Court Opinion

ID: 5033976
Source: CourtListenerOpinion
Date Created: 2021-10-01 05:47:31.965559+00
Date Added: 2024-06-11T14:07:20.146701
License: Public Domain

Being unable to find any evidence that granting the application of Austin Savings and Loan Association for a branch office in San Marcos will not unduly harm the First Federal Savings and Loan Association of San Marcos, I, respectfully, dissent.
Mr. Ted McIntyre, Secretary and Acting Manager of First Federal and who has been with the association since 1950, testified:
 "Q Now, if you are able to continue to obtain new money from the public, as you have been doing in July again, and as you did for many years, as your exhibit shows, and you effect these economies in operation, what is your opinion with regard to whether or not the Association can operate profitably for the next six months without going into this $4,000 giant "Surplus' that you've got here?
 A Well, of course, I study the records myself. As I say, we have had a very qualified person, not employed by the Association, who is a CPA who studies our records. My personal feelings is that our operation is going to be exceedingly close. I think our CPA has found the same thing. I think we live to see December 31st, 1967. I think we will be able to meet the requirements that we are required to make, and meet, unless there is something unforeseen happens to us in the next several months.
 Q Now, with that background of your condition, do you have an opinion of what the effect will be upon your Association if a branch office of this $50 million institution in Austin is placed down there during this particular time of your operation?
 A Well, I definitely feel that if any competition, whether it be the branch of Austin or another savings and loan association placed along side of us at this time, any other type of financial institution, even if it be a bank, all it would do is to compete for what little savings exist. In other words, we will just water whatever is there. There is just so much money in Hays *Page 894
 County, San Marcos, and if another mouth is put at the table, they are going to want to eat, too. And we can't compete at this time actively with an association that has a branch of that — I assume they are ten times as big as we are. If they were to so decide, they can make loans at a lower rate than we can survive, they can again change their rates from five and a quarter per cent to four and three quarters per cent within six months if they wish, or within the next quarter.
 Q What would be the effect upon your Association of a strong, well financed advertising and promotional effort, in your opinion, in San Marcos at this time for savings?
 A You mean by us?
 Q No, by a competing association.
 A If, in such advertising they were to increase the rate or offer any premiums, it could be very detrimental. It could be disastrous to us.
 Q Is the operation of your association now, and has it been throughout its history geared primarily to the economy and economics of Hays County?
 A Yes, sir. Definitely.
 Q Has it ever been geared to the economy of Austin?
 A No, sir.
 Q Do you compete up here in the Austin loan market?
 A No, sir."
Mr. Tom G. Oliver, Director of First Federal and who has been with the association for 31 years as Director and for some of this time its Vice President and attorney, testified:
 "Q Now, Tom, if you will, drawing upon your experience in the savings and loan business these many years in San Marcos, I would like for you to tell the Commissioner what you think the effect would be of the granting of this branch office on your association, particularly in view of your loss of surplus for the past eighteen months.
 A I think it would be ruinous, disastrous.
 Q Why do you say that?
 A Well, I don't think that $50,000-$50,000,000 assets can compete on an even keel with a $5,000,000 one, which is about as near broke as any outfit could be. They are already competing with us, but I think if they were there right there on the ground floor day and night with a big campaign, with savings stamps and money and whatever else they can give away, I think we would be ruined."
There is testimony from these officials of First Federal as Justice O'Quinn notes, that they have confidence in First Federal's future. This confidence is based on conditions as they presently are and as they expect them to be in the future, exclusive of new substantial competition.
Neither the Court in its opinions nor the appellants in their brief, in my judgment, point to evidence which refutes the testimony of Mr. Oliver and Mr. McIntyre that the granting of this application would cause undue harm to First Federal.
Savings and loan associations, being affected with a public interest, should be protected from undue injury caused by excessive competition. Gerst v. Nixon, 411 S.W.2d 350, (Tex.Sup. 1966).
It is my opinion that the Commissioner and this Court have failed to give First Federal the protection to which it is entitled. I do not believe that the law authorizes a coup de grace to a struggling association. I would affirm the judgment of the trial court. *Page 895