First National Bank of Logan, Utah v. Walker Bank and Trust Company First Security Bank of Utah v. Commercial Security Bank Saxon v. Commercial Security Bank, Nos. 51

CourtUnited States Supreme Court
Writing for the CourtCLARK
Citation87 S.Ct. 492,17 L.Ed.2d 343,385 U.S. 252
Docket NumberNos. 51,88,73
Decision Date12 December 1966
PartiesThe FIRST NATIONAL BANK OF LOGAN, UTAH, Petitioner, v. WALKER BANK AND TRUST COMPANY. FIRST SECURITY BANK OF UTAH, N.A., Petitioner, v. COMMERCIAL SECURITY BANK. James J. SAXON, Comptroller of the Currency, Petitioner, v. COMMERCIAL SECURITY BANK

385 U.S. 252
87 S.Ct. 492
17 L.Ed.2d 343
The FIRST NATIONAL BANK OF LOGAN, UTAH, Petitioner,

v.

WALKER BANK AND TRUST COMPANY. FIRST SECURITY BANK OF UTAH, N.A., Petitioner, v. COMMERCIAL SECURITY BANK. James J. SAXON, Comptroller of the Currency, Petitioner, v. COMMERCIAL SECURITY BANK.

Nos. 51, 73, 88.
Argued Nov. 7 and 8, 1966.
Decided Dec. 12, 1966.
Rehearing Denied Jan. 16, 1967.

See 385 U.S. 1032, 87 S.Ct. 738.

Richard A. Posner, Washington, D.C., and Theodore S. Perry, Logan, Utah, for petitioners.

John Wilson, Washington, D.C., for First Security Bank.

James F. Bell, Washington, D.C., and Joseph S. Jones, Salt Lake City, Utah, for respondents.

Page 253

Mr. Justice CLARK delivered the opinion of the Court.

These cases involve the construction of those portions of the National Banking Act, 44 Stat. 1228, 12 U.S.C. § 36(c), which authorize a national banking association, with the approval of the Comptroller of the Currency, to establish and operate new branches within the limits of the municipality in which the bank is located, if such operation is 'at the time authorized to State banks by the law of the State in question.'1 Two national banks with their main banking houses in Logan and Ogden, Utah, respectively, seek to open branches in those municipalities. The Utah statute prohibits Utah banks, with certain exceptions not here relevant, from establishing branches except by taking over an existing bank which has been in operation for not less than five years. Utah Code Ann., Tit. 7, c. 3, § 6 (1965 Supp.)2 In No. 51,

Page 254

First National Bank of Logan v. Walker Bank & Trust Co., the petitioner seeks to establish a new branch in Logan, where its principal banking house is located, without taking over an established bank. The District Court approved its doing so but the Court of Appeals reversed. 352 F.2d 90 (C.A.10th Cir.), sub nom. Walker Bank & Trust Co. v. Saxon. In No. 73, First Security Bank of Utah, N.A. v. Commercial Security Bank, and No. 88, Saxon v. Commercial Security Bank, First Security seeks to establish a new branch in Ogden, in which its home office is situated, without taking over an established bank. The District Court held that state law must be complied with, 236 F.Supp. 457, and the Court of Appeals affirmed in a judgment, without opinion, citing Walker Bank & Trust Co., supra. In view of a conflict between these holdings and the decision in First National Bank of Smithfield v. Saxon, 352 F.2d 267 (C.A.4th Cir.), we granted certiorari, and consolidated the three cases for argument. 384 U.S. 925, 86 S.Ct. 1441, 16 L.Ed.2d 530. We affirm the judgments.

In No. 51, the petitioner maintains its principal banking house in Logan, Utah, which is a second class city

Page 255

under Utah law (Utah Code Ann., Tit. 10, c. 1, § 1 (1953, as amended)), and is therefore subject to § 7—3—6 of the Utah Code, supra. It applied to the Comptroller of the Currency for a certificate to establish an 'inside' branch office in Logan. At the time of the application there were no other banks with their main banking offices in Logan. However, there were two branches of banks whose home offices were situated outside of Logan, one of which belonged to respondent, Walker Bank & Trust Co., whose home office was located in Salt Lake City. After a hearing, the Comptroller ordered the certificate issued. The respondent subsequently filed this suit seeking a declaratory judgment and injunctive relief against the Comptroller and First National claiming the action of the Comptroller to be void since the proposed branch was not taking over an established bank in Logan, as required by Utah law. The District Court dismissed the complaint. It found 'express authority' under Utah law for state banks to establish branch offices in Logan, relying on the general authority of the statute and holding that the subsequent conditions, such as the acquisition of another bank, did not 'change the 'express authority' into a lack of authority on the part of State banks or a lack of a statutory expression of such authority, and (did) not add to the Federal statute a requirement that compliance be made by National banks with all State conditions.' 234 F.Supp. 74, 78, n. 8. The Court of Appeals reversed, holding that the Congress in enacting § 36(c)(1) acceded to state law and created 'a competitive equality between state and national banks.' Finding that the trial court's interpretation was to the contrary, it declared 'the proper approach is for the Comptroller to look at all the State law on branch banking not just part of it.' 352 F.2d 90, 94.

