Security Nat. Bank & Trust Co. v. First W. Va. Bancorp., Inc., No. 14938

CourtSupreme Court of West Virginia
Writing for the CourtHARSHBARGER
PartiesSECURITY NATIONAL BANK & TRUST CO. et al., v. FIRST W. VA. BANCORP., INC., a Corp.; et al., etc.
Docket NumberNo. 14938
Decision Date05 May 1981

Page 613

277 S.E.2d 613
166 W.Va. 775
SECURITY NATIONAL BANK & TRUST CO. et al.,
v.
FIRST W. VA. BANCORP., INC., a Corp.; et al., etc.
No. 14938.
Supreme Court of Appeals of West Virginia.
May 5, 1981.

Page 614

Syllabus by the Court

1. State regulation of bank holding companies is not preempted by the Federal Bank Holding Company Act, 12 U.S.C. § 1841, et seq.

2. West Virginia may regulate activities of national banking associations if the regulations do not contravene national laws, frustrate the purpose for which the national banks were created or impair the effective discharge of their legal duties.

[166 W.Va. 776] 3. Code, 31A-8-12(b) prohibiting multibank holding companies may be applied to national banking associations.

4. Interpretations of statutes by bodies charged with their administration are given great weight unless clearly erroneous.

5. Private parties contracting about matters that are subject to state regulation, suffer no constitutional impairment of contractual obligations when the legislature reasonably changes the regulations through its police power for the preservation of community order, health, safety, morals or economic well-being.

Beneke & Bremer and George F. Beneke, Wheeling, Arnold & Porter, Washington, D. C., for appellants.

Bailey, Byrum & Vieweg, John Preston Bailey and George G. Bailey, Wheeling, for appellees.

HARSHBARGER, Chief Justice:

Security National Bank & Trust Co. and Half Dollar Trust and Savings Bank obtained a declaration from the Circuit Court of Ohio County finding First West Virginia Bancorp, Inc., a multibank holding company, in violation of W.Va.Code, 31A-8-12(b), and ordering:

"defendant, First West Virginia Bancorp, Inc., a corporation, shall divest itself of all of the shares which it owns in either of the defendant banks, First West Virginia Bank, N.A. Community or First West Virginia Bank, N.A. Warwood, or, in the alternative, shall divest itself of seventy-five (75) per cent of the shares which it owns in both of the defendant banks ..."

That Code section, as rewritten in 1975, provides:

(b) It shall be unlawful for any individual, partnership, society, association, firm, institution, [166 W.Va. 777] trust, syndicate, public or private corporation, or any other legal entity, or combination of entities acting in concert, to directly or indirectly own, control or hold with power to vote, twenty-five percent or more of the voting shares of each of two or more banks, or to control in any manner the election of a majority of the directors of two or more banks ....

Defendants First West Virginia Bank N.A. Community and First West Virginia Bank N.A. Warwood are national banking associations regulated by the United States Comptroller of the Currency. Defendant First West Virginia Bancorp., Inc. is a bank holding company operating by a November, 1974 approval by the Board of Governors of the Federal Reserve System, 12 U.S.C. § 1841, et seq., and is incorporated in this State. It purchased all shares of the other two defendants on January 30, 1975. The banks and holding company have directors and officers in common. 1

Page 615

[166 W.Va. 778] I.

State regulation of bank holding companies is not preempted by the Federal Bank Holding Company Act, 12 U.S.C. § 1841, et seq., because Section 1846 2 specifically reserves to the states the power to regulate them. Lewis v. BT Investment Managers, Inc., 447 U.S. 27, 100 S.Ct. 2009, 64 L.Ed.2d 702 (1980); Whitney National Bank v. Bank of New Orleans and Trust Co., 116 U.S.App.D.C. 285, 323 F.2d 290 (1963), reversed on other grounds, 379 U.S. 411, 85 S.Ct. 551, 13 L.Ed.2d 386 (1965). See generally Hearing on S. 880, S. 2350 and H.R. 6227 Before a Subcommittee of the Senate Committee on Banking and Currency, 84th Cong., 1st Sess. (1955); Hearings on H.R. 2674 Before the House Committee on Banking and Currency, 84th Cong., 1st Sess. (1955). Comment, Branch Banking Limitations Held Applicable to Approved Bank Holding Company Operation, 39 N.Y.U.L.Rev. 686 (1964).

