Court Opinion

ID: 9548864
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:09:54.620547+00
Date Added: 2024-06-11T15:19:31.482878
License: Public Domain

Mr. Justice GUTHRIE
delivered the opinion of the court.
Wyoming Baneorporation1 appeals the decision of the District Court of Laramie County, Wyoming, affirming the order of the Wyoming State Examiner authorizing the issuance of a State bank charter to *434Wyoming Security Bank of Sheridan, Wyoming.2
Section 13-44, W.S.19S7, 1973 Cum. Supp.,3 provides for the incorporation of State banks under the sole jurisdiction of the examiner. Incorporators are required to file with him articles of incorporation, setting forth information concerning the proposed bank, specifically including the capital stock and number of shares into which it is to be divided. Of particular pertinence to this action are the directions that the examiner shall inquire into the “convenience and needs of the community to be served by the proposed corporation” and that he “shall be the sole judge as to whether or not a charter shall be granted.” Section 13-45, W.S.1957, 1973 Cum.Supp, directs that the certificate of articles of incorporation so filed shall be accompanied by a fee of $500 “to cover the expense of the investigation to be made by the state examiner.”
Under date of April 27, 1972, a letter transmitting the required number of articles of incorporation was signed by George Acker, one of a group of five incorpora-tors seeking the issuance of the charter, and this letter, the copies of the articles, and a check for $500 were on the next day personally delivered to the examiner at his office in Cheyenne. At this time the examiner delivered to one of the representatives of the group an instruction sheet theretofore prepared by the examiner designating what further information should be furnished to the examiner, but orally informed them that the letter and other papers had been accepted as an application for charter. A letter of the examiner dated May 23, 1972, confirmed acceptance of the letter, articles, and check representing filing fee to accompany the Application for Charter and that requirements for “Completion of Application for Charter” had been delivered to applicants at the time the hand-carried letter had been received, and advised that the further information should be received by the examiner within 90 days.
“Application to Organize a State Bank and Representations of Applicants,” in the form required by the instructions delivered to the applicant on April 28, was mailed to the examiner on July 26 and received by him on July 31, 1972. An independent investigation was conducted by the chief investigator for the examiner, and on September 22, 1972, he filed his report recommending that the charter issue.
On June 14, 1972, Bancorporation mailed to the Regional Administrator of National Banks an application for a bank to be located at Sheridan and to be known as Bank of Wyoming, N. A. This application was acknowledged by the administrator to have been perfected on July 18, 1972, and in the letter advising of such acceptance it is stated that field work to investigate the merits of the application would be undertaken forthwith. Following indication of this acceptance, and on August 31, Bancor-poration filed its objection to the Security *435application, claiming that the Security application was filed by a group who through the existing Bank of Commerce controlled some 64 percent of the deposits in Sheridan 4 and that it would be in the better interests of the public to deny the State application and permit the national application to be granted. This protest was formally withdrawn by letter dated and filed with the examiner on September 25, 1972, but on February 26, 1973, Bancorporation wrote and filed with the examiner a letter asking for a hearing “as authorized in the bank hearing bill (S.L. of Wyoming 1973, ch. 119, app. February 23, 1973).” 5
In keeping with rules of the examiner entitled “Application Proceedings for State Bank Charters,” adopted effective May 25, 1973, a hearing was held by the examiner on June 20, preceded by a prehearing conference on June 11. At both the conference and hearing Bancorporation took the position that another bank was needed in Sheridan but that because of ownership of Security by persons already interested in the Bank of Commerce, a dominant bank in the Sheridan community, the needs of the community for competition would not be satisfied except through issuance to Bancorporation of the Federal charter then being sought by it. Mr. Howes, President of Bancorporation, testified that it protested Security’s application on the basis that its Federal application was prior in time and that it would be the only bank furnishing competition to the existing banks. Notwithstanding his expressed confidence that the Federal charter would issue, neither he, as the sole witness for Bancorporation, nor any of the witnesses for Security made any attempt to assess the impact upon the Sheridan community of the issuance of both a State and a Federal charter. The feasibility report prepared by the examiner’s chief assistant as well as the examiner’s oral remarks prior to closing the hearing likewise do not consider this point.
