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CENTENNIAL BANK v. WILLIAM E. WHITESELL (06/08/77)

decided: June 8, 1977.

CENTENNIAL BANK, APPELLANT
v.
WILLIAM E. WHITESELL, SECRETARY OF BANKING OF THE COMMONWEALTH OF PENNSYLVANIA, APPELLEE; FEDERAL DEPOSIT INSURANCE CORPORATION, INTERVENING APPELLEE. CENTENNIAL BANK, APPELLANT V. WILLIAM E. WHITESELL, SECRETARY OF BANKING OF THE COMMONWEALTH OF PENNSYLVANIA, APPELLEE. CENTENNIAL BANK, PETITIONER V. COMMONWEALTH OF PENNSYLVANIA, DEPARTMENT OF BANKING, RESPONDENT; FEDERAL DEPOSIT INSURANCE CORPORATION, INTERVENING RESPONDENT



Appeals from the Orders of the Court of Common Pleas of Philadelphia County in case of William E. Whitesell, Secretary of Banking of the Commonwealth of Pennsylvania v. Centennial Bank, No. 2479 October Term, 1976; and Original Jurisdiction, No. 1973 C.D. 1976 in case of Centennial Bank v. Commonwealth of Pennsylvania, Department of Banking, and Federal Deposit Insurance Corporation, Intervenor.

COUNSEL

Arlen Specter, with him Arthur H. Rainey, and, of counsel, Dechert, Price & Rhoads, for appellant.

Kathleen Herzog Larkin, Deputy Attorney General, with her J. Justin Blewitt, Jr., Deputy Attorney General, and Robert P. Kane, Attorney General, for appellee.

Arthur R. Littleton, with him Thomas W. Murrell, III, for intervenor.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by President Judge Bowman.

Author: Bowman

[ 30 Pa. Commw. Page 448]

A plethora of appeals from orders of the Court of Common Pleas of Philadelphia County and a petition for review in the nature of an original jurisdiction action or, alternatively, in the nature of an administrative agency appeal reflect the jurisdictional uncertainties involved in this litigation and the pragmatic solution by practitioners in applying our new Rules of Appellate Procedure to the dilemma confronting them.

The origin of the controversy is a determination by the Secretary of Banking that Centennial Bank (Centennial), of Philadelphia, was financially unsound. Acting under the authority of Section 504, Department of Banking Code (Code), Act of May 15, 1933, P.L. 565, as amended, 71 P.S. § 733-504, the Secretary, with the approval of the Attorney General, on October 20, 1976, issued a notice of possession, took possession of and closed Centennial. It reopened the next day following events hereafter referred to. Simultaneously with the issuance of the notice of possession, the Secretary filed in the Court of Common Pleas of Philadelphia County to No. 2479 October Term, 1976, a Certificate of Possession consistent with Section 604 of the Code, 71 P.S. § 733-604, which requires such a certificate to be filed "in the office of the prothonotary." This section of the Code and several other sections, particularly Section 605, 71 P.S. § 733-605, considered in conjunction with the provisions of the Appellate Court Jurisdiction Act of 1970 (ACJA), Act of July 31, 1970, P.L. 673, as amended, 17 P.S. § 211.101 et seq., pose the basic jurisdictional issue out of which this complexity of litigation arose.

[ 30 Pa. Commw. Page 449]

Numerous procedural irregularities raise other jurisdictional issues and collateral questions.

The record in the appeals consists of pleadings and documents filed and indexed to C.P. Philadelphia Docket No. 2479 October Term, 1976, and transcripts of dialogue by and among counsel and the presiding judge and arguments of counsel. Portions of the record refer to discussions in chambers between the presiding judge and counsel, and there is a transcript of testimony with respect to the sale and transfer of the assets and liabilities of Centennial.

