Kostman v. Pine Lawn Bank & Trust Co.

• Decision Date: 13 September 1976
• Docket Number: No. 59299,59299
• Parties: William R. KOSTMAN, Commissioner of Finance, Appellant, v. PINE LAWN BANK AND TRUST COMPANY, a Missouri Banking Corporation, and William J. Bollwerk, Chairman, Missouri State Banking Board, et al., Respondents.
• Court: Missouri Supreme Court

Page 72

540 S.W.2d 72

William R. KOSTMAN, Commissioner of Finance, Appellant, v. PINE LAWN BANK AND TRUST COMPANY, a Missouri Banking Corporation, and William J. Bollwerk, Chairman Missouri State Banking Board, et al., Respondents.

No. 59299.

Supreme Court of Missouri, En Banc.

Sept. 13, 1976.

Irven L. Friedhoff, Jefferson City, for appellant.

Albert Schoenbeck, St. Louis, Shook, Hardy & Bacon, Kansas City, D. Jeff Lance, St. Louis, and John H. Hendren, Jefferson City, for respondents.

BARDGETT, Judge.

The Commissioner of Finance of Missouri (commissioner) appealed to the Missouri court of appeals, Kansas City district, from the judgment of the circuit court of Cole county which judgment affirmed the decision of the Missouri State Banking Board (board) allowing respondent Pine Lawn Bank and Trust Co. (bank) to change its name and relocate. The board's decision, in effect, reversed the determination made by the commissioner on the bank's application.

The court of appeals by opinion held that the commissioner lacked legal standing to appeal the judgment of the circuit court and upon that ground affirmed the circuit court's judgment. This court sustained the commissioner's application for transfer pursuant to Art. V, sec. 10, Mo.Const., as amended 1970, to decide the question of whether the commissioner has legal standing to obtain review in circuit court of the board's decision and thereafter to appeal to the appropriate appellate tribunal in Missouri.

The court has concluded that the commissioner of finance does not have the legal right or standing to seek review in circuit court from a decision and order of the state banking board. The opinion of the court of appeals, Kansas City district, authored by Ronald L. Somerville, Judge, is adopted as the opinion of this court and is set forth infra in quotes followed by additional comments of this court.

'Pitted against each other on this appeal are the Commissioner of Finance (hereinafter referred to as the Commissioner) and the State Banking Board, both of whom occupy official positions in the same division (Division of Finance) of the same department (Business and Administration) of the executive branch of state government. The root of this discordant intragovernmental confrontation is an application by a state chartered bank to amend its articles of agreement so as to permit it to change its name and relocate its main banking house.

'The respondents on appeal are the applicant bank and the chairman and members of the State Banking Board. The Commissioner is the sole appellant. Respondents vigorously contend that the Commissioner is not an 'aggrieved' person within the purview and meaning of Section 512.020, RSMo 1969, and therefore lacks legal standing to appeal from a judgment entered by the Circuit Court of Cole County affirming a decision of the State Banking Board permitting th applicant bank to amend its articles of agreement so as to change its name and effect a relocation of its main banking house. Apparently anticipating that his standing to appeal would become a crucial issue, the first of the four points asserted by the Commissioner before this court addresses that issue. The following delineation of fact is limited to outlining the progression of procedural events leading up to crucial issue which this court is called upon to decide.

'On January 15, 1974, the Pine Lawn Bank and Trust Company (heretofore and hereafter referred to as the applicant bank), pursuant to Section 362.325, RSMo 1969, applied to the Commissioner for permission and approval to amend its articles of agreement so as to permit it to change its name and relocate its main banking house from 6149 Natural Bridge Avenue, Pine Lawn, Missouri to the southeast corner of the intersection of Missouri Route 725 and Ladue Road, Ladue, Missouri. On June 18, 1974, the Commissioner, after having conducted an examination as prescribed by subparagraph 7 of Section 362.325, supra, refused to grant the applicant bank permission and approval to amend its articles of agreement in the particulars heretofore mentioned. The applicant bank, pursuant to subparagraph 7 of Section 362.325, supra, timely appealed from the Commissioner's refusal to the State Banking Board. The Clayton Bank and the First National Bank of Clayton (hereinafter referred to as the opponent banks), as provided in subparagraph 3 of Section 361.095, RSMo 1969, were permitted to intervene in the hearing conducted by the State Banking Board pursuant to Section 361.094, RSMo 1969, regarding the applicant bank's appeal. The State Banking Board rendered its decision on July 26, 1974, whereby it reversed the Commissioner and granted the applicant bank permission to amend its articles of agreement as requested.

