GEORGIA ASSOCIATION OF INDEPENDENT INS. AGENTS v. Saxon

• Decision Date: 31 March 1967
• Docket Number: Civ. A. No. 9846.
• Parties: GEORGIA ASSOCIATION OF INDEPENDENT INSURANCE AGENTS, INC. (affiliated with National Association of Insurance Agents, Inc.) and Gerry R. Holden, Jr., Walter H. McGee, Charles A. Simons, Howard C. Kearns, Jr. v. James J. SAXON, Comptroller of the Currency of the United States of America.
• Court: U.S. District Court — Northern District of Georgia

268 F. Supp. 236

GEORGIA ASSOCIATION OF INDEPENDENT INSURANCE AGENTS, INC. (affiliated with National Association of Insurance Agents, Inc.) and Gerry R. Holden, Jr., Walter H. McGee, Charles A. Simons, Howard C. Kearns, Jr. v. James J. SAXON, Comptroller of the Currency of the United States of America.

Civ. A. No. 9846.

United States District Court N. D. Georgia, Atlanta Division.

March 31, 1967.

Gambrell, Harlan, Russell & Moye, Atlanta, Ga., for plaintiff.

Barefoot Sanders, Asst. Atty. Gen., Charles L. Goodson, U. S. Atty., Northern Dist. of Ga., Harland F. Leathers and Richard S. Baetty, Irvin Goldbloom, Robert Bloom, Attys., Dept. of Justice, Washington, D. C., for defendants.

LEWIS R. MORGAN, Chief Judge.

The plaintiffs in the above-styled action seek a declaratory judgment and injunction against an allegedly illegal act by the defendant James Saxon. Specifically, the act alleged to be illegal was the issuance of an administrative ruling by the defendant which authorized banks to carry on the business of insurance agents when such activity was incidental to banking transactions.

The instant case is presently before the Court on the plaintiffs' motion for summary judgment under Rule 56, Federal Rules of Civil Procedure.

Title 12 U.S.C.A. § 92 provides that national banks which are located in places with a population of 5,000 or less may act as insurance agents under rules and regulations prescribed by the Comptroller.¹ The defendant's administrative ruling No. 7110 authorizes national banks to conduct the business of insurance agents in cities of any size, provided the writing of such insurance is incidental to banking transactions.

The essence of the plaintiffs' argument is that by authorizing national banks to act as insurance agents only in places with a population of 5,000 or less, Title 12 U.S.C.A. § 92 prohibits such activity by national banks in places with a population of more than 5,000. Their position is simply that the congressional grant of the power to act as insurance agents in places of 5,000 or less impliedly prohibits such activity in places with a population of over 5,000.

The defendant takes the position that 12 U.S.C.A. § 92 does not impliedly prohibit banks from acting as insurance agents in places with a population of more than 5,000, so long as the insurance written is incidental to banking transactions. The defendant maintains that ruling No. 7110 does not authorize activity which is prohibited by 12 U.S.C.A. § 92, but rather authorizes an activity which is necessary and incidental to the banking business.

The essence of the defendant's contention is that 12 U.S.C.A. § 92 does not prohibit the selling of insurance by any national bank when such selling is incidental to banking transactions, and therefore that ruling No. 7110 is a valid ruling under 12 U.S.C.A. § 24 (Seventh) which provides that national banks have all incidental powers which are necessary to the transaction of the banking business.

It is important to note the contentions of the parties in dealing with the plaintiffs' motion for summary judgment, for if 12 U.S.C.A. § 92 does impliedly prohibit national banks from carrying on the business of insurance agents in places with a population of more than 5,000, then the instant case involves a determination based solely on questions of law. On the other hand, if 12 U.S.C.A. § 92 does not prohibit such activity, the case involves a question of fact regarding whether or not the writing of insurance is incidental and necessary to the transaction of banking business. Of course, it follows logically that if 12 U.S. C.A. § 92 prohibits the writing of insurance by banks in places with a population of more than 5,000, then the question of whether such activity is incidental and necessary is immaterial, as activity which is prohibited by a specific statute cannot be deemed authorized by a general enabling statute.

With...