First Nat. Bank of Thermopolis v. Bonham

• Citation: 559 P.2d 42
• Decision Date: 20 January 1977
• Docket Number: No. 4640,4640
• Parties: FIRST NATIONAL BANK OF THERMOPOLIS, Appellant (Plaintiff below), v. Dwight BONHAM, Wyoming State Bank Examiner, and First State Bank ofThermopolis and its Organizers and Proposed Officers and Directors in theirofficial capacity, Appellees (Defendants below).
• Court: Wyoming Supreme Court

Page 42

559 P.2d 42

FIRST NATIONAL BANK OF THERMOPOLIS, Appellant (Plaintiff below), v. Dwight BONHAM, Wyoming State Bank Examiner, and First State Bank ofThermopolis and its Organizers and Proposed Officers and Directors in theirofficial capacity, Appellees (Defendants below).

No. 4640.

Supreme Court of Wyoming.

Jan. 20, 1977.

Jack Speight and Brent R. Kunz, Hathaway, way, Speight & Kunz, Cheyenne, signed the brief and Brent R. Kunz appeared in oral argument for appellant.

Richard L. Eason and Stephen G. Everall, Simon, Eason, Hoyt & Malone, Denver, Colo., signed the brief and Richard L. Eason appeared in oral argument for appellees; Marty & Ragsdale, Green River, were on the brief as Wyoming counsel.

Before GUTHRIE, C. J., and McCLINTONCK RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

From an order of the state examiner granting a charter to the First State Bank of Thermopolis, applicants-appellees, the First National Bank of Thermopolis, protestant-appellant and only bank in Hot Springs County, petitioned the district court for review, which affirmed the examiner. Protestant now appeals to this court. We will affirm. The issues as presented by the appellant are:

1. 'Whether the Examiner deprived Protestant of a fair hearing and due process of law in remanding the case to the Senior Bank Examiner for further evidentiary and fact finding duties, and then in re-opening the hearing to receive the evidence acquired during the Senior Bank Examiner's investigation.'

2. 'Whether the Examiner deprived Protestant of a fair hearing and due process of law in limiting the scope of cross-examination and rebuttal evidence at the September 24, 1974, re-hearing.'

3. 'Whether the Examiner has legal authority at the conclusion of the initial hearing on the bank charter appliction on March 5, 1974, to remand the case to the Senior Bank Examiner for further evidentiary and fact finding duties, and then to re-open the hearing on a more narrow and limited scope on September 24, 1974.'

4. 'Whether the findings of fact and final order issued by the Examiner on December 5, 1974, were supported by substantial evidence in the record.'

The first three issues will be discussed together because of their interrelationship. The applicants for bank charter have raised a question with respect to their motion to dismiss the petition for review in the district court. We will discuss that point last and abide by the district court's decision in that regard.

At the close of the evidence at the first hearing on the application, the evidence of the applicants and the protestant, as to one phase related to the need for another bank in Thermopolis, was acutely divided. While under advisement, because of the wide difference, the state examiner notified the parties that:

'(I)t has been found that: evidence presented with respect to 'need and convenience' and 'economic feasibility' is inconclusive; findings of the investigation by the State Examiner contrast sharply with evidence received during the public hearing of March 5, 1974; * * *.

'The State Examiner has therefore remanded the case to the Senior Bank Examiner for more extensive investigation. It is anticipated that the public hearing will be reopened at a later date * * *.' (Emphasis added.)

The protestant took exception to that action, urging that if the evidence was inconclusive, the applicants had failed in their proof and the application should be denied. The further investigation proceeded.

The independent inquiry disclosed a substantial community need and support for an additional bank arising out of a prevailing use by local citizens of out-of-town banks, as well as an expanding economy. The examiner submitted the report of the senior bank examiner containing the newly-acquired information to the parties and informed them that 'Upon receipt of this communication, interested parties have twenty (20) days from receipt of this letter in which to give notice of intent to present evidence in rebuttal to the information contained in said memorandum or to request reopening of the hearing. * * *'

The protestant again objected to any further hearing, claiming that the examiner must find that applicants failed in their proof and must deny the application. Prior to the further hearing then requested by protestant, the examiner noticed parties that he would limit the evidence to 'that which will directly support or rebut the additional data gathered by the Senior Bank Examiner.'

