Chemical Bank & Trust Co. v. Falkner, A-9448
| Decision Date | 26 June 1963 |
| Docket Number | No. A-9448,A-9448 |
| Citation | 369 S.W.2d 427 |
| Parties | CHEMICAL BANK & TRUST COMPANY, Relator, v. Honorable J. M. FALKNER, Banking Commissioner of Texas, Respondent. |
| Court | Texas Supreme Court |
Dyche, Wheat, Thornton & Wright, Houston, Jake Jacobsen, Austin, for relator.
Waggoner Carr, Atty. Gen. of Texas, Dudley D. McCalla, Asst. Atty. Gen., for respondent J. M. Falkner, Banking Com'r of Texas.
Graves, Dougherty, Gee & Hearon, Austin, Baker, Heard & Elledge, Willis E. Gresham, Houston, for intervenors.
The Chemical Bank & Trust Company as relator seeks a writ of mandamus to compel J. M. Falkner, State Banking Commissioner, to issue to it a certificate of authority to operate a bank in Harris County, Texas.
The facts are: The First Board of Directors of Chemical Bank & Trust Company, relator, applied for a state bank charter in the City of Houston, the application was approved by the State Banking Board, and the State Banking Commissioner delivered to relator a certified copy of the articles of association of the new bank. Two Houston banks, River Oaks Bank & Trust Company and the University State Bank, who protested the granting of the charter, filed suit in the 53rd District Court of Travis County appealing from the order of the State Banking Board. Service was had on the State Banking Board by serving J. M. Falkner, a member. Relator, after receiving the certified copy of the articles of association, proceeded with all required steps necessary to entitle it to a certificate of authority to start in business. The Commissioner, although he admitted that all necessary requirements had been met by relator, refused to issue the certificate of authority because of the pendency of the suit appealing from the Board's order. Relator then filed a motion for leave to file a petition for writ of mandamus in this court to require the Commissioner to issue the certificate of authority.
Subsequent to the action of the court in granting the motion for leave to file, the River Oaks Bank & Trust Company and the University State Bank filed a first amended original petition in the suit which they had filed against the Board in the 53rd District Court of Travis County.
In this amended petition, J. M. Falkner, as Banking Commissioner, was made a party. In addition, the Chemical Bank & Trust Company and its First Board of Directors were made parties. Although in said amended petition there was request for a restraining order and injunction against the State Banking Board and the Banking Commissioner enjoining the issuance of the certificate of authority, no such order has been issued.
The two banks, plaintiffs in the district court case, filed a motion for leave to intervene in the cause before this court, which was granted.
The principal question before us for decision is whether the Banking Commissioner has the authority and the duty to issue the certificate of authority to relator even though an appeal has been taken from the State Banking Board's order granting the charter to relator. We answer this question in the affirmative.
The question is clearly posed in a statement in a letter from J. M. Falkner, Commissioner, to the correspondent for the Chemical Bank & Trust Company under date of February 7, 1963, as follows:
'It is clear from the wording of Art. 342-305, V.C.S. that I, as a member of the State Banking Board, in my ex officio capacity as Banking Commissioner of Texas, have fully performed my duties as a member of the State Banking Board after the application for the bank charter has been acted upon by the Board. When such application is granted, it then becomes my duty as Banking Commissioner of Texas, and not as a member of the Board, to approve, issue and deliver to the incorporators a certified copy of the Articles of Association upon the presentation to me of satisfactory evidence that all capital funds have been fully paid in in cash, which has been done in this case.
Intervenors contend that this court has no jurisdiction to issue the writ of mandamus against the Banking Commissioner because he is not an officer within Article 1733 of the Revised Civil Statutes. That article reads:
.'
It is our opinion that the Banking Commissioner is an officer of the state government and is subject to writ of mandamus by this court by authority of the above statute. In determining whether the Commissioner is an officer of the state government, it is necessary to refer to the statute creating the office of Banking Commissioner. In 1943 the Texas Banking Code was passed by the Legislature. (All reference to articles in this opinion are to Vernon's Annotated Civil Statutes.) Article 342-103 established the Finance Commission of Texas, consisting of nine members divided into two sections, one of which was the banking section, consisting of six members. It is provided that the banking section shall serve as an advisory board to the Commissioner as to general policies and shall have such other duties and powers and authority as may be conferred upon them by law. The banking section shall make thorough and intensive study of the Texas banking and building and loan statutes to maintain the maximum degree of protection to depositors and stockholders, and shall report every two years to the Legislature by filing with the clerks of the Senate and House of Representatives the results of its study, together with its recommendations. The banking section may promulgate certain rules and regulations for the conduct of state banks. Article 342-113. The Banking Commissioner presides over the meetings of the Finance Commission and each section thereof, but shall not vote except in the case of a tie, and does not preside when the meeting involves the selection of a Banking Commissioner. Article 342-111.
The Finance Commission shall, with the advice and consent of the Senate, elect a Commissioner who shall serve at the pleasure of the Finance Commission. The Commissioner shall be an employee of the Finance Commission and subject to its orders and directions. Article 342-207 provides as follows: 'The Commissioner shall supervise and shall regulate, as provided in this Code, 1 all state banks and shall enforce the provisions of this Code in person or through the Deputy Commissioner, the Departmental Examiner or any examiner. * * *'
The powers given the Commissioner by the Code to carry out his duties of supervising and regulating state banks are numerous-so many it would burden this opinion to enumerate them. Suffice it to say that the Commissioner's control over state banks is extensive. While the state does say the Banking Commissioner is an 'employee of the Finance Commission and subject to its orders and directions', he is far more than an employee of the Finance Commission because of the many powers and duties given him directly by the Legislature which are not subject to the control of the Finance Commission. The fact that the statute denominates the Commissioner as an employee does not necessarily mean that he is not an officer of the state government.
The Supreme Court of Texas in Kimbrough v. Barnett, 93 Tex. 301, 55 S.W. 120 (1900), quotes with approval from Mechem on Public Officers, § 1:
'Public office is the right, authority, and duty created and conferred by law, by which, for a given period, either fixed by law, or enduring at the pleasure of the creating power, an individual is invested with some portion of the sovereign functions of the government, to be exercised by him for the benefit of the public.'
Hence, calling the Commissioner an employee and giving him tenure at the pleasure of the Finance Commission does not prevent the Banking Commissioner from being an officer of the state government. As pointed out, the general administration of banking affairs is carried out by the Banking Commissioner. In exercising his duties he is carrying out the sovereign functions of the government for the protection and benefit of the public and as such he is a state officer as stated in Article 1733. See Betts v. Johnson, 96 Tex. 360, 73 S.W. 4; Middlekauff v. State Banking Board, 111 Tex. 561, 242 S.W. 442.
This holding does not mean that any 'officer' of the State may be subject to mandamus under Article 1733. There are many persons in the state government who meet the general requirements of public officers. See Knox v. Johnson, 141 S.W.2d 698 (Tex.Civ.App.194...
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