Traders and Farmers Bank of Haleyville v. Central Bank of Alabama

• Decision Date: 02 October 1975
• Citation: 320 So.2d 638,294 Ala. 622
• Parties: TRADERS & FARMERS BANK OF HALEYVILLE, Alabama, a corporation v. CENTRAL BANK OF ALABAMA, etc., et al. SC 1087, 1087--X.
• Court: Alabama Supreme Court

Page 638

320 So.2d 638

294 Ala. 622

TRADERS & FARMERS BANK OF HALEYVILLE, Alabama, a corporation v. CENTRAL BANK OF ALABAMA, etc., et al.

SC 1087, 1087--X.

Supreme Court of Alabama.

Oct. 2, 1975.

Tweedy, Jackson & Beech, Jasper, for appellant.

Harris, Harris, Shinn & Harris, Decatur, for appellee and cross-appellant.

ALMON, Justice.

Plaintiff-appellant, Traders & Farmers Bank of Haleyville, is a state bank with its home office in Haleyville and branches at Double Springs and Addison. Application for the establishment of the branch at Addison was made on July 30, 1973, with both the State Superintendent of Banks and the Regional Office of FDIC in Atlanta, Georgia. Authority for the application was based on Act No. 606, Acts of Alabama, 1953. State approval was granted in September of 1973; FDIC approval in November of 1973. The addition branch was opened for business on February 18, 1974.

Defendant-appellee, Central Bank of Alabama, is a national bank with its home office in Decatur with several branch offices, one of which is located in Winston County at Haleyville, and one of which is located in Cullman (near Addison). Appellee filed an application with the Comptroller of Currency of the United States of America for authority to establish a branch in Addison. The application was approved on or about April 4, 1974, and appellee planned to establish a branch in Addison.

On April 20, 1974, appellant filed a complaint in the Circuit Court of Winston County against appellee. The complaint alleged that the defendant was seeking to establish a branch bank in Addison by virtue of the provisions of Act No. 435, Acts of Alabama, 1973, as codified, Appx., Art. 11A(1/8), § 14(1k18a) (1973 Supp.), Code of Alabama 1940, Recompiled 1958. The complaint also alleged that Act No. 435 was a local law applying only to Winston County, which specified that it applied only to counties having a population of not less than 16,600 nor more than 16,950 according to the last or most recent federal decennial census. The complaint also alleged that Act. No. 435 was unconstitutional because notice was not published as required by Section 106 of the Constitution, and because the population range specified in the Act was not substantial and was not reasonably related to the purpose of the act, and because there had been no compliance with amendment 255 to the Constitution of Alabama requiring the approval of the qualified voters of Winston County for the approval of local laws applicable to that county.

In paragraph 7 of the complaint the plaintiff alleged that it was presently conducting a branch bank in Addison and that it would be detrimental economically to appellant's branch bank already established in Addison for appellee to open a branch there.

Appellee's answer contained a counterclaim alleging that if Act No. 435 is invalid for any of the grounds set out in the original complaint, then Tit. 5, § 125, Code, supra, (restricting branch bank geographically to the parent bank's 'principal place of business') and Amend. 255, Ala.Const., 1901, dictate that appellant also be permanently enjoined from further operating a branch bank in Addison.

Appellee later amended its answer and counterclaim to aver in the alternative that, if it was mistaken in its averments that the appellant had established its branch under the provisions of Act No. 435, then the appellant had established the same under the provisions of Act No. 606, Acts of Alabama, 1953, or Act No. 938, Acts of Alabama, 1961, and appellee averred that each of said Acts was unconstitutional for the reason that each of them violated Section 106 of the Constitution.

Appellant's application for a preliminary injunction was heard on May 6, 1974, and a preliminary injunction was granted. The hearing on the merits was held on June 27, 1974, and a final decree was rendered on August 14, 1974, holding that there was no legislative authority for either appellant or appellee to operate a branch bank in Addison. The decree enjoined appellee from establishing its proposed branch and enjoined the plaintiff from continuing the operation of the branch which it had established at Addison.

There have been three statutes in the last quarter century which have purported to authorize branch banking in Winston County. The first one was Act No. 606, enacted in 1953 (this act was later repealed by Act No. 939 in 1961); the second one was Act No. 938, enacted in 1961; and the third one was Act No. 435, enacted in 1973. The trial court found that authority for the application for appellant's existing bank had been based upon Act No. 606. However, Act No. 606 was expressly repealed by Act No. 939 in 1961 and was thus an inappropriate statute under which to make application. The court further found that neither Act No. 938 nor Act No. 435 provided any legislative authority for branch banking at Addison because both were local laws within the meaning of Art. 4, § 110, Ala.Const., 1901, and both failed to meet the requirements of Art. 4, § 106, as to notice and publication.

Appellant appealed from the decree to reverse the portion thereof enjoining it, and appellee cross-appealed assigning errors to reverse the decree enjoining it and to reverse the decree granting a preliminary injunction against it.

Appellant argues that it relied on Tit. 5, § 125(1), Code, supra, in establishing its branch in Addison. This section allows a bank such as appellant to branch in the county where it has its principal place of business if branching had been authorized by law on or before the effective date of the statute, which was June 21, 1955. Appellant submits that since Act No. 606 was passed some two years before Tit. 5, § 125(1) was passed, branch banking was authorized by law in Winston County at the time appellant opened its branch bank at Addison on February 18, 1974.

To sustain the validity of Act No. 606, appellant argues that the Act is valid on its face and that for the court to declare it unconstitutional the court would have to look to the House and Senate Journals to determine whether or not notice of the Act was given as required by Section 106 of the Constitution. This is precisely the procedure the court takes to determine whether the Journals affirmatively show, as the Constitution requires, that notice of a local law is given since the courts take judicial notice of the Journals. Moog...