Court Opinion

ID: 9672591
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:57:46.708015+00
Date Added: 2024-06-11T18:16:17.415601
License: Public Domain

STEAKLEY, Justice
(concurring).
The following opinion (omitting the review of the evidence) was written for the Court but did not become the majority view except in the result. This concurring opinion is filed for the purpose of recording the views of the writer, and of Associate Justices NORVELL and GREENHILL who join in the opinion. The majority is unwilling in this case to imply findings favorable to petitioner in respects not found adversely by the Commissioner and to limit the burden of proof of petitioner on appeal under the substantial evidence rule to that of establishing that the order of denial was arbitrary in the respects found adversely. It is our view that the rigidities with which the substantial evidence rule has been surrounded should be relaxed when appro*553priate, and that this is a proper case' in which to do so.
Petitioner, Gibraltar Savings and Loan Association, on February 12, 1958, filed application with respondent, J. M. Falkner, the Banking Commissioner of Texas, for authority to establish a branch office. The original application specified the proposed location as being “in the proposed Smith-Hofheinz Shopping City, located in the vicinity of Westheimer and Sage Roads, Houston, Texas.” Under date of February 11, the Building and Loan Supervisor acknowledged receipt of the application of petitioner and requested that the application be supported in certain respects, including “copy of resolution of your Board of Directors authorizing application for branch” and “specific location of proposed branch.” In compliance therewith petitioner under date of March 27 furnished a copy of the resolution of its Board of Directors reading as follows:
“WHEREAS, Gibraltar Savings and Loan Association desires to open an additional office in the proposed Smith-Hofheinz Shopping City or in the vicinity of an area bounded by West-heimer, Sage Road, San Felipe and Post Oak to provide greater service and convenience for approximately six hundred of our savers located within a two-mile radius of this area; * *
The complying letter described the specific location as follows:
“The specific location of the proposed new office will be in the immediate vicinity of Post Oak, Westheimer, Sage and San Felipe Roads. There are presently several shopping centers in this area and two additional to the Smith-Hofheinz Shopping City are in the construction stage. One is the Sakowitz Center, estimated at a cost of Six Million Dollars. We propose to locate in the Smith-Hofheinz Shopping City, which will be one of the largest if not the largest in the United States. It will be located on a 110-acre tract at a cost of One Hundred Million Dollars. We are presently negotiating for a lease in: the center’s mall area which will be 1600 feet long, completely covered and air conditioned. The total space available for leasing in the shopping center will be one million square feet.”
Hearing was held on the application on June 12, 1958. Petitioner’s chief executive officer stated to the Commissioner that petitioner proposed to occupy temporary quarters in the Lamar Terrace Shopping Center located across the street from the proposed Smith-Hofheinz Shopping City; this statement was, in turn, supported by a rental proposal in writing by the owner of the space to be rented by petitioner. The Commissioner upon the trial of the case testified that it was his view that the establishment of a branch office in the area proposed to be served was within the “content” of the original application. He further stated that his requirements were met if the “general plan” was followed.
Under date of July 29, respondent Commissioner denied petitioner’s application. The denial letter dated July 29, 1958, read as follows:
“The application is for a branch in an undeveloped shopping center, which would indicate that the volume of business that could be developed would be insufficient to render the operation profitable and, further, there appear.? to be facilities available to the public within a distance of approximately two (2) miles. We regret that the application does not in our opinion merit favorable action.”
Petitioner then filed suit to set aside the order of denial. The trial court held that the order was not reasonably supported by substantial evidence and was invalid. The Court of Civil Appeals held that there was substantial evidence to support the order of denial and reversed the judgment of the trial court, and rendered judgment for respondent. 359 S.W.2d 56.
*554The statement of the respondent Commissioner in his denial order that “there appears to be facilities available to the public within a distance of approximately two (2) miles,” refers to a branch office of San Jacinto Savings and Loan Association located in the area of the Highland Village Center. San Jacinto was a protestant at the hearing before the Commissioner and is an intervenor in support of the order of denial in this suit. The status of its branch office should be noted. On December 28, 1956, San Jacinto filed application with the Commissioner for a branch office which it opened on March 15, 1957, prior to action on its application. On April 1, 1957, the Commissioner denied the application and San Jacinto filed suit to set aside the denial order. It continued to operate its branch office in question. The suit of San Jacinto had not come to trial when the petitioner’s application in the instant case was heard by the respondent Commissioner on June 12, 1958, or when he denied petitioner’s application.
