would have a remedy after the reassessment was made: e.g., it could pay the tax under protest and bring suit to recover the amount unlawfully collected.
Defendant argues that the approval or disapproval of branches of national banks is a matter clearly committed to the discretion of the Comptroller. But there is no discretion in the Comptroller to approve the establishment of a branch office at a location prohibited by law. Defendants cite Apfel v. Mellon, 1929, 59 App.D.C. 94, 33 F.2d 805, and First National Bank of McKeesport v. Home Loan Bank Board, 1955, 96 U.S.App.D.C. 194, 225 F.2d 33. Apfel was a suit to compel the Federal Reserve Board to approve the articles of incorporation of the appellants so that they might engage in international or foreign banking. The Court held that mandamus would not lie to control the exercise of the Board's discretion. In the instant case, there is no desire to control the defendant's discretion; whether a particular area is in need of a bank, whether the local conditions warrant one, etc. (see supra, note 13) is clearly within the Comptroller's discretion. But, as mentioned above, there is no discretion to unlawfully issue a certificate. In Bank of McKeesport, the Court held that the Federal Home Loan Bank Board may grant permission to a federal savings and loan association to establish a branch bank without an agency hearing. The National Banking Act was not involved there, as it is here, and evidently there is no statute expressly setting forth limitations on the establishment of branch offices of savings and loan associations. See North Arlington National Bank v. Kearny Federal Savings & Loan Ass'n, 3 Cir., 1951, 187 F.2d 564, certiorari denied 342 U.S. 816, 72 S. Ct. 30, 96 L. Ed. 617; United States ex rel. State of Wisconsin v. First Federal Sav. & Loan Ass'n, D.C.E.D.Wis.1957, 151 F.Supp. 690, reversed on jurisdictional grounds 7 Cir., 1957, 248 F.2d 804, certiorari denied 1958, 355 U.S. 957, 78 S. Ct. 543, 2 L. Ed. 2d 533.
The other cases, similarly, are distinguishable on their facts.
The crucial issue remains: once the certificate issues, do the plaintiffs have a remedy? Defendant asserts they do; however, when questioned on oral argument, the Assistant United States Attorney was unable to provide the Court with a precise description of the nature of this remedy.
Plaintiffs contend that if the certificate issues, objection can be raised only by the United States; that the certificate is conclusive against all others as to the authority of the national bank's branch to conduct banking. The cases cited by the plaintiffs are of two types: (1) those holding that the facts upon which the Comptroller bases his decision to issue a certificate can not be questioned by anyone except the United States, see 12 U.S.C.A. § 27 and cases cited; and (2) those holding that only the United States may inquire into the validity of an executed contract entered into by a national bank, see, e.g., Kerfoot v. Farmers' & Merchants' Bank, 1910, 218 U.S. 281, 31 S. Ct. 14, 54 L. Ed. 1042.
But can a private party, or the attorney general of a state, bring a quo warranto proceeding -- in his own name, or in the name of the United States -- to challenge the validity of the establishment of a branch of a national bank?
In the first place, even if quo warranto were available, time might elapse before the plaintiffs could have the matter finally decided, and during this time National might operate its branch to the detriment of the plaintiffs.
Secondly, the remedy is speculative at best. The Michigan Supreme Court has held that Michigan courts would not have jurisdiction to hear such a matter since a national bank is a federally created corporation and a suit challenging the right of a national bank to establish and operate a branch bank raises questions of federal law. Millard v. National Bank of Detroit, supra, note 7. Cases such as First National Bank of Bay City v. Fellows ex rel. Union Trust Co., 1917, 244 U.S. 416, 37 S. Ct. 734, 61 L. Ed. 1233; First National Bank in St. Louis v. State of Missouri, 1924, 263 U.S. 640, 44 S. Ct. 213, 68 L. Ed. 486; Ex parte Worcester County National Bank, 1929, 279 U.S. 347, 49 S. Ct. 368, 73 L. Ed. 733, were distinguished on the ground that what was involved in those cases was state law.
