Source: https://www.legalcrystal.com/case/102217/first-nat-l-bank-plant-city-vs-dickinson
Timestamp: 2018-03-20 09:46:23
Document Index: 572350499

Matched Legal Cases: ['§ 7', '§ 36', '§ 36', '§ 21', '§ 7', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36', '§ 36']

First Nat L Bank in Plant City Vs Dickinson - Citation 102217 - Court Judgment | LegalCrystal
First Nat'l Bank in Plant City Vs. Dickinson - Court Judgment
LegalCrystal Citation legalcrystal.com/102217
Case Number 396 U.S. 122
Appellant First Nat'l Bank in Plant City
first nat'l bank in plant city v. dickinson - 396 u.s. 122 (1969) u.s. supreme court first nat'l bank in plant city v. dickinson, 396 u.s. 122 (1969) first national bank in plant city v. dickinson no.19 argued october 16, 1969 decided december 9, 1969 * 396 u.s. 122 certiorari to the united states court of appeals for the fifth circuit syllabus petitioner in no.19, a national bank in florida, having been granted permission by the comptroller of the currency of the united states, operated two off-premises services. (1) the bank operated an armored car (a "mobile drive-in"), equipped with a glass window and customer's service counter and staffed by a driver-guard and teller (both bank employees). the armored car.....
First Nat'l Bank in Plant City v. Dickinson - 396 U.S. 122 (1969)
U.S. Supreme Court First Nat'l Bank in Plant City v. Dickinson, 396 U.S. 122 (1969)
Decided December 9, 1969 *
Petitioner in No.19, a national bank in Florida, having been granted permission by the Comptroller of the Currency of the United States, operated two off-premises services. (1) The bank operated an armored car (a "mobile drive-in"), equipped with a glass window and customer's service counter and staffed by a driver-guard and teller (both bank employees). The armored car delivered cash in exchange for checks and received cash and checks at the depositors' premises, the bank insuring the funds during transit. (2) In a shopping center about a mile from the home premises, the bank maintained a secured receptacle, to which customers had keys, equipped with a writing table and bank forms. Monies and night bags were left at this facility, which was serviced daily by the armored car, the teller recording deposits by the customer's number and the driver-guard verifying all items collected by the teller. For these off-premises services, the bank used a "Comprehensive Dual Control Contract" and transmittal slips which specified that, in transporting funds, the bank acted as agent for the customer, and that funds would not be deemed deposited until delivered at the bank. Under § 7 of the McFadden Act, a national bank may establish and operate a "branch" only under such conditions as state law would authorize a state bank to establish and operate such a branch. The Florida Comptroller requested petitioner bank to cease both services as violative of Florida law, which prohibits branch banking altogether. Thereupon, the bank brought suit in the District Court for declaratory and injunctive relief. The United States Comptroller intervened on the bank's side, and several state banks intervened in support of the Florida Comptroller. The District
1. The policy of "competitive equality" between national and state banks is firmly embedded in the statutes governing the national banking system, and, under the McFadden Act, a national bank may establish a "branch" within the meaning of the federal definition in 12 U.S.C. § 36(f) only under the same conditions as state law would authorize a state bank to do so, First National Bank of Logan v. Walker Bank & Trust Co., 385 U. S. 252 . Pp. 396 U. S. 130 -133.
2. The term "branch bank" in 12 U.S.C. § 36(f) includes any place for receiving deposits apart from the chartered premises. Here (regardless of the formal arrangements between the bank and its contracting customers), at the time a customer delivers money either to the armored car or the stationary receptacle, the bank has received a deposit within the meaning of that provision, and the place of the delivery is an "additional office or . . . branch place of business . . . at which deposits are received" within the federal definition of a branch bank in the statute. Pp. 396 U. S. 134 -137.
3. Since Florida does not permit branching privileges to state banks, the congressional policy of competitive equality forecloses the Comptroller of the Currency from modifying that standard. P. 396 U. S. 138 .
