Washington Commercial Bank v. Bollwerk, 40173

• Decision Date: 20 March 1979
• Docket Number: No. 40173,40173
• Citation: 582 S.W.2d 695
• Parties: WASHINGTON COMMERCIAL BANK, Appellant, v. William J. BOLLWERK, Donald C. Redding, William F. Enright, Jr., L. W. Meier, Jr., as Members of the State Banking Board, Respondents, and Bank of Washington, Intervenor.
• Court: Missouri Court of Appeals

Page 695

582 S.W.2d 695

WASHINGTON COMMERCIAL BANK, Appellant, v. William J. BOLLWERK, Donald C. Redding, William F. Enright Jr., L. W. Meier, Jr., as Members of the State Banking Board, Respondents and Bank of Washington, Intervenor.

No. 40173.

Missouri Court of Appeals, Eastern District, Division Four.

March 20, 1979.

Motion for Rehearing and/or Transfer to Supreme Court Denied

June 15, 1979.

Application to Transfer Denied June 17, 1979.

Wayne L. Millsap, Harold P. Heitmann, Clayton, for appellant.

L. B. Eckelkamp, Jr., Jenny, Cole & Eckelkamp, Washington, John D. Ashcroft, Atty. Gen., Terry C. Allen, Asst. Atty. Gen., Jefferson City, for respondents.

DOWD, Presiding Judge.

A case involving the chartering of a bank.

Appellant Washington Commercial Bank appeals from the judgment of the Franklin County Circuit Court which affirmed the State Banking Board's denial of appellant's bank charter.

On June 1, 1976 the Washington Commercial Bank filed a reapplication for a certificate of incorporation with the Division of Finance of the State of Missouri. ¹ The Division opined that the application satisfied the criteria of § 362.030 RSMo 1969 and granted the charter on January 7, 1977. The sole contingency upon which the charter hinged was a Division directive that the bank's capitalization be increased to $1,050,000.

The Bank of Washington (the intervenor herein) appealed the Division's grant of appellant's charter to the State Banking Board. The Board reversed the action of the Division of Finance holding that the charter should be denied because the capital subscribed to the bank was not ready for utilization in the transaction of the proposed bank's business. The Circuit Court of Franklin County affirmed this decision holding that the Board's findings of fact and conclusions of law resulted in an order which was supported by substantial and competent evidence upon the record as a whole.

This appeal ensued.

Appellant Washington Commercial Bank contends that the intervenor's appeal was not timely, that the issue of the composition of the capital was not properly before the State Banking Board, and that the latter's revocation of appellant's charter was predicated on a finding which was unsupported by the evidence.

Appellate review of an administrative decision is limited to the following considerations: a) did the agency act in violation of constitutional provisions; b) did the agency act in excess of its statutory authority or jurisdiction; c) was the finding of the agency unsupported by competent and substantial evidence upon the record as a whole; d) was the agency action unauthorized by law, for any reason; e) was the agency finding predicated upon unlawful procedure without a fair trial; f) was the agency action arbitrary, capricious or unreasonable; g) did the agency action involve an abuse of discretion. § 536.140(2)(1-7) RSMo 1953.

A reviewing court is permitted to reweigh the evidence for itself and determine facts only in cases where the agency decision does not involve the exercise of administrative discretion in light of the facts, but involves only the agency's application of the law to the facts. § 536.140(3) RSMo 1953. Our scope of review is governed by this provision because this appeal concerns the Board's application of § 362.030 and § 361.094(2) RSMo 1969 to the facts of this case.

In its first point appellant contends that the appeal interposed by the intervenor was not timely because it was filed January 20, 1977, more than ten days after the action of the Commissioner of Finance. The "action" referred to in § 361.094(2) RSMo 1969 has been construed as meaning the Commissioner's issuance of the certificate of incorporation. Broadway National Bank v. Linwood State Bank, 456 S.W.2d 296 (Mo.1970).

While the certificate of incorporation contains the date of January 7, 1977, the stipulated facts in the administrative record disclose that the decision of the Division of Finance was not to be deemed final until January 11, 1977. The intervenor, relying on this latter date as fixing the time within which an appeal was to be lodged, filed its request for review within the following nine days. The record reveals that the charter was being typed on January 11, 1977 and was not available for release to the attorneys before that date. The Commissioner of Finance testified that the charter was not "transmitted" until the recorded copy of the articles was returned. The articles were recorded on January 12, 1977. We are of the opinion that the intervenor's notice of appeal was timely filed. To hold otherwise would exalt form over substance. Accordingly, point one is ruled against the appellant.

The second point of error raised by the appellant is that the Circuit Court erred in affirming the Banking Board's order because the latter made a finding on an issue which was not specifically raised by the intervenor. The issue alleged not to have been raised concerned the availability of the capital of the proposed bank.

The notice of appeal filed with the State Banking Board by the intervenor contained the allegation that the proposed bank did not comply with all of the statutory requirements relevant to the chartering of a bank. The notice also contained the following language: "The requisite capital has not been subscribed in good faith and all thereof actually paid up in lawful money of the United States in the custody of the persons named as the first board of directors."

It is our opinion that these two assertions in intervenor's notice of appeal adequately raise the issue of the composition and availability of the proposed bank's capital, and were sufficient to put the appellant on notice that the precise issue was in dispute. Accordingly, point two is ruled against the appellant.

In its third point appellant alleges the Circuit Court erred in affirming the Banking Board's finding that the capital of the proposed bank was not available for use in the transaction of business, because said finding was not supported by the evidence.

The challenge to the bank's capitalization stems from the fact that at the time of the application the Mark Twain Bank held a certificate of deposit in the amount of $900,000.00 for the four trustees of the proposed bank. ² This certificate of deposit represented a loan from the Mark Twain Bank to the incorporators of the proposed bank. The latter have made contributions in the amount of $56,000 to reduce their debt on the note. The collateral schedule which was filed by the Mark Twain Bank itemized the security pledged for the loan as consisting of an "assignment of proceeds of Mark Twain National Bank Certificate of Deposit No. 132 dated May 28, 1976, maturing August 26, 1976, in the amount of $900,000.00" ³ as well as all of the common stock owned or contracted for on behalf of the Washington Commercial Bank.

It is appellant's position that the capital was ready for immediate use, despite the subordinance of the Mark Twain Bank security interest. Appellant offered a letter from the Vice President of the Mark Twain Bank in support of this contention. The letter was addressed...