The opinion of the court was delivered by: YOUNGDAHL
Two state banks have moved for a preliminary injunction to restrain the Comptroller of the Currency from issuing a certificate authorizing a national bank to open a branch office in Clinton Township, Michigan.
The chronology is as follows: On March 9, 1959, National submitted its application to the Comptroller. On May 26, the Comptroller's District Examiner notified the plaintiffs of the pending application and asked for their views 'regarding the establishment of branch banking facilities at the location described'. The letter then stated: 'We shall appreciate your early reply as a decision on the subject proposal is imminent.' The next day, May 27, objections to the establishment of National's branch were filed on behalf of the Fraser and Roseville state banks; a hearing was granted and scheduled for June 17. Shortly before June 11, plaintiffs asked the defendant whether the 'usual practice' of having a time delay between approval of the application and issuance of the certificate, would be followed in this case. Defendant advised plaintiffs that the certificate might be issued contemporaneously with the approval; that the certificate of authorization might be used as notification of approval. On June 11, plaintiffs requested defendant to advise them of any contemplated issuance of a certificate prior to its issuance so that plaintiffs could, if they desired, take legal action to protect their rights. Defendant's reply, received by counsel for plaintiffs on June 15, stated:
'It is not the policy of this office to make advance announcements of actions which it proposes to take. Consequently, we cannot accede to the request of your clients that they be notified in advance of the action which we take on this application.'
Because plaintiffs believed they would be powerless to question the validity of the branch bank once the certificate issued, plaintiffs, on June 16, brought suit in this court and secured from Judge Curran, ex parte, an order restraining the defendant and his agents until June 26 'from issuing to * * * National * * * his Certificate approving and authorizing * * * a branch of said Bank * * * in * * * Clinton * * *.'
The next day, June 17, the scheduled hearing was held in the Comptroller's office at which time the Comptroller informed the plaintiffs that so long as the order restraining him from issuing a certificate to National was outstanding, he would make no determination.
In Perry v. Perry, 1951, 88 U.S.App.D.C. 337, 190 F.2d 601, 602, Judge Bazelon stated:
'When a motion for preliminary injunction is presented to a court in advance of hearing on the merits, it is called upon to exercise its discretion 'upon the basis of a series of estimates: the relative importance of the rights asserted and the acts sought to be enjoined, the irreparable nature of the injury allegedly flowing from denial of preliminary relief, the probability of the ultimate success or failure of the suit, the balancing of damage and convenience generally. A mere listing of the guiding considerations demonstrates their intangible nature, especially when no attempt is made at this stage to decide finally the questions raised."
It is seen, then, that the Court must explore the merits of plaintiffs' contentions so as to be able to exercise its discretion.
Consequently, it is necessary for the Court to turn to Michigan law to determine the legality of the establishment of a branch bank at the location here in question. Section 487.34 of the Michigan Financial Institutions Act provides, inter alia, that
'Any bank * * * may * * * establish and operate a branch or branches within a village or city other than that in which it was originally chartered: Provided, That the village or city in which it is proposed to establish and operate a branch is located in the same county in which the parent bank has its principal office or, if not in said county, then within 25 miles of said parent bank * * * Provided further, That no such branch shall be established in a city or village in which a state or national bank or branch thereof is then in operation * * *. Any bank may * * * establish and operate a branch or branches within the limits of the city or village in which said bank is located * * *.'
In banking parlance, there are 'outside branches' and 'inside branches'. An 'outside branch' is a branch office in a village or city other than the one in which the parent bank is located. An 'inside branch' is a branch in the same village or city as the parent. This statute permits a parent bank to have inside branches in the same village or city that other inside branches are located; but it prohibits a parent bank from having an outside branch in a village or city that already possesses a bank (be it parent or branch). See Michigan National Bank, Lansing, Michigan v. Gidney, 1956, 99 U.S.A.pp.D.C. 134, 237 F.2d 762, certiorari denied 1956, 352 U.S. 847, 77 S. Ct. 55, 1 L. Ed. 2d 54.
Is Clinton a 'village or city' within the meaning of § 487.34?
Plaintiffs contend that Clinton is not a 'village or city' because (a) it is unincorporated, and (b) the nature of the community does not satisfy the test laid down in Wyandotte Savings ...