First National Bank of Crown Point v. Camp, Civ. No. 70 H 147.

• Court: United States District Courts. 7th Circuit. United States District Court of Northern District of Indiana
• Citation: 342 F. Supp. 871
• Docket Number: Civ. No. 70 H 147.
• Parties: The FIRST NATIONAL BANK OF CROWN POINT and The Commercial Bank of Crown Point v. William B. CAMP and Mercantile National Bank of Indiana.
• Decision Date: 10 May 1971

342 F. Supp. 871

The FIRST NATIONAL BANK OF CROWN POINT and The Commercial Bank of Crown Point
v.
William B. CAMP and Mercantile National Bank of Indiana.

Civ. No. 70 H 147.

United States District Court, N. D. Indiana, Hammond Division.

May 10, 1971.

342 F. Supp. 872

COPYRIGHT MATERIAL OMITTED

342 F. Supp. 873

Fred G. Donnersberger, Hammond, Ind., William Carroll, Crown Point, Ind., for plaintiffs

Timothy P. Galvin, Sr. and Patrick Galvin, Hammond, Ind., for Mercantile Nat. Bank of Ind.

W. J. Glendening, U. S. Atty., Frank Kimbrough and John Austin, Asst. U. S. Attys., for William B. Camp.

MEMORANDUM

BEAMER, District Judge.

This case arises out of an action by the Comptroller of the Currency (hereinafter Comptroller) granting an application made by the Mercantile National Bank (hereinafter Mercantile) for a certificate of authority which would permit it to establish a branch bank at the intersection of 95th Avenue and Taft Street in Ross Township, Lake County, Indiana. The plaintiffs have filed suit pursuant to 28 U.S.C.A. § 2201 (the declaratory judgment statute) to have the

342 F. Supp. 874

conduct of the defendants declared illegal as violative of the National Banking Act and branch banking laws of the State of Indiana, and, to effectuate that declaration, issue a preliminary and permanent injunction prohibiting the defendants from establishing the proposed branch bank

The Comptroller has filed a motion to dismiss on the ground that the complaint does not contain "a short and plain statement of the grounds upon which the court's jurisdiction depends" required by Rule 8(a) (1) of the Federal Rules of Civil Procedure. It is true, as the Comptroller contends, that none of the statutes alleged as bases for the court's jurisdiction are jurisdictional statutes. Under ordinary circumstances, the Court would either dismiss the complaint and permit the plaintiffs to refile, or permit amendment to the complaint to properly allege the jurisdictional statute. However, it is apparent from the face of the complaint that the appropriate jurisdictional statute is 28 U.S.C.A. § 1331, and that upon a refiling or amendment, the only additional allegation which would need to be made for technical compliance with Rule 8(a) (1) would be that of the statute. While better practice would have been to plead the statute, the Court is of the opinion that sufficient facts have been alleged to invoke jurisdiction. The motion to dismiss should be denied.

Each defendant has filed a motion for summary judgment. The complaint here is for review of an action taken by an administrative agency. As such, the scope of the Court's authority to review the action is limited by statute as follows:

To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall —

(1) compel agency action unlawfully withheld or unreasonably delayed; and

(2) hold unlawful and set aside agency action, findings, and conclusions found to be —

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

(B) contrary to constitutional right, power, privilege, or immunity;

(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;

(D) without observance of procedure required by law;

(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute; or

(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.

In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error. 5 U. S.C.A. § 706

The Mercantile applied to the Comptroller for approval to establish the branch in question under the provisions of 12 U.S.C.A. § 36(c), which provides in pertinent part as follows:

(c) A national banking association may, with the approval of the Comptroller of the Currency, establish and operate new branches: . . . (2) at any point within the State in which said association is situated, if such establishment and operation are at the time authorized to State banks by the statute law of the State in question by language specifically granting such authority affirmatively and not merely by implication or recognition, and subject to the restrictions as to location

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imposed by the law of the State on State banks. . . .

It is clear that a national banking association may establish a branch bank in a state which permits branch banking to its own banks, to the extent that state banks may do so. First National Bank of Logan v. Walker Bank & Trust Co., 385 U.S. 252, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966). Thus, any legal restriction upon the right of Mercantile to establish a branch bank must be found in the laws of the State of Indiana.

The relevant Indiana statute is Burns § 18-1707, IC 1971, XX-X-XX-X, which provides in pertinent part as follows:

In all counties having a population of less than five hundred thousand 500,000 inhabitants, according to the last preceding decennial United States census, or in counties having three 3 or more cities of the second class, . . . any bank or trust company may open or establish a branch bank in any city or town within the limits of the county in which the principal office of such bank or trust company is located, if there is no bank or trust company located in such city or town. . . .

The words "any bank or trust company may open or establish a branch bank" in the Indiana statute constitute the specific grant of authority required by Section 36(c) before an application to establish a branch bank may be approved by the Comptroller; and the proposition that Indiana law permits branch banking is not in controversy. What is in controversy is, (1) whether the location selected by Mercantile is within a city or town as those terms are used in the Indiana statute, and, if it is determined that it is, (2) whether it is then within a city or town in which a bank or trust company is already established.

Section 706 requires the Court to interpret the applicable statutory provisions, and after so doing, to set aside agency action which is not in accordance with law. Turning first to whether the Comptroller correctly interpreted the statutory requirement of a "city or town", it is this Court's opinion that he did so.

The parties have not cited, and the Court has been unable to find, any Indiana cases which define the words "city or town" for purposes of Burns § 18-1707. We are referred to Opinion No. 33 of the Attorney General of Indiana issued on May 8, 1953, which indicates that the words should be given their ordinary and usual meaning. Consequently, the Attorney General was of the opinion that "the term `town' as used in the statute in question includes an unincorporated as well as an incorporated town." It is undisputed that the Indiana Department of Financial Institutions has followed this interpretation since that time, and is presently doing so, with regard to the establishment of branch banks by state banking institutions.

The state of Michigan has a branch banking statute which is similar to that being interpreted here. Instead of the word "town," however, it uses the word "village." Michigan courts have had several opportunities to construe and apply that statute, and many of those decisions have been cited here.¹ They have

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long worked with the definition of "village" set out in Wyandotte Savings Bank v. Eveland, 347 Mich. 33, 78 N.W. 2d 612, at 617

The word "village" is not a technical word, or one having a peculiar meaning, but is a common word in general usage with an ancient lineage. It is merely an assemblage or community of people, a nucleus or cluster for residential and business purposes, a collective body of inhabitants, gathered together in one group.

This definition is substantially in accord with the opinion of the Attorney General of Indiana referred to above, and the subsequent interpretive application of it to branch...