State ex rel. First Nat. Bank of Wisconsin Rapids v. M & I Peoples Bank of Coloma

• Citation: 95 Wis.2d 303,290 N.W.2d 321
• Decision Date: 13 May 1980
• Docket Number: No. 77-515,77-515
• Parties: STATE of Wisconsin ex rel. the FIRST NATIONAL BANK OF WISCONSIN RAPIDS, Wisconsin, Plaintiff, Farmers and Merchants Bank of Rudolph, Wisconsin, Plaintiff-Appellant, v. M & I PEOPLES BANK OF COLOMA, Wisconsin Banking Review Board, and Erich Mildenberg, Commissioner of Banking, State of Wisconsin, Defendants- Respondents.
• Court: United States State Supreme Court of Wisconsin

Page 321

290 N.W.2d 321

95 Wis.2d 303

STATE of Wisconsin ex rel. the FIRST NATIONAL BANK OF WISCONSIN RAPIDS, Wisconsin, Plaintiff Farmers and Merchants Bank of Rudolph, Wisconsin, Plaintiff-Appellant, v. M & I PEOPLES BANK OF COLOMA, Wisconsin Banking Review Board, and Erich Mildenberg, Commissioner of Banking, State of Wisconsin, Defendants- Respondents.

No. 77-515.

Supreme Court of Wisconsin.

Argued Jan. 8, 1980.

Decided April 1, 1980.

Reconsideration Denied May 13, 1980. ^*

Nicholas J. Brazeau, Wisconsin Rapids, and John E. Shannon, Jr., Stevens Point, for appellant; Brazeau, Potter, Wefel & Nettesheim, Wisconsin Rapids, on brief, and Anderson, Fisher, Shannon, O'Brien & Rice, Stevens Point, of counsel.

Frank J. Pelisek, K. Thor Lundgren and Michael, Best & Friedrich, Milwaukee, for M & I Peoples Bank.

Lowell E. Nass and Robert A. Patrick, Madison, argued, for the Banking Review Board and Erich Mildenberg; Bronson C. LaFollette, Atty. Gen., on brief.

CALLOW, Justice.

The Farmers and Merchants Bank of Rudolph, Wisconsin (Farmers), appeals from a judgment and an order denying its request for injunctive relief and dismissing its complaint in quo warranto and, additionally, for a declaratory judgment on its merits. We affirm.

On January 17, 1973, the M & I Peoples Bank of Coloma, Wisconsin (M & I), filed an application with the Commissioner of Banking, pursuant to sec. 221.04(1)(j)1, Stats., ¹ for permission to establish a branch bank facility in the town of Rome, Adams County, Wisconsin. A field investigation was assigned to Senior Examiner Kenneth Lay and was conducted on March 1 and 2, 1973. Lay's report recommended that the application for a branch be granted.

On March 6, 1973, the Commissioner and the Banking Review Board (Board) approved M & I's branch bank application. Farmers was not notified of the application, the investigation, or the application's approval.

On April 30, 1975, Farmers, together with First National Bank of Wisconsin Rapids (First National), commenced this action. The first cause of action in quo warranto pursuant to sec. 294.04, Stats., ² seeks a determination that M & I's franchise is null and void. As a second cause of action, Farmers seeks a declaratory judgment pursuant to sec. 269.56, Stats., 1973, adjudicating the rights of the parties and interpreting the statute under which M & I's application for a branch bank was granted. The following allegations were offered in support of both causes of action: (1) sec. 221.04(1)(j)1, Stats., under which M & I's application for a branch bank was granted, is unconstitutional because it fails to make adequate provision for notice to interested parties or for an opportunity for interested parties to be heard; (2) the approval of M & I's application for a branch bank is void because the statute authorizing the approval is unconstitutional; and (3) even if sec. 221.04(1)(j)1 were constitutional, M & I's application for a branch bank would be void because the location allowed by the Commissioner and the Board directly contravenes the terms of sec. 221.04(1)(j)1.

After the trial court granted the defendants' motions to dismiss First National's complaint, ³ the defendants filed motions to dismiss the complaint of Farmers for lack of standing. A hearing on these motions was held on April 15, 1976, and the trial court withheld ruling on the motions to dismiss Farmers' complaint for lack of standing, permitting Farmers to present further evidence at trial. The case was tried on June 20 and 21, 1977. Briefs were submitted after trial; and on October 11, 1977, the trial court found that Farmers had failed to establish standing to sue and held Farmers estopped to contest the constitutionality of the branch bank statute, having accepted benefits under the challenged legislation. Additionally, the trial court rejected each of Farmers' contentions on the merits.

