*1 COMPANY, BANK & TRUST CHEMICAL Relator, FALKNER, Banking Com-
Honorable J. M. Texas, Respondent. missioner of
No. A-9448.
Supreme Court of Texas.
June 1963. July
Rehearing Denied *2 Banking the State serving J. Falkner, Relator,
M. after re- member. ceiving copy of certified of articles association, proceeded required with all steps necessary to entitle toit a certificate authority to start of in The Com- business. missioner, although he admitted that all nec- essary requirements had met been rela- tor, refused to issue the certificate of au- thority pendency because of the the suit of from the appealing Board’s order. Relator peti- then filed a motion for leave to file a in tion of mandamus this to for writ court require the to issue cer- Commissioner authority. tificate Subsequent to the action of the in court file, granting motion leave for to Company Oaks River & Trust Bank Wheat, Wright, Dyche, Thornton & University a first State Bank filed Houston, Austin, for Jacobsen, relator. original petition Jake amended in suit which they against had filed the Board in the 53rd Carr, Texas, Atty. Waggoner Gen. of County. District' Travis Court McCalla, Gen., Atty. Asst. for Dudley D. Falkner, respondent Banking M. Com’r J. petition, In this amended M. FalkneR J. Texas. Commissioner, par- was made a Banking ty. addition, the Bank & Trust Chemical Hearon, Graves, Dougherty, Gee & Aus- Company First Board Directors Baker, tin, Elledge, Heard & Willis E. parties. made Although said were Houston, Gresham, for intervenors. petition request there was amended for a injunction against order and restraining HAMILTON, Justice. Board and Banking Banking State enjoining the issuance of the Commissioner Company Bank & Trust The Chemical authority, no such order has certificate compel a writ mandamus relator seeks issued. Falkner, Banking M. State Commission- J. er, authority a certificate to it to issue banks, plaintiffs two in the The district County, Texas. operate a bank Harris case, filed a motion leave inter- court, before vene in cause First Board of Di- facts are: granted. was Bank & Trust Com- Chemical rectors of relator, applied for state bank char- pany, principal question before us for de- Houston, City of ter Banking is whether the cision Commission- Board, Banking by the approved State was and the issue er has de- State authority to relator even the certificate copy a certified the ar- to relator livered been taken from the though the new bank. association Two ticles of granting the Banking Board’s order banks, Bank Trust River Oaks & Houston question relator. answer this We University Bank, Company affirmative. charter, protested who posed clearly in a state- District Court in the 53rd suit filed Falkner, from M. in a letter Com- ment County appealing Travis J. correspondent missioner, was had Service Board. the State under from an order Company Chemical & Trust Bank mem- 7, 1963, Board which am ex officio as follows: February date of *3 ber.” is Art. wording “It clear from of I,
342-305, as a member V.C.S. that this court contend that Intervenors Board, my ex Banking of the State jurisdiction of man has no issue the to writ capacity officio as Banking Commis- against Banking damus Commissioner performed Texas, fully sioner of have within because is not Article he officer my duties as member a of That Revised Civil Statutes. application for Banking Board after the article reads: upon been acted bank has Supreme any “The or Court by the such Board. When Justice thereof, power shall have issue writs to my is as granted, it then becomes procedendo, certiorari and all writs of Texas, and of Banking Commissioner quo agree- of warranto or mandamus ap- Board, not as a member of the to principles regulating able to the lawof prove, issue and to the in- deliver writs, against any such judge, district corporators copy a certified of Appeals or judges Court of or Civil pres- upon Articles of Association thereof, any or officer of the Gov- satisfactory of entation to me evidence Id.; ernment, except the Governor. capital fully that all funds have been 1913, p. 107; 1917, p. Acts Acts 140.” cash, paid in in which has done been in this case. opinion It is our that the Com- Banking am uncertain
“I time as to govern- at this missioner is an officer of the state appeal whether of an filing by ment subject and is to writ mandamus of order of the Banking by Board and this court stat- authority above the institution suit of Cause No. ute. whether In the Commis- determining 130,008, in the District 53rd Court government, of sioner is an officer the state of County, Texas, by Travis River necessary Oaks it refer is to to the statute cre- Company, Bank & al. Trust et vs. State Banking the office ating of Commissioner. al., Board, Banking et in which I am passed 1943the was Texas Code Banking a named as by defendant member as (All Bank- Legislature. reference to Texas, Commissioner of opinion constitutes articles are Vernon’s An- suspension a my authority per- Statutes.) notated Article Civil 342-103 es- required form duties Texas, me for the is- tablished Finance Commission of suance of the of Authority Certificate nine divided into consisting of members the pendency of such suit. during sections, banking As two one of which was the section, Commissioner Texas am of six members. consisting ready, able and to issue the willing provided banking section shall Authority Certificate advisory since all of the as an board serve to the Commis- legal