Court Opinion

ID: 6260241
Source: CourtListenerOpinion
Date Created: 2022-02-17 22:01:03.352453+00
Date Added: 2024-06-11T08:59:41.437442
License: Public Domain

Dissenting Opinion by
Mr. Chief Justice Bell:
A bank is an entity created by the Legislature and should be subject to the statutory provisions, powers, limitations and boundaries allowed or provided by the Legislature, subject, of course, to the Constitution. Because of the unique and delicate nature of Banks and *303Banking, a bank should not have to reveal to its competitors its confidential information and secrets, including, inter alia, its depositors, its customers—present and prospective, or its present or likely borrowers, its policies and its real financial condition or plight, or its present or future plans. Yet that is what the majority Opinion is now permitting under the farfetched, straw-like stretch of the Constitution. Moreover, the majority is once again conducting another “burial rite” for Stare Decisis.
For these reasons, I deem it appropriate to state at length the facts, the controlling statutes, our pertinent and controlling prior decisions and established legal principles, and the reasons therefor.
This is an appeal from the Order of the Department of Banking authorizing American Bank and Trust Company of Pennsylvania (hereinafter referred to as American), whose principal office is in Berks County, to establish a branch bank at 42-44 North Prince Street in Lancaster, Pennsylvania.
On February 6, 1969, American filed an Application with the Department of Banking in accordance with the Pennsylvania Banking Code of 1965 (Act of November 30,1965, P. L. 847, 7 P.S. §904(b) (iv)), seeking authority to establish a branch bank at the above-mentioned site. At that time, American already had two branch banks in Lancaster County, one in Reamstown, 17 miles northeast of the proposed branch site, and the second in Columbia, 10.8 miles west of the proposed site.
Appellants, Conestoga National Bank and Fulton National Bank (hereinafter called the Protesting Banks), each of which had its principal office in Lancaster, were informed of American’s Application by the Banking Department Examiner. They, in turn, informed the Examiner that they intended to file a formal protest.
*304On March 13, 1969, a Letter of Authority for the establishment of the proposed branch bank was issued by the Department of Banking. The Protesting Banks had not filed formal protests at this time, and, as the time for filing them had not lapsed, they requested that the Letter of Authority be withdrawn to allow them to file such formal protests and supporting data as they considered appropriate. After a conference with the Secretary of Banking, it was agreed that the issue of the establishment of this branch bank would be reopened if the Attorney General approved this procedure. At this conference, the Protesting Banks also requested both (1) the privilege of a hearing on their protests and (2) access to the Application and supporting data filed by American to aid them in the preparation of their protests. These requests were refused.
After a formal Opinion of the Attorney General approved the procedure, the Secretary of Banking withdrew the Letter of Authority. The Protesting Banks filed formal protests and presented evidence, including written data and contentions, to support these protests. An additional investigation was made by the Banking Department and all the evidence was considered. On May 19, 1969, a second Letter of Authority was issued approving the Application for the branch bank, accompanied by the forma] Decision and Order of the Department which contained findings of fact and conclusions of law supporting its Order.
The Protesting Banks contend that they were deprived of due process of law by the refusal of the Department of Banking to permit either a formal hearing sur the branch bank Application or, in the alternative, access to the Application and the data filed in support of it. They also contend that American failed to meet the burden of proof required to establish the need for the branch bank. They further assert that the Department of Banking erred in not making any finding that *305circumstances had changed since American’s petition for a branch bank was denied in 1965 and that supplementary findings that circumstances had changed— which were made by the Department after it learned of the intention of the Protesting Banks to bring this appeal—were too little and too late.
I. Due Pbocess
The contentions made by the Protesting Banks of lack of Due Process were extensively considered and conclusively decided by this Court only three years ago in Cement National Bank v. Department of Banking, 425 Pa. 554, 230 A. 2d 209. We concluded there that these contentions were devoid of merit.
A. Hearing
Section 905 of the Banking Code of 1965 pertinently provides: “Approval of branch by department* (a) Investigation and discretionary hearings—Upon receipt of an application for approval of a branch which satisfies the requirements of this Act, the department shall conduct such investigation as it may deem necessary and, in its discretion, may hold hearings before the department or before the Banking Board."
The comment of the Banking Commission is as follows:** “Subsection (a) does not require hearings in connection with branch bank applications but permits the department to hold such hearings in its discretion either before the department or before the banking board.”
Section 905 further provides: “(c) Action by department—Within sixty days after receipt of the application ... the department shall . . . approve the applica*306tion if it finds that there is a need for banking services or facilities such as are contemplated by the establishment of the proposed branch and that the requirements of this act have been complied with. ... If the department approves the application, it shall issue to the institution a letter of authority to establish the branch. If the department disapproves the application, it shall give the institution written notice of its disapproval and a statement in detail of the reasons for its decision. The decision of the department shall be final and shall not be subject to review except by the Supreme Court upon broad certiorari.”
