Marshfield Community Bank v. State Banking Bd., s. 9240

• Decision Date: 03 May 1973
• Docket Number: Nos. 9240,9241 and 9244,s. 9240
• Parties: MARSHFIELD COMMUNITY BANK, Plaintiff-Respondent, v. STATE BANKING BOARD of Missouri, Defendant-Appellant, Citizens State Bank of Marshfield, Missouri, Intervenor-Appellant, Seymour Bank and Pleasant Hope Bank, Intervenors-Appellants.
• Court: Missouri Court of Appeals

Page 17

496 S.W.2d 17

MARSHFIELD COMMUNITY BANK, Plaintiff-Respondent, v. STATE BANKING BOARD of Missouri, Defendant-Appellant, Citizens State Bank of Marshfield, Missouri, Intervenor-Appellant, Seymour Bank and Pleasant Hope Bank, Intervenors-Appellants.

Nos. 9240, 9241 and 9244.

Missouri Court of Appeals, Springfield District.

May 3, 1973.

Motion for Rehearing or to Transfer to the Supreme Court

Denied May 30, 1973.

Application to Transfer Denied July 16, 1973.

E. C. Curtis, L. J. Knauer, Farrington, Curtis & Strong, Springfield, for plaintiff-respondent.

John C. Danforth, Atty. Gen., Charles A. Blackmar, Asst. Atty. Gen., Jefferson City, for defendant-appellant State Banking Board of Missouri.

Robert W. Spangler, Crouch, Crouch, Spangler & Douglas, Harrisonville, for intervenor-appellant Citizens State Bank of Marshfield.

Warren S. Stafford, Thom G. Field, Neale, Newman, Bradshaw & Freeman, Springfield, Elvin S. Douglas, Douglas & Douglas, Bolivar, for intervenor-appellant Pleasant Hope Bank.

COTTEY, Special Judge.

We have for decision a question requiring the construction of several sections of the banking laws of the state and a review of some procedural aspects of their administration. The case has reached us by a progression of steps taken under circumstances on which it will be appropriate to comment as we go along, by way of background for the later discussion of the issues:

1. In 1967 the incorporators of a proposed new bank--the Marshfield Community Bank, respondent here--applied to the Commissioner of Finance for a charter to engage in the general banking business in Marshfield, in Webster County. There were ten established banks in, or on the periphery of, Webster County at the time, (exclusive of those in Springfield, twenty miles distant from Marshfield), which served all or overlapping parts of the trade area in which the new bank was scheduled to operate, and seven of them--including those named as appellants here--were opposed to the issuance of the charter. The proceedings before the Commissioner in cases of this kind, however, are purely exparte. Objecting banks are not accorded the status or even the title of 'parties;' no method is provided for them to resist the charter in any conventional way. ¹

2. Upon the filing of the application it became the duty of the Commissioner, under § 362.030(1), RSMo 1969, V.A.M.S., to 'cause an examination to be made to ascertain,' (among other things), 'if the convenience and needs of the community to be served justify and warrant the opening of the bank.' ² That is the ultimate fact to be found--the essential requirement in every case as a condition precedent to the chartering of a new bank. And it follows by logic, indeed by all conventional rules, that the burden of proving that fact rests on the proponents of the charter at all stages of the proceedings. ³ The Commissioner did his duty; he caused the required examination to be made, not once but twice.

3. The report of the first investigation, completed in 1969, concluded with this finding: 'The conditions are considered to be unsatisfactory. . . . (T)he needs of the community and surrounding trade area are being served by the existing bank(s).' No action was taken on that report, however. Instead, a new examination was ordered to be made--by a different examiner. The report of it, although ambivalent in some respects and challenged for accuracy in others, was on the whole favorable. Accordingly the Commissioner, in the exercise of the discretion vested in him by § 362.035, RSMo 1969, V.A.M.S., issued the charter to respondent on May 11, 1971.

