Mulkey v. Bennett

• Decision Date: 27 January 1920
• Citation: 186 P. 1115,95 Or. 70
• Parties: MULKEY et al. v. BENNETT, State Superintendent of Banks, et al. [*]
• Court: Oregon Supreme Court

186 P. 1115

95 Or. 70

MULKEY et al. v. BENNETT, State Superintendent of Banks, et al. ^[*]

Supreme Court of Oregon

January 27, 1920

Department 2.

Appeal from Circuit Court, Marion County; George G. Bingham, Judge.

Proceedings in mandamus by S.A. Mulkey and others to compel Will H Bennett, Superintendent of Banks of the State of Oregon, and others, members of the State Banking Board, to issue to the plaintiffs a charter to do a banking business. Judgment for plaintiffs, and defendants appeal. Reversed, and writ denied.

This is a proceeding in mandamus to compel the defendants to issue to the plaintiffs a charter to do a banking business in the district of St. Johns, in the city of Portland.

The defendant Mr. Olcott is Governor and secretary of state, and Mr. Hoff is state treasurer; and together they constitute the state board of bank commissioners which elected the defendant Bennett as state superintendent of banks. It is alleged that the city of Portland has a population of 200,000; that the St. Johns district, formerly the city of St. Johns, which is now in the city of Portland, is situated more than two miles to wit, twelve miles, from the central portion of Portland.

About March 27, 1919, the plaintiffs, acting through L.A. Bass made a written application to defendant W.H. Bennett, as state superintendent of banks, for a priority right to organize a bank in the St. Johns district, in the city of Portland, by whom they were informed that it would be necessary to show a desire and need upon the part of residents in that section before he would grant a charter. It is then alleged:

"That the petitioners above named are citizens of the United States and residents and inhabitants of the state of Oregon, and that all save two of your petitioners are actual residents within the St. Johns district, in the city of Portland. That on or about the 16th day of April, 1919 petitioners associated themselves together by articles of incorporation for the purpose of establishing a state bank to do a general banking business within the city of Portland, Multnomah county, Or.; said bank to be situated in the St. Johns district of said city upon the terms and conditions set out in said articles of incorporation, a copy of which, marked 'Exhibit A,' is attached hereto, referred to and made a part hereof. That thereupon petitioners elected S.A. Mulkey, J.W. Davis, and L.A. Bass majority stockholders in said corporation, as directors thereof and thereupon subscribed in full for the full amount of the capital stock of 500 shares of the par value of $100.00 per share, and further subscribed the sum of $5,000.00 for organization expenses of said corporation, a copy of said subscription list, marked 'Petitioners' Exhibit B,' being hereto attached, referred to and made a part hereof.

"That thereafter and on said date, petitioners filed with the defendant, Will H. Bennett, superintendent of banks, triplicates of the said articles of incorporation, a list of the stockholders, showing names, addresses, and number of shares subscribed by each, and made written application to said defendant for a charter as a state bank to do a general banking business in St. Johns district of the city of Portland, Multnomah county, Or., and at the same time tendered to defendant $31.00 as organization and corporation fees therefor."

On April 23, 1919, the defendant Bennett, as such superintendent, refused to grant a permit and made the following indorsement on the articles of incorporation:

" * * * For the reason that in my opinion the organization of such a bank in St. Johns is not justified at the present time. (Sec. 20.) There is already a national bank at this point which is the amalgamation of two national banks formerly located there, and also a state bank which expects to move from the outskirts of St. Johns into the heart of the district. The state bank, as you know, has been in the hands of this department temporarily, but has been completely reorganized and permitted to reopen."

The petitioners appealed from that decision and refusal, to the state banking board, which held a hearing thereon April 29, 1919, and on May 2, 1919, it sustained the decision of Bennett, as superintendent of banks, in his refusal to grant the permit, but in its decision provided:

"That if the First Trust & Savings Bank of St. Johns hereinafter referred to had not moved into the business district of St. Johns, by July 1, 1919, an application for a charter would be considered."

The First Trust & Savings Bank was a banking corporation, formerly doing business in the St. Johns district, and it became insolvent on February 19, 1919, and for such reason was taken under control by the state superintendent of banks. The assets thereof were assigned to one Dornbecher, who paid all the claims against it in full.

It is alleged that, between the date of petitioners' application for permission to organize and the date of the hearing on appeal to the state banking board, the defendant Bennett, as superintendent of banks, disregarding the rights of petitioners and the priority of their application, attempted to revive the First Trust & Savings Bank of St. Johns by means of supplementary articles of incorporation, into a new association of persons with a capital stock of $50,000, to be then removed to the business section of the St. Johns district and resume business under the corporate name of "Bank of Commerce," which was the identical name chosen by petitioners, as set forth in their application to defendant Bennett and in their articles of incorporation.

It further appears that, at the hearing on the appeal, Bennett represented that the reorganized First Trust & Savings Bank and the Peninsula National Bank of St. Johns would be sufficient to care for the banking business of that...