Article 881a-2, Vernon’s Annotated Texas Civil Statutes, provides that before granting a certificate to a proposed building and loan association the Commissioner shall ascertain “ * * * whether the public convenience and advantage will be promoted by allowing such proposed building and loan association to he incorporated and engaged in business, and whether the population in the neighborhood of such place and in the surrounding country affords a reasonable promise of adequate support for the proposed building and loan association.”
In interpreting Article 881a-2, this Court held in Southwestern Savings and Loan Association of Houston v. Falkner, 160 Tex. 417, 331 S.W.2d 917, that “ * * * the same basic standards are set for the approval or disapproval of applications to open branch offices as are set for the granting of an application for a charter in the first instance. The statutory standards of public convenience and advantage, and adequate population to assure reasonable support, are sufficient statutory basis for the rules and regulations.”
The rules and regulations referred to in the above opinion by this Court are those promulgated by the Building and Loan Section of the Finance Commission and the Banking Commissioner, governing the granting of charters to building and loan associations and the establishment of additional offices. Rule 3.3, relating to the approval of an additional office application, provides as follows:
“3.3 No application to establish and maintain an additional office shall he approved unless the Commissioner shall affirmatively find from the evidence before him that:
“(a) The applying association has adequate reserves and surplus to warrant the additional place of business;
“(b) The applying association has successfully operated its principal office for at least three (3) years prior to such application and the proposed operation will not impair the applying association’s ability to carry on its overall operations;
“(c) The functions and facilities proposed are adequate to serve the public convenience and advantage in the neighborhood proposed to be served and the volume of business there is such as to indicate that a profitable operation is possible;
“(d) The proposed operation will not unduly injure any other association operating in the area of the proposed location;
“(e) A separately enclosed office area will be provided within which no activity or business except that which is related to the affairs or services of the association will be conducted, provided that such enclosure may be by *555counters or ceiling of less than ceiling height; and
“(f) The proposed location of the additional office is within the same county as the home office of the applying association except in cases where it appears that the proposed additional office is in a neighboring or adjacent county to that in which the home office of the applying association is located and that there is no other association, either State or Federal, adequately serving the neighborhood in which such additional office is to be located.”
Rule 3.3 was promulgated to establish standards to govern the establishment of additional offices by existing associations. It requires the Commissioner to affirmatively find compliance with each requirement as prerequisite to approval of an application for an additional office. It will be implied that the Commissioner found that the application met the requirements of Rule 3.3 in respects not expressly found adversely to the application, and we will accord the recognized presumption of validity of acts of administrative agencies to these implied findings. The presumption of validity will persist in the appeal of the parties adversely affected by the Commissioner’s order, subject to the right of parties interested in sustaining the order of denial to assume the burden of establishing that the implied findings favorable to the application were arbitrary, that is, that they lack reasonable support in substantial evidence.
Here, the parties stipulated that petitioner’s application complied with Rule 3.3 except as to the requirements of Rule 3.3 (c) and (d). The adverse finding of the Commissioner in his order of denial was in terms of Rule 3.3(c). Thus the burden on appeal of petitioner, seeking as it was to set aside the order of denial, was one of establishing that the order of denial in terms of Rule 3.3(c) was arbitrary as lacking reasonable support in substantial evidence, and that a favorable affirmative finding was required.
Rule 3.3 is a reasonable exercise of the statutory duties of the Finance Commission and the Banking Commissioner. The requirements of the rule for the establishment of an additional office by an existing association comports with Article 881a-2 and with our decision in Southwestern. The implied findings of compliance with Rule 3.3 in respects not found adversely are consistent with the spirit and purpose of Article 881a-3 which requires the Commissioner to endorse “the reasons for such refusal” when he denies the application of a proposed building and loan association. Rule 3.3 as we construe it makes possible a proper limitation of the issues in an appeal from an order of the Commissioner disapproving an application for an additional office. The courts should not be concerned with a requirement of Rule 3.3 which the Commissioner has not found adversely to an applicant. The elimination of issues about which there is no real controversy is consistent with progressive judicial processes.
Under the evidence reviewed in the majority opinion, we would hold that petitioner discharged its burden of establishing that the evidence required an affirmative finding by the Commissioner that the volume of business in the neighborhood of its proposed branch office was “such as to indicate that a profitable operation is possible.” The only reasonable conclusion from the record as a whole is that the prospective profitability of petitioner’s branch office was established as a probability of substantial certainty. The order of denial in terms of Rule 3.3(c) was therefore shown to be arbitrary.
We would also hold that the implied findings favorable to petitioner’s application in terms of Rule 3.3(d), that is, that petitioner’s proposed additional office would not unduly injure any other association operating in the area of the proposed location, was not shown to be without reasonable support in substantial evidence.