Phelps County Sav. Co. v. Department of Banking and Finance

• Decision Date: 28 May 1982
• Docket Number: No. 44125,44125
• Citation: 320 N.W.2d 99,211 Neb. 683
• Parties: PHELPS COUNTY SAVINGS COMPANY, a Nebraska corporation, Appellee, v. DEPARTMENT OF BANKING AND FINANCE, State of Nebraska, Appellee, First National Bank of Holdrege, Nebraska, and First Security Bank of Holdrege, Nebraska, Appellants.
• Court: Nebraska Supreme Court

Page 99

320 N.W.2d 99

211 Neb. 683

PHELPS COUNTY SAVINGS COMPANY, a Nebraska corporation, Appellee, v.DEPARTMENT OF BANKING AND FINANCE, State of Nebraska, AppelleeFirst National Bank of Holdrege, Nebraska, and First Security Bank of Holdrege, Nebraska, Appellants.

No. 44125.

Supreme Court of Nebraska.

May 28, 1982.

Syllabus by the Court

1.Administrative Orders: Banks and Banking.A decision of the Department of Banking and Finance should be affirmed where it has acted within its jurisdiction and there is some competent evidence to sustain its finding and order.

2.Administrative Agencies: Appeal and Error.On remand, an administrative agency is required to follow the court's determination of questions of law but it is not foreclosed from enforcing the legislative policy committed to it.

3.Administrative Agencies: Appeal and Error.On review of the action of an administrative agency, a court must correct errors of law and on remand the agency is bound to act upon the correction.But an administrative determination in which is imbedded a legal question open to additional review does not impliedly foreclose the administrative agency, after its error has been corrected, from enforcing the legislative policy committed to its charge.

4.Administrative Agencies: Evidence.An administrative agency's duty to apply the statutory standard in determining whether an applicant is to receive a permit is the same after it falls into legal error as before.If, in the agency's judgment, new evidence is necessary to discharge its duty, the fact of a previously erroneous denial should not bar it from access to the necessary evidence for correct judgment.

Person, Dier, Person & Osborn, Holdrege, for appellants.

Knudsen, Berkheimer, Beam, Richardson & Endacott, Lincoln, for appelleePhelps County Sav. Co.

Heard before BOSLAUGH, McCOWN, CLINTON, WHITE, HASTINGS, and CAPORALE, JJ.

CLINTON, Justice.

This appeal arises out of the application of the Phelps County Savings Company to the Department of Banking and Finance(hereinafter department) for a license to operate as an industrial loan and investment company under the provisions of Neb.Rev.Stat. §§ 8-401 et seq.(Reissue 1977).The appeal is from an order of the District Court for Lancaster County made on January 8, 1981, remanding the matter to the department for a hearing "with directions to proceed in conformity with" a prior order of the District Court dated August 15, 1979.The question involved on the appeal is a procedural one involving whether on the remand under the order of August 15, 1979, the department could hold an entirely new hearing as if upon an original application, or whether the scope of the hearing under the court's order of August 15, 1979, was limited to a particular purpose.The issue involves both an interpretation of the court's order and its power to limit the scope of the rehearing.

A clear understanding of the errors assigned by the protestants-appellants makes necessary a chronological recital of the procedural history of the matter.On April 17, 1978, following its incorporation, the appelleePhelps County Savings Company filed an application for the license.No protests were filed.The application was denied by the department on August 3, 1978.The department's order contained the following: "9.That the applicant failed to show that the public necessity, convenience, and advantage of the community in which the business of Phelps County Savings Company is to be conducted will be served thereby."As required under § 8-403.01(Cum.Supp.1980), the applicant must show, among other things: "(3) that the public necessity, convenience and advantage of the community in which the business of the applicant is to be conducted will be served thereby."The order of the department contained the following findings: "2.No license for an industrial loan and investment company may be issued unless and until the Department of Banking and Finance shall have made the determination as required by Section 8-403.01 R.R.S.1943, as amended.In making the determination that the public necessity, convenience, and advantage of the community will be served by the proposed industrial loan and investment company, the Director of Banking and Finance must consider the economic area to be served by the proposed institutions; the size and population of such area; the number and size of institutions within or now serving the area; the wealth of the residents within the area; the commercial and industrial development and potential growth of the area; the capability of existing institutions to handle potential growth; the earning prospects of the proposed industrial loan and investment company; adequacy of services being provided by the existing institutions in relation to the needs of the residents of the area; the convenience of location of the proposed industrial loan and investment company; and all other facts and circumstances bearing upon or relevant to the inquiry of public necessity, convenience and advantage.