As we reconstruct the events, after counsel for Centennial became aware of the Secretary of Banking taking possession of the bank on October 20, 1976, that same afternoon he presented to Judge Rosenwald of the Court of Common Pleas of Philadelphia County "petition for review" seeking injunctive relief against the Secretary of Banking. The petition was captioned as being a proceeding in the Commonwealth Court of Pennsylvania, and it did not specifically invoke Section 605 of the Code. A conference in chambers ensued at which counsel for interested parties participated. Although it is not clear whether the jurisdiction of the Court of Common Pleas of Philadelphia County to entertain the "petition for review" was raised at the chambers conference, the record is clear that on the following morning of October 21, 1976, the court, in session, unequivocally declared that jurisdiction over the subject matter of the "petition for review" was not in that court but was exclusively in the Commonwealth Court. We would note parenthetically that on this occasion counsel for the Department expressed the view that the Court of Common Pleas did enjoy jurisdiction over the subject matter of the "petition for review." Unfortunately, there then occurred an important, if not the first, procedural irregularity. No specific written order by the court

[ 30 Pa. Commw. Page 450]

    dismissing Centennial's petition for review for want of jurisdiction was filed or docketed nor was the "petition for review" filed or docketed to any docket number in that court. It is this unrecorded and undocketed order which Centennial asserts is the subject matter of its appeal to this Court to our No. 1975 C.D. 1976. Later that same day the court below was presented with a petition by the Secretary of Banking as receiver of Centennial for approval of the sale of assets and transfer of liabilities to Lincoln Bank and the F.D.I.C. After hearing, the court approved the sale of assets and transfer of liabilities by order dated the same day. Centennial says its appeal to this Court from that order is its appeal docketed to our No. 2014 C.D. 1976. Bryn Mawr Trust Company also appealed the latter order to this Court to our No. 2015 C.D. 1976, but this appeal has since been withdrawn. Our docket Nos. 1 T.D. 1977 and 2 T.D. 1977 reflect transfers to this Court from the Superior Court of Pennsylvania, to which appeals had been taken by Centennial. These appeals appear to be from the same orders of the Court of Common Pleas of Philadelphia County as the appeals to this Court to No. 1975 C.D. 1976 and No. 2014 C.D. 1976. Centennial also filed a petition for review in this Court, which is docketed to our No. 1973 C.D. 1976. The filing of these various appeals and petitions for review precipitated a series of motions and preliminary objections, which we shall consider to the extent necessary.

The Basic Jurisdictional Issue

The threshold question is whether the Court of Common Pleas of Philadelphia County or this Court enjoys exclusive original jurisdiction over proceedings authorized by Section 605 of the Code. This section provides that any banking institution whose business or property has been taken over by the Secretary may,

[ 30 Pa. Commw. Page 451]

    at any time within ten days of such action, "apply to the court for an order . . . to show cause why he should not be enjoined from continuing as receiver."

It is Centennial's position that the Philadelphia County Court of Common Pleas in this case enjoyed jurisdiction over such proceedings and that it was the intent of Centennial to invoke this section in its application to that court on the afternoon of October 20, 1976.

It is the position of appellee-respondents that the Commonwealth Court enjoys exclusive original jurisdiction over Section 605 proceedings and that Centennial's attempt to invoke such jurisdiction in its petition for review to our No. 1973 C.D. 1976 was not timely filed as more than ten days had expired since the Secretary became receiver of Centennial. Appellee-respondents would have us reach this result notwithstanding their insistence that the Court of Common Pleas of Philadelphia County enjoys jurisdiction over other proceedings requiring judicial action incident to these receivership proceedings, a jurisdiction the Secretary invoked in filing the Certificate of Possession and in seeking court approval of the sale and transfer of Centennial's assets and liabilities.

In our opinion, courts of common pleas enjoy original jurisdiction over Section 605 Code proceedings and this Court enjoys appellate jurisdiction over such proceedings. It would be unrealistic and illogical to conclude that this Court enjoys exclusive original jurisdiction over Section 605 Code proceedings while common pleas courts enjoy original jurisdiction over all other judicial proceedings under the Code relating to receivership of banking institutions. Nor does a comparative analysis of the Code provisions on this subject and the provisions of the ACJA support the conclusion that appellee-respondents urge.

Prior to enactment of the ACJA, the Code unquestionably conferred upon courts of ...


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