A state may prohibit bank holding companies, whether the banks are federal or state. Cf. Commercial National Bank v. Board of Governors, 451 F.2d 86 (8th Cir., 1971); Grandview Bank & Trust Co. v. Board of Governors, 550 F.2d 415 (8th Cir.), cert. denied, 434 U.S. 821, 98 S.Ct. 64, 54 L.Ed.2d 78 (1977). Our statute would be invalid only if its application to national banks "expressly conflict(s) with the laws of the United States or frustrate(s) the purpose for which the national banks were created, or impair(s) their efficiency to discharge the duties imposed upon them by the law of the [166 W.Va. 779] United States." McClellan v. Chipman, 164 U.S. 347, 357, 17 S.Ct. 85, 87, 41 L.Ed. 461 (1896); Anderson Nat'l. Bank v. Luckett, 321 U.S. 233, 64 S.Ct. 599, 88 L.Ed. 692 (1944); National State Bank v. Long, 469 F.Supp. 1068 (D.N.J.1979), modified, 630 F.2d 981 (3d Cir., 1980); National Bank of Hyde Park v. Isaacs, 27 Ill.2d 205, 188 N.E.2d 704 (1963); Braeburn Security Corp. v. Smith, 15 Ill.2d 55, 153 N.E.2d 806, app. dismissed, 359 U.S. 311, 79 S.Ct. 876, 3 L.Ed.2d 831 (1959); Opinion of Justices, 102 N.H. 106, 151 A.2d 236 (1959); Scott, The Patchwork Quilt: State and Federal Roles in Bank Regulation, 32 Stan.L.Rev. 687, 690-95 (1980).

II.

When Bancorp purchased the banks, our applicable statute was:

(b) It shall be unlawful for any person to purchase and hold stock in any banking institution for the purpose of selling, negotiating or trading participation in the ownership thereof either for the purpose of perfecting control of one or more such banking institutions or for the purpose of inducing other persons, firms or corporations or the general public to become participating owners therein....

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55 practice notes
  • DePond v. Gainer, No. 16902
    • United States
    • Supreme Court of West Virginia
    • March 12, 1986
    ...great weight unless clearly erroneous." [177 W.Va. 176] Syl. pt. 4, Security National Bank & Trust Co. v. First W. Va. Bancorp, Inc., 277 S.E.2d 613 5. "An administrative body must abide by the remedies and procedure it properly establishes to conduct its affairs." Syl. pt. 1, Powell v. Bro......
  • State ex rel. ACF Industries v. Vieweg, No. 25142.
    • United States
    • Supreme Court of West Virginia
    • February 5, 1999
    ...are given great weight unless clearly erroneous.' Syllabus point 4, Security National Bank & Trust Co. v. First W.Va. Bancorp, Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981)."); Syl. pt. 6, Daniel v. Simms, 49 W.Va. 554, 39 S.E. 690 (1901) ("The construction, given to a statute by those charged......
  • Thomas v. William Ray Mcdermitt & State Farm Mut. Auto. Ins. Co., No. 12–0688.
    • United States
    • Supreme Court of West Virginia
    • November 26, 2013
    ...administration are given great weight unless clearly erroneous.” Syl. Pt. 4, Sec. Nat'l Bank & Trust Co. v. First W. Va. Bancorp, Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981). 7. “A cardinal rule of statutory construction is that significance and effect must, if possible, be given to every se......
  • Owensboro Nat. Bank v. Moore, Civ. A. No. 91-3.
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
    • August 4, 1992
    ...85 S.Ct. 551, 13 L.Ed.2d 386 (1965) (regulation of bank holding companies); Security Nat. Bank & Trust Co. v. First W.Va. Bancorp., Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981), appeal dismissed, 454 U.S. 1131, 102 S.Ct. 986, 71 L.Ed.2d 284 (1982) (regulation of bank holding companies); Whitn......
  • Request a trial to view additional results
55 cases
  • DePond v. Gainer, No. 16902
    • United States
    • Supreme Court of West Virginia
    • March 12, 1986
    ...great weight unless clearly erroneous." [177 W.Va. 176] Syl. pt. 4, Security National Bank & Trust Co. v. First W. Va. Bancorp, Inc., 277 S.E.2d 613 5. "An administrative body must abide by the remedies and procedure it properly establishes to conduct its affairs." Syl. pt. 1, Powell v. Bro......
  • State ex rel. ACF Industries v. Vieweg, No. 25142.
    • United States
    • Supreme Court of West Virginia
    • February 5, 1999
    ...are given great weight unless clearly erroneous.' Syllabus point 4, Security National Bank & Trust Co. v. First W.Va. Bancorp, Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981)."); Syl. pt. 6, Daniel v. Simms, 49 W.Va. 554, 39 S.E. 690 (1901) ("The construction, given to a statute by those charged......
  • Thomas v. William Ray Mcdermitt & State Farm Mut. Auto. Ins. Co., No. 12–0688.
    • United States
    • Supreme Court of West Virginia
    • November 26, 2013
    ...administration are given great weight unless clearly erroneous.” Syl. Pt. 4, Sec. Nat'l Bank & Trust Co. v. First W. Va. Bancorp, Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981). 7. “A cardinal rule of statutory construction is that significance and effect must, if possible, be given to every se......
  • Owensboro Nat. Bank v. Moore, Civ. A. No. 91-3.
    • United States
    • United States District Courts. 6th Circuit. United States District Court of Eastern District of Kentucky
    • August 4, 1992
    ...85 S.Ct. 551, 13 L.Ed.2d 386 (1965) (regulation of bank holding companies); Security Nat. Bank & Trust Co. v. First W.Va. Bancorp., Inc., 166 W.Va. 775, 277 S.E.2d 613 (1981), appeal dismissed, 454 U.S. 1131, 102 S.Ct. 986, 71 L.Ed.2d 284 (1982) (regulation of bank holding companies); Whitn......
  • Request a trial to view additional results

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