Coahoma Bank & Trust Co. v. Bowen, 45021

• Decision Date: 17 February 1969
• Docket Number: No. 45021,45021
• Citation: 218 So.2d 868
• Parties: COAHOMA BANK AND TRUST COMPANY v. O. B. BOWEN, Jr., State Comptroller, Department of Bank Supervision of State of Mississippi and Bank of Clarksdale.
• Court: Mississippi Supreme Court

Page 868

218 So.2d 868

COAHOMA BANK AND TRUST COMPANY v. O. B. BOWEN, Jr., State Comptroller, Department of Bank Supervision of State of Mississippi and Bank of Clarksdale.

No. 45021.

Supreme Court of Mississippi.

Feb. 17, 1969.

Maynard, Fitzgerald, Maynard & Bradley, Clarksdale, Watkins & Eager, Jackson, for appellant.

Holcomb, Curtis & Connell, Clarksdale, Wells, Thomas & Wells, Earl T. Thomas and Jack W. Brand, Jackson, Joe T. Patterson, Atty. Gen., by W. D. Coleman, Asst. Atty. Gen., Jackson, for appellee.

INZER, Justice:

This is an appeal by Coahoma Bank & Trust Company from a decree of the Chancery Court of the First Judicial District of Hinds County dismissing its bill of complaint against appellees, O. B. Bowen, Jr., state bank comptroller, and the Bank of Clarksdale. Appellant sought an injunction to restrain the comptroller from issuing to the Bank of Clarksdale a permit to operate branch offices in the towns of Lula and Jonestown and if such permits had been issued to restrain the Bank of Clarksdale from operating such branch offices. We affirm.

The pertinent facts leading up to this controversy are as follows: Appellant bank was incorporated in 1931 under the name of Coahoma County Bank & Trust Company and by its charter it was authorized to transact a commercial banking business, savings bank and trust company, in accordance with the laws of the state governing banks. The place where it was authorized to transact business was at Clarksdale, Coahoma County, Mississippi. Thereafter its charter was amended increasing its capital stock and changing its name to Coahoma Bank & Trust Company.

In 1961 appellant filed an application under the provisions of Section 5214, Mississippi Code 1942 Annotated (1956), with the state banking department requesting authority to consolidate with Peoples Bank & Trust Company domiciled at Jonestown, Mississippi, at the same time appellant requested that the Federal Deposit Insurance Corporation approve the consolidation. The forms prescribed by Federal Deposit Insurance Corporation were utilized for both applications. Peoples Bank was granted a charter in 1912 to do a general banking business in the Town of Jonestown in accordance with the state banking law. The application for consolidation set up that an agreement had been reached for the purchase of all the stock in Peoples Bank by appellant for a price of $112,500. Appellant proposed to assume all the liabilities and acquire all the assets of Peoples Bank and after consolidation it would operate a branch office in Jonestown under the name of Coahoma Bank & Trust Company, Jonestown Office. Prior to filing this application appellant had entered into a duly authorized contract with Peoples Bank whereby the consolidation was agreed upon. In this contract as well as the resolution passed by the stockholders of both banks it was stipulated and agreed that subject to the approval of the state bank comptroller and the Federal Deposit Insurance Corporation that the consolidation or merger would be accomplished by appellant buying all the stock in Peoples Bank for the purchase price of $112,500. The contract among other provisions stated:

3. In the event all the foregoing conditions for consolidation, merger and establishment of a branch office have been made, then the Peoples Bank of Jonestown, Jonestown, Mississippi, and the Coahoma County Bank & Trust Company, Clarksdale, Mississippi, shall be consolidated and merged in accordance with Section 5214 of the 1942 Code of Mississippi, Recompiled, into one bank to operate under the charter of Coahoma County Bank & Trust Company with said Coahoma County Bank & Trust Company to operate a branch office of said merged and consolidated banks in the Town of Jonestown, Mississippi, under the name of 'Coahoma County Bank & Trust Company, Jonestown Office.'

Upon compliance with all the conditions set forth in this contract, the consolidation and merger and establishment of a branch office as herein set forth shall be effective as of the close of business of each bank on the last day of the month of compliance with the last of said conditions, or as soon thereafter as is practicable, and Coahoma County Bank & Trust Company, Jonestown Office, shall begin business on the next banking day thereafter.

The application for consolidation was approved on July 15, 1961, by a certificate which is as follows:

I, Llewellyn Brown, State Comptroller, Department of Bank Supervision, State of Mississippi, do hereby approve the acquisition of all assets and liabilities of Peoples Bank of Jonestown, Jonestown, Mississippi, by Coahoma County Bank & Trust Company, Clarksdale, Mississippi, under the provisions of Section 5214, Mississippi Code of 1942.

The consolidation was then effected and since that date appellant has carried on a banking operation in Jonestown which the chancellor found to be a branch office.

In March, 1962 appellant filed an application with the state banking department and the Federal Deposit Insurance Corporation to consolidate with the Bank of Lula under the charter of appellant bank in accordance with the provisions of Section 5214.

The Bank of Lula was chartered in 1908 and was authorized to carry on a general banking business in the Town of Lula, Coahoma County, Mississippi. The application was approved by the state comptroller on March 30, 1962. The certificate granted is similar to the one set out above and the format used in the consolidation is for all practical purposes the same as used in the Jonestown consolidation except as to the consideration paid for the stock. Since that date appellant has carried on a banking operation in Lula, the character of which the chancellor found to be a branch office.

On May 5, 1966, appellee, Bank of Clarksdale, filed applications with the comptroller asking for permits to establish branch offices in accordance with the provisions of Section 5228, Mississippi Code 1942 Annotated (Supp.1966) in the towns of Lula and Jonestown. Appellant objected to the issuance of such permit and on January 9, 1967, filed its bill of complaint seeking the injunction, which was denied by the trial court.

The bill of complaint alleged that since the consolidation the appellant had continuously engaged in the general banking business in Jonestown and Lula and that it held and enjoyed the same rights of property, franchises, and interests in the same manner and to the same extent as was held by the banks with which it had consolidated. It was also alleged that since Lula and Jonestown were towns with less than 3,500 population that by virtue of the provisions of Section 5228, supra, appellee, comptroller, was prohibited from issuing permit to the Bank of Clarksdale to operate branch offices at these towns and that the Bank of Clarksdale was prohibited from operating such offices.

In the alternative it was alleged that in the event the court found that comptroller had authority to issue such permits the issuance of such permits under the facts alleged in the bill of complaint would constitute an abuse of discretion.

The separate answers of the Comptroller and the Bank of Clarksdale denied that the bank was doing a general banking business in Lula or Jonestown or that it had the authority to do such business in these towns. It was alleged that appellant was authorized to operate only branch offices in these towns and that it was only operating such offices. It was further denied that the comptroller abused his authority in issuing permits to the Bank of Clarksdale to operate branch offices in the towns of Lula and Jonestown. After a lengthy hearing the chancellor rendered an opinion in which he found from the evidence in part as follows:

With the finding and conclusion that the Complainant, Coahoma Bank and Trust Company, is operating branch offices only in Lula and Jonestown, and not operating branch banks or unit banks, or doing a general banking business in the said towns, other issues raised by the pleadings and evidence need not be detailed or discussed in this opinion. The Bank of Clarksdale had the right to make application for permits to establish and operate branch offices in Lula and Jonestown. There was no abuse of discretion or violation of the duties of his office or of law on the part of O. B. Bowen, Jr., Comptroller of the...