Citizens State Bank of Neche v. Bank of Hamilton

• Decision Date: 11 February 1976
• Docket Number: No. 9156,9156
• Citation: 238 N.W.2d 655
• Parties: CITIZENS STATE BANK OF NECHE, and State Banking Board, Appellees, v. BANK OF HAMILTON, Appellant.
• Court: North Dakota Supreme Court

Page 655

238 N.W.2d 655

CITIZENS STATE BANK OF NECHE, and State Banking Board, Appellees, v. BANK OF HAMILTON, Appellant.

No. 9156.

Supreme Court of North Dakota.

Feb. 11, 1976.

Syllabus by the Court

1. The State Banking Board is an administrative agency to which the provisions of Chapter 28--32, NDCC, apply.

2. The decisions and orders of the State Banking Board pursuant to § 6--01--05, NDCC, are appealable.

3. Where a bank received notice from the State Banking Board of a hearing on the relocation of another bank, participated in such proceeding before the agency, and has the potential of being factually aggrieved, which potential ripens into a reality, by the decision of the agency, such bank is a party to the proceeding for the purpose of taking an appeal.

4. Section 6--03--13, NDCC, permits the State Banking Board to take into account future developments in determining whether to grant a bank authority to relocate.

5. Judicial review of an administrative agency decision is pursuant to the provisions of Chapter 28--32, NDCC.

6. Judicial review of the factual basis of an administrative order is a three-step process: (1) Are the findigns of fact supported by substantial evidence? (2) Are the conclusions of law sustained by the findings of fact? (3) Is the agency decision supported by the conclusions of law?

7. The findings of fact by the State Banking Board are supported by substantial evidence.

Lamb, Schaefer & McNair, Moorhead, Minn., for Bank of Hamilton, appellant; argued by Raymond A. Lamb, Moorhead, Minn.

Vogel, Vogel, Brantner & Kelly, Fargo, for Citizens State Bank of Neche, appellee; argued by Kermit E. Bye.

David O. Lee, Special Asst. Atty. Gen., Bismarck, for State Banking Board, appellee.

SAND, Judge.

On March 4, 1974, the State Banking Board received an application from the Citizens State Bank of Neche to relocate its bank from Neche to Cavalier, North Dakota, to change its name to Citizens State Bank of Cavalier, and to establish a paying and receiving station at Neche, North Dakota. On March 15, 1974, the State Banking Board also received an application from the Bank of Hamilton to relocate its bank from Hamilton to Cavalier, North Dakota, to change its name, and to open a paying and receiving station at Hamilton. ¹ The State Banking Board set the hearing for both applications on April 18 and 19, 1974, in the Capitol at Bismarck, North Dakota. Notice of the hearing was served by certified mail upon the banking institutions in the area, including the Bank of Hamilton, and was published in the Cavalier Chronicle.

The State Banking Board issued its decision, dated August 14, 1974, granting the application to the Citizens State Bank of Neche. On the same date it also issued its decision granting the application to the Bank of Hamilton.

The Bank of Hamilton appealed the decision of the State Banking Board to the Burleigh County district court. The trial court held that the Bank of Hamilton lacked standing to appeal and affirmed the determination of the State Banking Board. The Bank of Hamilton appealed the district court decision to this court.

The Bank of Hamilton, on appeal to this court, argued that the district court erred by concluding that it lacked standing to appeal from the decision of the State Banking Board and that there was no substantial evidence to support the findings of fact and determination made by the State Banking Board. The Bank of Hamilton specifically challenged the Board's finding that the Citizens State Bank of Neche had insufficient business for the profitable conduct of the bank at Neche, where it was located, so as to justify the relocation under the provisions of § 6--03--13, NDCC, to Cavalier, North Dakota.

The Citizens Bank of Neche, appellee, contended before this court that the Bank of Hamilton lacked standing to appeal the decision of the State Banking Board and the decision of the district court. The Citizens State Bank of Neche further and specifically argued that the decision of the State Banking Board was adequately supported by substantial evidence.

