First Nat. Bank of Shakopee v. Dept. of Comm.

• Decision Date: 20 August 1976
• Docket Number: No. 45985,45985
• Parties: FIRST NATIONAL BANK OF SHAKOPEE, Petitioner, Appellant, v. DEPARTMENT OF COMMERCE, State of Minnesota, Respondent, William C. Norris, et al., Intervenors, Respondents.
• Court: Minnesota Supreme Court

Page 861

245 N.W.2d 861

310 Minn. 127

FIRST NATIONAL BANK OF SHAKOPEE, Petitioner, Appellant, v. DEPARTMENT OF COMMERCE, State of Minnesota, Respondent William C. Norris, et al., Intervenors, Respondents.

No. 45985.

Supreme Court of Minnesota.

Aug. 20, 1976.

Syllabus by the Court

1. The Commerce Commission properly permitted amendment of an application for a bank charter and it was not necessary for the applicants to file an entirely new application where, subsequent to the filing of separate applications, the other was withdrawn.

2. The statute requiring the commission to make a decision within 90 days after a hearing is directory and not mandatory.

3. On appeal to district court of a commission decision allowing a new bank charter, since no trial de novo was had in district court, no note of issue was required.

4. There was ample evidence to sustain the commission's finding that a reasonable public demand exists for the proposed new bank.

5. It lies within the discretion of the hearing examiner whether witnesses should be allowed to testify who were not disclosed prior to hearing pursuant to Rule 16 of the Commerce Commission.

Albert H. Newman, Minneapolis, for appellant.

Warren Spannaus, Atty. Gen., Charles Wikelius, Spec. Asst. Atty. Gen., Roderick Mackenzie, Asst. Atty. Gen., St. Paul, for Dept. of Commerce.

Peterson, Engberg & Peterson and John G. Engberg, Minneapolis, for Norris, et al.

Heard before ROGOSHESKE, PETERSON and YETKA, JJ., and considered and decided by the court en banc.

YETKA, Justice.

The First National Bank of Shakopee appeals from the order of the Hennepin County District Court affirming the decision of the Commerce Commission granting the application of William C. Norris, Norbert R. Berg, James Rogers Fox, M.D., and Roger A. Peterson (intervenors) for a certificate authorizing the formation of a new bank in the city of Shakopee. We affirm.

On March 2, 1973, intervenors filed an application with the Minnesota Department of Commerce for a certificate authorizing the formation of a second bank in Shakopee to be operated under the name of the Citizens State Bank of Shakopee. Their application had been preceded by another separate application of James Frady and Cletus Link who proposed to form the Western Fidelity State Bank of Shakopee (Fidelity).

Because it was intended that both banks operate in the city of Shakopee, the commission, on intervenors' motion, ordered a comparative hearing pursuant to Rule 15 of the Commerce Commission. At a comparative hearing a determination is made whether the two competing applicants intend to serve the identical trade area. The hearing was set for April 16, 1973. Notice was properly published in the Shakopee Valley News on March 14, 1973, and petitioner's notice of objection followed on March 28. The hearing was continued thereafter five times, four at the instance of petitioner and another objector and once on the motion of intervenors, finally being set for October 1, 1973.

On September 18, 1973, Frady and Link withdrew their application in consideration of their becoming stockholders and directors in the Citizens State Bank. On September 7, 1973, intervenors, in a letter to the acting commissioner of banks (a copy of which was sent to petitioner), advised the commission and petitioner of the amendment of their application in the following respects: (1) The addition of Frady and Link as stockholders and directors; (2) a revision of the distribution of stock and correction of a typographical error regarding the total consideration for the stock issued; (3) a change in location of the site of the proposed bank; (4) a change in officers; and (5) an updating of the deposits and loans of banks in the Shakopee area. By letter of September 12, 1973, petitioner objected to intervenors' method of amending their application. On September 24, 1973, apparently at the instance of the commission, intervenors served and filed a formal notice of motion and motion pursuant to Dept. of Commerce Reg. 14 (COMC 14), requesting that they be permitted to amend their application as set forth above. This motion was heard October 1, 1973, immediately preceding the hearing on the application, and granted by the hearing examiner.

