Whitney Nat. Bank v. Bank of New Orleans & Trust Co.
Decision Date | 14 August 1963 |
Docket Number | 17681.,No. 17672,17672 |
Citation | 116 US App. DC 285,323 F.2d 290 |
Parties | WHITNEY NATIONAL BANK IN JEFFERSON PARISH, Appellant, v. BANK OF NEW ORLEANS AND TRUST COMPANY et al., Appellees. James J. SAXON, Comptroller of the Currency, Appellant, v. BANK OF NEW ORLEANS AND TRUST COMPANY et al., Appellees. |
Court | U.S. Court of Appeals — District of Columbia Circuit |
Mr. Dean Acheson, Washington, D. C., with whom Messrs. W. Graham Claytor, Jr., and Brice M. Clagett, Washington, D. C., were on the brief, for appellant in No. 17,672.
Mr. David L. Rose, Atty., Dept. of Justice, with whom Messrs. David C. Acheson, U. S. Atty., and Joseph D. Guilfoyle, Director of Operations, Civil Div., Dept. of Justice, and Morton Hollander, Atty., Dept. of Justice, were on the brief, for appellant in No. 17,681.
Mr. Edward L. Merrigan, Washington, D. C., for appellee Bank of New Orleans & Trust Co. and certain other appellees.
Mr. Bentley G. Byrnes, New Orleans, La., with whom Mr. Edward L. Merrigan, Washington, D. C., was on the brief, for appellee Louisiana State Bank Commissioner.
Mr. James F. Bell, Washington, D. C., filed a brief on behalf of the National Ass'n of Supervisors of State Banks, as amicus curiae, urging affirmance.
Before WILBUR K. MILLER, WASHINGTON and DANAHER, Circuit Judges.
Petition for Rehearing En Banc Denied October 17, 1963.
The City of New Orleans, Louisiana, is conterminous with the Parish of Orleans in which it is located. It is south of and adjacent to that part of Jefferson Parish which lies east of the Mississippi River. The latter is a populous area, already commercially and industrially active, in which further development is expected to be rapid and extensive.
The Whitney National Bank of New Orleans, by far the largest bank in Louisiana, with its main office and numerous branches in Orleans Parish, draws a substantial volume of business from customers in east Jefferson Parish. For some time it has desired to extend its operations into that area, but cannot establish branches therein because a Louisiana statute,1 which is construed as forbidding such expansion by state banks, is made applicable to national banks in Louisiana by a federal statute.2
After several years of studying alternate methods of doing indirectly what these statutes prohibited it from doing directly, The Whitney National Bank of New Orleans finally decided upon a corporate reorganization, the details of which included the formation of a holding company to own two new national banks: Crescent City National Bank, a mere conduit to exist temporarily in name only, and Whitney National Bank in Jefferson Parish, to be operated as we shall describe. All three new organizations were to be financed with funds furnished by Whitney of New Orleans.
Through elaborate maneuvers which will be explained later, the result would be that Whitney Holding Corporation would own all the stock, except qualifying shares, of Whitney of New Orleans and Whitney in Jefferson Parish; and the shares of Whitney Holding Corporation would be owned by the shareholders of the original Whitney of New Orleans in the same proportion as before. The holding company feature of the plan required the approval of the Board of Governors of the Federal Reserve System, and the remainder of it required the approval of the Comptroller of the Currency.
Commenting on the proposed plan, Whitney's president on October 28, 1961, advised his shareholders it had been decided to use the holding company device instead of the "affiliated" bank plan which we approved in the Camden Trust case3 largely because, under the latter arrangement, it is impossible to attain and preserve identity of ownership of the two banks. He said:
This plan was carried out almost completely. Whitney of New Orleans organized the Whitney Holding Corporation with $350,000 initial capital furnished by it, with which Whitney Holding acquired the "phantom"4 Crescent City National Bank. The Whitney Bank then by consolidation transferred its assets to Crescent City National Bank (owned by Whitney Holding) and immediately changed Crescent City's name to The Whitney National Bank of New Orleans. Then the new Whitney of New Orleans furnished the Holding Corporation with $650,0005 with which the latter organized The Whitney National Bank in Jefferson Parish. And all the Holding Corporation's capital stock was distributed proportionately to the stockholders of the original Whitney of New Orleans.
All this was done with the approval of the Board of Governors of the Federal Reserve System (which had the duty of passing on the validity of the holding company arrangement) and of the Comptroller of the Currency. The only step not yet taken is the Comptroller's issuance to The Whitney National Bank in Jefferson Parish of a Certificate of Authority which will enable it to begin business.
After the complaint was filed, the Comptroller at first voluntarily withheld issuance of a Certificate of Authority to Whitney-Jefferson, but later indicated he would do so no longer. As a consequence, the plaintiffs moved for a temporary restraining order which was issued by District Judge Hart June 27, 1962; and on July 10, 1962, District Judge Holtzoff entered a preliminary injunction in accordance with the prayer of the complaint.
Meanwhile the Louisiana legislature of 1962 adopted a State Bank Holding Company Act, being Act 275,7 which the...
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