Page 256

In Nos. 73 and 88, the First Security Bank of Utah, a national bank, applied for a certificate from the Comptroller to establish a branch bank in Ogden, where it maintained its principal banking house. Its proposal was to open a new branch and not to take over an existing bank in Ogden. Under Utah law, Ogden is also a second class city and the 'take over' provision of § 7—3 6, supra, was therefore applicable. Two other banks have their main offices in Ogden. After the Comptroller approved the issuance of the certificate, respondent filed suit in the District Court of the United States for the District of Columbia asking for injunctive and other relief. The District Court imposed all of the restrictions of § 7—3—6 of Utah law on the establishment of national banks and the Court of Appeals for the District of Columbia Circuit affirmed, by a judgment without opinion, but cited the opinion of the 10th Circuit, Walker Bank & Trust Co., supra.

2. The National Banking Act: Its Background.

There has long been opposition to the exercise of federal power in the banking field. Indeed, President Jefferson was opposed to the creation of the first Bank of the United States and President Jackson vetoed the Act of Congress extending the charter of the second Bank of the United States. However, the authority of Congress to act in the field was resolved in the landmark case of M'Culloch v. State of Maryland, 4 Wheat. 316, 4 L.Ed. 579 (1819). There Chief Justice Marshall, while admitting that it does not appear that a bank was in the contemplation of the Framers of the Constitution, held that a national bank could be chartered under the implied powers of the Congress as an instrumentality of the Federal Government to implement its fiscal powers. The paramount power of the Congress over national banks has. therefore, been settled for almost a century and a half.

Page 257

Nevertheless, no national banking act was adopted until 1863 (12 Stat. 665), and it was not until 1927...

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130 practice notes
  • Meetings: Petition for Rulemaking to Preempt Certain State Laws; public hearing,
    • United States
    • Federal Register March 21, 2005
    • March 21, 2005
    ...FDIC.\15\ The requested FDIC rule would implement these Congressional purposes. \15\ See First Nat'l Bank v. Walker Bank & Trust Co., 385 U.S. 252 (1966); First Nat'l Bank in Plant City v. Dickinson, 396 U.S. 122 (1969); FDIC Advisory Letter The principle of fundamental competitive pari......
  • National Treasury Employees Union v. Nixon, No. 72-1929.
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    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
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    ...v. Calvert Distillers Corp., 341 U.S. 384, 394-395, 71 S.Ct. 745, 95 L.Ed. 1035 (1951). See First Nat'l Bank v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966). It is true that Mr. Widnall and Mr. Sparkman were conferees; but so were Mr. Patman and Mr. St. Ge......
  • Marshall & Ilsley Corp. v. Heimann, No. 80-2251
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • June 19, 1981
    ...and state banks on a basis of "competitive equality" with respect to branch banking. First Nat'l Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 497, 17 L.Ed.2d 343 (1966). Thus, both state and national banks that would compete with a proposed branch of a national......
  • Saxon v. Georgia Ass'n of Independent Ins. Agents, Inc., No. 25050
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 28, 1968
    ...(D.D.C.1959), affirmed 108 U.S.App.D.C. 37, 278 F.2d 871 (1960); Commercial Security Bank v. Saxon, 236 F.Supp. 457 (D.D.C.1964), affirmed 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966); Walker Bank & Trust Co. v. Saxon, 234 F.Supp. 74 (D. Utah 1964), reversed 352 F.2d 90 (10 Cir. 1965),......
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129 cases
  • National Treasury Employees Union v. Nixon, No. 72-1929.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • January 25, 1974
    ...v. Calvert Distillers Corp., 341 U.S. 384, 394-395, 71 S.Ct. 745, 95 L.Ed. 1035 (1951). See First Nat'l Bank v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966). It is true that Mr. Widnall and Mr. Sparkman were conferees; but so were Mr. Patman and Mr. St. Ge......
  • Marshall & Ilsley Corp. v. Heimann, No. 80-2251
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • June 19, 1981
    ...and state banks on a basis of "competitive equality" with respect to branch banking. First Nat'l Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 497, 17 L.Ed.2d 343 (1966). Thus, both state and national banks that would compete with a proposed branch of a national......
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    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • October 28, 1968
    ...(D.D.C.1959), affirmed 108 U.S.App.D.C. 37, 278 F.2d 871 (1960); Commercial Security Bank v. Saxon, 236 F.Supp. 457 (D.D.C.1964), affirmed 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966); Walker Bank & Trust Co. v. Saxon, 234 F.Supp. 74 (D. Utah 1964), reversed 352 F.2d 90 (10 Cir. 1965),......
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    ...City), 396 U.S. 122, 130, 90 S.Ct. 337, 341, 24 L.Ed.2d 312, 318 (1969); accord, First Nat'l Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 261-62, 87 S.Ct. 492, 497, 17 L.Ed.2d 342, 349 8 Sections 36(d) and 51 provide, in relevant part, as follows: The aggregate capital of every n......
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