The commission's decision granting intervenors' application and directing the commissioner of banks to issue intervenors a certificate of authorization was entered November 13, 1974. On December 18, 1974, petitioner appealed the commission's decision to the Hennepin County District Court. The appeal was heard April 14, 1975, and the court's decision affirming the commission was filed April 29, 1975.

Petitioner challenges the decisions of the district court and the Commerce Commission on the following grounds: The proceedings below were procedurally defective; the commission's finding of a reasonable public demand for the proposed bank is unsupported by substantial evidence in view of the entire record; and the hearing examiner improperly refused to allow petitioner's witnesses to testify.

1. Petitioner contends that the Commerce Commission permitted intervenors to amend their application in a procedurally impermissible manner. Neither the applicable statute, Minn.St. 45.04 to 45.08, or regulations Specifically provide the procedure to be followed in order to amend an application. The commission's rule, COMC 14, governing motion practice provides that a motion shall be in writing, set forth the relief sought, and be served on all parties of record. If a hearing is granted by the commission, it is required to notify all parties of the time and place of the hearing.

Intervenors, by letter of September 7, a copy of which petitioner admits receiving, notified the commission of their intention to amend their application and detailed the substance of those amendments. Five days later petitioner objected by letter to the commission to the manner of amendment. Apparently as a result of that objection, the commission requested intervenors to file and serve a formal motion and notice of motion. This was done September 24. The amendments were again detailed, and notice was given that the motion would be heard October 1. We believe this substantially complied with COMC 14.

Petitioner suggests that a new application should have been filed, and notice of filing and hearing republished. The application is a lengthy and complicated form containing much more information than the proposed amendments cover. Absent a clear directive, it would simply be unreasonable to hold that the statutory or regulatory procedure would require duplication of this effort. Second, republishing the notice required by the commission and statute would have served no purpose. Essentially all that Minn.St. 45.04, subd. 1, and COMC 12 require is notice of the hearing on the application, which in this case had been given.

Moreover, even if we were to assume the procedure was defective, that is grounds for reversal only where 'the substantial rights of the petitioners may have been prejudiced.' Minn.St. 15.0425. The record indicates that petitioner was informally advised of the nature and substance of the amendments in mid-August and that it received the September 7 letter detailing the amendments. Moreover, the personal and occupational data regarding the two additional stockholders had been available to petitioner since January 29, 1973, when Fidelity's application was filed. Petitioner's claim that it did not have sufficient time to prepare to meet the substance of the amendments is not supported.

2. Minn.St. 45.04, subd. 2, provides that '(i)f, upon the hearing, it shall appear to the commission that the application should be granted, it shall, Not later than 90 days after the hearing * * * make and file in the office of the commissioner of banks its order, in writing, directing him to issue the certificate of authorization as provided by law.' The receipt of evidence was concluded October 19, 1973. At that time the parties were advised that they had the opportunity to file briefs and proposed findings. Intervenors were given 30 days from the completion of the transcript, petitioner 30 days after that, and intervenors another 10 days for a reply. The transcript was completed February 5, 1974. Intervenors' brief was filed May 31, petitioner's July 15, and intervenors' reply July 23. Neither party filed proposed findings. On August 20, the executive secretary of the Department of Commerce notified intervenors by letter of their failure to file proposed findings and requested they do so. Intervenors complied with the request November 7, and the decision and order for certificate was issued November 13. Petitioner contends that the commission's decision and order are void for failing to issue the decision in the statutorily prescribed time.

Regardless of whether the commission violated the 90-day filing requirement, its decision and order are nevertheless valid. We believe that the 90-day filing requirement is directory only, and not mandatory, and therefore its violation does not operate to invalidate the order. In Wenger v. Wenger, 200 Minn. 436, 274 N.W. 517 (1937), reaffirming our earlier decision in Vogle v. Grace, 5 Minn. 294 (Gil. 232) (1861), where we held that a similar requirement of district court judges was directory, we endorsed the 'well established rule of statutory construction that statutory provisions defining the time and mode in which public officers shall discharge their duties, and which are obviously designed merely to secure...