Newport Nat. Bank v. Providence Institution for Sav.

• Decision Date: 01 February 1967
• Docket Number: 77,76,Nos. 37-40,s. 37-40
• Citation: 226 A.2d 137,101 R.I. 614
• Parties: The NEWPORT NATIONAL BANK v. PROVIDENCE INSTITUTION FOR SAVINGS. The NEWPORT NATIONAL BANK v. OLD STONE TRUST COMPANY. The SAVINGS BANK OF NEWPORT v. Raymond H. HAWKSLEY et al. (Old Stone Trust Company). The SAVINGS BANK OF NEWPORT v. Raymond H. HAWKSLEY et al. (Providence Institution for Savings). NEWPORT SAVINGS AND LOAN ASSOCIATION v. Raymond H. HAWKSLEY et al. (Old Stone Trust Company). NEWPORT SAVINGS AND LOAN ASSOCIATION v. Raymond H. HAWKSLEY et al. (Providence Institution for Savings). Appeal
• Court: Rhode Island Supreme Court

Page 137

226 A.2d 137

101 R.I. 614

The NEWPORT NATIONAL BANK v. PROVIDENCE INSTITUTION FOR SAVINGS.

The NEWPORT NATIONAL BANK v. OLD STONE TRUST COMPANY.

The SAVINGS BANK OF NEWPORT v. Raymond H. HAWKSLEY et al. (Old Stone Trust Company).

The SAVINGS BANK OF NEWPORT v. Raymond H. HAWKSLEY et al. (Providence Institution for Savings).

NEWPORT SAVINGS AND LOAN ASSOCIATION v. Raymond H. HAWKSLEY et al. (Old Stone Trust Company).

NEWPORT SAVINGS AND LOAN ASSOCIATION v. Raymond H. HAWKSLEY et al. (Providence Institution for Savings).

Appeal Nos. 37-40, 76, 77.

Supreme Court of Rhode Island.

Feb. 1, 1967.

Moore, Virgadamo, Boyle & Lynch, Francis J. Boyle, Newport, for appellant Newport Nat. Bank

Corcoran, Peckham & Hayes, William W. Corcoran, Newport, for appellant Savings Bank of Newport.

Sheffield & Harvey, Andrew M. Brown, Jr., Newport, for appellant Newport Savings and Loan Ass'n Higgins, Cavanagh & Cooney, John P. Cooney, Jr., Providence, for appellees Providence Institution for Savings and Old Stone Trust Co.

Before ROBERTS, C.J., and PAOLINO, POWERS, JOSLIN, and KELLEHER, JJ.

OPINION

PAOLINO, Justice.

These cases present the question whether the Administrative Procedures Act, G.L.1956, chap. 35 of title 42, hereinafter referred to as the act, applies to proceedings before the Board of Bank Incorporation, hereinafter referred to as the board, seeking certificates to establish branch banking offices pursuant to the provisions of G.L.1956, §§ 19-2-23 and 19-1-13. ¹ The causes are before this court on appeals brought by certain remonstrants from a judgment of the superior court dismissing their petitions for judicial review of the board's action on the ground that the act was not applicable.

The Providence Institution for Savings, a savings bank, and the Old Stone Trust Company, a trust company, hereinafter sometimes referred to as the applicants, filed applications with the board under §§ 19-2-23 and 19-1-13, respectively, for certificates of public convenience and advantage to establish branch offices on the same premises at 98 William street, Newport. The board, in accordance with the requirements of the statute, assigned a date and place for a public hearing on the applications.

Section 19-2-23 reads as follows:

'Establishment of branches.-Any savings bank may establish a branch or branches within this state at any other place than its principal place of business upon obtaining the consent of the board of bank incorporation thereto. Said board of bank incorporation shall, before giving such consent, require that a notice of such intention to establish a branch or branches of said savings bank shall be given for the same period of time and in the same manner, and a hearing had thereon, as is provided in the case of incorporation of savings banks in § 19-2-3; and if said board of bank incorporation shall decide that public convenience and advantage will be promoted by the establishment of such branch or branches, it shall, and it is hereby authorized to, issue a certificate to that effect, a copy of which shall be filed with the director of business regulation, and thereupon said branch or branches may begin the transaction of business. If said board refuses to issue such certificate, no further proceedings shall be had, but the application may be renewed after one (1) year from the date of such refusal, in which case notice of a public hearing thereon shall be published as hereinbefore provided.'