The initial questions posed by this appeal are questions of standing whether "a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy." Sierra Club v. Morton, 405 U.S. 727, 731, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972). Where, as here, a plaintiff has raised a constitutional challenge to legislative, executive, or administrative acts, the standing question is twofold: whether "the plaintiff himself has suffered 'some threatened or actual injury resulting from the putatively illegal action,' " Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 2205, 45 L.Ed.2d 343 (1975), quoting Linda R. S. v. Richard D., 410 U.S. 614, 617, 93 S.Ct. 1146, 1148, 35 L.Ed.2d 536 (1973); and "whether the constitutional . . . provision on which the claim rests properly can be understood as granting persons in the plaintiff's position a right to judicial relief." Warth v. Seldin, supra, 422 U.S. at 500, 95 S.Ct. at 2206. ⁴

To meet the requirement ⁵ of an injury, a plaintiff must allege "such a personal stake in the outcome of the controversy," Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962), as to insure that "the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution." Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 1953, 20 L.Ed.2d 947 (1968). However, the magnitude of a plaintiff's injury is not a determinant of his standing. " 'The basic idea that comes out in numerous cases is that an identifiable trifle is enough for standing to fight out a question of principle; the trifle is the basis for standing and the principle supplies the motivation.' " United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669, 689 n. 14, 93 S.Ct. 2405, 2417 n. 14, 37 L.Ed.2d 254 (1973), quoting Davis, Standing: Taxpayers and Others, 35 U.Chi.L.Rev. 601, 613 (1968).

We conclude an injury has been shown. Although the trial court determined that Farmers had not demonstrated any injury in fact, in our view the "evidence in support of a contrary finding . . . constitute(s) the great weight and clear preponderance of the evidence," Cogswell v. Robertshaw Controls Co., 87 Wis.2d 243, 249-50, 274 N.W.2d 647, 650 (1979), and the finding of no injury must be set aside. While testimony indicated that operation of the branch would not "materially" affect Farmers, no evidence counters the assertion that at least some economic impact would occur. The defendants' expert witness testified that Farmers' potential earning loss was between $49 and $66 annually. While only a "trifle," this injury is sufficient to confer standing. However, standing depends not only on the allegation of a sufficiently personal stake or interest in the outcome of the controversy but also on a showing of a "logical nexus between the status asserted and the claim sought to be adjudicated." Flast v. Cohen, supra, 392 U.S. at 102, 88 S.Ct. at 1953; Moedern v. McGinnis, 70 Wis.2d 1056, 1064, 236 N.W.2d 240 (1975). For such a showing to be successfully made in this case, the due process clause must be interpreted to require that a bank be extended procedural protections whenever government action results in an increase in competition and consequent economic loss. We cannot accept this conception of the due process guarantee.

The procedural guarantees of the due process clause apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property. Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). "Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law rules or understandings that secure certain benefits and that support claims of entitlement to those benefits." Id. at 577, 92 S.Ct. at 2709. Addressing a question related to the one now presented, this court stated in State Bank of Drummond v. Nuesse, 13 Wis.2d 74, 79, 108 N.W.2d 283, 286 (1961):

"It is clear that in determining claims of unconstitutional discrimination and the denial of alleged rights, a distinction must be drawn between a lawful business in which one has the right to engage and other types of business which may be carried on only as a result of legislative grace. The right to engage in banking in the state of Wisconsin is purely a matter of such legislative grace."

We conclude Farmers possesses no property right to engage in the banking business free of competitors. Accord: First National Bank of Abbeville v. Sehrt, 246 So.2d 382, 384 (La.App.1971); Franklin National Bank v. Superintendent of Banks, 40 Misc.2d 565, 243 N.Y.S.2d 507, 510 (1963); Bridgeport Federal Savings & Loan Ass'n v. Federal Home Loan Bank Bd., 307 F.2d 580, 582 (3d Cir. 1962) cert. denied 371 U.S. 950, 83 S.Ct. 504, 9 L.Ed.2d 499 (1963). Contra: Conestoga National Bank of Lancaster v. Patterson, 442 Pa. 289, 275 A.2d 6, 11-13 (1971).

Therefore, we hold that Farmers does not have standing to assert the alleged constitutional infirmity of sec. 221.04(1)(j)1, Stats.

In quo warranto actions, whether the action has been brought by a proper private plaintiff is determined under a different analysis, couched in terms of injury and interest. A private person acting as relator must show that he has sustained or is in danger of sustaining injury as a result of the challenged action, and he must show a special interest. It is not sufficient that the relator has merely a general interest common to all members of the public. Because the record supports the conclusion that Farmers is threatened with at least some injury, the question presented by Farmers' appeal is whether a competitive interest suffices to permit a relator to challenge in quo warranto the acts of another corporation.

The Supreme Court has "repeatedly held that the economic injury which results from lawful...