Florida prohibits all branch banking by state chartered banks; by statute, a Florida bank may "have only one place of doing business," and all the business of the
bank is to be carried on at that place, "and not elsewhere." [ Footnote 1 ] The issue must be resolved by determining what constitutes a "branch" or "additional office"; there is a threshold question of the extent to which this is governed by federal law.
The First National Bank in Plant City, Florida, is a national banking association organized and operated pursuant to the National Bank Act, 12 U.S.C. § 21 et seq.; it sought and received from the United States Comptroller of the Currency permission to operate two services for the convenience of customers; one was an armored car messenger service and the other an off-premises receptacle for the receipt of packages containing
cash or checks for deposit. The Comptroller's letter authorizing the armored car messenger service relied upon paragraph 7490 of the Comptroller's Manual for National Banks, [ Footnote 2 ] a relatively recent ruling which specifically authorizes such a service. A second letter authorizing construction of an off-premises receptacle authorized such a service "as an incident to" the bank's ordinary business. Both letters contained explicit instructions to First National designed to insure that deposits so received would not become bank liabilities until actually in the hands of the bank teller at the chartered office or regular "banking house", and that checks cashed for customers would be deemed paid at the bank when the cash was handed to the messenger, not when the cash was delivered to the customer by the armored car teller.
Relying on these letters, First National offered an armored car service and a secured receptacle for receipt of monies intended as deposits. The bank advertised "Full Service Banking at your doorstep . . ." and a "mobile drive-in . . . where customers may be served. . . ." A more detailed examination of the services shows that customers having an account with First National could, upon signing a "Comprehensive
Dual Control Contract," [ Footnote 3 ] arrange to have the armored car call at their place of business to pick up cash and checks for deposit, or to bring cash to them in exchange for checks delivered to the armored car teller. The contract provided that, in each situation, the bank's armored car messenger would be the agent of the customer. Additionally, proffered deposits were accompanied by a transmittal slip upon which the customer itemized the funds being deposited in the same manner as with deposits made at the chartered office of the bank. The transmittal slip contained a "Contract" which provided that, in this off-premises transaction, the bank was the agent of the customer, and that
"the transmittal of said currency, coin and checks, shall not be deemed to be a deposit until delivered into the hands of the bank's tellers at the said banking house. [ Footnote 4 ] Sums
The stationary off-premises receptacle for receipt of monies intended for deposit was located in a shopping center one mile from First National's banking house in a space leased by the bank. The facility consisted of a secured receptacle for monies and night bags, together
First National then sued in the United States District Court for the Northern District of Florida seeking declaratory and injunctive relief against respondent. The United States Comptroller intervened as plaintiff on the side of First National; several state banks intervened to support the Florida Comptroller. The District Court granted judgment for petitioners, 274 F.Supp.
The conditions under which national banks may establish branches are embodied in § 7 of the McFadden Act, 44 Stat. 1228, as amended, codified in 12 U.S.C. § 36. One such condition is that a "branch" may be established only when, where, and how state law would authorize a state bank to establish and operate such a branch, 1 U.S.C. § 36(C). [ Footnote 5 ] First National Bank of Logan v. Walker Bank & Trust Co., 385 U. S. 252 (1966).
We have noted that the State of Florida permits no branch banking under a statute providing that banks are to "have only one place of doing business"; the business of the bank may be transacted at that place "and not elsewhere." [ Footnote 6 ] The parties agree generally that the McFadden Act permits national banks to branch if and only if the host State would permit one of its own banks to branch; the Florida Bank Comptroller insists that the State of Florida unequivocally forbids off-premises banking
At the outset, we note that, while Congress has absolute authority over national banks, the federal statute has incorporated by reference the limitations which state law places on branch banking activities by state banks. Congress has deliberately settled upon a policy intended to foster "competitive equality." Walker Bank, 385 U.S. at 385 U. S. 261 . State law has been utilized by Congress to provide certain guidelines to implement its legislative policy.
