Gate City v. Pitts

Montana Supreme Court

Gate City v. Pitts

Montana Supreme Court·Decided April 8, 1975·No. 12766·Published

Opinion

No. 12766

I N THE SUPREME COURT O THE STATE O M N A A F F OTN

GATE C I T Y SAVINGS AND L A ASSOC. ON , et a 1. ,

P l a i n t i f f s and Respondents, -vs - HAROLD PITTS , DIRECTOR, DEPARTMENT OF BUSINESS REGULATION O THE STATE O MONTANA, e t a l . , F F

Defendants, M N A A SAVINGS & L A LEAGUE, GREAT FALLS OTN ON FEDERAL SAVINGS & L A ASSOC. e t a l . , ON

Defendant i n I n t e r v e n t i o n and A p p e l l a n t s .

Appeal from: D i s t r i c t Court o f t h e F i r s t J u d i c i a l D i s t r i c t , Honorable P e t e r G. Meloy, Judge p r e s i d i n g .

Counsel of Record:

For Appellants :

Hon. Robert L. Woodahl, A t t o r n e y G e n e r a l , H e l e n a , Montana Lon J . Maxwell, A s s i s t a n t A t t o r n e y G e n e r a l , a r g u e d , Helena, Montana Church, H a r r i s , Johnson & W i l l i a m s , G r e a t F a l l s , Montana C h a r l e s C. Love11 a r g u e d , G r e a t F a l l s , Montana

F o r Respondents:

L o b l e , P i c o t t e , L o b l e , Helena, Montana P e t e r C. Pauly a r g u e d , and Henry Loble a r g u e d , Helena, Montana

Submitted: March 3 , 1975

Decided: APR - 8 1975 Filed: fiPR - 8 1975 Mr. J u s t i c e Wesley C a s t l e s d e l i v e r e d t h e O p i n i o n o f t h e C o u r t .

T h i s i s a n a p p e a l by d e f e n d a n t H a r o l d P i t t s , D i r e c t o r

o f t h e Department of B u s i n e s s R e g u l a t i o n o f t h e s t a t e o f Montana

( h e r e i n a f t e r r e f e r r e d t o a s D i r e c t o r ) , and i n t e r v e n i n g d e f e n d -

a n t s , Nontana S a v i n g s & Loan League, G r e a t F a l l s F e d e r a l S a v i n g s

& Loan A s s o c i a t i o n and F i r s t F e d e r a l S a v i n g s and Loan A s s o c i a t i o n ,

f r o m a judgment and d e c r e e o f t h e d i s t r i c t c o u r t , Lewis and C l a r k

County, i n f a v o r o f p l a i n t i f f s G a t e C i t y S a v i n g s and Loan A s s o c i a -

t i o n ( h e r e i n a f t e r r e f e r r e d t o a s G a t e C i t y ) , F i d e l i t y S a v i n g s and

Loan A s s o c i a t i o n ( h e r e i n a f t e r r e f e r r e d t o a s F i d e l i t y ) and Glen-

d i v e B u i l d i n g and Loan A s s o c i a t i o n ( h e r e i n a f t e r r e f e r r e d t o a s

Glendive).

G a t e C i t y commenced t h i s a c t i o n a g a i n s t J o h n A. Dowdall,

t h e n D i r e c t o r o f t h e S t a t e Department o f B u s i n e s s R e g u l a t i o n ,

u n d e r t h e p r o v i s i o n s o f t h e Uniform D e c l a r a t o r y Judgments A c t ,

s e c t i o n s 93-5901-93-8916, R.C.M. 1947, s e e k i n g t o have t h e d i s -

t r i c t c o u r t c o n s t r u e t h e p r o v i s i o n s o f T i t l e 7 , R.C.Y. 1947,

g o v e r n i n g t h e o p e r a t i o n s and a c t i v i t i e s o f b u i l d i n g and l o a n

a s s o c i a t i o n s i n t h e s t a t e o f Montana and t o o v e r r u l e two o f f i c i a l

o p i n i o n s o f t h e Montana a t t o r n e y g e n e r a l .

On m o t i o n , Montana S a v i n g s and Loan League, G r e a t F a l l s

Federal Savings & Loan A s s o c i a t i o n , and F i r s t F e d e r a l S a v i n g s

and Loan A s s o c i a t i o n were g r a n t e d l e a v e t o i n t e r v e n e . The d i s -

t r i c t c o u r t o r d e r e d Harold P i t t s , s u c c e s s o r i n o f f i c e t o John A.

Dowdall, s u b s t i t u t e d a s d e f e n d a n t . F i d e l i t y and G l e n d i v e w e r e

o r d e r e d j o i n e d a s i n d i s p e n s a b l e p a r t i e s p l a i n t i f f , pursuant t o

Rule 1 9 , M.K.Civ.P. The c a u s e w a s s u b m i t t e d t o t h e d i s t r i c t c o u r t on a n a g r e e d s t a t e m e n t o f f a c t s .