requirements precedent policies to such is- sioner as to and shall have fully performed sue have been authority as re- other duties and such quired by law, provided upon may au- conferred I am them law. thorized or directed to do so an or- section shall make thorough banking competent der of a court jurisdic- study banking intensive the Texas tion. my The sole reason for refusal and loan statutes to maintain building to issue the Authority, protection Certificate degree the maximum de- stated, stockholders, report above that there is a and shall positors and my as to Legislature by whether as Banking every years two filing Commissioner of Texas is limited the clerks of the Senate and with House the fact Representatives study, the results taken to- of its competent jurisdiction gether with its recommendations. The by which, period, either promulgate certain may section banking pleasure enduring at the fixed by conduct rules for the regulations power, an individual creating state Article banks. 342-113. sov- meetings portion of the invested with some presides over ereign government, functions section and each of the Finance Commission except him benefit thereof, exercised but shall not vote public.” preside when tie, of a case does the selection of meeting involves Hence, an em calling the Commissioner 342-111. Commissioner. *4 ployee pleasure the giving and him tenure at shall, the with The Finance Commission prevent not of the Finance does Commission Senate, a elect and the advice consent of an Banking being from the Commissioner pleas- the who shall serve at Commissioner point As officer of the state government. The Com- ure the Finance Commission. out, bank general ed the administration Fi- employee of the an missioner shall be Banking by out the affairs is carried ing subject orders and to its nance Commission his he exercising duties Commissioner. provides as and Article 342-207 directions. sovereign carrying the functions of out super- shall “The Commissioner follows: government protection and bene the provided in this regulate, shall as vise and public is a of and as such he state fit the the shall enforce Code,1 banks and all state as See Betts ficer stated Article 1733. through person or this Code provisions 360, 4; Middle Johnson, 96 73 S.W. Tex. Depart- Commissioner, the Deputy the Board, Tex. 111 Banking kauff v. examiner. any Examiner mental 242 S.W. ** *» by the Commissioner given not mean that holding This does supervis- carry the out his duties subject Code any may “officer” of the State numer- banks are regulating state There are under Article 1733. mandamus opinion many it would burden government ous —so who many persons in state the say that it to enumerate them. Suffice of general requirements meet the state banks control over Commissioner’s Johnson, the 141 See Knox v. S.W.2d ficers. say does While the statute is extensive. (Tex.Civ.App.1940), writ refused. 698 “employee Banking Commissioner is However, only to a extends subject to Commission and the Finance class officers. In Betts v. certain limited directions”, more he far its orders and supra, Judge Gaines concluded Johnson, Finance employee of the Commis- only than an predecessor to Article 1733 many powers du- sion because departments to heads of extended (cid:127) directly by Legislature him pointed ties He government. out state subject to control of the which are not statute as follows: rationale Commission. fact Finance “ ** * reside, must These officers the Commissioner as denominates statute kept, offices must be at and their employee necessarily does mean government, and their of the state seat gov- an officer of the he is not state performed are to be official functions ernment. A proceeding against mandamus there. Supreme in Kim- Court of Texas department, rule, a in- of a the head Barnett, brough v. 93 Tex. 55 S.W. questions are which volves approval quotes with (1900), speedy call public interest and for a de- Officers, Public 1: Mechem § they That are far termination. importance than or- those right, authority, office “Public mandamus suits dinarily arising created and conferred through 342-911. 1. Articles 342-101 appeal vacating the officers, thereby nullifying against whether of other hand, is, re- state, district, order the other county, On or a of the Board. or of pro- only argues lator think, that Article 342-115 we obvious.” vides if the determine duty of authority Banking Board determinations of the certifi to issue a evidence, supported substantial cate of stat authority is controlled being valid until set aside provides: ute. Article 342-307 court. may “No until state bank do business Article 342-115 Code of it receives certificate of provides: Commissioner, from the shall “ * * * The orders of the State not be it has delivered until elected may appealed the officers and directors named in competent jurisdiction court of and the charter or other of- competent juris- trial in the court of approved by ficers and directors *5 diction shall be novo the same ifas de Commissioner; adopted by- shall have said originally matter had been filed approved Commissioner; laws by the ” * ** such court. complied shall have with all the above that the agree We with intervenors requirements other of this Code rela- novo, a trial the provision contemplated de tive incorporation state ” * * * Banking Board the issues that were before Banks. pre- under the to be courts tried the is This one of the the Com- By pro- ponderance of the evidence rule.