H.R.Rep. No. 83, 69th Cong., 1st Sess., 7 (1926).
385 U.S. at 385 U. S. 258 , quoting from S.Rep. No 473, 69th Cong., 1st Sess., 14 (1926).
When the economic depression of the 1930's brought on widespread bank failures, Congress responded by amending the McFadden Act with the passage of the Banking Act of 1933, which further strengthened the policy of competitive equality. Some Members argued that bank failures were due to the undercapitalization of small rural banks and sought to authorize national banks to engage in branch banking without regard to state law; but that approach was rejected. As finally passed, the Act was reported to the House by one of
"In the controversy over the respective merits of what are known as 'unit banking' and 'branch banking' . . . branch banking has been steadily gaining in favor. It is not, however, here proposed to give the advocates of branch banking any advantage. We do not go an inch beyond saying that the two ideas shall compete on equal terms an only where the States make the competition possible by letting their own institutions have branches. "
385 U.S. at 385 U. S. 260 , quoting from 77 Cong.Rec. 5896 (1933). (Emphasis supplied.) The policy of competitive equality is therefore firmly embedded in the statutes governing the national banking system. The mechanism of referring to state law is simply one designed to implement that congressional intent and build into the federal statute a self-executing provision to accommodate to changes in state regulation.
We reject the contention made by amicus curiae National Association of Supervisors of State Banks to the effect that state law definitions of what constitutes "branch banking" must control the content of the federal definition of § 36(f). [ Footnote 7 ] Admittedly, state law comes into play in deciding how, where, and when branch banks may be operated, Walker Bank, supra, for, in § 36(c), Congress entrusted to the States the regulation of branching as Congress then conceived it. But to allow the States to define the content of the term "branch" would make them the sole judges of their own powers. Congress
did not intend such an improbable result, as appears from the inclusion in § 36 of a general definition of "branch." On this point, the language of the Court of Appeals perhaps overstated the relation of state law to the problem, since the threshold question is to be determined as a matter of federal law, having in mind the congressional intent that so far as branch banking is concerned "the two ideas shall compete on equal terms and only where the States [allow] their own institutions [to] have branches." In short, the definition of "branch" in § 36(f) must not be given a restrictive meaning which would frustrate the congressional intent this Court found to be plain in Walker Bank, supra. [ Footnote 8 ]
Against this background, we turn to the question whether the off-premises business activities conducted by First National amounted to "branch" banking within the meaning of the McFadden Act. Since national banks are "necessarily subject to the paramount authority of the United States," First National Bank in St. Louis v. Missouri, 263 U. S. 640 , 263 U. S. 656 (1924), we consult that part of the McFadden Act that defines the term "branch." 12 U.S.C. § 36(f) provides:
The bank also urges that creation of a deposit being purely a matter of intent, the issue is governed exclusively
We have no difficulty accepting the bank's argument that the debtor-creditor relationship is a creature of contract and that the parties can agree that, until monies are physically delivered to the bank, no deposit will be credited to the customer's account. [ Footnote 9 ] We are satisfied, however, that the contracts have no significant purpose other than to remove the possibility that the monies received will become "deposits" in the technical and legal sense until actually delivered to the chartered premises of the bank.
Because the purpose of the statute is to maintain competitive equality, it is relevant in construing "branch" to consider not merely the contractual rights and liabilities created by the transaction, but all those aspects of the transaction that might give the bank an advantage
Since the putative deposits are, in fact, "received" by a bank facility apart from its chartered place of business, we are compelled, in construing § 36(f), to view the place of delivery of the customer's cash and checks accompanied by a deposit slip as an "additional office, or . . . branch place of business . . . at which deposits are received." [ Footnote 10 ]
Here we are confronted by a systematic attempt to secure for national banks branching privileges which Florida denies to competing state banks. The utility of the armored car service and deposit receptacle are obvious; many States permit state chartered banks to use this eminently sensible mode of operations, but Florida's policy is not open to judicial review any more than is the congressional policy of "competitive equality." Nor is the congressional policy of competitive equality with its deference to state standards open to modification by the Comptroller of the Currency. [ Footnote 11 ]
Comptroller's Manual for National Banks Ĺš 7490.