At the hearing, the senior bank examiner was asked on cross-examination, 'What other data was considered as possibly pertinent?' The examiner sustained an objection that the question was outside the scope of the hearing and confined cross to the 'accuracy of what is in the report.' By protestant's expert witness, the accuracy of the senior bank examiner's newly-gathered information was disputed. The examiner refused evidence offered by protestant that went outside the limitation imposed. The protestant asserted that when the evidence was reopened, that meant a new hearing in all respects for every purpose.

The examiner, following the supplemental hearing, made and entered his findings, conclusions and order granting charter. It is observed that they have been meticulously drawn, fully justifying the examiner's action and leaving no doubt as to why the charter was granted. Their adequacy as to form is not challenged. There is found within those findings, the real reason and justification for the examiner's need of the further investigation and its application. He pointed out that while the evidence to and including the first hearing carried the burden of the applicants if accepted at face value, he, '* * * alarmed by the divergent and convlicting nature of the testimony given by apparently reliable witnesses concerning the volume of banking business being conducted in out-of-town banks considered that the resolution of this conflict of testimony was vital to a fair and just decision in the public interest, not only with respect to the specific evidence in question but also as it affected the credibility of the witnesses with respect to other testimony received from the same sources.' ¹

The findings explain just how the examiner utilized the results of the further investigation which he independently ordered to be made by a member of his staff:

'A substantial volume of business and individual demand deposits are now leaving the community by way of deposit accounts placed with banks located in other communities. Surveys by the Applicants and the testimony of witnesses at the hearing of March 5, 1974 reflect a much higher volume of such out-of-town bank accounts than does the check survey of Protestant witnesses, which suggests that less than ten (10%) percent of Thermopolis citizens have established demand accounts with banks other than the First National Bank at Thermopolis. Responses to the State Examiner's initial filed investigation questionnaire suggests (sic) that the discrepancy in testimony was due to the practice of Thermopolis citizens maintaining both local and out-of-town bank accounts. This suggested explanation was verified by further investigation conducted by the Senior Bank Examiner at the instruction of the State Examiner and supports a finding that both sources of testimony were correct. This is so in that while nearly ninety (90%) percent of Thermopolis residents and businesses do maintain bank accounts in the First National Bank of Thermopolis many of these persons also maintain bank accounts with banks in other towns and that the volume of out-of-town banking business is substantial and sufficient to support the projections of the Applicants.'

Protestant urges that if any further hearing was to be held at all, it must be a complete rehearing on all the issues submitted in the original hearing and § 13 44(c), W.S.1957, 1975 Cum.Supp., ² gives no authority to make a further inquiry nor does the Wyoming Administrative Procedure Act, under which hearings before the examiner are conducted. We note that the cited section is silent on the subject as is the Administrative Procedure Act.

A considerable responsibility is placed upon the state examiner. A recognition of his important role has been expressed by this court. His decision comes to this court with a presumption of legality and validity; we may not substitute our judgment for his; he has been entrusted by the legislature as the sole judge as to whether a bank charter shall be granted, and we cannot set aside his judgment unless his decision is arbitrary, fraudulent or illegal; the burden is upon the complainant to show such an abuse. Wyoming Bancorporation v. Bonham, Wyo.1974, 527 P.2d 432. The state examiner has been most cautious here and has earned that trust.

A special statutory obligation is imposed upon the examiner to investigate, amongst other responsibilities, with respect to chartering of banks. Section 13-44(c) provides that, 'It shall be the duty of the state examiner to inquire into * * * the convenience and needs of the community to be served * * *.' Given its ordinary meaning, the phrase 'to inquire into' means to investigate, to seek for truth or information by questioning. See Webster. There is no statutory restriction on whether his investigative job takes place before, during or after evidence presented by the applicants and protestant. As long as it is not done secretly, the information gained is made available to the parties and an opportunity to rebut afforded, we can detect no difference as to when it is done. The same section provides for a public hearing upon request to be conducted in accordance with the Wyoming Administrative Procedure Act. ³ As far as practice procedure before an agency is concerned, that act provides only bare-bones direction and provides specially by § 9-276.20(a)(1), W.S.1957, 1975 Cum.Supp., that each agency shall 'Adopt rules of practice setting forth the nature and requirements of...