Court Opinion

ID: 9621550
Source: CourtListenerOpinion
Date Created: 2023-08-22 06:00:19.232456+00
Date Added: 2024-06-11T12:42:18.564115
License: Public Domain

ELLETT, Justice
(concurring).
I concur in affirming the judgment of the trial court, and I wish to detail my reasons for doing so. I think the ownership of the stock in the banks is immaterial. In the first place, the commissioner has the information as to the ownership of stock in the banks involved, and remanding will not add to his knowledge of the facts. In the second place the appellant knows that the stockholders who own the controlling interest in the First Security Corporation also own the controlling interest in both the First Security State Bank and in the First Security Bank, N.A. It also knows from testimony given that the stockholders who own 89.98 percent of the stock of the Bank of Utah also own 73.55 percent of the stock of the Bank of Ben Lomond. In eliciting this testimony, counsel for the protestant, the appellant herein, said he wanted “to establish that the control of the Bank of Utah and the Bank of Ben Lomond is also the controlling interest of the applicant bank” (Bank of Northern Utah).
Counsel for Clearfield State Bank was cross-examining one of the applicant’s witnesses. The matter had not been gone into on direct examination, and the witness said he did not know the ownership of stock in the other banks, but with permission of the officers and staff of the Bank of Utah he could get the information. Appellant’s counsel could have subpoenaed the records of the particular banks if he thought the evidence material and admissible, but he did not do so. The commissioner refused to order the witness to go into the books and private records of a company not a party to the proceedings in order to get the information to help the protestant’s case. The witness said he could not give the names of the stockholders from memory even though he was vice president and cashier of the Bank of Utah, and there is *343no evidence that he could do so. He also stated that three of the officers and nine of the directors of the Bank of Utah were also officers and directors of the Bank of Ben Lomond. He testified that he himself had subscribed to 500 shares of the stock of the applicant bank and was the proposed cashier and director thereof.
Regardless of whether the exact detail of stock ownership was given to the commissioner, I believe the matter is of no importance as is shown by the following cases:
In Nemirow v. Bloom, 445 P.2d 214 (Colo.1968), a holding company owned all of the stock of the five industrial banks in Denver and also would own all of the voting stock of the proposed bank to be located in Colorado Springs. There would be common officers and directors of the proposed bank, the holding company, and the five banks in Denver. It was contended in that case that the proposed bank was a mere branch. The court said at page 215:
We hold that the proposed industrial bank would not be a branch bank, because the record shows as a matter of law that it has or will have all the attributes of a separate operational entity, both legally and financially.
See also Goldy v. Crane, 445 P.2d 212 (Colo.1968).
The case of First National Bank in Billings v. First Bank Stock. Corp., 306 F.2d 937 (C.A. 9th Cir. 1962), held that it was not enough to show common control through common stock ownership and management participation to constitute a branch bank, but that it must be shown that the alleged branch is doing business with the alleged parent in the same way as if the institutions were one, and that it must be shown that the “unitary type of operation,” which is the hallmark of a branch bank, is present.
The definition of a branch bank was set out in the case of In re Application of Kenilworth State Bank, 49 N.J. 330, 230 A.2d 377, 380 (1967) as follows:
The distinctions between branch, chain and group banking are' known generally in banking, legal and legislative circles. A branch is not a separate corporation or legal entity but is an office or agency operated by the legal entity which, operates the main bank. It has no separate board of directors or capital structure, its deposits are pooled with those of the main bank, and its loan limits are based on the main bank’s capital structure. * * *
It is my opinion that neither one of two separate corporate banks, each with its own separate capital, can be an alter ego of the other. In the matter now before us, the Bank of Northern Utah is a separate entity with its own stock records,, its own corporate assets separate and apart from that of all other banks. Its 'stockholders *344and directors constitute a distinct group, although the individual members may also be stockholders, directors, and officers of other corporate entities.
Even if appellant could establish by its own witnesses or otherwise that the stock-ownership in the proposed bank is identical to that in several other banks, it in my opinion would not constitute a branch bank. It still would be a unit bank, and the district court did not err in affirming the order made by the commissioner.