First Sav. & Loan Ass'n of East Paterson v. Howell

• Decision Date: 20 April 1965
• Citation: 87 N.J.Super. 318,209 A.2d 343
• Parties: FIRST SAVINGS & LOAN ASSOCIATION OF EAST PATERSON, Appellant, v. Charles R. HOWELL, Commissioner of Banking and Insurance of New Jersey, and First Savings & Loan Association of Fair Lawn, Bergen County, Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 318

87 N.J.Super. 318

209 A.2d 343

FIRST SAVINGS & LOAN ASSOCIATION OF EAST PATERSON, Appellant, v. Charles R. HOWELL, Commissioner of Banking and Insurance of New Jersey, and First Savings & Loan Association of Fair Lawn, Bergen County, Respondents.

Superior Court of New Jersey, Appellate Division.

Argued March 8, 1965.

Decided April 20, 1965.

Leonard I. Garth, Paterson, argued the cause for appellant (Cole, Berman & Garth, Paterson, attorneys; Ross B. Abrash, Paterson, and William L. Kattak, Clifton, on the brief).

Morris Yamner, Deputy Atty. Gen., argued the cause for respondent Charles R. Howell, Commissioner of Banking and Insurance of New Jersey (Arthur J. Sills, Atty. Gen., of New Jersey, attorney).

George A. Brown, Hackensack, argued the cause for respondent First Savings & Loan Association of Fair Lawn, Bergen County, (Morrison, Lloyd & Griggs, Hackensack, attorneys; August Schedler, Hackensack, of counsel).

Before Judges FOLEY, KILKENNY and COLLESTER.

The opinion of the court was delivered by

KILKENNY, J.A.D.

On April 20, 1964 the Commissioner of Banking and Insurance, acting under N.J.S.A. 17:12B--26, approved an application by First Savings & Loan Association of Fair Lawn (hereinafter 'Fair Lawn') to establish and maintain a branch office 'at the southeast corner of Broadway (New Jersey State Highway Route 4) and Plaza Road, Fair Lawn, Bergen County New Jersey.' First Savings & Loan Association of East Paterson (hereinafter 'East Paterson') opposed the application, offered evidence in support of its opposition at the public hearings conducted by the Commissioner, and prosecutes this appeal from his final decision.

Before approving a branch office, N.J.S.A. 17:12B--26(2) requires a determination by the Commissioner that:

'(a) the association and the proposed branch meet all of the requirements of sections 25 and 26 of this act, and

(b) the establishment and operation of such branch office is in the public interest and will be of benefit to the area served by such branch office, and that

(c) such branch office may be established without undue injury to any other association in the area in which it is proposed to locate such branch office, and that

(d) Conditions in the area to be served, afford reasonable promise of successful operation.'

The Commissioner expressly determined the existence of each of these four factors in favor of Fair Lawn's application.

We note at the outset the limited scope of our appellate review of administrative findings. We are generally limited to determining whether the factual findings are supported by substantial evidence. We have the power and the duty to assay the facts, but ordinarily only to determine whether the evidence before the administrative body or officer furnished a reasonable basis for its or his factual conclusions and action. It is not the function of the appellate tribunal to substitute its independent judgment for that of the administrative body or officer where there may exist a mere difference of opinion concerning the evidential persuasiveness of relevant testimony. If the record discloses substantial evidence to support factual findings of the administrative body or officer, a presumption of reasonableness attaches to its or his findings. Re Application of Millburn-Short Hills Bank,59 N.J.Super. 470, 473--474, 158 A.2d 66 (App.Div.1959); Elizabeth Federal Savings & Loan Ass'n v. Howell, 24 N.J. 488, 508, 132 A.2d 779 (1957); Re Application of State Bank of Plainfield, 61 N.J.Super. 150, 158, 160 A.2d 299 (App.Div.1960). However, the applicant for approval has the initial burden of establishing that the statutory requirements were met. Application of Howard Savings Institution of Newark, 32 N.J. 29, 40, 159 A.2d 113 (1960).

East Patterson's main contention is that there is no substantial, competent and relevant evidence in the record to support the Commissioner's finding that 'conditions in the area to be served afford a reasonable promise of successful operation.' East Paterson maintains that the Commissioner's finding as to this statutory requirement was erroneously based upon unwarranted criteria and assumptions of fact lacking evidential support. East Paterson also urges that the Commissioner has disregarded the only competent evidence of reasonably anticipated annual income and projected annual expense of this branch office operation, and that this evidence demonstrates that there is no reasonable promise of successful operation of this branch office for the next ten years.

The Commissioner noted in his findings that Fair Lawn has been a successful operation since its incorporation in 1927. Its main office is located at 14--01 River Road, Fair Lawn. Besides the branch office in issue, it has three other branch offices located at (1) 200 Fair Lawn Avenue, Fair Lawn, (2) S--134 Far View Avenue, Paramus, and (3) Space 0--6 Building O, Bergen Mall, all in Bergen County. The accounts of its members are insured up to $10,000 for each member by the Federal Savings and Loan Insurance Corporation. It has enjoyed a rapid growth, especially during the five years ending December 31, 1963, its capital increasing $33,000,000 during that period. As of December 31, 1963 its assets were $86,500,000, its capital accounts $75,700,000, and its reserve and undivided profits accounts were about 5,700,000. As of that date it had over 33,000 savings members and about 5,600 borrowing members. Its last declared dividend was at the rate of 4% Per annum. The foregoing figures represent the total operations of the main office and three branch offices combined. Its reports do not disclose the separate operations of each branch office.

The Commissioner also noted East Paterson's successful operation. We find no need to recite herein the details thereof. The Commissioner stressed that the managements of both applicant and objector 'have been of high caliber and their public services in the thrift savings and home finance field have been outstanding.'

However, Fair Lawn's past performance at other locations is not Per se an adequate basis for a determination that 'conditions in the area to be served' by the new branch office 'afford reasonable promise of successful operation.'

Fair Lawn owns the vacant land upon which the new branch office would be located, having purchased it at a cost of about $225,000 on November 15, 1963, just prior to application on November 27, 1963 for approval of a branch office there. The plot has a frontage of 200 feet along Broadway and is irregularly shaped, having a depth of 36 feet on one side and 170 feet on the other side. It is subject to 20-foot front and side yard setbacks. There is an irregular strip appended to the larger part of the property. We were advised that no permanent structure has as yet been erected upon the land, but Fair Lawn has been operating a branch office at the site from a trailer placed thereon. East Paterson's motion for a stay was heard by us on June 29, 1964 and denied.

The area to be serviced by this branch office is described as being bounded by the Erie-Lackawanna railroad on the west, the Garden State Parkway on the south and Saddle River on the east. On the north, there is no such defined natural boundary, but Fair Lawn asserts that the area extends northward into the borough of Fair Lawn 'such a distance as may be convenient to any present or prospective members. Morlot Avenue was considered as the northerly boundary by 'Fair Lawn."

Fair Lawn's executive vice-president, Robert T. Holland, testified that a house count made by him of the area south of Morlot Avenue, taken from an Aeroflex survey dated April 4, 1962, available at the municipal building, indicated approximately 3,272 homes in this area. He used the term 'approximately' because 'there were some buildings in that survey that looked like houses but later I found out could have been...