Grant v. Fritz, 55199
Decision Date | 19 September 1972 |
Docket Number | No. 55199,55199 |
Citation | 201 N.W.2d 188 |
Parties | D. E. GRANT et al., Appellees, v. Collin W. FRITZ, Superintendent of Banking of the State of Iowa, Appellant. |
Court | Iowa Supreme Court |
Richard C. Turner, Atty. Gen., and Elizabeth A. Nolan, Asst. Atty. Gen., for appellant.
R. K. Richardson of Richardson, Richardson & Handley, Jefferson, and H. S. Selby of Selby & Updegraff, Newton, for appellees.
This is an appeal from a judgment and decree entered in a certiorari action holding section 524.305(3), The Code, 1971, unconstitutional, and invalidating defendant-superintendent of banking's order denying the issuance of a new state bank charter at Arnolds Park in Dickinson County, Iowa. Defendant-superintendent further appeals from the denial of his motion for a new trial and to correct, amend or enlarge the trial court's findings.
This is the first time the new Iowa banking act of 1969 has come under judicial scrutiny, so far as we are informed. The act, identified as senate file #118, was approved April 7, 1969, became effective January 1, 1970, and is a comprehensive law relating to the establishment, operation and regulation of state banks in Iowa. It now appears as chapter 524 in the Code, 1971.
Prior to the enactment of chapter 524 of the 1971 Code, no judicial review of the refusal by the superintendent of banking was available to applicants who applied for permission to incorporate a state or savings bank. Under the provisions of sections 524.11 and 524.12 of chapter 524, repealed by the enactment of the present chapter 524, any person aggrieved by the action of the superintendent of banking in either granting or refusing to grant a certificate of authority to engage in banking could appeal to the executive council of the state, and the action of the executive council after hearing was final. Judicial review of the action of the superintendent of banking in either granting or refusing to grant permission to incorporate a state or savings bank is now available under the provisions of section 524.305, The Code, 1971, as will be hereinafter elaborated upon.
Section 524.305, The Code, 1971 (the section of the statute with which we are principally concerned here) provides in pertinent part:
* * *'
The plaintiffs, on or about September 8, 1970 filed with the defendant-superintendent their application to organize a state bank to be known as Okoboji Marine State Bank, and to be located at Arnolds Park, Iowa. They filed with their application proposed articles of incorporation and other supporting papers and information as is required by statute (section 524.303, The Code, 1971).
On March 12, 1971, following investigation and hearing, defendant-superintendent issued his 'Order Denying New State Bank', specifically denying the application of the plaintiffs to organize the bank. Based upon the application and the investigation caused to be made by the superintendent and the testimony and written evidence presented at the hearing, the superintendent in his order found:
(1) The articles and supporting items satisfy the requirements of section 524.305(1), The Code.
(2) The convenience and needs of the public would be served by the proposed state bank; however, in view of the number and proximity of existing bank facilities in relation to the proposed location of the new state bank, the superintendent did not find substantial reason to doubt that the convenience and needs of the public were not already being adequately served.
(3) The population density and other economic characteristics of the area primarily to be served by the proposed state bank did not afford reasonable promise of adequate support of the bank.
The superintendent further found that the character and fitness of the incorporators were such as to command the confidence of the community and to warrant the belief the business of the proposed bank would be honestly and efficiently conducted; that the capital structure of the proposed bank was more than adequate in relation to the amount of anticipated business of the bank and the safety of prospective depositors, and that the bank would have sufficient personnel with adequate knowledge and experience in the banking business to manage the bank. It is apparent, therefore, that the superintendent based his denial upon: (a) that while the needs and convenience of the public would be served by the proposed bank, the superintendent did not find substantial reason to doubt the public needs and convenience were not now already being adequately served, and (b) that the population density and other economic characteristics of the area primarily to be served by the bank did not afford reasonable promise of adequate support of the bank.
Trial court, after petition for review had been filed in the district court of Polk County, sustained the writ of certiorari and set aside the order of the superintendent denying the new state bank. Trial court held sub-section 3 of section 524.305 of the Code, 1971 was unconstitutional and is separable from the remainder of section 524.305, and ordered the superintendent of banking to take further action 'for the approval' of the application of plaintiffs for a new state bank. Trial court further found the superintendent's action illegal as being arbitrary, capricious and without foundation in fact or law, and in excess of proper jurisdiction and authority.
Defendant-superintendent of banking relies for reversal on the following claimed errors:
(1) The trial court erred in declaring section 524.305(3), the Code, 1971, to be null and void as an unconstitutional delegation of legislative authority.
(2) Trial court erred in finding the order of the superintendent of banking 'arbitrary, capricious, without proper foundation in fact and in law, and in excess of his proper authority and jurisdiction.'
(3) Trial court exceeded its jurisdiction in a certiorari proceeding and erred in ordering defendant-superintendent to take further action for the approval of the subject application for a new state bank charter.
I. We are unable to agree with the finding and conclusion of trial court that section 524.305(3), which directs the superintendent of banking to determine
is unconstitutional. Trial court found sub-section 3 of section 524.305 is null and void as being an unconstitutional delegation of legislative power in violation of section 1, article III of the Iowa Constitution.
In its determination that sub-section 3 of the cited statute constitutes an unlawful delegation of legislative power, the trial court relied on State ex rel. Klise v. Town of Riverdale, 244 Iowa 423, 57 N.W.2d 63, 70. In State ex rel. Klise, this court in passing upon the constitutionality of a municipal...
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