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June 28, 1954


Appeal, No. 34, May T., 1954, from order of Banking Board of Pennsylvania dated February 4, 1954, in case of Delaware County National Bank v. L. Merle Campbell, Secretary of Banking of Pennsylvania et al. Order affirmed. Appeal in the nature of certiorari to review decision of Banking Board of Pennsylvania approving merger of banks.


Bernard G. Segal, with him Gilbert W. Oswald, Chadwick, Curran, Petrikin & Smithers and Schnader, Harrison, Segal & Lewis, for appellant.

Robert L. Rubendall, Deputy Attorney General, with him Frank F. Truscott, Attorney General, for Commonwealth, appellee.

Ernest Scott, with him Augstus S. Ballard, Paul Lane Ives, C. William Kraft, Jr., Thomas B. K. Ringe, Morgan, Lewis & Bockius and Pepper, Bodine, Stokes & Hamilton, for Fidelity-Phila. Trust Co., appellee.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Bell

[ 378 Pa. Page 313]


The Delaware County National Bank has appealed directly to this Court by certiorari from an Order or decision of the Pennsylvania Banking Board dated February 4, 1954, which approved the proposed merger of Fidelity-Philadelphia Trust Company (which has its main office and six branch offices in Philadelphia) with the First National Bank of Chester (which has a main and two branch offices in) Delaware County. Under the merger the Fidelity-Philadelphia Trust Company will establish a branch office or bank in the present banking quarters of the First National Bank of Chester -- in other words, it will in effect continue the local bank as a branch bank. No serious objection was made by appellant to the merger and establishment

[ 378 Pa. Page 314]

    of a branch bank at Clifton Heights, or of a branch bank at Marcus Hook, and since our decision will likewise govern those mergers and branches we shall confine our discussion to the merger in Chester.

The Fidelity-Philadelphia Trust Company and the Attorney General of Pennsylvania moved to quash the appeal on the two-fold ground that certiorari will not lie and that in any event a national bank has no standing to contest this merger.

Three important questions are raised by this appeal: (1) will certiorari lie from the Supreme Court of Pennsylvania to review an Order of the Pennsylvania Banking Board approving such a merger and if so, is it a broad or a narrow certiorari; (2) has a national bank in the community in question any standing, position or right to contest the merger of a state bank and a national bank with the resultant branch office in that community in competition with the contesting bank; and (3) what is the interpretation of the pertinent provisions of the Banking Code*fn1 and of the Department of Banking Code?*fn2

The Department of Banking was created not to manage or operate a bank but to supervise a bank, and to be a watchdog in the interests of depositors, creditors, shareholders and of the community in general. The Department has the power and duty, inter alia, to approve or disapprove a proposed merger or consolidation of banks: § 1406 of the Banking Code. If the Department of Banking disapproves the articles of merger or of consolidation its decision "shall be conclusive and not subject to review:" § 1406 C. If, however, it approves the articles of merger or of consolidation, there is no express provision that its decision

[ 378 Pa. Page 315]

    shall be conclusive or not subject to review: cf. § 1406 B.

However, if a merger or consolidation is proposed, the effect of which is to establish a branch, the Department of Banking has the power and the duty to approve or disapprove the articles of merger or consolidation within 60 days. But in the event of approval, that is not the end of the matter.

"If the Department of Banking shall approve such articles it shall forward them to the Banking Board for review.*fn3 [and]... The decision of the Banking Board shall be binding upon the Department of Banking.": § 204 F(2) (Banking Code).

The Banking Board is composed of 11 members -- the Secretary of Banking of the Commonwealth of Pennsylvania, as Chairman, four members appointed by the Governor of Pennsylvania, and six members selected by the Governor from among the nominees submitted to him by groups of the Pennsylvania Bankers Association representing different geographical sections of the State: § 501 C of the Department of Banking Code. The Board is composed of experienced and able bankers who should know, if anyone knows, the banking needs of the various communities in Pennsylvania and whether adequate banking facilities do or do not exist.

The powers of the Banking Board, so far as they are pertinent hereto, are as follows ( § 501 C): "There is hereby created a board to be known as the 'Banking Board,' which shall hear any attorney, officer, employe,

[ 378 Pa. Page 316]

    director, or trustee of any corporation or person, subject to the supervision of the Department of Banking, who shall have been ordered, by the Department of Banking to appear before such board, to show cause why his office or position should not be declared vacant. The Board shall also exercise such additional powers as shall be given to it, and shall act upon such matters as shall be referred to it by any laws of this Commonwealth."

In disposing of the motions to quash we must consider the powers and authority of the Banking Board, and what power of review, if any, the Courts possess on an appeal by a national bank from an order of a State administrative agency. It will aid us in determining these questions if we first review the applicable principles of law.

This case arose on a certiorari and possessing as we do, and other courts of the Commonwealth do not, the powers of King's Bench, it was properly brought direct to this Court: Commonwealth v. Onda, 376 Pa. 405, 103 A.2d 90; cf. also Nobles v. Piollet, 16 Pa. Superior Ct. 386; Morrison, Sec. of Com. v. Philadelphia College of Law, Inc., 56 Dauphin 265.

Review on certiorari has been recently considered and clarified by Mr. Chief Justice STERN in Kaufman Construction Co. v. Holcomb, 357 Pa. 514, 55 A.2d 534. In that case the statute provided that the award of the Board of Arbitration shall be final and no appeal from such award to any court shall be allowed. The Chief Justice said (pp. 517-519): "Where a statute expressly denies the right of appeal to a court from the action of some agency of government, or to an appellate court from the decision of a court of original jurisdiction, to what extent is a disappointed claimant thereby prevented from obtaining a complete judicial review of his claim? After some vacillation

[ 378 Pa. Page 317]

    by the courts in regard to the proper answer to that question -- (as to which see Rimer's Contested Election. Geary's Appeal, 316 Pa. 342, 175 A. 544, and McGettigan's Liquor License Case, 131 Pa. Superior Ct. 280, 200 A. 213) -- the law is now reasonably clear, a distinction being made between the effect of a statute which merely fails to provide for a right of appeal and the effect of one which expressly denies that right. This differentiation apparently had its origin in Twenty-First Senatorial District Nomination, 281 Pa. 273, 279, 126 A. 566, 568, in which it was said: 'Where, in a statutory proceeding, the legislature fails to provide for an appeal, and because of that omission the action of the tribunal involved is, generally speaking, considered final... a certiorari to inspect the record, in the broadest sense allowed by our cases, may, nevertheless, issue; but where the legislature... particularly states that no appeal shall be permitted, then review, beyond determining questions of jurisdiction, cannot be had; and, under circumstances such as those at bar, a certiorari for the latter purpose cannot be broadened into something more extensive, either by our prior rulings on the general subject in hand, or by operation of the Act of April 18, 1919, P.L. 72.' The distinction thus made has been reiterated and reinforced in a multitude of subsequent cases holding that where a statute expressly provides that there shall be no appeal the scope of appellate review is limited to the question of jurisdiction and the regularity of the proceedings; the merits of the controversy cannot be considered even though the interpretation given to the facts or the law by the governmental agency or the court below may have been erroneous. It is only where the statute is silent on the question of appeal that a review by certiorari may be had 'in the broadest sense' and the court may consider the

[ 378 Pa. Page 318]

    record, including the testimony, to determine whether the findings are supported by competent evidence and to correct any ...

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