First State Bank, Hearne v. Citizens Bank of Bryan
| Decision Date | 19 July 1978 |
| Docket Number | No. 12746,12746 |
| Citation | 569 S.W.2d 604 |
| Parties | FIRST STATE BANK, HEARNE, Texas, et al., Appellants, v. CITIZENS BANK OF BRYAN et al., Appellees. |
| Court | Texas Court of Appeals |
T. D. Smith, Edwin Lamm, III, Smith & Lamm, Houston, for appellant First State Bank, Hearne.
John L. Hill, Atty. Gen., Thomas A. Rutledge, Asst. Atty. Gen., Austin, for appellant State Banking Board of Texas.
Larry Temple, Austin, for appellees Citizens Bank of Bryan, et al.
O'QUINN, Justice.
This appeal is from judgment of district court setting aside an order of the State Banking Board, entered October 18, 1976, by which the Board granted First State Bank at Hearne, in Robertson County, permission to change its name to College Station Bank and move its domicile from Hearne to College Station, in Brazos County, a distance of about 22 miles.
Four existing banks, located in Bryan and College Station, protested the application of First State Bank of Hearne before the Banking Board and later instituted their appeal from the Board's order to district court of Travis County. Protestants who appealed to district court, and are appellees before this Court, are Citizens State Bank of Bryan, First Bank and Trust of Bryan, First National Bank of Bryan, and University National Bank of College Station.
From judgment of the district court, appeal has been perfected by the State Banking Board, and by First State Bank of Hearne, intervenor below.
We will reverse judgment of the trial court and will render judgment that the order of the Board be reinstated and approved as valid.
Pending before this Court is motion of appellees, the four banks of Bryan and College Station, to dismiss this suit as moot, or for remand to the Banking Board with instructions to dismiss the application of First State Bank of Hearne. The ground asserted to support the motion is passage by the Legislature of an amendment of Article 342-314, V.A.T.S., relating to change of domicile of state banks, which now provides that "No state bank may change its domicile to a location outside the county where it is located." (Acts 1977, 65th Leg., p. 25, ch. 10, sec. 1, eff. March 10, 1977).
Movants rely on authority of Texas Jurisprudence, and certain cases cited in support, which states, "A case or question before an appellate court may become moot by reason of new legislation, or by reason of the expiration or the superseding of existing legislation." 4 Tex.Jur.2d Appeal and Error Civil Cases, sec. 630 pp. 547-8 (1974).
The order of the Banking Board granting First State Bank permission to change its name and move its domicile from Robertson County to Brazos County was entered in October of 1976, and protestants' petition appealing from the order was filed in district court on November 12 of 1976. The amendment of Article 342-314, providing for the first time that no state bank could change its domicile from one county to another, became effective March 10, 1977, about five months after the Banking Board entered its order and while appeal from the order was pending in district court.
Appellees place particular reliance on Clymore Co., Inc. v. Railroad Commission of Texas, 86 S.W.2d 797 (Tex.Civ.App. Austin 1935, no writ), and City of Dallas v. Meserole Bros., 164 S.W.2d 564 (), in urging that this lawsuit is now moot because Article 342-314 now forbids state banks from moving outside the county where located.
In Clymore a temporary injunction granted by the trial court had been predicated upon a statute subsequently superseded, and on appeal this Court held that the questions involved had become moot. This Court observed that the later statute had superseded the prior law and prescribed "definitions, standards, and criteria which in many respects are essentially different from those prescribed or involved in the (earlier statute)." The Court concluded, "We cannot in this proceeding, upon the record made in a hearing involving only . . . (the earlier statute) determine those issues; but are confined to the issues presented by the record as applied to the (earlier law)." 86 S.W.2d 798, col. 1.
Passing on whether the temporary injunction was improvidently granted would have been meaningless, and the case was remanded, although moot, in the manner required in such circumstances by the rule announced in Danciger Oil & Refining Co. v. Railroad Commission, 122 Tex. 243, 56 S.W.2d 1075, 1076 (1933).
