits would find a bank in the area where Southeast sought to relocate more convenient and would be captured by the relocating bank. It was his judgment that the proposed relocation of Southeast would result in the reduced profitability, and eventual insolvency, of the Blue Ridge Bank's operation. There was other expert testimony by appellant that Southeast would probably lose 50% of its present $16,206,000 in deposits by the proposed relocation, and such a depletion coupled with an increase in expenses would result in eventual insolvency. Another expert for the appellant testified, however, that although Blue Ridge Bank would suffer an erosion of profits as a result of the relocation, insolvency would not result.

The relevant Statute (§ 362.325(7)) requires that if an existing bank wishes to change its location, the Commissioner of Finance shall examine

Whether the convenience and needs of the new community wherein the bank desires to (re)locate are such as to justify and warrant the opening of the bank therein and whether the probable volume of business at the new location is sufficient to insure and maintain the solvency of the bank and the solvency of the then existing banks and trust companies at the location, without endangering the safety of any bank or trust company in the locality as a place of deposit of public and private moneys. . . .

The Commissioner of Finance determined that these statutory requirements had been met and issued the relocation authority. On appeal, the State Banking Board found that the convenience and needs of the community at the proposed site warranted the relocation and that the move would not endanger the satefy or solvency of either the Southeast State Bank or of the other banks in the locality, and affirmed the authority for relocation granted by the Commissioner of Finance. The appellant Blue Ridge Bank asserts that these findings are clearly contrary to the overwhelming weight of the evidence and that the determination of the Board should be set aside. Appellant contends also that the Board erred in admitting certain evidence and that the removal of Southeast from an area where there was an admitted need for banking services was an abuse of discretion and in violation of constitutional standards.

We notice first the point in appellant's brief that: 'The decision of the State Banking Board is in violation of the Due Process and Equal Protection Clauses of the Missouri and United States Constitution.' This point does not explicate how or in what manner the decision of the Board is in violation of constitutional principle or what right of appellant has been infringed, and therefore presents nothing for review. Hilke v. Firemen's Retirement System of St. Louis, 441 S.W.2d 730, 733(3, 4) (Mo.App.1969). This contention is briefly elaborated to assert that the relocation would deny banking services to citizens presently served by Southeast State Bank and therefore 'deprive(s) (such citizens) rights granted to (them) by the Missouri and U.S. Constitutions'. The sum of the matter is, however, that appellant Bank has no standing to assert governmental action unconstitutional because it hurts a neighbor, rather, 'a litigant himself must be hurt by the unconstitutional exercise of power before he may vex the judicial ear with complaints'. State ex rel. Crandall v. McIntosh, 205 Mo. 589, 103 S.W. 1078, 1082(1) (banc 1907); State ex rel. Toliver v. Board of Education of City of St. Louis, 360 Mo. 671, 230 S.W.2d 724, 730(8) (1950).

We consider next the contention that inflammatory, prejudicial and hearsay evidence was received by the Board over the objection of appellant. This complaint is differentiated into two particulars: (1) the admission of a survey and map of crime in the Kansas City area generally and of the site of Southeast State Bank's present location particularly and (2) the admission into evidence of the file of the Commissioner of Finance.

The map and survey were hearsay and should not have been received. This evidence was presented by the president of respondent Southeast State Bank from an issue of the Kansas City Star. The witness had not prepared the exhibit, could not say who had, and was otherwise unable to establish its authenticity. For reasons which we expound fully later, the crime rate of the present location of respondent Bank was simply not a material factor to be considered in allowing relocation under § 362.325 and therefore any error in the admission of the exhibit was harmless. Farmers Loan & Trust Co. v. Southern Surety Co., 285 Mo. 621, 226 S.W. 926, 936(13) (1920). Rulings on evidence immaterial to the issues or not affecting the merits are not ground for reversal. Pyle v. Kansas City Light & Power Co., 246 S.W. 979, 987(15) (Mo.App.1922) (reversed on other grounds, 291 Mo. 532, 237 S.W. 1021 (banc 1922)). Nor is there any showing that this evidence entered into the Board's determination that the statutory criteria for relocation had been met.

The second evidentiary objection relates to the...