First Hardin National Bank v. Fort Knox National Bank

• Decision Date: 26 May 1966
• Docket Number: No. 16906.,16906.
• Citation: 361 F.2d 276
• Parties: The FIRST HARDIN NATIONAL BANK and the Farmers Bank of Vine Grove, Kentucky, Plaintiffs-Appellants, v. FORT KNOX NATIONAL BANK, Defendant-Appellee, and James J. Saxon, Comptroller of the Currency of the United States, Intervening Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

361 F.2d 276 (1966)

The FIRST HARDIN NATIONAL BANK and the Farmers Bank of Vine Grove, Kentucky, Plaintiffs-Appellants, v. FORT KNOX NATIONAL BANK, Defendant-Appellee, and James J. Saxon, Comptroller of the Currency of the United States, Intervening Defendant-Appellee.

No. 16906.

United States Court of Appeals Sixth Circuit.

May 26, 1966.

L. A. Faurest, Elizabethtown, Ky., for appellant First Hardin Nat. Bank.

H. L. James, Elizabethtown, Ky., for appellant Farmers Bank of Vine Grove, Ky.

Robert E. Hatton, Louisville, Ky. (Robert E. Hatton, L. Lyne Smith, Jr., Louisville, Ky., on the brief), for Fort Knox Nat. Bank.

Jack H. Weiner, Atty., Dept. of Justice, Washington, D. C. (John W. Douglas, Asst. Atty. Gen., David L. Rose, Atty., Dept. of Justice, Washington, D. C., Ernest W. Rivers, U. S. Atty., Louisville, Ky., on the brief), for James J. Saxon.

Robert Matthews, Atty. Gen. of Kentucky, John B. Browning, Asst. Atty. Gen., Frankfort, Ky., on the brief for Commissioner of Kentucky Dept. of Banking, amicus curiae.

Before WEICK, Chief Judge, and O'SULLIVAN and CELEBREZZE, Circuit Judges.

CELEBREZZE, Circuit Judge.

The First Hardin National Bank, a National Banking Corporation, and The Farmers Bank of Vine Grove, a State Banking Corporation, hereinafter referred to as Appellants, instituted this action to enjoin the Fort Knox National Bank, hereinafter referred to as Appellee, from opening a branch bank at Radcliff, Hardin County, Kentucky. James J. Saxon, Comptroller of the Currency of the United States, intervened on behalf of the Appellee.

Appellee is a National Banking Corporation, with its principal office located upon the Fort Knox Military Reservation. Fort Knox was established and is now operated and controlled by the United States. The State of Kentucky consented to the acquisition by the United States of the Fort Knox Military Reservation, and did not retain any right of any kind in or upon the land acquired by the United States for so long as the same shall remain the property of the United States.¹

Pursuant to 12 U.S.C. Section 36(c),² Appellee sought to establish a branch bank at Radcliff, Hardin County, Kentucky. The Comptroller of the Currency investigated Appellee's application and on April 15, 1965 gave preliminary approval. At the time this suit was instituted, Appellee had not asked for a certificate of authority to open the branch, and one has not yet been granted.

A National bank, with the approval of the Comptroller of the Currency of the United States, may establish and operate a branch at any point within the State where the State authorizes the establishment and operation of a State bank.³ The statute law of Kentucky, KRS 287.180(2) provides:

"Any corporation presently or hereafter engaged in the business of banking, and meeting the requirements of this subsection, may apply to the Commissioner of Banking for permission to establish, within the city in which its principal office is located and, subject to the limitation hereinafter imposed, within the county in which its principal office is located or in an adjacent county, in which there is no existing bank a branch at which all of the powers conferred in subsection (1) of this section may be exercised. * *

"(b) No such corporation shall be permitted to establish a branch in any incorporated city, other than in the city in which its principal office is located or in any adjacent county, in which there is an existing bank. Nor shall any such corporation be permitted to establish a branch in any unincorporated area within a radius of one mile of an existing bank located in such unincorporated area. As used in this subsection, an `existing bank\' shall mean the principal office of a bank as distinguished from a branch thereof."

Here the Appellee, located upon the Fort Knox Military Reservation, is attempting to establish a branch bank, outside the Reservation, at Radcliff, Hardin County, Kentucky. It is conceded there is no principal office of any bank in Radcliff, and that Appellee has its main office on a part of Fort Knox which was a part of Hardin County at the time of its acquisition by the United States.

The sole issue presented is whether that part of Fort Knox, which was part of Hardin County at the time it was acquired by the United States with the consent of Kentucky, is a part of Hardin County as the word "county" is used in the Banking Act of Kentucky. Appellee and the Comptroller of the Currency urge that it is, and the District Court so found.

This Court held in Community National Bank of Pontiac v. Saxon, 310 F.2d 224 (C.A.6, 1962) that the Comptroller has "the initial responsibility of determining whether the several conditions under which a National banking association may establish a branch are met". The scope of judicial review is limited, and the factual findings of the Comptroller will not be overturned unless they are arbitrary, capricious, or otherwise not in accordance with law. In that case the Court held that the finding of the Comptroller that the area in which the defendant bank...