In United States ex rel. State of Wisconsin v. First Federal Savings & Loan Ass'n, 7 Cir., 1957, 248 F.2d 804, certiorari denied 1958, 355 U.S. 957, 78 S. Ct. 543, 2 L. Ed. 2d 533, the Court held that a federal district court has no original
jurisdiction to entertain a quo warranto action filed by the State of Wisconsin in the name of the United States to test the right of a federal savings and loan association to establish three limited agency offices. Jurisdiction, it had been argued, flowed from 28 U.S.C. § 1345 and § 1651(a). The Court rejected the arguments, saying that § 1345
was inapplicable because the suit, while in the name of the United States, actually was a suit by the State of Wisconsin.
And § 1651(a),
the Court held, 'does not enlarge or expand the jurisdiction of the courts but merely confers ancillary jurisdiction where jurisdiction is otherwise granted and already lodged in the court.' 248 F.2d at page 808.
While plaintiffs here might succeed in persuading the United States Attorney General to institute quo warranto proceedings, even though the plaintiff in First Federal could not, the remedy is hardly an 'adequate' one; it is speculative at best and in the Court's opinion not sufficient to prevent the issuance of a preliminary injunction. Cf. Columbian Cat Fanciers v. Koehne, 1938, 68 App.D.C. 257, 96 F.2d 529, 532, in which it was held that the remedy of quo warranto is not an 'adequate remedy at law', so as to preclude equitable relief, where the party interested must appeal to the discretion of some other person or body to maintain quo warranto.
"Adequate remedy at law' means a remedy vested in the complainant, to which he may at all times resort at his own option, fully and freely, without let or hindrance.' 68 App.D.C. at page 260, 96 F.2d at page 532.
A suit for damages against the Comptroller of the Currency for unlawfully issuing a certificate of authorization is also not an 'adequate remedy at law' since, for one thing, such a suit can not be brought. Cooper v. O'Connor, 1938, 69 App.D.C. 100, 99 F.2d 135, 118 A.L.R. 1440, certiorari denied 1938, 305 U.S. 642, 59 S. Ct. 146, 83 L. Ed. 414; Standard Nut Margarine Co. of Florida v. Mellon, 1934, 63 App.D.C. 339, 341, 72 F.2d 557, 559, certiorari denied 1934, 293 U.S. 605, 55 S. Ct. 124, 79 L. Ed. 696.
Do the plaintiffs have standing? Is the case justiciable? Is National an indispensable or necessary party?
The plaintiffs are two state banks within two and a half miles of the proposed location of National's branch; they are seeking to enjoin unlawful competition which threatens them with irreparable and immediate
damage. An uncontroverted affidavit states that there is insufficient banking business in Clinton itself; any new branch in Clinton would have to draw its business from the surrounding communities which these plaintiffs already service. Under the circumstances of this case, the Court is of the opinion that plaintiffs have standing to bring this suit.
In National Bank of Detroit v. Wayne Oakland Bank, supra, note 10, a suit was brought by a state bank to enjoin the Comptroller from issuing a certificate authorizing a national bank to establish a branch office in Troy, Michigan.
On the question of standing, the Court stated:
'As to the standing of the Wayne Oakland Bank to maintain its suit, it was faced with invasion of property rights, and injury from a competition which was prohibited by the federal statutes subjecting national banks to the same rules of law as cover state banks. The district court found, as a fact, that the competition resulting from the opening and operation of a branch by the National Bank of Detroit would certainly cause inestimable damage to The Wayne Oakland Bank. Whether the rights of a party are infringed by unlawful action of an individual or by exertion of unauthorized federal administrative power, it is entitled to have such controversy adjudicated.' 252 F.2d at page 544.
