The act of 1919 (Ga. L. 1919, p. 164) as several times amended provides special proceedings for incorporating banks by the secretary of State, which include reference by the secretary of State to the State superintendent of banks of all applications for charter for investigation and issuance or refusal of a certificate of approval.
(a) The superintendent of banks is not vested with power of absolute discretion to issue or refuse a certificate of approval.
(b) If he refuses to issue a certificate of approval, it is his duty to so notify the secretary of State in writing.
(c) After such notice to the secretary of State, any aggrieved applicant is afforded a special remedy in the nature of mandamus against the superintendent of banks. The remedy is not appellate in character, but is an original action based on the facts and circumstances of the particular case, into which the court will inquire and on which it will enter judgment, subject to review by the supreme court. If it is found that the facts and circumstances authorize and require the granting of a certificate, the court will enter judgment directing the superintendent of banks to issue a certificate of approval. If the judgment is unexpected to, it becomes the duty of the superintendent of banks to issue the certificate, without further question. *Page 322
(d) The petition alleged a cause of action for the relief sought, and was not subject to general demurrer on any of the grounds taken. The case of McGinty v. Gormley, 181 Ga. 644 (2) (183 S.E. 804), distinguished.
No. 12920. NOVEMBER 29, 1939. P. D. DuBose and four others, all residents of Blakely, Georgia, made formal application to the secretary of State for issue of a certificate for charter of Farmers Exchange Bank to be located in Blakely, Early County, Georgia. The secretary of State transmitted a triplicate of the application to R. E. Gormley as superintendent of banks of the State of Georgia, for investigation as provided by statute. The superintendent of banks approved the character and general fitness of the applicants, but refused to issue his certificate approving the application for charter. The applicants, by petition to the superior court, sought by writ of mandamus to compel the superintendent of banks to issue a certificate of approval, on the ground that under the existing facts they had a legal right to a certificate of approval, and his refusal was an abuse of discretion. The petition alleged all that is stated above, averred that establishment of the bank will promote the public convenience, and set forth the facts on which the petitioners based their right to relief, as follows:
"9. Early County is a progressive county, its farmers fast adopting the newest agricultural methods and practices. It has an area of 514.32 square miles, a population of 18,273 (census of 1930), and a public-road mileage in excess of 550 miles. The county is traversed by the Central of Georgia, the Atlantic Coast Line, and the Seaboard Air-Line railroads. Early County receives taxes from property returned for taxation for the years 1937 and 1938, as follows: 1937, $3,601,099; 1938, $3,756,668. Early County is one of the largest peanut-producing counties in the State, and its people, in addition to farming, are engaged in the naval-stores industry, sawmilling, and manufacturing.
"10. Blakely, the county seat of Early County, has a population in excess of 2400 people, and received taxes from property returned for taxation in the years 1937 and 1938 as follows: 1937, $1,250,473; 1938, $1,337,020. Among other businesses, there are located in Blakely two wholesale grocery houses, one of the largest *Page 323 peanut-shelling plants in the southeast, three hotels, one hospital, a lumber mill, a hosiery mill, and four drug stores. Blakely has a new city hall erected at a cost of $37,000, and a new postoffice building erected at a cost of $60,000.
"11. There is in Early County no national bank, and but one bank chartered by the State, viz., the First State Bank.
"12. The First State Bank has a capital of $100,000, less than $30,000 of which is owned by residents of Early County.
"13. Both the president (W. B. Haley) and the active vice-president (J. T. Haley) of the First State Bank reside in Albany, Georgia, and they own more than one-half of the stock in said bank.
"14. The said W. B. Haley and J. T. Haley operate and own the majority of the stock of the City National Bank of Albany, Georgia, the Bank of Terrell of Dawson, Georgia, and the Bank of Fort Gaines, of Fort Gaines, Georgia.
"15. The statements of the condition of the First State Bank of Blakely, Georgia, at the close of business on December 31, 1937 and 1938, as called for by the defendant and furnished him by said bank, are as follows:
Resources: Dec. 31, 1937 Dec. 31, 1938
Loans and Discounts .................. $415,147.09 $456,964.56 State of Georgia municipal bonds owned 9,170.52 10,170.52 U.S. Government Securities ........... 9,000.00 9,000.00 Banking House and Lot ................ 4,075.00 3,925.00 Furniture and Fixtures ............... 2,850.00 3,210.55 Other Real Estate Owned .............. 5,225.00 5,225.00 Cash in Vault and Amount Due From Approved Reserve Agents ............ 132,184.81 218,612.87 Checks for Clearing and Due from Other Banks .............................. 1,929.08 Advances on Cotton and Other Commodities ........................ 7,017.16 4,968.32 Other Resources ...................... 750.00 ----------- ----------- Total .......................... $585,419.58 $714,256.90
Liabilities:
Capital Stock ........................ $100,000.00 $100,000.00 Surplus Fund ......................... 30,000.00 30,000.00 Undivided Profits .................... 18,360.41 25,344.89 *Page 324 Reserve Funds ........................ $ 5,500.00 $ 8,500.00 Dividends Unpaid ..................... 663.00 60.00 Cashiers Checks ...................... 550.10 6,790.14 Demand Deposits ...................... 384,125.24 433,984.71 Time Certificates of Deposits ........ 15,492.41 41,065.57 Savings Deposits ..................... 30,728.42 68,510.59 ----------- ----------- Total .......................... $585,419.58 $714,255.90
"17. Public convenience and advantage are not promoted, when, as obtains at Blakely, one bank, 70% of whose stock is owned by non-residents, and with its executive control in non-residents, has a monopoly of the banking business of two adjoining counties, viz., Early and Clay.
