Peoples Bank of Trenton v. Saxon
| Decision Date | 19 January 1967 |
| Docket Number | 16804.,No. 16802,16802 |
| Citation | 373 F.2d 185 |
| Parties | PEOPLES BANK OF TRENTON, Plaintiff-Appellee, and National Bank of Wyandotte and Security Bank, Intervening Plaintiffs-Appellees, v. James J. SAXON, as Comptroller of the Currency of the United States of America, Defendant-Appellant. PEOPLES BANK OF TRENTON, Plaintiff-Appellee, and National Bank of Wyandotte and Security Bank, Intervening Plaintiffs-Appellees, v. MANUFACTURERS NATIONAL BANK OF DETROIT, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
David L. Rose, Department of Justice, Washington, D. C., John W. Douglas, Asst. Atty. Gen., Morton Hollander, Atty., Department of Justice, Washington, D. C., Lawrence Gubow, U. S. Atty., Detroit, Mich., on brief, for James J. Saxon, etc.
Carson C. Grunewald, Detroit, Mich., Bodman, Longley, Bogle, Armstrong & Dahling, James M. Baysinger, Detroit, Mich., on brief, for Manufacturers Nat. Bank of Detroit.
Richard B. Foster, Lansing, Mich., Raubolt, MacDonald & Dodge, Raleigh R. Raubolt, Trenton, Mich., Foster, Campbell, Lindemer & McGurrin, Theodore W. Swift, Edmund E. Shepherd, Lansing, Mich., on brief, for appellees.
Richard W. Look, Wyandotte, Mich., for intervening plaintiff-appellee National Bank of Wyandotte.
Harry F. Vellmure and Victor T. Mitea, Allen Park, Mich., for intervening plaintiff-appellee Security Bank.
Before O'SULLIVAN and PHILLIPS, Circuit Judges, and KALBFLEISCH*, District Judge.
These declaratory judgment actions were brought against the Comptroller of the Currency (hereafter the Comptroller) and the Manufacturers National Bank of Detroit (hereafter Manufacturers) by the Peoples Bank of Trenton (hereafter Peoples) to have declared void the Comptroller's issuance of a certificate permitting Manufacturers to operate a branch at the intersection of Telegraph, Toledo and West Roads in Brownstown Township, Wayne County, Michigan, and to enjoin the continued operation of such branch. Two other interested banks intervened as plaintiffs.
By stipulation of the parties, these two actions were consolidated by the trial Court. After examining the Comptroller's file and evidence offered at a trial on the merits, the District Court concluded that the Comptroller's decision was not supported by competent, substantial evidence and therefore was an abuse of discretion. Accordingly, the District Court granted the relief sought by the plaintiffs. These appeals are prosecuted from the final orders granting injunctive relief.
On July 3, 1964, Manufacturers sought permission of the Comptroller to open and operate a branch at the above-mentioned location. The office of the Comptroller conducted an investigation, during the course of which an examiner from that office made a field inspection of the area in question accompanied by an employee of Manufacturers and filed his report and recommendation. On December 4, 1964, the Comptroller approved Manufacturers application and on December 14, 1964, executed the authorization certificate. On December 15, 1964, the branch was opened in temporary quarters.
Plaintiff commenced these actions on December 18, 1964, asserting that the area in which the branch was located did not constitute an unincorporated village within the meaning of the Michigan branch-banking law (Section 34, Michigan Financial Institutions Act, 17 Mich. Stats.Ann., Section 23.762). This statutory limitation is incorporated into federal law by 12 U.S.C.A. Section 36(c). In addition, plaintiff asserted that the comptroller's action was unlawful because he had not held an adjudicatory hearing pursuant to the Administrative Procedures Act, and because there was no necessity for the establishment of a branch at that location under Michigan law. The District Court rejected these latter two contentions upon motion for summary judgment and proceeded to trial on the remaining contention. No appeal of the issues disposed of by summary judgment is being pursued.
Under the applicable section of the National Bank Act, 12 U.S.C.A. Section 36 (c), a national bank, with the approval of the Comptroller of the Currency, may establish and operate branches only at such places within the state in which the bank is located as are expressly authorized for state banks by the law of the state in question, subject to the restrictions as to location imposed by the law of the state on state banks. Michigan law limits the establishment of a branch bank to a location "within a village or city other than that within which it was originally chartered: * * * provided further, that no such branch shall be established in a city or village in which a state or national bank or branch thereof is then in operation * * *." 17 M.S.A. 23.762, Comp.Laws 1948, Section 487.34.
The issue presented here is a familiar one in the State of Michigan, where many communities are unincorporated but are villages, nevertheless, within the meaning of the Michigan branch-banking law. When such an unincorporated area is proposed as a location for a branch bank it becomes necessary to determine if that area is an unincorporated village under Michigan law.
The meaning of the word "village" is not explicit. The Supreme Court of Michigan has said that it can only be defined and construed for banking purposes "in the light cast by the obvious purpose of the statute and the mischief sought to be remedied." Wyandotte Savings Bank v. Eveland, 347 Mich. 33, 78 N.W.2d 612 (1956). On page 41 of its opinion in that case, 78 N.W.2d on page 617, the Court gave the following definition of an unincorporated village:
"* * * merely an assemblage or community of people, a nucleus or cluster for residential and business purposes, a collective body of inhabitants, gathered together in one group."
A more recent elaboration of the definition appears in the case of Bank of Dearborn v. State Banking Commissioner, 365 Mich. 567, 571, 114 N.W.2d 210, 212 (1962), where the Court said in part:
The Court indicated that economic factors rather than governmental, geographical or physical boundaries are controlling in arriving at the definition of a given area as a "village."
In Community National Bank of Pontiac v. Saxon, 310 F.2d 224, 226 (CA 6, 1962), this Court held that the Comptroller has
Manufacturers, one of the larger Detroit banks, is attempting to establish a branch near the center of a three-square-mile unincorporated area adjacent to the incorporated village of Woodhaven. Peoples operates a branch bank in Woodhaven. The area alleged by Manufacturers to be an unincorporated village contains 30 to 36 businesses, 360 homes, and a population of 1,330 people. There are no shopping centers, schools, churches, or professional offices in the area. The District Court took testimony, reviewed the file of the Comptroller, and by stipulation of all parties visited the area in question in the company of the attorneys on both sides.
The scope of judicial review of a determination of the Comptroller is governed by 5 U.S.C.A., Section 706, which is, in applicable part, as follows:
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