I need only reiterate what we so pertinently said in Cement National Bank v. Department of Banking, 425 Pa., supra (page 559) : “It is clear from the above quoted provisions of the Code that neither an adversary hearing nor any other kind of hearing is required* before the Secretary of Banldng or at the Department level. This nonrequirement of a hearing is because both the Banking Department and the Legislature have recognized the delicate and sensitive nature of banldng and of the banking information in the possession of the Banldng Department, which in some matters should remain confidential, and the disastrous effects which divulgence of this information might have on all banks in that community.”
Appellants correctly state that in Cement National Bank v. Department of Banking, 425 Pa., supra, it was noted that under the Federal system the Comptroller of the Currency was not then required to conduct hearings on the establishment of a branch bank. They point out that since that time the Comptroller’s Office changed this procedure to provide for hearings when requested by any party concerned. Even if we were to consider this a wise procedure, it is not the procedure *307provided under Pennsylvania law. The Banking Code, we repeat, provides hearings only in the discretion of the Department. We have hereinabove stated the reasons why the Legislature wisely did not make such hearings mandatory. In the present case, the Department, in the exercise of its discretion, refused to grant a hearing. We believe that the Protesting Banks were given ample opportunity to fully present their position, claims and contentions, and consequently we believe that the Department did not abuse its discretion by refusing to grant a hearing.
B. Access to the Application
The Protesting Banks further contend that the Department of Banking deprived them of Due Process when it failed to grant them access to American’s Application and the information filed in support of its Application. As we said in Cement National Bank v. Department of Banking, 425 Pa., supra (page 559) : “. . . both the Banking Department and the Legislature have recognized the delicate and sensitive nature of banking and of the banking information in the possession of the Banking Department, which in some matters should remain confidential, and the disastrous effects which divulgence of this information might have on all banks in that community. This is further confirmed (1) by Article III, §302, of the Department of Banking Code [footnote omitted] which makes the divulgence of information by the Secretary or by any officer or employee of the Department of Banking, with certain enumerated exceptions, a misdemeanor. . . .”
As the Protesting Banks have made clear in their contentions and arguments both to the Department and to this Court, they are fully aware of the factual and legal issues to be resolved by the Department in deciding whether or not an Application for a branch should be granted. They submitted detailed protests, with ex*308tensive data to support their views. We do not feel that they were handicapped by the refusal of the Department to permit access to American’s Application. When we further consider the strong public and legislative policy against such disclosure, as emphasized by the statute making such disclosure a misdemeanor, we must conclude that they have no absolute right of access to the confidential material of American’s Application.
As we further said in Cement National Bank v. Department of Banking, 425 Pa., supra (page 562) : “Banks often forget that they are merely creatures of a Legislature or of Congress, and have only such rights as are granted by Statute or by Congressional Act, as the case may be. The Legislature can grant such powers and impose such conditions and limitations as it desires on all banks and other bodies it creates, provided the same are not unlawful or unconstitutional; and in particular, the Legislature is not required to provide for hearings before its created bodies such as are constitutionally required in judicial proceedings. Moreover, in this case, as we have seen, the Legislature is not required to provide, nor has it provided for hearings at the Department level. The denial of a Judicial or a public or adversary hearing before the Department of Banking or even before a Banking Board is not a violation of procedural due process or of any other Constitutional right; nor is the refusal to permit (a) the inspection of applications and supporting material, or (b) the divulging of information [footnote omitted] by the Secretary of Banking or by any officer or employee of the Department, a violation of any Constitutional right which is possessed by a bank.”
II. Alleged Error in Granting the Application
Appellants further contend that the record does not support the Department’s conclusion that a branch *309bank may be established at the proposed location. The evaluation of all this evidence, some of it conflicting, some of it merely deductions and conclusions from all the data submitted to or gathered by the Department, is sometimes difficult. However, we must approach this and similar cases mindful of what this Court aptly said in Blairsville National Bank v. Myers, 409 Pa. 526, 533-534, 187 A. 2d 655: “A Supreme Court cannot be a Secretary of Banking or a Department of Banking or a Banking Board. These men are not only experts in the technical, field of banking, but they may have knowledge of intangibles and imponderables, of strengths and weaknesses which may exist in a particular bank or in the broad banking situation in that banking area which are not clearly or definitely or concretely disclosed in the cold, bare record. For these reasons much must be left to the discretion of the Secretary of Banking or, as the case may be, to the Banking Board.
“We are well aware of the accuracy of the statements in Philadelphia Saving Fund Society v. Myers, 406 Pa., supra, where the Court said (pp. 449-450) : ‘The question of whether there is a need for the services and facilities of an additional bank or branch is sometimes a delicate and difficult one. The dangers inherent in any situation which may possibly or likely create an overbanked area that may likely weaken or destroy some existing banks to the detriment of depositors, creditors, stockholders, and the public alike, must never be forgotten or minimized . . . “ ‘. Part of the powers and duties of the Department of Banking ... is to determine . . . whether the community served and from which a bank draws its depositors and clients has adequate banking facilities and is not overbanked . . . “. . . the clear intention of the statute ... is the same: to guard against ‘overbanking’ on the one hand, and ‘underbanking’ on the other; . . ”” However, we appropriately added: “‘Where a Board [or Depart*310ment] is composed of able and experienced experts who are dealing with technical questions, a Court should be loath to find a clear abuse of discretion upon a subject or subjects as to which they are far better qualified than any Court.” ’ ”
