State of Utah ex rel. Dept. of Financial Institutions v. Zions First Nat. Bank of Ogden, Utah
| Decision Date | 13 February 1980 |
| Docket Number | No. 78-1733,78-1733 |
| Citation | 615 F.2d 903 |
| Parties | STATE OF UTAH ex rel., DEPARTMENT OF FINANCIAL INSTITUTIONS and W. S. Brimhall, Commissioner of Financial Institutions, Plaintiffs-Appellees, v. ZIONS FIRST NATIONAL BANK OF OGDEN, UTAH, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Joseph P. McCarthy, Asst. Atty. Gen., Salt Lake City, Utah (Robert B. Hansen, Atty. Gen., and H. Wright Volker, Asst. Atty. Gen., Salt Lake City, Utah, with him on the brief), for plaintiffs-appellees.
H. Russell Hettinger of Callister, Greene & Nebeker, Salt Lake City, Utah (J. Thomas Greene and Gary L. Schwendiman of Callister, Greene & Nebeker, Salt Lake City, Utah, with him on the brief), for defendant-appellant.
Before McWILLIAMS, BREITENSTEIN and BARRETT, Circuit Judges.
The State of Utah, upon information of its Department of Financial Institutions and one W. S. Brimhall, Commissioner of Financial Institutions, brought the present action against Zions First National Bank of Ogden, Utah, seeking declaratory judgment and injunctive relief. It was alleged in the complaint that Zions, a national bank, maintained its place of business at 2350 Washington Boulevard in Ogden, Utah, and that it was also maintaining a branch bank, i. e., a drive-in facility, at 2302 Washington Boulevard in Ogden, Utah, in violation of both federal and state law. 12 U.S.C. § 36(f) and (c) and Utah Code Ann. § 7-3-6 (1953). By answer Zions denied that its drive-in facility at 2302 Washington Boulevard was a "branch bank" within the meaning of 12 U.S.C. § 36(f). The case was tried to the court on facts which were, in the main, stipulated to by opposing counsel.
The trial court concluded that Zions' drive-in facility was a branch bank within the meaning of 12 U.S.C. § 36(f) and that since a state bank under local Utah law could not maintain a drive-in facility of the type here maintained by Zions, under the provisions of 12 U.S.C. § 36(c), Zions was precluded from further maintaining the drive-in facility. Accordingly, Zions was ordered to stop, cease and desist its drive-in facility, and it is from that judgment and order that Zions now appeals.
As indicated, there is no real dispute as to the facts. In 1973, Zions, a national bank, established its present premises at 2350 Washington Boulevard in Ogden. Those premises front on Washington Boulevard mid-way between 23rd Street and 24th Street. Zions desired to have a drive-in facility, but was unable to do so on its own property, nor was it apparently successful in purchasing any contiguous property upon which a drive-in facility could be built. However, at about the same time Zions opened for business at 2350 Washington Boulevard, it acquired the corner property at 23rd Street and Washington Boulevard with the thought that some time in the future it might construct a drive-in facility on the corner property.
In 1975 Zions sought a ruling from the Comptroller of Currency as to whether it could maintain a drive-in facility on the corner property at the intersection of 23rd Street and Washington Boulevard. The Comptroller ruled that the proposed drive-in facility would constitute a "contiguous unit operation" with the existing main office and that there was "no legal objection" to the establishment of such facility.
On the strength of the Comptroller's ruling, Zions constructed a drive-in facility on the corner property at 23rd Street and Washington Boulevard which was opened for business on or about July 1, 1976.
Zions' drive-in facility has a safe and a teller's cannister. The drive-in has different hours than the main bank, as it opens earlier and stays open later. The drive-in facility does not offer full banking services, but does accept deposits and loan payments, and also cashes checks.
As indicated, Zions' drive-in facility is not contiguous to the bank's premises. There are six separate tracts of land between the two, upon which are located nine different businesses. Along Washington Boulevard, the two properties are some 271 feet apart. The distance between the two properties at the rear property line is some 249 feet. There is no "physical connection" between the drive-in facility and the bank proper, except for telephone connections.
With possible exceptions not here pertinent, Utah statutory law prohibits branch banks in all cities of second class, which it is agreed Ogden is. Utah Code Ann. § 7-3-6 (1953). The Commissioner of Financial Institutions for the State of Utah has adopted the position that any separate facility which accepts deposits and cashes checks is a branch unless it is located either on the premises of the main banking house itself, or on property immediately contiguous thereto. The only exception to this rule is that the Commissioner has allowed a main banking house to be separated from, and non-contiguous to, its drive-in facility where the area of separation is occupied by a public thoroughfare, not by other business structures, and the drive-in and the main banking house are connected by a pneumatic tube or other like means of transmission.
Upon complaint, the Commissioner of Financial Institutions personally inspected the drive-in facility maintained by Zions, and concluded that it was a branch bank. When Zions declined to cease its drive-in operation, the Commissioner instituted the present proceeding.
It is agreed by all that whether Zions' drive-in facility is a branch bank is to be determined by reference to federal law, and not the state law of Utah. First National Bank v. Dickinson, 396 U.S. 122, 90 S.Ct. 337, 24 L.Ed.2d 312 (1969). 12 U.S.C. § 36(f) defines the term "branch" as follows: *
(f) The term "branch" as used in this section shall be held to include any branch bank, branch office, branch agency, additional office, or any branch place of business located in any State or Territory of the United States or in the District of Columbia at which deposits are received, or checks paid, or money lent.
In First National Bank v. Dickinson, 396 U.S. 122, 135, 90 S.Ct. 337, 344, 24 L.Ed.2d 312 (1969), the Supreme Court declared that the term "branch bank," under the definition set forth in 12 U.S.C. § 36(f), includes, at the very least, "any place for receiving deposits or paying checks or lending money apart from the chartered premises . . ." (Emphasis in the opinion). The off-premises operations in Dickinson were two: (1) an armored car, described as a "mobile drive-in," which delivered cash in exchange for checks and received cash and checks at its depositor's premises; and (2) a secured receptacle for receipt of monies intended as deposits located in a shopping center about one mile from the bank proper. In Dickinson both of these off-premise banking operations were held to be branch banks under 12 U.S.C. § 36(f). Application of the Dickinson rule to the instant case leads us to conclude, as did the trial court, that, under the provisions of 12 U.S.C. § 36(f), Zions' drive-in facility is a branch bank.
We recognize that there is authority to the effect that the rule of Dickinson should not be rigidly and mechanically applied and that other...
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