In Meserole a landowner, whose property lay outside municipal corporate limits, started construction of commercial buildings prior to effective date of either annexation or temporary zoning, but before completion of the structures annexation and zoning laws limiting land uses to residential purposes were completed. The appellant court held that the landowner "acquired no vested right to complete the two commercial buildings in a residential area merely because the work was begun prior to the enactment of the temporary zoning ordinance . . ." (164 S.W.2d 568, col. 1) The court pointed out that the municipality acted in exercise of its police powers, to which "all property is held subject." The court dismissed the appeal as moot. (164 S.W.2d 567, col. 2)
The holding in Meserole was the principal authority for identical results in a later case similar on the facts, in which no vested rights had been acquired and the city acted under its police powers. Westwood Development Company v. City of Abilene, 273 S.W.2d 652 (Tex.Civ.App. Eastland 1954, writ ref'd n. r. e.).
In the present lawsuit the Banking Board entered its order in October of 1976 approving amendment to the charter held by First State Bank of Hearne and thereby allowed the bank to change its name and move its domicile to a neighboring county. The original charter and the amendments approved by the Board in 1976 constituted a vested property right, and the Board's order if valid and lawful became effective and enforceable when entered, and at that time was presumed to be valid. Chemical Bank & Trust Company v. Falkner, 369 S.W.2d 427, 433 (Tex.Sup.1963); Brazosport Savings and Loan Association v. American Savings and Loan Association, 161 Tex. 543, 342 S.W.2d 747, 750-2 (1961).
The trial court on November 19, 1976, entered its stay order enjoining the State Banking Commissioner from delivering to First State Bank a new certificate of authority reflecting the new name and the new domicile as approved by the Banking Board in October. The stay order was entered to preserve the Status quo pending final judicial determination of the order. Since First State Bank was prevented from changing its name and moving to the new domicile because the Commissioner was enjoined from performing a ministerial act, "involving no exercise of judgment or discretion," and delay in exercise of the bank's rights "resulted solely from the processes of law," the bank was not deprived of its rights. Gordon v. Lake, 163 Tex. 392, 356 S.W.2d 138, 141 (1962).
As a general rule statutes operate prospectively, and may not operate retrospectively if such would result in impairment of vested rights. A statute is retroactive, and retroactive results are prohibited by the Constitution, if the law takes away or impairs vested rights acquired under existing laws. American Surety Co. of New York v. Axtell Co., 120 Tex. 166, 36 S.W.2d 715 (1931); International Security Life Insurance Company v. Maas,458 S.W.2d 484, 490 (Tex.Civ.App. Houston (1st) 1970, writ ref'd n. r. e.).
Nothing in the Act of 1977 by which the Legislature amended Article 342-314 indicates other than prospective application beginning with the law's effective date, March 10, 1977. We conclude that the statute as amended was not intended to, and did not, divest or impair the vested rights First State Bank acquired in its franchise as amended by the State Banking Board effective October 18, 1976. Motion to dismiss this suit as moot is overruled, and we proceed to consider the appeal on its merits.
The trial court filed findings of fact and conclusions of law, prefaced by the observation that the district court, in appeals from administrative proceedings, is not called upon to make findings of fact, except as to irregularities occurring before the administrative body and not reflected in the record. The trial court made four findings of fact which will be considered later.
The conclusions of law are the principal target of attack by appellants. The first conclusion of law, from which other conclusions logically flow, is the following:
(Emphasis added)
The obvious impact of this conclusion of law is to require an applicant bank, seeking change of domicile, to prove not only a public necessity that the bank fulfill a need in the proposed new location, but also that the applicant prove no public necessity for the bank to remain in the location in which it already operates. Taken to its logical conclusion, such requirement would also oblige the Banking Board reasonably to support both such ultimate findings by substantial evidence. We must look to the statute and the rule to determine whether dual proof and findings in instances of change of domicile are indispensable to validity of an order.
Under Article 342-314, prior to amendment and since its amendment in 1977, no state bank may change its domicile ". . . without...
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Citizens Bank of Bryan v. First State Bank, Hearne
...and the State Banking Board, the Court of Civil Appeals reversed the judgment of the District Court and reinstated the order as valid. 569 S.W.2d 604. The four protesting banks are our Petitioners at whose instance writ of error was granted. We reverse the judgment of the Court of Civil App......