As this Court said in Delaware County National Bank v. Campbell, 378 Pa. 311, 106 A. 2d 416 (pages 327-328): “We will not overrule or reverse the Banking Board if there is adequate evidence to support its findings of fact and the proceeding is free from error of law and there has been no clear abuse of discretion. Cf. Rolling Green Golf Club Case, 374 Pa. 450, 458, 97 A. 2d 523.”
In First Bellefonte Bank and Trust Company v. Myers, 410 Pa. 298,188 A. 2d 726, the Court pertinently said (pages 302-303) : “In this case and in other similar* cases it will be necessary for the applicant to prove (1) that substantially different circumstances or conditions exist from those which existed at the time and place of the rejected application for a branch bank, and (2) that ‘ “there is a need for banking services or facilities such as are contemplated by the establishment of such branch [citing cases].” ’ Philadelphia. Saving Fund Society v. Myers, 406 Pa., supra; cf. also Blairsville National Bank v. Myers, supra.”
ill. The Facts
With this in mind, I turn now to a brief discussion of the evidence presented in this case. American’s initial Application for a branch bank cited a substantial increase in demands for service from customers in the Lancaster area. This demand had developed since the denial of American’s previous Application in 1965. The present Application noted further that American was *311unable to make requested loans to customers in the Lancaster area because it had no depositors in that area to support the loans. The Application also noted, the increasing traffic and congestion in the Lancaster área and stated that not only would the proposed bank have three “drive-in” windows, but also there would be convenient parking facilities at the new location to make banking easier for the public.
The investigators’ report set forth inter alia these reasons for granting the Application for this branch. The report stated. that the proposed location would “provide for the first time more convenient banking services to the present customers [of American].” In addition, the investigators’ report noted that several other local banks in Lancaster were conducting negotiations intending to merge with other banks nearby. They especially noted the proposed merger of the Lancaster County Farmers Bánk with banks in Reading and York. They concluded that if these mergers were to take place, competition in the Lancaster area would be maintained on a more favorable level if the proposed branch bank were allowed.
All these facts and factors were presented to the Department before the first authorization was granted. When that authorization was withdrawn at the request of the Protesting Banks, additional evidence was then presented by American, as well as by the Protesting Banks. The evidence presented by American stressed more fully the changes and circumstances since the denial of American’s prior Application in 1965. In particular, the report stressed that the so-called “conservative” city banks were not adequately serving the Lancaster area and that allowing American to open a branch in Lancaster would provide competition which would improve banking services in the area generally. The report also noted the rapid growth of Lancaster *312County and the extensive urban renewal project designed to promote economic growth in the City.
All of this evidence was considered before the second authorization was granted on May 19, 1969. The findings of fact filed with that authorization indicate that the Department agreed with American’s view of the trend of economic development in Lancaster County and the need for further banking services and increased competition in the banking business. I have studied the record carefully and am convinced that thé evidence presented by American to establish a need for this branch bank adequately and amply demonstrated that circumstances had changed since its prior Application, and that there was. a definite need for this branch bank.
The Protesting Banks finally contend that the Department of Banking erred in some fashion when it made Supplemental Findings of Fact and Conclusions of Law after the Protesting Banks had filed their petition for review of the decision. We note that there is no requirement that the Department of Banking make any such findings in cases where an Application for a branch bank is granted. It is only where an Application is disapproved that findings must be made. Banking Code of 1965, Section 905(c). This Court noted in Cement National Bank v. Department of Banking, 425 Pa., supra (page 560) : “However, we again emphasize, as we did in Blairsville National Bank v. Myers, 409 Pa. 526, 534, 187 A. 2d 655, the desirability of having the Department make findings of fact and conclusions —Avhich in their discretion may be brief—whenever protests are filed against the grant of a neAv bank or of a merger, or of a branch bank, in order to support the Department’s final decision. This practice is especially desirable where an appeal by broad certiorari is allowed by this Court.”
This advice was followed in this case by the Department of Banking, and I appreciate the additional guid*313anee of the Supplemental Findings of Fact and Conclusions of Law.
In my opinion, the Department of Banking in approving the proposed branch was not guilty of an abuse of discretion or an error of law and its findings were supported by substantial evidence. The majority Opinion which finds a violation of due process is so unrealistic and farfetched as to be almost unbelievable.
I would affirm the Order of the Department of Banking.

 Italics throughout ours, unless otherwise noted.

 Section 104(a) provides that the comments of the Commission may be consulted in the construction and application of the provisions of the Act.

 Italics in Cement National Bank.

 Italics in First Bellefonte Bank and Trust Company.