"3.All the facts and circumstances, as disclosed by the evidence and investigation support the determination that the public necessity, convenience, and advantage will not be served by permitting ...."

This order of the department was appealed to the District Court for Lancaster County.On August 15, 1979, after the hearing in the District Court, that court entered an order which contained the following: "5.That the appellee found that all statutory conditions were met except '(3) that the public necessity, convenience and advantage of the community in which the business of the applicant is to be conducted will be served thereby.'

"6.That paragraph 2 of appellee's order indicates that appellee made an investigation, but the record fails to disclose the contents of the investigation or the facts, if any, upon which the appellee relied in making its decision.The appellee did not give notice to appellant pursuant to Sec. 84-914(5) R.R.S., 1943; neither did the appellee give the appellant an opportunity to contest any facts noticed by appellee."The court's order was as follows: "IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the order of the appellee of August 3, 1978 should be and hereby is reversed and set aside; that this case should be and hereby is remanded to the appellee for further proceedings in conformance with the findings and order herein."

On the remand to the department it set a new hearing date, gave notice of hearing, and proceeded to hold a hearing as upon an original application.At that hearing the protestants-appellants, First Security Bank of Holdrege, Nebraska, and the First National Bank of Holdrege, Nebraska, made appearances, entered objections, and presented evidence.On February 14, 1980, the department entered its order with detailed findings of fact and conclusions of law, saying: "3.All the facts and circumstances, as disclosed by the evidence and investigation support the determination that the public necessity, convenience, and advantage will not be served by permitting the Phelps County Savings Company to engage in the business of an industrial loan and investment company at 719 Fourth Avenue, Holdrege, Phelps County, Nebraska, and that, therefore, the application should be denied and an order should be entered denying the applicant a license to conduct an industrial loan and investment company."An order denying the license was issued.

This order was then appealed to the District Court for Lancaster County.At this time a different district judge presided and affirmed the order of denial on November 24, 1980.A motion for new trial was filed, and after hearing thereon the court reversed its position after making findings and entered the following order: "IT IS THEREFORE ORDERED, ADJUDGED AND DECREED, that the order entered by me on October [sic November] 24, 1980, which was done in the September, 1980 term of this court is set aside.

"IT IS FURTHER ORDERED, ADJUDGED AND DECREED, that this matter be and it is hereby remanded with directions to proceed in conformity with Judge Fahrnbruch's order of August 15, 1979, entered in Docket 321Page 270 of the records of this court.Costs are taxed against the appellee.This order entered in the September, 1980 term of this court."

The appellants make the following assignments of error: (1)The District Court erred in finding that it had the authority to restrict further proceedings of an administrative agency.(2)The District Court erred in finding that the original order of remand to the department was intended to restrict the department.(3)The District Court erred in not deciding that there was sufficient evidence to support the decision of the department.(4)The District Court erred in finding that the department had not complied with the order of the District Court of August 15, 1979.

Appellants rely upon the following propositions and authorities.The District Court, in hearing an appeal from an administrative agency, is limited by the provisions of Neb.Rev.Stat. § 84-917(6)(Reissue 1976) which provides: "(6)The court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioner may have been prejudiced because the agency decision is:

"(a) In violation of constitutional provisions;

"(b) In excess of the statutory authority or jurisdiction of the agency;

"(c) Made upon unlawful procedure;

"(d) Affected by other error of law;

"(e) Unsupported by competent, material, and substantial evidence in view of the entire record as made on review; or

"(f) Arbitrary or capricious."

A decision of the Department of Banking and Finance should be affirmed where it has acted within its jurisdiction and there is some competent evidence to sustain its finding and order.Southwestern Bank & Trust Co. v. Dept. of Banking and Finance, 206 Neb. 599, 294...