Department of Financial Institutions v. State Bank of Lizton, 1068

• Decision Date: 18 November 1969
• Docket Number: No. 1068,1068
• Parties: DEPARTMENT OF FINANCIAL INSTITUTIONS of the State of Indiana, Charles W. Phillips, Chairman, Glen M. Lyon, Member, Maurice R. Kirkwood, Member, Joseph L. Bridwell, Member, Robert A. Morrow, Member, Thomas H. Cougill, Member, and Brownsburg State Bank, Remonstrator, Appellants, v. STATE BANK OF LIZTON, Appellee. S 161.
• Court: Indiana Supreme Court

Page 248

252 N.E.2d 248

253 Ind. 172

DEPARTMENT OF FINANCIAL INSTITUTIONS of the State of

Indiana, Charles W. Phillips, Chairman, Glen M. Lyon, Member, Maurice R. Kirkwood, Member, Joseph L. Bridwell, Member, Robert A. Morrow, Member, Thomas H. Cougill, Member, and Brownsburg State Bank, Remonstrator, Appellants, v. STATE BANK OF LIZTON, Appellee.

No. 1068 S 161.

Supreme Court of Indiana.

Nov. 18, 1969.

Theodore Sendak, Atty. Gen., John Rabb Emison, Curtis C. Plopper, Deputy Attys. Gen., Joseph C. Wallace, Indianapolis, for appellants.

Melvin R. Lind, Danville, Robert V. Bridwell, Indianapolis, for appellee.

ARTERBURN, Judge.

This proceeding originated when the appellee, State Bank of Lizton, filed a petition before the Department of Financial Institutions of the State of Indiana to open a branch bank at Brownsburg, Indiana. This petition was opposed by the Brownsburg State Bank. After a hearing, the petition was denied by the Department. From this denial the State Bank of Lizton filed a petition in the Hendricks Circuit Court for a review of the administrative decision. The trial court, after a hearing pursuant to Burns' Anno.Stat. § 63--3014, on July 10, 1968 entered special findings of fact and conclusions of law, reversing the Department's denial of the application to open the branch bank and ordered the proceedings remanded to the Department with instructions to make a special finding of fact supporting the application of the State Bank of Lizton for the establishment of a branch bank at Brownsburg and ordered the Department to grant said application.

The appellant urges that the trial court, in the judicial review of the administrative action of the Department of Financial Institutions, erroneously and without authority, made its own special findings of fact as to the merits of the application and had no authority to order the Department of Financial Institutions to make a special finding of fact in accordance with the trial court's findings on the merits of the application.

This appeal involves a typical question that has occurred frequently in a review by a trial court of an administrative finding and determination of facts as to the merits of the issue before the administrative body. The Administrative Adjudication and Court Review Act, Burns' §§ 63--3001--63--3030 (1961 Repl.) is applicable in this case.

In State ex rel. Calumet National Bank v. McCord (1962), 243 Ind. 626, 189

N.E.2d 583, in holding that Burns' § 63--3001 et seq. (commonly known as the Administrative Adjudication Act) was applicable to review of the Department of Financial Institutions, we stated:

'Although this Act has some ambiguities and is not as clear as we would desire it, we have no choice but to make a construction which we think is most logical and reasonable under the circumstances. We believe it is the object of the Administrative Adjudication Act to provide for a uniform and orderly method of judicial review. In view of Burns' § 63--3003, unless there is a very clear and specific exception, we must hold that the Act is applicable.'

Burns' § 63--3003, referred to in the above quote, reads as follows:

'In every administrative adjudication in which the rights, duties, obligations, privileges or other legal relations of any person are required or authorized by statute to be determined by any agency the same shall be made in accordance with this act (§ 63--3001--63--3030) and not otherwise.'

Under the Administrative Adjudication Act the scope of our judicial review is limited generally to considerations of whether the determination of the agency is capricious, arbitrary, an abuse of discretion or in excess of statutory authority or unsupported by substantial evidence.

Burns' § 63--3018 of the Administrative Adjudication Act provides in part as follows:

'Judicial review--Procedure--On such judicial review such court shall not try or determine said cause de novo, but the facts shall be considered and determined exclusively upon the record filed with said court pursuant to this act (§§ 63--3001--63--3030).

'On such judicial review if the agency has complied with the procedural requirements of this act, and its finding, decision or determination is supported by substantial, reliable and probative evidence, such agency's finding, decision or determination shall not be set aside or disturbed. * * *'

It is to be noted that the trial court, in reviewing the administrative decision, cannot retry the facts 'de novo' and cannot come to its own conclusions as to the merits of the case by weighing the facts and evidence. We have held that even though the statute (as in the case of proceedings before the Public Service Commission) provides that the appeal shall be 'de novo', constitutionally this is not correct. The court cannot hear the matter as a new action and weigh the evidence and determine the facts on the merits as an appeal from a Justice of the Peace court 'de novo', which is purely a judicial proceeding. An administrative proceeding is not a pure judicial proceeding, but is a proceeding in either the executive or legislative branch of the government. The court's only right or scope of review is limited to a consideration of whether or not there is any substantial evidence to support the finding and order of the administrative body. A court may also determine whether or not the action constitutes an abuse of discretion and is arbitrary or capricious, as revealed by the uncontradicted facts. Public Service Commission et al. v. City of Indianapolis (1956), 235 Ind. 70, 131 N.E.2d 308; Indiana Board of Pharmacy v. Horner (1961), 241 Ind. 326, 172 N.E.2d 62.

In Public Service Commission of Indiana v. Chicago, I. & L. Ry. Co. (1956), 235 Ind. 394, 132 N.E.2d 698, reh. den. 134 N.E.2d 53, this Court said:

'The purpose of a judicial review of an administrative order by the court is not to decide the matter on the merits for the administrative body but rather solely to determine whether or not the order made by the administrative body was outside the limits and jurisdiction of such body. Once the matter of jurisdiction is determined the court has no further right to interfere with an administrative procedure which belongs to another department of the government--not the judiciary. As a court, we have no right to substitute our judgment on the merits of an issue before an administrative body acting within its jurisdiction.'

We further point out that the law is overwhelming in Indiana that the burden is on the party seeking to upset an administrative order to show in the administrative appeal and review in the trial court that there are no substantial facts to support the finding or that...