missioner which is under not the control of shall be the viding the before that trial the Finance Commission. said matter had been court “the same as if court”, Legisla- in such the originally filed ad- Since has the plac- that court should be ture intended the prerequisites entitling mitted that all the Bank- position the as the ed in same Company Chemical Bank Trust to a cer- & ing Board. complied tificate have been with, that remains to the all be done for charter, applicant an To obtain a must get begin operation bank to is ministerial the following the elements affirmative on issuing act of the Commissioner of the cer- 2 : authority. tificate of Without the public necessity A“1. exists for compel writ of would lie to him mandamus proposed the bank. such certificate filing issue unless the capital proposed The structure “2. appeal grant- from the Board’s order adequate. is ing prevent. will The fact that the negative the is worded statute does “3. The volume business in the duty from change not to dis- ministerial community proposed where such bank cretionary. requirement negative that is to be such as to indi- established may not act until the Commissioner certain profitable operation propos- cate implies steps taken are Commis- ed bank. steps must act when those sioner have been proposed “4. The officers and direc- completed. satisfactorily banking experience, sufficient tors have ability standing render success contend Intervenors probable. proposed bank provides appeal Banking Code an from the trial de Board’s for novo applicants “5. The acting are rule, preponderance of evidence good faith.” 342-305, Y.A.O.S. another, and duty on which are provision places Executive another; those which are courts to make these determinations. Judicial persons, person, courts no or collection placing of this being departments, shall adversary with each of one these proceedings makes the any power properly exercise attached party applicant contestant- —advocat- — special par- others, except interests. Each own either its sustaining ty expressly permitted.” evidence would introduce instances herein point That leave own view. would is controlled this case argued It is protection no public since for Ins. Co. v. State by Key Life Western in- equipped courts are not to make an Insurance, Tex., S.W.2d Board of dependent investigation into the facts v. Insurance Board of (1961), and State always has circumstances. Co., Ins. Men’s and Business Professional great public field of interest. There writ (Tex.Civ.App.1962), 359 S.W.2d rights involved than of the indi- novo refused, n.r.e., upheld trial de engage viduals who wish to in the business In- field. State in the insurance banking. general populace Men’s and Business Professional surance economic interest financial welfare in the get requirements to Co. held Ins. banking place They institutions. their and could judicial charter were insurance savings example, there safekeeping, However, it by the courts. be determined they and if given protection by are necessity” in “public the determination of the chances great that the legislative, which is banking area will *6 collapse be hurt. The in- banking of insurance requirement the is not a in that in stitutions the 1930’sis this illustrative of field. point. Key case that the Western contended is consid- Hence, originally Legislature the determining a broad rule laid down a bank charter applicant for ered each administrative function whether a of individual special to create passed laws court judicial legislative. or agency Leg- However, business the banks. “particular judicial action is that said duty of great, so the too islature became than, immediate, case of as in the rather delegated to admin- was granting charters action, general making legislative rule ex- personnel. As agencies istrative out, point how- future in effect.” We 342-305, Legislature emplified the in Article lay ever, did intend to that necessary particular elements has .set some pronouncement adminis- of down a broad 2, 5), 4 and but it (Nos. get a only was used language law. trative flexibility establishing provided has also spe- reaching the answer aid requirement “public of Key the court. West- question facing cific “public determination of necessity”. The ern, supra, page at 350 S.W.2d in- Banking Board necessity” by State Key the decision Western heart of public policy a of volves determination give did not that the case was statute legislative matter of discretion is a which legislative discretion in Board Insurance constitutionally given to can not which policies. insurance The court approving That would be a violation of judiciary. Lubbock, City of v. distinguished Davis II, Constitution of Section Article 38, (1959) on the 326 S.W.2d Tex. Ann.St., Texas, provides: which Vernon’s grant legisla- was a that there of ground City in that powers of discretion to Council the Government tive “The of grant legislative is a of Texas be divided in- dis- shall case. There departments, each of Board under distinct cretion to three 342-305, .separate hence case distin- confided to a this 'which shall Key Western falls with- body magistracy, guishable wit: Those one;., logic City of Davis v. Legislative to those in the Lubbock.. which agree I appeal provision providing holding We hold with the that Bank- preponderance trial de a Commissioner is a novo state officer within 1733, that, of no meaning evidence to be unconstitutional and Art. proper case, force and jurisdiction Court effect. has
issue a writ of
mandamus
him.