'On August 27, 1974, the Commissioner, ostensibly pursuant to Section 536.100, RSMo 1969, and Rule 100.03, filed a petition in the Circuit Court of Cole County for judicial review of the decision rendered by the State Banking Board. On August 30, 1974, the opponent banks did likewise. The separate petitions for review were ordered consolidated for hearing by the Circuit Court of Cole County since a common issue was presented by both petitions. On October 24, 1974, the applicant bank filed a motion in the Circuit Court of Cole County seeking to dismiss the Commissioner's petition for judicial review on the ground that he was not an 'aggrieved party' within the meaning of Section 536.100, supra, and Rule 100.03, supra, and therefore lacked the requisite legal standing to seek judicial review of the decision rendered by the State Banking Board. On November 15, 1974, the City of Pine Lawn was granted leave by the Circuit Court of Cole County to intervene in the hearing to be held on the consolidated petitions for judicial review.

'On November 20, 1974, the Circuit Court of Cole County overruled the applicant bank's motion to dismiss the Commissioner's petition for judicial review and, after all parties were heard, found, inter alia, that the decision of the State Banking Board was 'supported by competent and substantial evidence upon the whole record' and entered judgment affirming same. ¹

'Intervenor, the City of Pine Lawn, and the opponent banks did not appeal from the judgment rendered by the Circuit Court of Cole County, and may therefore be said to have judicially acquiesced to its legal propriety. The Commissioner, however, refused to acquiesce to the legal propriety of the judgment rendered by the Circuit Court of Cole County and by a timely appeal to this court seeks reversal of said judgment on three grounds directed toward its merits. If the Commissioner be not an 'aggrieved party' within the purview and meaning of Section 512.020, supra, then he lacks legal standing to invoke appellate review of said judgment and it becomes unnecessary to address the three points asserted by him striking at the merits of the judgment.

'The weight of authority negates the right of an addministrative officer of a branch of government, the position occupied by the Commissioner herein, who has suffered defeat at the hands of an administrative tribunal with jurisdiction to review his actions, the position occupied by the State Banking Board herein (Section 361.094, supra), to invoke judicial review of an administrative tribunal's decision absent statutory authority to do so. See State ex rel. Broadway Petro. Corp. v. City of Elyria, (18 Ohio St. 23) 247 N.E.2d 471 (Ohio 1969), and cases therein cited. The Commissioner asserts that subparagraph 3 of Section 361.095, RSMo 1969, Section 536.100, RSMo 1969, and Section 512.020, RSMo 1969, statutorily vest him with authority to run the gamut of judicial review regarding the State Banking Board's reversal of his initial decision.

'That portion of subparagraph 3 of Section 361.095, supra, seized upon by the Commissioner reads as follows: 'At any hearing provided for in Section 361.094 the Commissioner of Finance shall be deemed a party . . .. Section 361.094, RSMo 1969, referred to in subparagraph 3 of Section 361.095, supra, statutorily impregnates the State Banking Board with jurisdiction to hear and by judicial order determination all appeals from refusals of the Commissioner to grant certificates of incorporation to proposed incorporators of banks and trust companies or refusals to grant permission to banks or trust companies to relocate and, as well as, from actions of the Commissioner granting certificates of incorporation to proposed incorporators of banks and trust companies or permitting banks and trust companies to amend their articles of agreement in order to achieve relocation. Said statute imposes no restraints or limitations whatsoever on the scope of the State Banking Board's review of specified matters coming before it on appeal from actions or refusals taken by the Commissioner; the Commissioner's actions or refusals, as the case may be, flow from ex parte proceedings (Section 362.030, RSMo 1969, relative to the granting of certificates of incorporation and Section 362.325, RSMo 1969, relative to amendment of articles of agreement to permit relocation), and when properly lodged before the State Banking Board for review have no ring of finality and are not inviolable, even though supported by competent and substantial evidence, since the State Banking Board may substitute its own discretion and judgment in determining the facts in light of the applicable law and override any prior determination made by the Commissioner. Marshfield Community Bank v. State Banking Bd., 496 S.W.2d 17 (Mo.App.1973); and Section 361.094, supra. Ex parte actions or refusals of the Commissioner on appeal before the State Banking Board stand in complete deference to the latter's determination since the Commissioner's actions or refusals in no way inhibit, constrict, or limit the State Banking Board from substituting its own discretion and judgment (so long as compatible with statutory...