Title: Bay City Federal Savings and Loan Ass'n v. Lewis
Citation: 474 S.W.2d 459
Docket Number: B-2629
State: Texas
Issuer: Texas Supreme Court
Date: December 8, 1971

474 S.W.2d 459 (1971) BAY CITY FEDERAL SAVINGS AND LOAN ASSOCIATION et al., Petitioners, v. W. Sale LEWIS, Savings and Loan Commissioner of Texas et al., Respondents. No. B-2629. Supreme Court of Texas. December 8, 1971. Rehearing Denied January 19, 1972. *460 C. R. Bell, Bay City, Duckett &amp; Duckett, El Campo, Jacobsen &amp; Long, Joe R. Long and Gary Evatt, Austin, for petitioners. Crawford Martin, Atty. Gen., Heath, Davis &amp; McCalla, Dudley D. McCalla, Austin, for respondents. DANIEL, Justice. This is an appeal by Bay City Federal Savings and Loan Association and Wharton County Savings and Loan Association, hereinafter referred to as Petitioners, from an order of the Savings and Loan Commissioner of Texas, W. Sale Lewis, granting the charter application of A. J. Stanish, et al. to operate Matagorda County Savings and Loan Association in Bay City, Texas. The 167th District Court of Travis County found the order valid and supported by substantial evidence. The Court of Civil Appeals for the Third Supreme Judicial District affirmed (463 S.W.2d 268), holding that the failure of the Commissioner to set forth in his order a concise and explicit statement of the underlying facts supporting certain findings in his order was not reversible error. We reverse the courts below and remand this case to the Commissioner for further proceedings consistent with this opinion. Section 2.08 of the Texas Savings and Loan Act[1] provides in part as follows: Section 2.03 of the Act provides: Section 11.11(4) of the Act provides: The finding of fact made by the Commissioner with regard to the requirements *461 of Section 2.03, supra, was set forth by him in the following statutory language: The foregoing finding is only by reference to the section numbers, without any separate finding on the prerequisites set forth in each section. It is apparent that Section 2.08(1), when read in connection with the other provisions of the Act, contemplates separate findings with reference to the applicable requirements of Sections 2.02-2.06. In any event, there is no underlying statement of facts supporting the blanket finding with respect to the prerequisites of Sections 2.02-2.06. For instance, with respect to Section 2.03, there is no statement concerning the amount of cash which was required by the Commissioner or the amount paid in by the incorporators. Neither is there any concise and explicit statement of the underlying facts supporting the finding with respect to the requirements of Sections 2.02 and 2.04.[2] Petitioners contend that the lack of a concise and explicit statement of the facts supporting the findings of the Commissioner as required by Section 11.11(4) vitiates the entire order. This was the holding of the same Court of Civil Appeals in Gonzales County Savings and Loan Association v. Lewis, 461 S.W.2d 215 (Tex. Civ.App., Austin 1970), which we have this day affirmed. Lewis v. Gonzales County Savings and Loan Association (Tex.Sup. Ct.1971), 474 S.W.2d 453. The Court of Civil Appeals attempts to distinguish this case from its prior decision in Gonzales on the grounds that the findings of the Commissioner in the Gonzales case were contested on the merits but "were never seriously at issue" in this case, and that Petitioners do not contend that they were harmed by the Commissioner's failure to follow the statutory requirement in this case. Likewise, it is pointed out that the complaining parties in Gonzales urged lack of substantial evidence to support the findings which were not accompanied by statements of underlying facts, while Petitioners here did not preserve their substantial evidence challenge to the finding that the prerequisites of Sections 2.02-2.06 had been complied with. We cannot agree that these distinctions relieve the Commissioner from complying with the mandatory provision of Section 11.11(4) of Article 852a, which specifically requires that when his findings of fact are in statutory language, they "shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings." This part of the Act is not conditioned on whether the findings were contested on the merits, whether lack of substantial evidence was urged, or whether or not Petitioners alleged that they were harmed by the Commissioner's failure to comply with the law. This is a case of statutory construction in which the plain meaning and requirement of the statute are obvious. The legislature has delegated to the Commissioner the authority to grant a charter application, and the Commissioner may exercise such delegated authority only in the manner prescribed by the legislature. In Miller v. Railroad Commission, 363 S.W.2d 244 (Tex.Sup.1962), this Court held an order of the Railroad Commission invalid because the findings of fact were not adequately supported as required by statute. The purpose in requiring a "full *462 and complete" finding in the administrative order was discussed: The Court of Civil Appeals said "we feel that neither appellants nor this Court would benefit by remanding this case to the Commissioner with instructions to set out the underlying facts supporting a finding which in fact is not contested." This may be true. However, appellants and the court are not the only ones concerned with the Commissioner's order and his failure to follow the procedure required by law. The public has an interest in the administrative decisions of State agencies, especially where they concern the public need for savings and loan agencies. We assume that the public also has a general interest in the laws of the State being followed as they are written. Petitioners also urge that there is no substantial evidence in the record to support the Commissioner's findings of public need and volume of business sufficient to indicate a profitable operation (Sec. 2.08 [3]), and that the proposed operation will not unduly harm any existing association (Sec. 2.08 [4]). A summary of the evidence supporting these findings is set forth in the opinion of the Court of Civil Appeals, and it has correctly applied the substantial evidence test. This Court has held that review of the Commissioner's findings is not by a preponderance of the evidence test, because "the court would be in the attitude of impermissibly substituting its judgment for the expertise of the administrative officer in the exercise of his statutory discretion." Gerst v. Goldsbury, 434 S.W.2d 665, 667 (Tex.Sup.1968). It was said in that case: "Where there is substantial evidence which would support either affirmative or negative findings, the order must stand, notwithstanding the Commissioner may have struck a balance with which the court might differ." Petitioners' arguments against these findings, however persuasive, are of no avail unless they show that the evidence so conclusively required opposite findings that the Commissioner must be held to have acted arbitrarily or capriciously. We have examined the hearing record and hold that the Court of Civil Appeals did not err in finding that there is substantial evidence in the record to support the findings complained of. However, as heretofore stated, since the Commissioner did not comply with the requirements of Section 11.11(4) of the Act with regard to the findings required by Section 2.08(1), his order of November 26, 1969, approving the charter application for Matagorda County Savings and Loan Association, is invalid. Accordingly, the judgments of the courts below are reversed and the case is remanded to the Commissioner for further proceedings consistent with this opinion. Concurring opinion by POPE, J., in which CALVERT, C. J., and STEAKLEY, J., join. POPE, Justice (concurring). For the reason expressed in the concurring opinion in Lewis v. Gonzales County Savings and Loan Association, 474 S.W.2d 453 (Tex.1971), this day handed down by this court, I would withhold judgment *463 concerning the presence of substantial evidence to support the commissioner's order until we have before us a valid order. CALVERT, C. J., and STEAKLEY, J., join in this concurring opinion. [1] Article 852a. This and all other citations of Texas statutes refer to Vernon's Annotated Texas Civil Statutes. [2] Section 2.02 concerns the issuance, amount, and nature of Permanent Reserve Fund Stock. Section 2.04 allows the Commissioner to require as a prerequisite to approval a paid-in surplus. Sections 2.05 and 2.06 concern an association without a Permanent Reserve Fund Stock and are not applicable to the instant application.