" Messenger Service "
" Comprehensive Dual Control Contract "
In 1963, Comptroller Saxon, author of Ĺš 7490 in the Comptroller's Manual for National Banks, supra, n 2, declared that
It will come as a shock, where common sense is the guide, to learn that an armored car picking up merchants' cash boxes and checks is a branch bank. Conceivably a bank could use an armored car as a place of business by stationing it at designated places during designated hours for opening accounts, receiving deposits, making
Federal law stated in the McFadden Act, 12 U.S. C, § 36(f), defines "branch" as any facility "at which deposits are received, or checks paid, or money lent." And Congress provided that national banks may establish "branches" whenever, wherever, and however state banks may do so. First National Bank of Logan v. Walker Bank & Trust Co., 385 U. S. 252 , 385 U. S. 261 -262. The opinion of the Court leaves the impression that the McFadden Act created "competitive equality" between national and state banks across the board. But, as we stated in the Walker Bank case, that Act "intended to place national and state banks on a basis of competitive equality' insofar as branch banking was concerned. " Id. at 385 U. S. 261 . (Italics added.) There was no other or additional overriding principle of "competitive equality" that limited off-premises services of national banks to those that state banks could provide.
The services rendered in these cases were undertaken only after approval by the Comptroller of the Currency, who attached a condition that "the messenger is the
agent of the customer, rather than of the bank." [ Footnote 2/1 ] I thought it was elemental law that a bank deposit cannot arise without some unequivocal act whereby both parties express their consent to the creation of the status of debtor and creditor. The District Court, which is a more faithful exponent of local law than are we, so ruled. 274 F.Supp. at 454. Certainly the Comptroller, who is the supervisory agent for policing § 36, has some authority to define "deposits" as used in § 36(f), and this case affords no excuse for disparaging him. This is not a government by administrative fiat; the exercise of administrative discretion is normally subject to judicial review. When it comes to an administrator's construction of a statutory term in the law that he supervises, however, we have allowed his expertise great leeway in the definition, [ Footnote 2/2 ] only rarely disturbing it.
See SEC v. New England Electric System, 384 U. S. 176 , 384 U. S. 185 ; Udall v. Tallman, 380 U. S. 1 , 380 U. S. 16 ; United States v. Drum, 368 U. S. 370 , 368 U. S. 374 -376; NLRB v. Coca-Cola Bottling Co., 350 U. S. 264 , 350 U. S. 269 ; Unemployment Compensation Comm'n v. Aragon, 329 U. S. 143 , 329 U. S. 153 -154; NLRB v. Hearst Publications, Inc., 322 U. S. 111 , 322 U. S. 130 -131; Gray v. Powell, 314 U. S. 402 , 314 U. S. 411 -413; Rochester Telephone Corp. v. United States, 307 U. S. 125 , 307 U. S. 145 -146; Jaffe, Judicial Review: Question of Law, 69 Harv.L.Rev. 239, 261 (1955); Nathanson, Administrative Discretion in the Interpretation of Statutes, 3 Vand.L.Rev. 470, 490-491 (1950).
I wholly agree with the Court that federal law is to be applied in determining whether the activities of a national bank constitute branch banking under the exclusive definition contained in the National Bank Act, 12 U.S.C. § 36(f). Whether the activities here in question constitute branch banking under that standard seems to me an extremely close question. That being so, I would defer to the determination of the Comptroller of the Currency. He is the official charged with administering these provisions of the Act, and I cannot say his determination was not a reasonable one. See Udall v. Tallman, 380 U. S. 1 , 380 U. S. 16 -18.