The d i s t r i c t c o u r t r u l e d , i n s u b s t a n c e , t h a t t h e D i r e c t o r

was a u t h o r i z e d t o c o n s i d e r G a t e C i t y ' s a p p l i c a t i o n t o d o b u s i n e s s

i n Montana a n d t o merge w i t h F i d e l i t y and G l e n d i v e ; a n d , t h e l a w s of Montana p e r m i t t h e e s t a b l i s h m e n t , maintenance and o p e r a t i o n o f b r a n c h o f f i c e s i n Montana by f o r e i g n o r d o m e s t i c b u i l d i n g and

loan associations. The D i r e c t o r and i n t e r v e n o r s a p p e a l .

Gate C i t y i s a s a v i n g s and l o a n a s s o c i a t i o n i n c o r p o r a t e d under t h e laws of t h e s t a t e o f North Dakota. Its principal place

of b u s i n e s s i s F a r g o , North Dakota, w i t h e i g h t branch o f f i c e s i n North Dakota. F i d e l i t y and G l e n d i v e a r e s a v i n g s and l o a n a s s o -

c i a t i o n s i n c o r p o r a t e d under t h e laws of t h e s t a t e of Montana.

T h e i r o f f i c e s a r e l o c a t e d r e s p e c t i v e l y a t G r e a t F a l l s and Glen-

d i v e , Montana.

On May 1 0 , 1972, Gate C i t y e n t e r e d i n t o two s e p a r a t e

a g r e e m e n t s of merger w i t h F i d e l i t y and G l e n d i v e w i t h t h e i n t e n t

t o c o n t i n u e t o o p e r a t e t h e e x i s t i n g o f f i c e s a t G r e a t F a l l s and

G l e n d i v e , i f and when t h e mergers became e f f e c t i v e . On J u n e 8,

1972, G a t e C i t y f i l e d a n a p p l i c a t i o n , w i t h s u p p o r t i n g documents,

w i t h t h e D i r e c t o r s e e k i n g p e r m i s s i o n t o c o n d u c t s a v i n g s and l o a n

a c t i v i t i e s i n t h e s t a t e of Nontana and p e r m i s s i o n t o merge w i t h

F i d e l i t y and G l e n d i v e . The a p p l i c a t i o n t o merge was c o n d i t i o n e d

upon t h e c o n s e n t of t h e members and s h a r e h o l d e r s of t h e i n s t i t u -

t i o n s i n v o l v e d ; t h e c o n s e n t of t h e D i r e c t o r ; t h e a p p r o v a l of t h e

F e d e r a l Home Loan Bank Board ( h e r e i n a f t e r r e f e r r e d t o a s F H L B B ) ;

and i s s u a n c e of i n s u r a n c e of a c c o u n t s by t h e F e d e r a l S a v i n g s and

Loan I n s u r a n c e C o r p o r a t i o n . On J u l y 1 0 , 1972, D i r e c t o r Dowdall r e q u e s t e d a n a t t o r n e y

g e n e r a l ' s o p i n i o n c o n c e r n i n g Gate C i t y ' s a p p l i c a t i o n . Attorney

G e n e r a l Woodahl r u l e d t h a t Gate C i t y ' s proposed merger was con- t r a r y t o Montana law, 3 4 Opinions of t h e A t t o r n e y G e n e r a l , No. 5 3 . The o p i n i o n r u l e d t h e a p p l i c a t i o n was d e f i c i e n t i n t h a t t h e pro- posed merger had n o t been r a t i f i e d by t w o - t h i r d s of t h e members of e a c h of t n e t h r e e a s s o c i a t i o n s i n v o l v e d p r i o r t o t h e submis-

s i o n of t h e a p p l i c a t i o n t o t h e D i r e c t o r f o r h i s a p p r o v a l . It

r e l i e d upon a f o r m a l o p i n i o n i s s u e d by A t t o r n e y G e n e r a l Anderson which h e l d t h a t b r a n c h s a v i n g s and l o a n a s s o c i a t i o n s a r e p r o h i b -

i t e d by Montana law, 29 Opinions o f t h e A t t o r n e y G e n e r a l , No. 2 .

On October 1 2 , 1972, on t h e b a s i s of A t t o r n e y G e n e r a l

Woodahl's o p i n i o n , D i r e c t o r Dowdall d e n i e d Gate C i t y ' s a p p l i c a -

tion. This a c t i o n followed.

The i s s u e s i n v o l v e d on a p p e a l a r e :

(1) Whether t h e d i s t r i c t c o u r t had j u r i s d i c t i o n of t h e

s u b j e c t m a t t e r of t h e c a s e ?

Free access — add to your briefcase to read the full text and ask questions with AI