Section 19-1-13 in substance reads the same as § 19-2-23, except that it relates to establishment of branches by banks or trust companies.

The following banking institutions, hereinafter referred to as remonstrants, namely, The Newport National Bank, a commercial bank created by act of Congress, The Savings Bank of Newport, a mutual savings bank organized under the laws of this state, and Newport Savings and Loan Association, a state chartered association, are located in the city of Newport, not too distant from the location where applicants propose to establish their branch offices.

The remonstrants appeared at the initial hearing before the board at which they requested permission to enter their appearance as parties of record, raised the question of the applicability of the act, and objected to further proceedings pending the adoption by the board of rules of procedure as required by § 42-35-2(2) of the act. The board continued the hearing to a later date for submission of memoranda and in the interim adopted rules of procedure pursuant to the requirements of § 42-35-2(2). When the hearing was resumed, the board ruled that the act applied to the proceedings but held that the remonstrants were not legal parties thereto. However it invited the remonstrants to submit such evidence and arguments as they wished.

After a hearing on the merits the board made specific findings of fact and decided that public convenience and advantage would be promoted by the establishment of such branches. It then approved the applications and issued the prescribed certificates.

The remonstrants thereupon filed six separate petitions seeking judicial review of the board's decisions under §§ 42-35-15 and 42-35-16 of the act. By agreement the petitions were consolidated for hearing in the superior court and by stipulation the applicants were permitted to intervene.

The applicants filed motions in the superior court to dismiss the petitions for judicial review on the grounds that the court lacked jurisdiction because § 42-35-15 is not applicable to proceedings before the board; that the proceedings before the board did not constitute a contested case; that the remonstrants were not parties to the proceedings before the board and were not parties aggrieved by its decision; that the decision of the board did not relate to any conflicting rights between adverse parties; and that the board in making its determinations on the applications before it was performing legislative acts and making policy determinations.

The superior court granted the motions to dismiss and entered judgment on the ground that the proceedings before the board could not be construed as a 'contested case' as that term is defined in the act and on the further ground that remonstrants were not 'aggrieved parties' within the meaning of the act. It based its decision squarely on our holding in the case of Newport National Bank v. Hawksley, 92 R.I. 433, 169 A.2d 616. Hawksley involved a petition for certiorari to review the decision of the board in granting a certificate to establish a branch bank under § 19-2-23. We held in substance that the proceeding there was not an adversary proceeding and therefore commonlaw certiorari did not lie. In reviewing the legislative history of § 19-2-23, we stated that the nature of the act of issuing a certificate was purely legislative and that the nature of the proceedings of the board performing such act was administrative. We also stated that the fact that a hearing was required and that certain conditions had to be met before the board could exercise such power did not mean that its action was necessarily judicial or quasi-judicial.

We agree with the superior court's statement that 'The sole issue before this Court is whether the Administrative Procedures Act affected the decision of our Supreme Court in The Newport National Bank vs. Hawksley, et al, supra,' but we cannot agree with its determination of this issue. We believe that the answer to this question depends upon whether these proceedings are contested cases within the meaning of the act. If they are, the act is applicable and therefore has affected our decision in Hawksley. In that event the only other question is whether remonstrants, as competing banking institutions in the same area, are persons aggrieved within the contemplation of the act.

We note here that the opinion in Hawksley was filed on April 13, 1961 and that the Administrative Procedures Act was approved on April 17, 1962.

Sections 19-2-23 and 19-1-13, under which the application were filed, provide for public hearings as a condition precedent to action by the board. Section 42-35-1 of the act, in part, contains the following definitions:

'(a) 'agency' includes each state board, commission, department, or officer, other than the legislature or the courts, authorized by law to make rules or to determine contested cases.

'(b) 'contested case' means a proceeding, including but not restricted to rate-making, price fixing, and licensing, in which the legal rights, duties, or privileges of a specific party are required by law to be determined by an agency after an opportunity for hearing;

'(c) 'license' includes the whole or part of any agency permit, certificate, approval, registration, charter, or similar form of permission required by law, but it does not include a license required solely for revenue purposes;

'(d) 'licensing' includes the agency process respecting the grant, denial, renewal, revocation, suspension,...