4. The dissident banks applied to the State Banking Board for a review of that decision, as they were authorized to do by §§ 361.094(2) and 361.095(3), RSMo 1969, V.A.M.S. Since the statutes and rules relating to such a review bear directly on the issues before us, it will be well to notice them here and to make some observations on them that may be helpful in analyzing our later application of them in this case. To begin with, the Legislature created the Banking Board and invested it with jurisdiction to 'hear and by order determine an appeal from the action of the commissioner granting the incorporation' of a new bank, and directed that the Commissioner 'shall act in accordance with any order' made by the Board pursuant to that authority. §§ 361.092, 361.094(2), and 361.095(4), RSMo 1969, V.A.M.S. On appeal from the Commissioner's action, the Board is authorized to subpoena witnesses and administer oaths and compel the production of any documentary evidence deemed pertinent to the inquiry, and is directed to 'make rules and regulations, consistent with applicable law, for the proceedings in connection with' such appeals. §§ 361.096, 361.095(1), RSMo 1969, V.A.M.S. The decision of the Board is 'subject to judicial review as provided by law.' § 361.095(4), RSMo 1969, V.A.M.S. The right of appeal to the Board is granted to any bank 'claiming to be adversely affected' by the Commissioner's decision. § 361.094(2), RSMo 1969, V.A.M.S. And an alternative and essentially indistinguishable right to intervene on any such appeal is likewise granted, in the same language, to any bank 'claiming to be adversely affected' by the Commissioner's action. § 361.095(3), RSMo 1969, V.A.M.S. Two of the dissident banks in the case at hand elected to appeal from the Commissioner's decision; the remaining five chose to intervene on that appeal.

5. The review by the Board was made in due course. It was a de novo hearing on all of the objections raised by the dissident banks, whether as appellants or intervenors--an evidentiary hearing on the merits of the case conducted by conventional rules. The result of it was that the Board reversed the Commissioner and revoked respondent's charter by its order of July 14, 1971, which recited, 'That the record and evidence adduced does not support a finding that the convenience and needs of the community to be served justify and warrant the issuance of a charter to the applicant Marshfield Community Bank.' Respondent professes to find some ambiguity in that language. We see none. Beyond doubt, in the view the Board took, the proponents of the charter simply failed to sustain their burden of proof on the privotal isssue of 'the convenience and needs of the community to be served.'

6. Disappointed by that result, respondent applied to the Circuit Court of Webster County for a judicial review of the Board's decision--and the case took a new turn. Based on a review of the record compiled before the Board, the circuit court made a two-part finding: 1) 'that the State Banking Board acted in excess of its authority in that its decision was based upon a ground and finding not included in the grounds upon which the appeal to the Board was taken,' and 2), that the Board's decision 'was arbitrary, capricious and unreasonable' because the 'evidence clearly shows that the convenience and needs of the community to be served do justify and warrant the issuance of the charter.' Accordingly, the court reversed the Board and reinstated respondent's charter by its order of January 20, 1972. The case comes to us by consolidated appeals from that ruling.

The learned trial judge has not favored us with a memorandum opinion outlining the considerations that led him to that conclusion. ⁴ In support of it, however, counsel for respondent have marshalled an array of arguments and brought them on the field in this order:

A. To sustain the court's first finding--that the Board acted in excess of its authority by deciding the case on a ground not properly presented to it--a proposition of six parts is advanced: 1) that § 361.094(2), RSMo 1969, V.A.M.S., requires a dissident bank's notice of appeal to 'state the grounds upon which it is alleged that the action of the commissioner should be . . . reversed;' 2) that the requirement is jurisdictional and 'could not possibly be waived;' 3) that the appealing banks wholly failed to comply with it because they prefaced every stated ground for their appeal with the assertion, 'The Commissioner has failed to make an examination to ascertain,' etc.--as, for pertinent example, 'The Commissioner has failed to make an examination to ascertain and determine if the convenience and needs of the community to be served justify and warrant the opening of said Bank;' 4) that such an assignment raises only the question of whether an examination for that purpose was in fact made--nothing more; 5) that proof of the admitted fact that the Commissioner had caused the required examination to be made, not once but twice, put an end to the legitimate inquiry of the Board and dictated the result; hence 6) that in inquiring beyond the fact, and in delving into the merits of the case and in deciding on the basis of new evidence what the Commissioner's decision should have been, the Board 'acted in excess of its authority.' Three comments on that proposition occur to us:

(1) It obviously depends for its persuasive effect on a strictly literal interpretation of the language used in the notice of appeal; but not since Portia's success with it has that approach enjoyed much favor in court. It is a fact of life that the art of precise expression is not generally practiced; examples of its lapse are daily before the courts to be dealt with. And out of necessity of doing plain justice in those cases a rule has evolved that has its roots in ancient wisdom, 'The letter killeth, but the spirit giveth light.' Guided by that precept, courts look to the intendment of language used, not to the inartificialities of its use. The Board evidently followed that policy in this case. Implicit in its decision is a finding that the wording of the notice of appeal did not obscure its purpose or meaning and, in spite of the awkward preface to its assignments, did not mislead respondent to its prejudice in any way. We approve.

(2) Essential to the argument...