Century State Bank v. State Banking Bd. of Missouri

• Decision Date: 05 May 1975
• Docket Number: No. KCD,KCD
• Citation: 523 S.W.2d 856
• Parties: The CENTURY STATE BANK, a Missouri Banking Corporation, and David Babel, Individually and as Correspondent and Agent for Century State Bank and for the Individual Shareholders of the Century State Bank, Appellants, v. STATE BANKING BOARD OF MISSOURI and its Individual members et al., Respondents. 26823.
• Court: Missouri Court of Appeals

Page 856

523 S.W.2d 856

The CENTURY STATE BANK, a Missouri Banking Corporation, and David Babel, Individually and as Correspondent and Agent for Century State Bank and for the Individual Shareholders of the Century State Bank, Appellants, v. STATE BANKING BOARD OF MISSOURI and its Individual members et al., Respondents.

No. KCD 26823.

Missouri Court of Appeals, Kansas City District.

May 5, 1975.

Motion for Rehearing and/or Transfer Denied June 2, 1975.

Application to Transfer Denied July 14, 1975.

Robert Hines, Bear, Hines & Thomas, Columbia, for appellants.

Raymond C. Lewis, Jr., David B. Rogers, Smith, Lewis & Rogers, Columbia, for respondents.

Before WASSERSTROM, P.J., and SHANGLER and TURNAGE, JJ.

TURNAGE, Judge.

Century State Bank (Century) appeals from the judgment of the circuit court affirming an order made by the State Banking Board (Board) which revoked the bank charter granted to Century by the Commissioner of Finance.

An appeal from the granting of the bank charter by the Commissioner of Finance was taken to the State Banking Board by the four existing banks in Columbia, Missouri, and by the State Bank of Hallsville. Century intervened in such appeal and thereby became a party.

It was proposed that Century would become the fifth bank in Columbia and would be located in the north part of town on the road between Columbia and Hallsville. Hallsville is located 11.8 miles northeast of Columbia and this accounts for the interest of State Bank of Hallsville in a charter being granted to Century. The Board held two days of hearings which comprises a transcript of 541 pages. Thereafter the Board entered the following order:

Upon consideration of the record before the Commission and evidence adduced at the hearing the Board finds and concludes:

That the record and evidence adduced does not support a finding that the convenience and needs of the community to be served justify and warrant the issuance of a charter to applicant. Columbia is presently served by four banks, with three separate facilities and another facility under construction. Considerable expansion of banking facilities in Columbia and Boone County have occurred over the past ten years to meet the needs of an expanding population. The evidence shows that the banking needs of Columbia are being adequately served at this time.

The Legislature has pronounced a public policy of continuing to liberalize the expansion of banking services through separate facilities and the Board takes notice of such policy in reaching this decision.

IT IS, THEREFORE, ORDERED; That the decision of the Commissioner of Finance be and it is hereby reversed and that the charter issued to Century State Bank is hereby revoked and held for naught, with the costs of this appeal assessed against applicant pursuant to Sec. 361.095(2) RSMo 1969.

On this appeal Century makes a point of the failure of the Board to make findings of fact and conclusions of law as required by the Administrative Review Act, § 536.090 RSMo 1969, V.A.M.S. Such Section provides 'every decision and order in a contested case shall be in writing, and, . . . shall include and be accompanied by findings of fact and conclusions of law. The findings of fact shall be stated separately from the conclusions of law and shall include a concise statement of the findings on which the agency bases its order'.

The necessity for an administrative agency to make findings of fact and conclusions of law has recently been restated in St. Louis County v. State Tax Commission, 515 S.W.2d 446 (Mo.1974). In that case the court stated at l.c. 452(9, 12), '(i)n the case here for decision there are disputed issues of fact and law which must be resolved by the commission before we may make any pronouncements as a matter of law on the correctness and propriety of the assessor's valuation . . .. 'A court cannot substitute its discretion for the discretion legally vested in the agency, § 536.140, subd. 5, or make a determination of the value of the property and fix the amount of the tax assessment upon record evidence from which different conclusions might be drawn in the exercise of the administrative discretion'.'

In the case at bar, the Board heard evidence from a number of witnesses concerning the adequacy of the banking services being rendered to the Columbia area, the growth, or lack thereof, of the new bank, whether or not the University of Missouri would continue to grow, whether or not the City of Columbia would continue to grow, and the effect of the incorporation of a new bank in Columbia on the existing banks in that City together with its impact on the Bank of Hallsville. Included in the evidence were two research reports from each side, one on each side made by a research company, and one on each side made by a professor from the University of Missouri. As may be surmised, the reports offered by each side agreed with one another, but were diametrically opposed to the reports offered by the other side. Thus, the Board was confronted with a great deal of conflicting evidence. Under § 536.140, the scope of judicial review of administrative decisions is generally limited to a determination of whether the order is supported by competent and substantial evidence upon the whole record. To determine if an order is supported by competent and substantial evidence, it is necessary to know which evidence the Board believed and, therefore, found to be true. If the Board had set out the facts it found to be true, then it would be possible for this court to go through the evidence before the Board and decide if such findings and the conclusion based thereon was supported by competent and substantial evidence. However, without such findings, this becomes an impossible task.

Moreover, in appeals from decisions of administrative agencies, it is not permissible to consider that the agency found the facts in accordance with the result reached. In Stephen & Stephen Properties, Inc., v. State Tax Commission, 499 S.W.2d 798 (Mo.1973) the court stated at l.c. 804(6):

'Appeal from a tax commission decision is unlike appeal from a judgment in a court tried case where review is de novo and the appellate court may assume that all fact issues on which no findings were made were found in accordance with the result reached (rule 73.01(b), V.A.M.R.). In administrative review, the court is bound by the agency's findings if supported by competent and substantial evidence and its scope of review is limited. For a court to infer findings from the ultimate decision of an administrative agency, defeats this limited review provision, as it allows the court to find both the law and the facts on appeal.'

The court further stated at 804(8, 9):

'Five practical reasons have been outlined for the requirement of findings by the Model State Administrative Procedure Act which has been enacted in Missouri. These justifications include: (1) the facilitation of judicial review; (2) preventing judicial usurpation of administrative functions; (3) to protect against careless or arbitrary action (the requirement of findings, evokes 'care on the part of the trial judge in ascertaining the facts.'; (4) to help parties plan their cases for rehearing and for judicial review; and (5) to keep the agencies within their jurisdiction. Davis, Adm. Law, Vol. 2, Sec. 16.05 (1958).' (citations omitted).

Beginning at least as early as Michler v. Krey Packing Co., 363 Mo. 707, 253 S.W.2d 136 (1952), the courts have voiced the necessity for an agency to make findings of fact. The failure of agencies to make adequate findings found expression in the report of the Administrative Law Committee to the Missouri Bar as noted in 29 J.Mo.Bar 563 (1973). In Iron County v. State Tax Commission, 480 S.W.2d 65 (Mo.1972), the court reviewed the...