Wyoming Bancorporation v. Bonham, 4363

• Court: United States State Supreme Court of Wyoming
• Writing for the Court: GUTHRIE
• Citation: 527 P.2d 432
• Parties: WYOMING BANCORPORATION, Appellant (Plaintiff below), v. Dwight BONHAM et al., Appellees (Defendants below).
• Docket Number: No. 4363,4363
• Decision Date: 16 October 1974

Page 432

527 P.2d 432 WYOMING BANCORPORATION, Appellant (Plaintiff below),
v.
Dwight BONHAM et al., Appellees (Defendants below). No. 4363. Supreme Court of Wyoming. Oct. 16, 1974.
Rehearing Denied Oct. 29, 1974.

Page 433

Jack B. Speight and John G. Hanes, of Hanes, Carmichael, Johnson, Gage & Speight, P. C., Cheyenne, for appellant.

Juan L. DeHerrera, Cheyenne, for appellee Dwight Bonham.

Henry A. Burgess, of Burgess & Davis, Sheridan, Richard L. Eason, of Simon, Eason, Hoyt & Malone, P. C. Englewood, Colo., for Wyoming Security Bank.

Before GUTHRIE, McINTYRE and McCLINTOCK, JJ.

Mr. Justice GUTHRIE delivered the opinion of the court.

Wyoming Bancorporation ¹ appeals the decision of the District Court of Laramie County, Wyoming, affirming the order of the Wyoming State Examiner authorizing the issuance of a State bank charter to

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Wyoming Security Bank of Sheridan, Wyoming. ²

Section 13-44, W.S.1957, 1973 Cum.Supp., ³ provides for the incorporation of State banks under the sole jurisdiction of the examiner. Incorporators are required to file with him articles of incorporation, setting forth information concerning the proposed bank, specifically including the capital stock and number of shares into which it is to be divided. Of particular pertinence to this action are the directions that the examiner shall inquire into the 'convenience and needs of the community to be served by the proposed corporation' and that he 'shall be the sole judge as to whether or not a charter shall be granted.' Section 13-45, W.S.1957, 1973 Cum.Supp., directs that the certificate of articles of incorporation so filed shall be accompanied by a fee of $500 'to cover the expense of the investigation to be made by the state examiner.'

Under date of April 27, 1972, a letter transmitting the required number of articles of incorporation was signed by George Acker, one of a group of five incorporators seeking the issuance of the charter, and this letter, the copies of the articles, and a check for $500 were on the next day personally delivered to the examiner at his office in Cheyenne. At this time the examiner delivered to one of the representatives of the group an instruction sheet theretofore prepared by the examiner designating what further information should be furnished to the examiner, but orally informed them that the letter and other papers had been accepted as an application for charter. A letter of the examiner dated May 23, 1972, confirmed acceptance of the letter, articles, and check representing filing fee to accompany the Application for Charter and that requirements for 'Completion of Application for Charter' had been delivered to applicants at the time the hand-carried letter had been received, and advised that the further information should be received by the examiner within 90 days.

'Application to Organize a State Bank and Representations of Applicants,' in the form required by the instructions delivered to the applicant on April 28, was mailed to the examiner on July 26 and received by him on July 31, 1972. An independent investigation was conducted by the chief investigator for the examiner, and on September 22, 1972, he filed his report recommending that the charter issue.

On June 14, 1972, Bancorporation mailed to the Regional Administrator of National Banks an application for a bank to be located at Sheridan and to be known as Bank of Wyoming, N. A. This application was acknowledged by the administrator to have been perfected on July 18, 1972, and in the letter advising of such acceptance it is stated that field work to investigate the merits of the application would be undertaken forthwith. Following indication of this acceptance, and on August 31, Bancorporation filed its objection to the Security

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application, claiming that the Security application was filed by a group who through the existing Bank of Commerce controlled some 64 percent of the deposits in Sheridan ⁴ and that it would be in the better interests of the public to deny the State application and permit the national application to be granted. This protest was formally withdrawn by letter dated and filed with the examiner on September 25, 1972, but on February 26, 1973, Bancorporation wrote and filed with the examiner a letter asking for a hearing 'as authorized in the bank hearing bill (S.L. of Wyoming 1973, ch. 119, app. February 23, 1973).' ⁵

