Howard Sav. Institution of Newark, Application of

Citation32 N.J. 29,159 A.2d 113
Decision Date21 March 1960
Docket NumberNo. A--37,A--37
PartiesApplication of HOWARD SAVINGS INSTITUTION OF NEWARK for Approval of Establishment of Branch Office at 27 Bloomfield Avenue, Borough of North Caldwell, Essex County, New Jersey. MONTCLAIR NATIONAL BANK AND TRUST COMPANY, etc., and the Montclair Savings Bank, etc., Appellants, v. Charles R. HOWELL, Commissioner of Banking and Insurance, etc., and Howard Savings Institution, etc., Respondents.
CourtUnited States State Supreme Court (New Jersey)

John Ferguson, Montclair, for appellant the Montclair Nat. Bank & Trust co.

Ernest F. Keer, Jr., Montclair, for appellant the Montclair Savings Bank (Boyd, Dodd, Keer & Booth, Montclair, attorneys).

William H. Osborne, Jr., Newark, for respondent the Howard Savings Institution (Pitney, Hardin & Ward, Newark, attorneys; Waldron M. Ward, Leslie L. Vanderbilt and William H. Osborne, Jr., Newark, of counsel).

David Landau, Deputy Atty. Gen., for respondent Charles R. Howell, Commissioner of Banking and Insurance (David D. Furman, Atty. Gen., attorney).

The opinion of the court was delivered by

HALL, J.

This appeal challenges a determination of the Commissioner of Banking and Insurance approving the application of the Howard Savings Institution ('Howard'), a mutual savings bank with its main office in Newark, Essex County, to establish a branch at 27 Bloomfield Avenue, in the Borough of North Caldwell, in the same county. Appellants, objecting financial institutions in the general area, sought review in the Appellate Division pursuant to R.R. 4:88--8 and the appeal was certified on our own motion prior to argument there. R.R. 1:10--1(a).

The questions raised revolve around the meaning and application of certain of our statutory requirements for bank branches. N.J.S.A. 17:9A--19 and 20. These provisions had their origin in the Banking Act of 1948. L.1948, c. 67, §§ 19 and 20. Section 19, as amended by L.1952, c. 220, § 1, deals with basic physical requisites. Beyond situations arising from merger or liquidation not pertinent here, both commercial and savings banks are thereby permitted to establish branch offices in the municipality where the principal office is located or in a municipality in the same county 'in which no banking institution has its principal office or a branch office.' 'Municipality' is defined by the act, in effect, as a political subdivision (N.J.S.A. 17:9A--1(10)) and 'banking institution' as a state commercial bank or trust company, a savings bank or a national bank (N.J.S.A. 17:9A--1(2)). It may be noted that neither state nor federal savings and loan associations are included within the latter definition. There is no dispute that the proposed branch location meets this requirement. There is no bank of any kind in North Caldwell or even a savings and loan association. This section also demands that the savings bank seeking to establish the branch have a specified minimum surplus, which, it is conceded, is amply satisfied here.

The crux of this case relates to the criteria prescribed by section 20. It is there provided that before any branch office shall be established, except those resulting from a merger, application shall be made for the Commissioner's approval, which he shall grant, if, after such investigation or hearings as he 'may determine to be advisable,' he shall find, in addition to compliance with the requirements heretofore mentioned:

'(2) that the interests of the public will be served to advantage by the establishment of such branch office, and

'(3) that conditions in the locality in which the proposed branch office is to be established afford reasonable promise of successful operation.'

The Commissioner concluded these requisites had been met after a lengthy hearing at which the applicant and the objectors, appellants and two savings and loan associations who have not appealed, presented full factual and opinion evidence. Before considering the respects in which appellants say the determination is erroneous--and some of the points they raise are of broad and fundamental significance--it is important to summarize the particular physical and economic setting, undisputedly disclosed to the Commissioner by the proofs as a whole.

