First National Bank of Southaven v. Camp, 72-1555.

Decision Date17 January 1973
Docket NumberNo. 72-1555.,72-1555.
Citation471 F.2d 1322
PartiesFIRST NATIONAL BANK OF SOUTHAVEN, Plaintiff-Appellant, v. William B. CAMP, Comptroller of the Currency of the United States, Defendant-Appellee, and Coahoma National Bank, Intervenor-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Rubel L. Phillips, Jackson, Miss., Peter B. Work, Washington, D. C., for plaintiff-appellant.

Dorothy Kulig, Office of the Comptroller of the Currency, Treasury Dept., Patrick L. Gray, III, Asst. Atty. Gen., Justice Dept., Washington, D. C., H. M. Ray, U. S. Atty., Oxford, Miss., Walter H. Fleischer, Judith S. Feigin, Dept. of Justice, Washington, D. C., for defendant-appellee.

William H. Maynard, Clarksdale, Miss., for intervenor-appellee.

Before BELL, AINSWORTH and DYER, Circuit Judges.

AINSWORTH, Circuit Judge:

This is an appeal by plaintiff, First National Bank of Southaven, from a summary judgment in favor of defendant, William B. Camp, the Comptroller of the Currency of the United States, which upheld his decision allowing the establishment of a branch bank in Southaven, an unincorporated Mississippi community situated in DeSoto County near Memphis, Tennessee.1 The issues on appeal are whether, under the National Bank Act, 12 U.S.C. § 36(c) and applicable Mississippi statutory law, a branch bank can be established in an unincorporated area such as Southaven, Mississippi, and whether the Comptroller's approval of the establishment of the branch bank at Southaven was arbitrary, capricious, or inconsistent with applicable state law.

Coahoma National Bank filed an application for a branch bank addressed to the Comptroller of the Currency in July 1970. The application was protested by First National Bank of Southaven, the only commercial bank in Southaven, and other financial institutions in DeSoto County. An administrative hearing was held in October 1970 and a complete record was made. The Comptroller's office also conducted a full field investigation by a national bank examiner. After reviewing the record and staff recommendations, the Comptroller approved the application in April 1971. In May 1971, Coahoma National sought permission to change the location within Southaven of the approved, unopened branch. First National again protested, and a further hearing was held in July 1971. At this hearing Coahoma National withdrew its request for change of location. The Comptroller then reconsidered Coahoma National's application for a Southaven branch and reaffirmed his original approval. First National sought to have the Comptroller's decision reversed in Federal District Court and summary judgment for the defendant Comptroller followed.

Southaven is 12 miles from Memphis and is one of the few suburban areas in that vicinity which has substantial desirable undeveloped land. The population of Southaven, estimated to be between 12,000 and 15,000, has increased markedly over the last decade and is expected to continue growing at a rate of 15 per cent annually for the next several years. Residential construction is active. There are four shopping centers containing national retail stores. Southaven is a growing community and has several manufacturing plants, some of which plan expansion, and new industry is anticipated. Further residential and commercial development is projected. Southaven has one interstate and two intrastate highways, plus truck, rail, and air facilities. All of these factors indicate that substantial physical and financial growth may be expected to continue in Southaven.

First National is the only commercial bank in the primary service area of Southaven. It was established in 1966. Its loan limit is $60,000 per customer. The loan limit of Coahoma National, a large bank, is $250,000 per customer. Its proposed branch would offer full banking services, including a trust department and data processing services. These latter two services are not presently offered in the Southaven area. Additionally, Coahoma National's loan ceiling is substantially higher than that presently available in the area.

The Comptroller thus found that the Southaven area is economically sound and that the establishment of the proposed Coahoma National branch bank would serve public convenience and necessity. He also found that Coahoma National would provide additional banking facilities and capital resources, and would offer services not presently available in the area. He further found that beneficial competition would result, and that existing financial institutions in the surrounding area would not be harmed by Coahoma National's entry into the Southaven market.

The principal issue raised by appellant is whether Mississippi statutory law allows the establishment of a branch bank in an unincorporated area. The National Bank Act, 12 U.S.C. § 36(c), provides in pertinent part:

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 imposed by the law of the State on State banks.