And see Frost v. Corporation Commission, 1929, 278 U.S. 515, 49 S. Ct. 235, 73 L. Ed. 483.
An indispensable party may be defined as one whose interest in the controversy before the Court is such that the Court can not render an equitable judgment without having jurisdiction over him. While it might have been helpful to the Court to have had the additional oral arguments and briefs of National, the Court is of the opinion that an equitable judgment can be rendered in this case without having National before the Court. In Gauss v. Kirk, 1952, 91 U.S.App.D.C. 80, 198 F.2d 83, 33 A.L.R.2d 1085, a potential purchaser of realty brought suit to recover a deposit held by the broker. The potential vendors of the property, upon whom service could not be had, also claimed the deposit. The Court held that the vendors should be deemed conditionally necessary but not indispensable parties. Judge Fahy stated:
'Moore's Federal Practice, Vol. 3, 2154-5 (2nd ed. 1948), indicates that the true rule as to indispensability calls for a reconciliation of the desirability on the one hand of preventing multiplicity of suits and obtaining a complete and final decree between all interested parties, and, on the other hand, of having some adjudication if at all possible rather than none, leaving the parties remediless because of 'an ideal desire to have all interested persons before the court.' This is an interpretation of the applicable principles which in the end guides our decision in this case.' 91 U.S.App.D.C. at page 83, 198 F.2d at page 85.
In an analogous situation to the case at hand, Cherokee Nation v. Hitchcock, 1902, 187 U.S. 294, 23 S. Ct. 115, 47 L. Ed. 183, the Supreme Court held that proposed lessees of oil lands were not indispensable parties in a suit against the Secretary of Interior to restrain him from leasing the oil lands held for the benefit of the Cherokee Nation. In the instant case, if the plaintiffs are finally successful, the reason will have to be that National's branch -- or any outside branch -- may not be located in Clinton. Under these circumstances the Court is of the opinion that National is not an indispensable party to this action.
Furthermore, since jurisdiction can not be acquired over National without their consent or voluntary appearance, and, in addition, since venue is not proper as to them in this district, the Court in its discretion holds that National is not a necessary party. Federal Rule of Civil Procedure 19(b); 12 U.S.C.A. § 94. The Court quotes, with approval, the following statement of Professor Moore:
'The general theory as to who are indispensable and necessary parties applies to suits for declaratory judgments. Obviously, an indispensable party must be joined in a declaratory judgment action, just as in any other, since the court could not proceed to enter an equitable judgment in the absence of such a party. But we have called attention to the desirability of not expanding the concept of indispensable parties to the point that parties, having rights warranting adjudication, are left remediless, if it is at all possible to proceed with the parties before the court, and that 'a court of equity will strain hard to reach that result.' As a result of this, and due to the flexibility of the declaratory judgment procedure there may be times when the court will be able to proceed, without prejudicing the rights of absent persons, when it would be difficult to do so under a more rigid procedure. * * *' 3 Moore's Federal Practice para. 19.17.
Finally, the Court emphasizes that because of the form that the order on this motion will take, there will be no undue interference in the running of the Comptroller's office. The Comptroller is free to approve or disapprove the application of National as he sees fit. As appears below, the preliminary injunction will take effect only when and if approval of the application is granted, and then only until such time as this suit is finally resolved.
This memorandum is to be considered specific findings of fact and conclusions of law. The Court notes that because there was no dispute as to the basic facts, it did not consider it necessary to hear oral testimony. See Ross-Whitney Corp. v. Smith Kline & French Laboratories, 9 Cir., 1953, 207 F.2d 190, 198; 7 Moore's Federal Practice para. 65.04(3).
The motion for a preliminary injunction is granted but the injunction shall be stayed until such time as approval is given by the defendant or his agents to the Manufacturers National Bank of Detroit, Detroit, Michigan, for the establishment and operation of a branch of said Bank at a location in the unincorporated area of Clinton Township, Macomb County, Michigan.