Prior to closing the hearing the examiner requested each side to submit a summation of the evidentiary material and to submit proposed findings of fact and conclusions of law, along with memoranda as to their respective legal positions. Following the hearing and on July 5, 1973, Bancor-poration was advised by the comptroller that preliminary approval had been granted to organize the Bank of Wyoming, National Association, which information was telephoned to the examiner and incorporated in an affidavit filed with Bancorporation’s memorandum brief. In this memorandum it is claimed that the situation has materially changed and that action of the examiner granting a charter to Security would be subject to court challenge as being arbitrary for want of sufficient information upon which to make a proper decision. It was argued that the examiner did not have sufficient information to justify the issuance of a fourth bank charter, the entire record being predicated upon the issuance of a charter for a third bank. No request was made for permission to submit further evidence concerning the national charter.
On July 31, 1973, the examiner entered his Findings, Conclusions and Order Granting Charter. Three of the findings may be said to relate to the question of *436convenience and need, the first of these being that there “is an existing need for better service to the business community growing southward along South Coffeen Avenue, and the proposed bank would fulfill such need”; the second finds that the bank would have a competitive advantage because of its location in that it would “be more conveniently accessible to businesses and residents located within the primary service area, which is a rapidly developing commercial and residential area of the community”; and the third is that accelerated growth of Sheridan banks in recent years “indicates a rapidly expanding market in the community and demonstrates the need for additional banking facilities.” The examiner concludes in part that the proposed bank “will serve the convenience and needs of the community of south Sheridan, Wyoming, Big Horn and Story and surrounding unincorporated area.” The order makes no reference to the preliminary approval of the national charter for Bancorporation, nor are there any findings or conclusions with respect to what effect the authorization of two new banks would have upon the banking community of the City or County of Sheridan.
In its petition for review Bancorporation specifically complains of this failure to find that the city or county can economically support a fourth bank despite the fact that Bancorporation has brought home to the examiner the approval of the national institution.
The matter was orally argued to the district court and memoranda were again submitted, with Bancorporation including in its submission the memorandum which had been submitted to the examiner, thereby again emphasizing its claim that a fourth bank charter was being considered by the examiner. Security and the examiner both argued that the question had to be considered on the then status and that the national charter had not yet been finally approved. The examiner also argued that the question of whether 'a fourth bank charter should issue should be considered by the Federal banking authorities and was not a question for the State court.
A written opinion delivered by the district court expressed the view that the examiner was not required to take cognizance of possibilities that might or might not happen and was entitled to make his decision on the basis of the record as it stood at the time of the presentation to him. It is said that the findings of the examiner embrace the element of competition, location of the bank, growth of the community, and the general character, experience and ability of the incorporation which will tend to sound management and command public confidence. The judgment thereafter entered finds among other things that the examiner inquired into “the convenience and needs of the community to be served by the proposed corporation”; that the examiner was the sole judge as to whether a bank charter should be issued; that his action was supported by substantial competent legal evidence; and that the decision was not arbitrary, capricious, nor an abuse of the examiner’s discretion and was in conformity with the law.
We agree with certain basic principles cited by Security, namely, that the examiner’s decision comes to the district court and to us with a presumption of legality and validity, that we may not substitute our judgment for that of the examiner, that the legislature has entrusted to him the determination of approval of bank charters, and that the weight and sufficiency of any evidence in support of the application is for him to decide. All this is underscored by the legislative direction that the examiner shall be the sole judge as to whether or not the charter shall issue. This court has said in Marathon Oil Company v. Welch, Wyo., 379 P.2d 832, 836, citing a number of earlier decisions, that the courts may set aside action of an administrative agency only where its action is “arbitrary or fraudulent or where there is an illegal exercise of discretion; and the *437burden of proving arbitrary, illegal or fraudulent action is on the complainant.”
Appellant herein asserts three bases for reversal of this order which it states as follows:
“I. THE STATE EXAMINER ACTED ARBITRARILY AND CAPRICIOUSLY WHEN HE ACCEPTED THE APRIL 27, 1973, LETTER FROM THE APPELLEE AS A PERFECTED APPLICATION FOR A STATE BANK CHARTER.
“II. THE EXAMINER ERRONEOUSLY FAILED TO CONSIDER COMPETITION OR LACK OF COMPETITION IN DETERMINING WHETHER OR NOT TO ISSUE THE WYO. SEC. BANK CHARTER. “HI. THE EXAMINER’S FINDINGS OF FACT AND CONCLUSIONS OF LAW ARE NOT SUPPORTED BY THE EVIDENCE.”