In keeping with rules of the examiner entitled 'Application Proceedings for State Bank Charters,' adopted effective May 25, 1973, a hearing was held by the examiner on June 20, preceeded by a prehearing conference on June 11. At both the conference and hearing Bancorporation took the positition that another bank was needed in Sheridan but that because of ownership of Security by persons already interested in the Bank of Commerce, a dominant bank in the Sheridan community, the needs of the community for competition would not be satisfied except through issuance to Bancorporation of the Federal charter then being sought by it. Mr. Howes, President of Bancorporation, testified that it protested Security's application on the basis that its Federal application was prior in time and that it would be the only bank furnishing competition to the existing banks. Notwithstanding his expressed confidence that the Federal charter would issue, neither he, as the sole witness for Bancorporation, nor any of the witnesses for Security made any attempt to assess the impact upon the Sheridan community of the issuance of both a State and a Federal charter. The feasibility report prepared by the examiner's chief assistant as well as the examiner's oral remarks prior to closing the hearing likewise do not consider this point.

Prior to closing the hearing the examiner requested each side to submit a summation of the evidentiary material and to submit proposed findings of fact and conclusions of law, along with memoranda as to their respective legal positions. Following the hearing and on July 5, 1973, Bancorporation was advised by the comptroller that preliminary approval had been granted to organize the Bank of Wyoming, National Association, which information was telephoned to the examiner and incorporated in an affidavit filed with Bancorporation's memorandum brief. In this memorandum it is claimed that the situation has materially changed and that action of the examiner granting a charter to Security would be subject to court challenge as being arbitrary for want of sufficient information upon which to make a proper decision. It was argued that the examiner did not have sufficient information to justify the issuance of a fourth bank charter, the entire record being predicated upon the issuance of a charter for a third bank. No request was made for permission to submit further evidence concerning the national charter.

On July 31, 1973, the examiner entered his Findings, Conclusions and Order Granting Charter. Three of the findings may be said to relate to the question of

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convenience and need, the first of these being that there 'is an existing need for better service to the business community growing southward along South Coffeen Avenue, and the proposed bank would fulfill such need'; the second finds that the bank would have a competitive advantage because of its location in that it would 'be more conveniently accessible to businesses and residents located within the primary service area, which is a rapidly developing commercial and residential area of the community'; and the thrid is that accelerated growth of Sheridan banks in recent years 'indicates a rapidly expanding market in the community and demonstrates the need for additional banking facilities.' The examiner concludes in part that the proposed bank 'will serve the convenience and needs of the community of south Sheridan, Wyoming, Big Horn and Story and surrounding unincorporated area.' The order makes no reference to the preliminary approval of the national charter for Bancorporation, nor are there any findings or conclusions with respect to what effect the authorization of two new banks would have upon the banking community of the City or County of Sheridan.

In its petition for review Bancorporation specifically complains of this failure to find that the city or county can economically support a fourth bank despite the fact that Bancorporation had brought home to the examiner the approval of the national institution.

The matter was orally argued to the district court and memoranda were again submitted, with Bancorporation including in its submission the memorandum which had been submitted to the examiner, thereby again emphasizing its claim that a fourth bank charter was being considered by the examiner. Security and the examiner both argued that the question had to be considered on the then status and that the national charter had not yet been finally approved. The examiner also argued that the question of whether a fourth bank charter should issue should be considered by the Federal banking authorities and was not a question for the State court.

A written opinion delivered by the district court expressed the view that the examiner was not required to take cognizance of possibilities that might or might not happen and was entitled to make his decision on the basis of the record as it stood at the time of the presentation to him It is said that the findings of the examiner embrace the element of competition, location of the bank, growth of the community, and the general character, experience and ability of the incorporation which will tend to sound management and command public confidence. The judgment thereafter entered finds among other things that the examiner inquired into 'the convenience and needs of the community to be served by the proposed corporation'; that the examiner was the sole judge as to whether a bank charter should be issued; that his action was supported by substantial competent legal...