The location of the proposed branch is near the center of a geographical region commonly known as West Essex. This area, comprising the northwestern corner of the county, has and always has had considerable physical and economic separation and differing characteristics from the heavily urban section to the east. Topography largely accounts for physical separation, the barrier, so-called, being the first ridge of the Watchung Mountains. West Essex extends from this crest five miles or more west to the Morris County boundary and about the same distance from north to south. The densely populated urban section of the county may be said to end with Montclair, which occupies the easterly slope of the ridge.

The area is composed of seven municipalities: Verona, North Caldwell, Essex Fells, Caldwell, West Caldwell, Caldwell Township and Cedar Grove, all of which have been in governmental existence since at least 1908. The first six are closely knit geographically and economically. Cedar Grove has fewer ties with them and consequently is a less important part of the picture before us. They are almost entirely high type residential communities and small-town rather than urban in character. A large part of the working population commutes to Newark, New York City and other parts of the metropolitan area. Caldwell and, to some extent, Essex Fells have been largely built up for many years and have had less recent population growth. The others, with large amounts of vacant land, have experienced a heavy increase in single-family dwellings and residents since the war. Taken as a whole, the area population has increased about 70%, from 26,985 in 1940 to an estimated 45,886 in 1957. Continued extensive growth is predicted with an expected population levelling off 10 or 15 years hence at approximately 60,000. Most of this future increase will undoubtedly take place in West Caldwell, North Caldwell, Caldwell Township and Cedar Grove where large amounts of vacant land still remain as contrasted with the present almost saturated condition in Caldwell, Verona and Essex Fells.

The area also has considerable independence in the matter of retail trade. The centers are found in the long established business sections of Caldwell, serving all of the Caldwells and Essex Fells, and Verona, serving its residents and part of Cedar Grove, where most of the populace do their ordinary day-to-day shopping and procure their usual services, including family banking. The other municipalities presently have very few retail facilities.

A most important element in this setting is the general mode and main route of transportation binding the whole area together. West Essex is to a very great extent dependent upon the automobile rather than public transportation for all kinds of travel, including commuting and shopping. And the main artery for both local and through traffic, in fact the spinal column of the region, is Bloomfield Avenue, running from Newark and Montclair through the area we are describing to join U.S. Route 46 just over the Morris County line, thereby serving also the central and northern portions of that county and providing an interstate route west. It is not only the principal route east and west to and from West Essex (except for Cedar Grove which principally uses State Route 23 running northwesterly from Montclair into Passaic County), but also is the main business street of Verona and Caldwell and the site of a shopping center now in the development stage in West Caldwell. Roads to the various residential sections of all the communities lead north and south from the avenue. Counts near the site of the proposed branch established traffic of better than 10,000 vehicles in a ten-hour daytime period.

This brings us more particularly to North Caldwell itself. The shape of the borough resembles an electric bulb with the small base representing the southerly boundary, running along the north side of Bloomfield Avenue for a distance of about 1,100 feet between the westerly line of Verona and the easterly one of Caldwell. In the neck of the bulb are two large Essex County institutions, the penitentiary and the sanatarium, with a third one, the mental hospital, just over the line in Cedar Grove. The largest portion of the borough's area where its residential districts are found lies in the bulbous part to the north. Mountain Avenue, one of the three main roads from this residential section to Bloomfield Avenue, enters that highway within Caldwell about 400 feet west of the branch site. Its 1957 population was estimated[159 A.2d 118] at 3,094, a 60% Increase since 1950. A further 100% Rise was predicted within the next 15 years. It has practically no shopping facilities. Its residents are entirely dependent upon motor vehicles and shop and bank primarily in Caldwell. Essex Fells, a smaller municipality of about 2,000 people, which also has no financial institution of any kind, is somewhat similarly shaped but oppositely located, with the narrow base forming its northern boundray running along the south side of Bloomfield Avenue across from the North Caldwell line. Access to the avenue is had either in the center of Caldwell or just over the Verona boundary.

The proposed location lies on the north side of the avenue about midway of this North Caldwell frontage. The section is not now a general retail area, land uses being mixed residential and commercial. The opposite Essex Fells frontage is occupied by railroad tracks. The site is about equidistant from the business centers of Verona on the east and Caldwell on the west, approximately a mile from each. The new West Caldwell shopping center is a mile or so further west and the Morris County line an additional...

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