provision of
Holding the above
agree
I
also
holding
with the
that Art.
the statute
not mean
unconstitutional does
provides
novo, pre-
342-115
for a true de
that
right
intervenors do not
have a
ponderance
evidence,
trial.
appeal.
property
When a vested
right,
pro-
holding that
disagree
I
with the
charter,
each intervenor has in
is unconstitutional.
vision for de novo trial
the action
an adminis
affected
agency, thereby
trative
pro
invoking
made
which must be
The five
process
law,
tection of due
is an
there
incident to the
Board
right
appeal. Brazosport
inherent
Sav
set out
granting of a bank charter are
ings & Loan Ass’n
Savings
American
opinion and need not be re-
the Court’s
Ass’n,
&
543,
Loan
161 Tex.
342 S.W.2d
peated
only
the issues
here.
one of
City
Hancock,
747 (1961);
of Amarillo v.
which
to render the
is said
150 Tex.
termination that is a there particular An under a bank in the substantial area to be a me, any public policy. negatives evidence rule idea that determination of To application question approving public Board’s order whether there ais filing ap pure vacated or of the need for a bank in nullified area is a peal. Company Southern fact which a judge Canal trial v. —one 227, jury Engineers, Board Water 159 Tex. could decide on evidence available for 619. introduction in 318 Since court. S.W.2d suspend is not nullified or The Court’s fear for the interests of the appeal, ed but is still in full force public judicial is, if full review is allowed effect, ground there is no valid warrant, suggest, I without as is its con- Commissioner to refuse to issue the certifi adversary system that cern of trial authority, cate of and relator is entitled to undeveloped leave that would evidence most have writ of mandamus issue. public favorable to the interest. fix- utility freight light opin- assume that in the rates is much We of this complicated Commissioner will issue intricate and calls ion the the certifi- greater expertise, for much requested yet cate full the rela- judicial Otherwise, mandamus, review is allowed in both tor. writ of fields. for, cases cited in prayed See Southern Canal will issue. Co. v.
State Board of Engineers, Water Tex. 227, 619, 318 S.W.2d 624. We have no evi- CALVERT, Chief (dissenting). Justice public dence that the interest has suffered respectfully dissent. judicial from full review of rate orders of bodies, reason be- administrative no WELCH, Appellant, B. Albert lieve that courts concern- would be less than with the ed the State guaran- interest. There is no better Virginia Appellee. WELCH, Morrow development than ty full evidence No. 16188. trial And adversary proceeding. Appeals Court of Civil of Texas. while it is trial are not that courts true equipped independent investiga- to make Dallas. facts,
tions all admissible evidence 14, June agen- developed by facts the administrative cy would be available at trial. Key Life Co. v. Ins. Western Insurance, Tex.Sup., S.W.2d
Board of State ex approval from quoted with we Bates, 96 Minn. Patterson v. rel. 709, 711, proposition
N.W. character ambiguous
“when duties of any judicial officer imposed upon resolved in favor will doubt statute, held
validity to me judicial.” It seems 342-115 is of Art. provision trial
de novo at worst.
doubtful accomplished by nothing to be
There is is well length. this matter at
pursuing however, problem remember, not the concerned which we are
with in re- Legislature act of the
wisdom judiciary of
quiring de novo review decision, but Banking Board’s Legislature power constitutional is decided each case require While it. facts, foreshadows this decision own *8 legislative all acts similar fate for of administra- true novo review de
require con- orders based
tive necessity.
venience filed in the opinion that suit my effectively nullified
district relator, Banking Com- and the therefore, is, legal under no du-
missioner authority. certificate of
ty issue the petition deny writ of
I would
mandamus. STEAKLEY, JJ., join
CULVER
in this dissent.