State ex rel. Duluth Clearing House Ass'n v. Department of Commerce
| Decision Date | 02 December 1955 |
| Docket Number | No. 36592,36592 |
| Parties | STATE ex rel. DULUTH CLEARING HOUSE ASSOCIATION, Relator, v. DEPARTMENT OF COMMERCE, State Securities Division and Industrial Credit Plan, Inc., Respondents. |
| Court | Minnesota Supreme Court |
Syllabus by the Court
In determining whether there is a reasonable public demand for an industrial loan and thrift company so as to warrant issuance of a certificate to transact business as such by the Department of Commerce under M.S.A. § 53.03, the department may consider the potential market for the services offered, including such facts as population of the area to be served, occupation and income of the citizenry in the area, existing competing establishments, and other evidence of a similar nature. So viewing the evidence in this case, the findings of the department are sustained by the evidence.
Eckman & Eckman, Duluth, for relator,
Gerhard Bundlie, Jerome B. Simon, St. Paul, for Industrial Credit Plan, Inc., Bundlie, Kelley & Maun, St. Paul, of counsel.
Miles Lord, Atty. Gen., Harold J. Soderberg, Sp. Asst. Atty. Gen., for Department of Commerce, State Securities Division.
Certiorari to review a decision of the Department of Commerce of the State of Minnesota granting to Industrial Credit Plan, Inc., a certificate of authority to transact business as an industrial loan and thrift company in the city of Duluth under the provisions of M.S.A. c. 53.
There seems to be no dispute as to the following facts: The territory within which applicant proposes to operate is composed of the Duluth, Minnesota, area and the immediate suburbs. There is only one other industrial loan and thrift company serving this entire area and population. The approximate population of the area is 120,000 people, with an estimated 50,000 of these being employed. The business establishments consist of approximately 176 manufacturing concerns; over 586 retail establishments; about 230 wholesalers, jobbers, and distributors; and 50 service establishments.
Other types of lending institutions serving the Duluth population at the time of the hearing on this application consisted of 9 commercial banks, 28 credit associations of various kinds, 2 savings and loan associations, and 11 small loan companies. The various types of lending institutions each provide a different class of credit accommodation, running from the highest quality commercial bank loans at low rates of interest to loans of the 'small loan' variety for which 36 percent interest per annum may be charged.
In addition to the above, the evidence consists largely of the opinion of Stanley A. Nelson, vice president of applicant, based on an experience of 24 years in operating this type of financial institution in other localities. He stated that in his opinion an industrial loan and thrift company serves a segment of the population who cannot borrow funds on a balance-sheet basis from commercial banks but who are deserving of credit at a much lower cost than 36 percent per annum. He testified that a conservative estimate of the number of borrowers in this credit class which his company would attract would be about one percent of the population or about 1,200 people. Placing the estimate upon an ultraconservative basis, he stated that the company would have an ultimate loan portfolio of 600 borrowers. He estimated that, after the first six months, it would have 100 borrowers with a loan portfolio of approximately $75,000. He estimated that, after the first year of operation, they would have about 200 borrowers with $150,000 outstanding and, after the second year, about 400 borrowers with about $300,000 outstanding. These estimates took into consideration the fact that one other industrial loan and thrift company operates in the Duluth area.
Respondents first contend that the order now under consideration may not be reviewed by certiorari and, further, that relator has no standing to obtain review of it. In view of the decision we arrive at on the merits, we need not now determine the technical questions raised as to the right to review. 1 Cases may be found to support almost any view.
The scope of our review in a matter of this kind is limited to a consideration of whether the Department of Commerce has kept within its jurisdiction; whether it has proceeded on an erroneous theory of law; whether its action is so arbitrary and unreasonable that it represents its will and not its judgment; or whether the decision of the department is without evidence to support it. 2 Insofar as the scope of review is concerned, the only issue in this case is whether there is evidence to support the action taken by the department.
The requirements for issuance of a certificate to transact business as an industrial loan and thrift company under M.S.A. § 53.03 are identical with those required under L.1919, c. 86, § 3, M.S.A. § 45.07, considered in State ex rel. Dybdal v. State Securities Comm., 145 Minn. 221, 176 N.W. 759. They are, as stated in the Dybdal case, (1) that the statutory requirements respecting establishment of the financial structure of the proposed company have been met; (2) that there is a reasonable public demand for such company in such location; (3) that the applicants are of good moral character and financial integrity; (4) that the probable volume of business in such location is sufficient to insure and maintain the solvency of such company and the solvency of the then existing company or banks in such locality without endangering the safety of any such company or bank in the locality as a place for investing or depositing public or private money; and (5) that the company will be properly and safely managed.
Insofar as these requirements are concerned, the challenge here is only to the sufficiency of the evidence to establish a reasonable public demand.
Thus, the issues presented for our consideration narrow down to the single question of whether the evidence sustains the department's finding that there is a reasonable public demand for this new institution.
As we pointed out in State ex rel. Dybdal v. State Securities Comm., 145 Minn. 221, 224, 176 N.W. 759, 760, the words "reasonable public...
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