Appellant seeks to buttress its claim in support of the first-mentioned contention by a showing that the state examiner had made additional requirements for filing of groups seeking State charters in Story, Hanna, and Casper. In our view, this raises a substantial question of standing but we do not decide the question whether appellant might raise these questions which would seem applicable and peculiar only to these applicants about which complaint is made. The fact that we are confronted with a dual system and that each can issue a charter might also raise some interesting questions as to the effect of priority and standing of the parties to raise the same. However, our disposition will not rest thereon. At the time of this filing, April 28, 1972, there were no administrative rules issued by the examiner and the statute was the sole basis of his actions, §§ 13-44 and 13-45, W.S.1957, 1973 Cum.Supp., and appellant makes no contention in its brief that Security had not filed the papers therein required, although it styles it a letter. Additionally, the trial court in its letter opinion held that the application was filed on April 28 and that the only then “controlling directives” were contained in §§ 13-44 and 13-45. There is no authority or cogent argument submitted in the brief which would justify any different conclusion or a reversal of this finding.
Appellant’s principal contention and upon which it must rise or fall is that the examiner failed to consider the effect of the competition between the Wyoming Security Bank and the appellant, Bank of Sheridan, N.A. This could not have been properly considered by the state examiner, the trial court, or this court, because at the time of the hearing on the issuance of the charter for Security on June 20, 1973, there had been no action at all upon the application of the appellant and nothing could have appeared in the record of that hearing. On July 31, 1973, the date upon which the order was made authorizing the issuance of the charter, there was still no evidence in the record that the appellant bank had been chartered and definite evidence that it did not have any authority to operate at that time, nor was there anything in the record from which the examiner could have made a proper determination that appellant’s application had been unconditionally approved by the comptroller.
The structure of appellant’s entire argument must rest solely upon a telephone conversation of July 5,6 and the copy of the telegram attached to the affidavit of Howes dated July 16. The body of this telegram dated July 3 is as follows:
“PRELIMINARY APPROVAL GRANTED APPLICATION TO ORGANIZE NATIONAL BANK AT *438SHERIDAN, WYOMING UNDER TITLE ‘BANK OF WYOMING, NATIONAL ASSOCIATION’. LETTER FOLLOWS.”
The affidavit sets out its receipt by Howes on July 5 and that he had advised the state examiner by telephone. Appellant did not at that time or any time ask to reopen the hearing or make any further showing nor was any mention ever made thereafter of the letter to which reference is made and which may have defined or conditioned “preliminary approval.”
 The examiner had before him the testimony of Howes at the hearing that an application for a bank to be chartered by the comptroller required approval by the Federal Reserve System.’7' The examiner may also have recognized and known this because of his expertise in this field. In absence of trying to get this preliminary approval and its effect into the record, appellant insists that the examiner could or should take judicial notice of this telegram. The area of judicial notice available in administrative proceedings has been well and closely defined by § 9-276.26(d), W.S.1957, 1973 Cum.Supp., and there is no justification for such judicial notice resting therein obvious to us nor does appellant point out its admissibility under this section, but relies solely on argument by example which .we find inapplicable.
We are further aware of the statement in Torgeson v. Connelly, Wyo., 348 P.2d 63, 66, as follows:
“* * * In Wyoming our statute does not permit courts to take judicial notice of the occurrences in Federal bureaus,
so neither the trial court nor this court is free' so to do. This telegram and the information therein not being properly in the record and not being adduced before the state examiner nor being a matter of which he could take official notice, he could base no finding of fact thereon, § 9-276.25 (p), W.S.1957, 1973 Cum.Supp. Neither the trial court nor this court can then properly consider it if it not be in the record, Chicago, Burlington & Quincy Railroad Company v. Bruch, Wyo., 400 P. 2d 494, 497.
Appellant has no ground for complaint. First, it made its reliance upon the telegram and affidavit without any request to reopen and make a proper showing in this proceeding. Second, it did not avail itself of the opportunity to even advise the examiner that it wished to pose this definite question when it failed to submit suggested findings of fact and conclusions of law during the 30-day period which it asked for this purpose. There must have been some purpose in the minds of the legislators when they included as a part of the record “any proposed findings,” § 9-276.-25(m), W.S.1957, 1973 Cum.Supp. It is suggested in 1 Cooper, State Administrative Law, pp. 425-426 (1965), that it is by this vehicle that appellant can frame issues clearly, specifically, and precisely, and thereafter cast upon the administrative body the burden of the specific issue they deem decisive.