We must, therefore, look to the statutory law of Mississippi to determine whether the establishment of a national branch bank is authorized in an unincorporated area in Mississippi such as Southaven.2 The pertinent state provisions are found in the Mississippi Code of 1942. Section 5226 thereof requires that the establishment of the branch bank promote public convenience and necessity. Section 5227 states that the name of the branch bank is to include the name of the municipality in which the branch bank is domiciled. Section 5228 provides a lesser standard for branch offices than branch banks by excluding the extra capitalization requirement. It also provides that branch offices may be established in the county or adjacent county of the parent bank. Section 5229 establishes the territorial limits of a branch bank, and requires that the branch bank be within a 100-mile radius of the parent bank; that when there is another bank where the branch bank is to be located, there be no less than 3,100 population; that the parent bank have no more than fifteen branches. Section 5230 requires extra capitalization of the branch bank, in an amount at least equal to the minimum capital required of a unit bank.

Section 5229 is the only provision which specifically addresses itself to the location of branch banks. It provides that "Branch banks may be established within a radius of one hundred miles of the parent bank. . . ." The territorial requirement is the radius; no location within this radius is specified.3 This section further provides that "no parent bank shall be permitted to establish a branch bank in any town or city of less than 3,100 population according to the last preceding Federal census where such town or city has one or more banks in operation." However, this provision does not limit branch banks to towns and cities, but states that in the event a branch bank is to be located in a town or city already having a bank, the population requirement must be met.

Appellant contends that the requirement that branch banks be located in municipalities is found by reading the several pertinent Mississippi statutory provisions together. We do not find that the provisions so read impose such a requirement.

Section 5227 reads: "The name of all branch banks in this state shall include the name of the parent bank, followed by the name of the municipality in which the branch is domiciled, . . . ." The verb form "is" is not mandatory language. The provision may presume, but does not require, location in a municipality.

Section 5230 requires extra capitalization at least equivalent to the minimum capital required of a unit bank "in the municipality in which such branch bank shall be established." "Shall" is mandatory language, yet to construe this provision as mandatory in the context here would result in a requirement that the branch bank must be established, and there is no duty imposed on any bank to establish a branch. The statute,...

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4 cases
  • Community Bank of Sullivan v. First Nat. Bank
    • United States
    • U.S. District Court — Southern District of New York
    • December 12, 2000
    ...775 (1977) ("the Comptroller is not bound by a state agency's interpretation of state's statutes"); First National Bank of Southaven v. Camp, 471 F.2d 1322, 1325-26 (5th Cir.1973) ("we do not find a long-standing administrative interpretation, nor would the Comptroller necessarily be bound ......
  • Bank of Commerce of Laredo v. City Nat. Bank of Laredo
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • October 25, 1973
    ...record adequately explained and justified his decision to grant a national bank charter. See First National Bank of Southaven v. Camp, 471 F.2d 1322, 1326-1327 (5th Cir. 1973). Here that voluminous record surely indicated the determinative reason for the final agency action: a finding that ......
  • First Bank & Trust Co. v. Smith
    • United States
    • U.S. Court of Appeals — First Circuit
    • November 4, 1974
    ...Chelmsford. The Comptroller is not bound by a state agency's interpretation of the state's statutes. First National Bank of Southaven v. Camp, 471 F.2d 1322, 1325--1326 (5th Cir. 1973); Union Savings Bank v. Saxon, 118 U.S.App.D.C. 296, 335 F.2d 718, 723 (1964).We note further that the Mass......
  • Department of Financial Institutions v. Wayne Bank and Trust Co.
    • United States
    • Indiana Appellate Court
    • November 8, 1978
    ...FUND SOCIETY V. GREEN (1972) --- Del. ---, 300 A.2d 227; GERST V. CAIN (1965) --- Tex. ---, 388 S.W.2d 168; FIRST NATIONAL BANK OF SOUTHAVEN V. CAMP (5th Cir., 1973) 471 F.2d 1322. Cf. GRENDADA BANK V. WATSON (D.Ct.N.D.Miss.1973) 361 F.Supp. 728 (holding that granting of application for bra......

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