Court Opinion

ID: 9664767
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:29:06.802322+00
Date Added: 2024-06-11T18:15:09.924070
License: Public Domain

HUGHES, Justice.
I respectfully dissent. In my opinion the McAshan group alone is entitled to receive a charter for the “Meyerland State Bank.”
It filed its application first. Its application was approved first and no legal or equitable reasons are found by me to justify the Board in vacating these priorities.
The majority of the Board having done just that it is my opinion that such action is arbitrary.
A time honored equitable maxim is: “Where there are equal equities, the first in time shall prevail.” 17 Tex.Jur. p. 37.
More important however is the modern rule applicable to the specific problem here found in Michie on Banks and Banking, Vol. 1, pp. 126-127:
“It is generally held that when there has been a compliance with the statutory and constitutional prerequisites for the organization of a bank, then the duty of the state officer to issue the certificate is ministerial and he cannot refuse to grant the charter * * * Even where equally meritorious applications for charter for several banks in the same community are pending before the charter board at the same time, and the charter board *267determines against the necessity for more than one bank, there is still no discretion; the application first presented should be granted.1’ (Italics mine.)
See also Schaake v. Dolley, 85 Kan. 598, 118 P. 80, 87, 37 L.R.A.,N.S., 877, where the Kansas Banking Board applied the same principle and the Court in sustaining its action stated:
“Two equally deserving applications were pending before the charter board at the same time. The statute makes no provision for a choice in such cases, and the charter board did right in granting the one first filed.”
At a Board meeting on May 2, 1957, Commissioner Falkner, in the presence of the full Board and the McAshan and Robinson groups, stated in regard to these applications :
“ * * * we had two applications for charters in the same location, that is, the Meyerland area, and the application which was filed first would be heard first.”
On June 20, 1957, another Board meeting was held regarding these applications and the official Minutes of that meeting reflect:
“Mr. Falkner reminded the Board that because the McAshan application was filed first, it should be presented and acted on first, and the application was presented to the Board. * * * A vote was called for on all the factors * * *.
“The application filed by T. A. Robinson and his group was then presented to the Board.”
This procedure by the Board was in strict accordance with its rules one of which provides:
“All completed applications on hand that date [meeting date] shall be presented in order of filing.”
This order of procedure was scrupulously observed by the Board as to these applications until the meeting of August 2 when the Board acted in the absence of its Chairman and considered the Robinson application first. This variance was fatal to the McAshan application because with the Robinson application approved a negative vote on the McAshan application followed as a necessary consequence since all members of the Board were then of the opinion that approval of only one application was authorized. See analysis of voting in majority opinion.
The Board by such action established conclusively, in my opinion, the validity of the August 1 approval of the McAshan application and the invalidity of the August 1 approval of the Robinson application.
There was no change in the evidence or other circumstances surrounding these applications between August 1st and August 2nd.
On August 2nd Commission Falkner branded the August 1st action of the Board as “ridiculous.”
On August 2nd Board Member Attorney General Wilson stated:
“Obviously, but one bank can he successful because of a lack of a volume of business to support more than one bank. * * * I do not feel that there should be more than one bank at this place.”
Board Member Treasurer Jesse James has consistently voted against authorizing the creation of two banks.
By formal pleading filed herein the Board has stated:
“Defendant Board * * * had an obligation and duty to reconsider such order of August 1 as soon as practicable in view of the fact that the Defendant Board regarded such order as a mistake in that it proposed to approve applications for charters for two banks with the identical same *268name located approximately across the street from each other in the same community where the evidence indicated the need for only one such bank at that time.”
I agree with the Board that it made a mistake on August 1st; I also agree with the Board that it had, on August 2nd, the authority to correct this mistake.1
I only disagree with the Board on where the mistake occurred or the manner in which it was corrected.
The only mistake the Board made on August 1st was in granting the Robinson ■".pplication.
As heretofore stated this conclusion is reached by analyzing the actions of the Board alone.
Assuming, as 1 do, that the Board was factually correct on August 2nd in granting the Robinson application and then in denying the McAshan application solely because the volume of business was insufficient it necessarily follows, the evidence being unchanged, that on August 1st the Board was factually correct in approving the McAshan application and factually wrong in approving the Robinson application.
This error, being to me conclusively demonstrated, should be corrected and the only remaining question is : How ?
The method used by the Board was to invalidate the valid order and validate the invalid order.
This strange and otherwise inexplicable procedure is accounted for by General Wilson who stated:
“Obviously, but one bank can be successful because of a lack of a volume of business to support more than one bank. Both groups are equally balanced in experience, capital, banking judgment, and good character. In deciding which should have the application, I am motivated primarily in voting for the Robinson group on the grounds that Robinson furnished the risk capital to develop the shopping center.”
The Board has adopted a policy, currently in effect, with regard to its consideration of bank charter applications a part of which is:
“We deem it advisable to record herein the fundamental position of the Department of Banking on the subject of charter application * * *. Our authority in the premises must be limited by a careful consideration of all factors which are enumerated in the law; but, as stated, we must not go beyond that enumeration.”
The reason assigned by General Wilson is not one which has statutory authority. See pertinent provisions of Art. 342-305, V.A.C.S., majority opinion.
Personalities are properly considered by the Board only in determining the matters mentioned in numbers (4) and (5) of the statutes and as to which both groups received favorable determinations by the Board.
Personalities of the applicants or proposed officers are completely foreign to the showing required under No. 3 of the statutes as to the volume of business in the community where the proposed bank is to operate.
Having quoted General Wilson’s reason for his August 2nd votes it is proper to quote from the McAshan group brief its position on the equities referred to by General Wilson:
“The evidence is undisputed that the Meyerland corporation owns the Mey-erland Shopping Center and the land comprising the Meyerland residential area; the stock of this corporation is *269owned by George Meyer’s five children and T. A. Robinson, Jr., the Meyers holding 79½ percent. Of the five Meyer children, three are shown as stockholders in the McAshan group and have been quite active in the organization of the McAshan bank. T. A. Robinson, Jr. — holder of 20½ percent of the Meyerland Corporation stock — is the only backer of the Robinson bank among the people owning the Meyerland Corporation, the entity which furnished the ‘risk capital’ to develop the shopping center.”
It is my opinion that the action of the Board on August 2nd was legally arbitrary in the sense that it is unsupported by and contrary to law and established legal principles.
I would, as heretofore indicated, enter judgment sustaining the McAshan application and rejecting the Robinson application.

. Laws of Banks and Banking, Sec. 28, by Judge Ocie Speer (1952); Handlon v. Belleville, 4 N.J. 99, 71 A.2d 624, 16 A.L.R.2d 1118.