Peoples State Bank of Velva v. State Bank of Towner, 9335

Decision Date26 April 1977
Docket NumberNo. 9335,9335
PartiesPEOPLES STATE BANK OF VELVA, Plaintiff-Appellee, v. STATE BANK OF TOWNER and the State Banking Board, Defendants-Appellants. Civ.
CourtNorth Dakota Supreme Court

Syllabus by the Court

For the reasons stated in the opinion, the movant's motion to stay the preliminary injunctive relief pending appeal, pursuant to Rule 8(a), N.D.R.App.P., is denied.

Frank F. Jestrab, Williston, and David O. Lee, Department of Banking and Financial Institutions, Bismarck, Sp. Asst. Attys. Gen., for State Banking Board, defendant and appellant; argued by Frank F. Jestrab, Bismarck.

Donald R. Holloway, Bismarck, for State Bank of Towner, defendant and appellant.

Pringle & Herigstad, Minot, for Peoples State Bank of Velva, plaintiff and appellee; argued by Thomas A. Wentz, Minot.

PAULSON, Judge.

This is a motion made pursuant to Rule 8(a) of the North Dakota Rules of Appellate Procedure filed subsequent to the order of the district court of McHenry County dated March 18, 1977, denying the motion made by the defendants, the State Bank of Towner and the North Dakota State Banking Board (hereinafter the Bank of Towner and the Banking Board, respectively) to stay the preliminary injunctive relief granted by the district court on March 16, 1977.

Until November 26, 1976, a paying and receiving station was operated in Granville, North Dakota, by the former Pioneer State Bank of Towner. On November 26, 1976, the State Bank Examiner of the Commission of Banking and Financial Institutions of the State of North Dakota, pursuant to § 6-07-04 of the North Dakota Century Code, took possession of the books, records, and other property of the former Pioneer State Bank of Towner, including its paying and receiving station at Granville. Under the control of the State Bank Examiner, the Pioneer Bank of Towner remained open for limited purposes as did, also, the Granville pay station. The Granville pay station continued open for the convenience of the public in recognition of the need for banking services, and continued to receive payments due the bank, to cash checks, and to make change, all of which had been within the scope of the station's activities since it was established in 1975.

On December 16, 1976, notice of hearing of application for a new bank charter in Towner, North Dakota, was published in the Mouse River Farmers Press. No reference was given to the paying and receiving station at Granville. On December 20, 1976, the plaintiff, Peoples State Bank of Velva (hereinafter Bank of Velva), filed the statutorily required application for a paying and receiving station at Granville. § 6-03-15, N.D.C.C. On December 26, 1976, the former Pioneer State Bank of Towner, by a majority vote of its board of directors, placed its assets and property in control of the Banking Board, as provided by § 6-07-10, N.D.C.C.

On January 5, 1977, the Bank of Towner was granted a charter for a bank in the city of Towner. Such bank acquired some, but not all, of the assets of the former Pioneer State Bank of Towner. On January 17, 1977, the paying and receiving station at Granville, formerly operated by the former Pioneer State Bank of Towner, commenced operation under the Bank of Towner, without having made application to the Banking Board for a permit for the establishment and maintenance of such station, pursuant to § 6-03-15, N.D.C.C. The Bank of Velva, alleging that the Bank of Towner's operation of a paying and receiving station at Granville was illegal and that its continued operation would do irreparable harm to the Bank of Velva's competitive standing at the upcoming hearing on its application to operate a paying and receiving station at Granville, to be heard April 14, 1977, petitioned the district court for injunctive relief to prevent the continued operation of the paying and receiving station at Granville by the Bank of Towner.

The instant proceeding does not address itself to the merits of the underlying case, but, rather, is limited to determining whether or not the application of the Bank of Towner and the Banking Board for a stay of the preliminary injunctive relief granted by the district court in the instant case pending appeal to this court should be granted.

The Bank of Towner and the Banking Board assert that the preliminary injunctive relief granted by the district court in the instant case should be stayed pursuant to Rule 8(a) of the North Dakota Rules of Appellate Procedure during the pendency of appeal to this court of the order of the district court granting preliminary injunctive relief, and that the district court's failure to grant such a stay was erroneous for five reasons:

1. The preliminary injunction granted disturbs the status quo;

2. The Bank of Velva has failed to show that there is a likelihood of prevailing on the merits;

3. The Bank of Velva has failed to show that it has no adequate remedy at law;

4. The injunction is contrary to the public interest and its effect is to deprive the people of Granville of the services of a paying and receiving station during the pendency of the appeal; and

5. The Banking Board has primary jurisdiction and is currently considering an application of the Bank of Velva to establish a paying and receiving station in Granville.

I.

The contention by the Bank of Towner and the Banking Board that a stay should be issued during the pendency of appeal in the instant case because the preliminary injunctive relief granted by the district court disturbs the status quo is without merit.

Prior to November 26, 1976, the former Pioneer State Bank of Towner operated the paying and receiving station in Granville. On November 26, 1976, such operation ceased and the paying and receiving station at Granville continued to function under the control of the North Dakota State Banking Commissioner, performing limited banking services cashing checks, making change, and receiving payments due the former Pioneer State Bank of Towner. On January 17, 1977, the State Banking Commissioner ceased operation of the paying and receiving station at Granville, and such operation was assumed by the Bank of Towner.

II.

The second reason asserted by the Bank of Towner and the Banking Board why a stay should be issued in the instant case that the Bank of Velva has failed to show that there is a likelihood of prevailing on the merits is also without merit.

The Bank of Velva in its complaint and accompanying affidavits submitted to the district court alleges that the Bank of Towner's operation of a paying and receiving station at Granville was illegal in that it was being conducted prior to the Bank of Towner's having made application for the establishment and maintenance of such a paying and receiving station, pursuant to § 6-03-15, N.D.C.C.; and without a finding having been made by the Banking Board, after hearing, that the public convenience and advantage will be promoted by the establishment and maintenance of such paying station, as is required by § 6-03-16, N.D.C.C.

In response to the allegations made by the Bank of Velva, the Bank of Towner and the Banking Board contend: (1) that the Bank of Towner does not need to make an application to operate a paying and receiving station at Granville, because the Bank of Towner comes within the provisions for banking institution consolidation and...

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1 cases
  • Peoples State Bank of Velva v. State Bank of Towner, 9335
    • United States
    • North Dakota Supreme Court
    • October 3, 1977
    ...North Dakota Rules of Appellate Procedure. On April 26, 1977, this court denied the motion for a stay, in Peoples State Bank of Velva v. State Bank of Towner, 253 N.W.2d 174 (N.D.1977). The Bank of Towner and the Banking Board have brought this appeal requesting a reversal of the order of t......

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