Appellant in its memorandum filed with the state examiner raised the question of the competition between the so-called third and fourth banks, stating:
“What, of course, has happened is that since the hearing the basic facts have been changed because the Comptroller of Currency has issued a National Bank Charter to the Protestants. * * *”
again relying on the equivocal telegram, and concludes that because the record was based upon issuance of a charter for the third bank the proceedings are now moot. We might give great weight to this assertion if it is conceded a charter was issued prior to the decision. However, the state *439examiner is bound to the record, § 9-276.-25(p), W.S.1957, 1973 Cum.Supp. This argument demonstrably has its basis in a claim of priority which was not in our view sustained by the record. As mentioned in Marathon Oil Co. v. Welch, Wyo., 379 P.2d 832, 836, “the burden of proving arbitrary, illegal or fraudulent action is on the complainant.” This burden includes not only clear presentation of this question but placing evidence in the record to sustain appellant’s position. Further appellant made no application to the trial court presenting any evidence thereon, Rule 72.1(h), W.R.C.P.
Unless adverse parties appearing before administrators or administrative bodies are required to frame issues and contentions for decision by the hearing body, such hearings will become meaningless charades necessitating upon appeal what would be factually a trial de novo contrary to the purpose and philosophy of the Administrative Procedure Act. For a reviewing court to reach an asserted proposition of an appellant the issue must have been raised for decision before the administrative body or administrator responsible for the decision. This is admirably expressed by the United States Supreme Court in the case of United States v. L. A. Tucker Truck Lines, 344 U.S. 33, 73 S.Ct. 67, 68-69, 97 L.Ed. 54, where it is said:
“We have recognized in more than a few decisions, and Congress has recognized in more than a few statutes, that orderly procedure and good administration require that objections to the proceedings of an administrative agency be made while it has opportunity for correction in order to raise issues reviewable by the court. * * *”
See additionally, Moog Industries v. Federal Trade Commission, 355 U.S. 411, 78 S. Ct. 377, 380, 2 L.Ed.2d 370, rehearing denied 356 U.S. 905, 78 S.Ct. 559, 2 L.Ed.2d 583, and United States v. Elof Hansson, Inc., 48 C.C.P.A. 91, 296 F.2d 779, 781, certiorari denied 368 U.S. 899, 82 S.Ct. 179, 7 L.Ed.2d 95, following Tucker Truck Lines, and with a further discussion. Further, objections must have had particularity as to properly identify the question and to give notice of the contention, National Labor Relations Board v. Seven-Up Bottling Co., 344 U.S. 344, 73 S.Ct. 287, 290-291, 97 L.Ed. 377. Thus, in our view the competition as between these two banks was never properly posed to the examiner and we cannot now consider or order him to consider it. There must be some finality even in administrative proceedings, as in judicial proceedings, Martellaro v. Sailors, Wyo., 515 P.2d 974, 976.
Appellant’s last contention that the findings of fact and conclusions of law are not supported by the evidence has been covered in some particulars in the factual statement and preceding remarks. However, it bases this assignment on the following, which it styled “Pertinent Facts”:
“(1) There are presently two existing banks in Sheridan, Wyoming;
“(2) Wyo. Bancorp, has filed an application for a national bank charter in Sheridan, Wyoming, which was perfected July 18, 1972
“(3) Wyo. Sec. Bank has filed an application for a state bank charter in Sheridan, Wyoming, which was perfected July 31, 1972
“(4) The Wyo. Bancorp, national bank charter was issued by the Comptroller of the Currency on July 3, 1973 8 “(5) Wyo. Sec. Bank state bank charter was issued by the Examiner on July 31, 1973.”
It is apparent that these contentions, although interrelated, do not become operative unless we recognize the asserted claims of priority, first as to filing, and second as to the issuance of a charter. From what has been heretofore said, this position is not viable and we see no reason for further discussion of this matter.
*440The situation here demonstrates that there may be inherent dangers in our dual system of chartering banks and this clearly demonstrates the obligation of the respective legislative bodies of those chartering authorities to in some manner coordinate or make issuance of these charters dependent upon mutual action or consultation for the public good. However, it is not the province of this court to attempt to effect such cure and it is inconceivable to us that a preliminary or tentative approval by the comptroller should tie the hands of the state banking officials upon an earlier application. If either licensing or chartering authority was bound to investigate and determine the question of the effect of competition between the Security State Bank and appellant, that burden rested upon the comptroller, who had notice of the filing of a state application ahead of appellant, and he should have carefully considered the rules and the cases cited by appellant to us, particularly Bank of New Bern v. Wachovia Bank & Trust Company, N.A., D.C.No.Car., 353 F.Supp. 643, 647, and Howard Savings Institution of Newark v. Howell, 32 N.J. 29, 159 A.2d 113, and the case of Bank of Haw River v. Saxon, D.C.No.Car., 257 F.Supp. 74, 79.
The judgment of the trial court is affirmed.