The Department of Banking and Financial Institutions ² filed a brief with this court and appeared in support of the decision of the State Banking Board, contending that the Bank of Hamilton lacked standing to prosecute this appeal. Such appearance, in our view, was for and in behalf of the State Banking Board and we will hereinafter consider and refer to such appearance as if made by the State Banking Board.

Because the State Banking Board gave separate notice ³ of the hearing on the application of the Citizens State Bank of Neche to the Bank of Hamilton, the legal question arises whether or not the State Banking Board is estopped from challenging the standing of the Bank of Hamilton on the right to appeal. We have found no statutory duty in Title 6, and none has been called to our attention, which requires the State Banking Board to give separate notice of a hearing to banking institutions or associations on the proceedings involving the removal of a bank, similar to § 6--03--16, NDCC, requiring the giving of a notice to banking institutions where a hearing is to be held on an application to establish a paying and receiving station. Even though we are not aware of a similar provision requiring the giving of such notice on an application for removal under § 6--03--13 NDCC, we take cognizance of the provisions of § 28--32--08, NDCC, which sets out the conditions under which notice must be given and to whom. ⁴

However, because the Citizens State Bank of Neche also challenged the standing of the Bank of Hamilton, making it necessary for us to resolve the standing of the Bank of Hamilton, it is not essential that we resolve the question of estoppel at this time.

The appearance by the State Banking Board before this court was for a twofold purpose, which suggests a further observation on our part. We recognize a sharp distinction between an administrative agency's appearance to explain or defend its decision and its appearance challenging the standing of those seeking a review of its decision. The former sometimes is unavoidable or even necessary and frequently serves a useful purpose by bringing to the attention of the appellate court some of the expertise and considerations involved in arriving at the decision; whereas the latter is a deliberate effort to prevent a judicial review of the agency's decision.

In Application of Bank of Rhame, 231 N.W.2d 801 (N.D.1975), this court held that the decisions and orders of the State Banking Board pursuant to § 6--01--05, NDCC, are appealable and that the State Banking Board is an administrative agency to which the provisions of Chapter 28--32 apply. The court also discussed who had standing to seek such appeal and concluded that 'any person who is directly interested in the proceedings before the administrative agency who may be factually aggrieved by the decision of the agency, and who participates in the proceedings before such agency, is a 'party' to any proceedings for the purposes of taking an appeal from the decision.' In Bank of Rhame the question was whether the bank located in a city into which applicant bank was going to relocate had standing to appeal the decision of the agency. In this case the factual situation is not quite that clear. Both the Bank of Hamilton and the Citizens State Bank of Neche applied to the Banking Board for permission to relocate to Cavalier. The hearings for the two applications were held in sequence. The decision and order granting the application to relocate, etc., for both banks were dated the same day. Had the State Banking Board granted the application to one bank earlier than to the other bank a different result on a technicality basis could have been reached. However, this did not occur.

We are impressed with that part of Davis' Administrative Law Treatise (1970 supplement) wherein the author discusses the trend in the United States Supreme Court decisions as to the treatment of standing. In § 22.00--4, at page 723, he states that 'The law of standing is the wrong tool to accomplish judicial objectives unrelated to the task of deciding whether a particular interest asserted is deserving of judicial protection.' He continues by saying:

'The courts should avoid hypothetical or remote questions--through the law of ripeness, not through the law of standing. The courts should decline to enter political areas--through the law of political questions, not through the law of standing. The courts should limit themselves to issues 'appropriate for judicial determination'--through the law of case or controversy, but not through that part of the law of case or controversy pertaining to standing. The courts should avoid taking over functions of government that are committed to executives or administrators--through the law of scope of review, not through the law of standing. The courts should virtually stay away from some governmental activities, such as foreign affairs and military operations--through the law of unreviewability, not through the law of standing. The courts should insist upon competent presentation of cases--through refusals to respond to inadequate presentations, not through the law of standing.'

On the question of standing, the Bank of Hamilton at the time of the hearing before the Banking Board had the potential of relocating in Cavalier and being in competition with the Citizens State Bank of Neche. This potential ripened into a reality when the State Banking Board approved the...