177 Ky. 761 | Ky. Ct. App. | 1917
— Affirming.
The appellees, Dossey and several others, undertook the organization of a state bank, under the laws of this Commonwealth, to be located at Fountain Bnn, Monroe county, Kentucky. The articles of incorporation were duly prepared, signed and acknowledged by the incorporators and presented to George G. Speer, Banking Commissioner of the Commonwealth, for his approval, as required by subsection 20 of section 165a, Kentucky Statutes. The Banking Commissioner refused to approve the articles of incorporation, and this action in mandamus was instituted by the incorporators in the Franklin circuit court to require Speer, as Banking Commissioner, to approve the articles. By the allegations of the petition it is made to appear that the plaintiffs (twenty-oné in number) have complied with the requirements of the statute, regulating the organization and establishment of banks and trust companies in this Commonwealth, and that the articles of incorporation conform to the statutes in such cases made and provided, and that such articles have been duly signed and acknowledged by each of the incorporators, and that each of the said incorporators is of good moral character and is worth double the amount of his subscription to stock, exclusive of his exemptions and liabilities, and they in good faith intended the establishment of a bona fide banking business.
By the answer the Banking Commissioner admits that the incorporators have properly complied with the statutes in the preparation and execution of the articles of incorporation, and that each of said incorporators is of good moral character and in good standing financially and worth above his exemptions and liabilities double the amount of his subscription to stock, but he denies that the incorporators are in good faith in the establishment of the bank, but asserts that they are incorporating the bank as a retaliatory measure against certain other citizens in Fountain Eun community, who are preparing to engage in a flour milling business in opposition to a mill already there. The statute requiring the approval of the articles of incorporation by the Banking Commissioner reads, in part, as follows:
“Upon the presentation of the said articles of said incorporation to the Banking Commissioner for approval, said commissioner shall carefully examine same, and shall make such inquiry and investigation as to the financial*763 standing and moral character of each of the incorporators as he may deem necessary, and shall require said incorporators to furnish satisfactory proof that each is worth over and above all exemptions and liabilities at least double the amount of the par value of his stock subscription. He shall inform himself that the incorporators are seeking to establish a bona fide bank or trust business, and are acting in good faith, and upon his conclusions, he shall approve or refuse to approve the articles of incorporation.”
The commissioner, in refusing to approve the articles of incorporation, wrote one of the incorporators, at Fountain Kun, a letter, dated May 11, 1917, in which he stated, among other things, that he had conducted an investigation “of the country and conditions surrounding your little town, with a view of ascertaining whether there is a demand for a second bank at this place.
“I have tried to ascertain if another bank was chartered at this place, if both of them could secure enough business to justify the establishment of a second bank. ’ ’ And the letter further states that the commissioner has had one of his examiners investigate the bank already established and that such examiner has reported to the commissioner “that he did not believe a second bank could succeed, and, if it did succeed, it would destroy the one already located there.” And further “that the establishment of another bank would either ruin the bank already there or the one established would fail in its efforts to build up a good, strong financial institution.” The letter adds, however, that the approval of the articles is refused “for the further reason that we do not believe there is sufficient business in this community to -justify the establishment of a second bank.”
Under the statute above quoted, it is the duty of the incorporators of a bank to present the proposed articles of incorporation to the Banking Commissioner for his approval before filing and recording the same in the office of the county court clerk and of the Secretary of State. The statute then makes it the duty of the Banking Commissioner to examine the articles of incorporation and to make such inquiry and investigation as to the financial standing and moral character of each of the incorporators as he may deem necessary, and he shall require such incorporators to furnish satisfactory proof that each is worth over and above his exemptions and liabilities at least double the amount of the par value of
Under the facts in this case, the refusal of the Banking Commissioner to approve the charter of the Farmers Bank of Fountain Run appear to have been without warrant of law. The lower court properly granted the mandatory order, requiring the commissioner forthwith to approve, in writing over his official signature, the articles of incorporation of said banking institution.
Judgment affirmed.