. Wyoming Baneorporation, hereinafter referred to as Baneorporation, is a bank holding company organized under Federal law, and itself controls a number of banks within the State of “Wyoming, some federally chartered and some under charters from the State. As hereinafter more particularly detailed, it was the successful recipient of a national charter for Bank of Wyoming, N.A., the doors of which were opened for business on the day this appeal was argued before us.

. Hereinafter referred to as Security; Dwight Bonliam, Wyoming State Examiner, vested by State law with the power to- issue State bank charters, will be referred to as the examiner.

. In pertinent part, paragraph (c) of this section, as amended by S.L. of Wyoming 1973, ch. 119, provides: “It shall be the duty of the state examiner to inquire into the adequacy of the capital structure proposed by the incorporators, the future earning prospects of the proposed corporation, the general character and ability of the incorporators, and the convenience and needs of the community to be served by the proposed corporation, and whether or not its proposed corporate powers are consistent with the purpose and requirements of the banking laws of this state. The state examiner shall be the sole judge as to whether or not a charter shall be granted, and he shall have authority either to approve or reject any certificate of incorporation. Before any application is approved or rejected the state examiner shall upon the request of five persons or upon examiner’s own motion conduct a public hearing in accordance with the Wyoming Administrative Procedure Act [§§ 9-276.19 to 9-276.33]. * * * When the charter is either approved or rejected the state examiner shall issue findings of fact and conclusions of law regarding the requirements set forth herein. * * ⅜ ” The last two sentences above were added by the 1973 amendment.

. It is not denied that Security and the Bank of Commerce would constitute affiliated banks. Much of Bancorporation’s claims concerning lack of effective competition is predicated on this fact.

. The First National Bank of Sheridan, which the evidence shows had some 30 percent of the deposits of the two Sheridan banks, first objected to the issuance of a State charter to Security (as well as another application then pending for a State bank at Story, Wyoming) by letter dated September 19, 1972, supported by some documents that do not appear in the present record. This objection was renewed by letter filed with the examiner May 31, 1973. Both of these letters indicate the objection of this bank that the issuance of a new charter in either Sheridan or Story is not justified by the economy and might endanger the financial well-being of the banking community. First National was not represented at the examiner’s hearing and has taken no part in the review proceedings.

. The propriety of ex parte telephone communications with an officer or body disposing of an administrative matter after the close of the hearing but prior to decision is questionable and to have acted thereon would have given legitimate grounds of complaint to appel-lee. Howes recognizes this impossibility of direct communication with the comptroller after having completed a hearing in a national bank application in his testimony.

. Although it is de hors the record and cannot be considered by this court in its disposal, Appendix A attached to the brief of appellee state examiner is a copy of an order showing that the Board of Governors of the Federal Reserve approved this charter effective May 3, 1973.

. This proposition is insupportable from what has been said earlier in this opinion.