"18. The official residence of the defendant is in Fulton County, Georgia.
"19. One bank is not sufficient to supply the banking needs of Blakely and its trade territory."
In an amendment it was alleged:
"21. Blakely is the trade center of a large agricultural territory, and the major part of this section's fertilizer, seed, mules, hardware, supplies and other articles are bought there; its cotton ginned, warehoused, and sold there; and its peanuts sold and processed there. The various businesses connected with these operations is highly competitive in Blakely, and directors and members of the loan committee of the present bank at Blakely own and are directly interested in each of these species of business, specifically: in the sale of mules, fertilizer, hardware, tractors, seed, and building supplies; in ginning, cottonseed buying, cotton buying, and cotton warehousing; in the buying of peanuts. This situation can only lead, as a natural consequence, to a monopoly in each of these basic businesses, such monopolies being vested in those persons so connected with the present bank, and to the elimination from such basic businesses of those persons who are now in competition with them. The direct effect of such a result on the farming public would be disastrous, would stifle trade, and be directly contrary to the general welfare.
"22. The establishment of the proposed Farmers Exchange Bank is expedient and desirable."
The petition as amended was dismissed on general demurrer *Page 325 which urged that "said petition fails to show that the establishment of the proposed bank is either expedient or desirable, fails to show that the superintendent of banks has grossly abused his discretion in refusing to approve the application for the charter in question, and fails to set forth any cause of action and affords no basis for mandamus against this defendant." The petitioners excepted. In the act of 1919 relating to chartering of banks by the secretary of State (Ga. L. 1919, P. 164) as several times amended, certain official duties preliminary to issuance of certificates of incorporation by the secretary of State are imposed on the superintendent of banks. It is declared in the act (Code, § 13-905): "The superintendent of banks shall ascertain from the best source of information at his command whether the character and general fitness of the persons named as subscribers to the stock of such bank are such as to command the confidence of the community in which such bank is proposed to be located, and whether the public convenience and advantage will be promoted by its establishment. If so satisfied he shall . . issue . . a certificate approving the granting of the charter for such bank and shall transmit a copy of such certificate of approval to the secretary of State, who shall enter the same of record in his office. . . If the superintendent shall not be satisfied that the establishment of the bank, as proposed, is expedient and desirable, he shall . . notify the secretary of State, in writing, that he refuses to approve the granting of a charter, and upon such notice any applicant aggrieved may avail himself of the right of mandamus, as provided in section 13-1701," of the Code. The provision in § 13-1701 is that the aggrieved person "may institute appropriate proceedings in the nature of a mandamus against the superintendent, in the superior court of the county in which such bank is sought to be incorporated . . which proceeding shall be tried as in other cases of mandamus." Concerning the trial of the mandamus proceeding against the superintendent of banks in the superior court it is declared in the Code, § 13-1702: "On the trial of any such cause the superintendent shall have the right to introduce *Page 326 evidence to sustain or tending to sustain his action or refusal to act in the premises; and if from the evidence in the case the court is of the opinion that such permit, or authority, or certificate has been wrongfully or improperly refused or withheld by the superintendent, and that the facts and circumstances authorize and require the granting of such permit, authority, or certificate . . the court shall render an order, judgment, or decree directing the superintendent of banks to issue such permit, authority, or certificate, . . and thereupon the superintendent shall issue . . the same, and may state, in any permit, authority or certificate issued by him under such order, that the same is done by order of the court." In the Code, § 13-1703, it is declared: "A bill of exceptions may be sued out by either party who may be dissatisfied with the judgment, and the cause may be carried to the Supreme Court as in other cases of mandamus proceedings." It is apparent that the legislature has provided special proceedings for incorporating banks by the secretary of State, and by the foregoing sections of the Code has prescribed special procedure to accomplish the object. These include reference by the secretary of State of applications for certificates of incorporation to the State superintendent of banks for investigation, and approval or disapproval. If disapproved, any aggrieved applicant, after report has been made to the secretary of State, is given a special remedy by "proceedings in the nature of a mandamus against the superintendent, . . which proceeding shall be tried as in other cases of mandamus," and finally provision is made for writ of error to the Supreme Court to review the judgment of the superior court.
The whole legislation on the subject shows a complete special system applicable to the subject of chartering banks. The superintendent is not given power arbitrarily to grant or refuse a certificate of incorporation, but on the basis of facts, and those derived from the best source of information at his command, he must be "satisfied" whether or not the application should be granted. This is not the grant of an absolute discretion to grant or refuse a certificate of incorporation, but his satisfaction or dissatisfaction must depend on the facts of the particular case. The first right of the applicant, under the Code, to be heard or complain, comes after the superintendent has completed all the duties imposed on him. Any aggrieved applicant is then afforded the right to bring the superintendent *Page 327 into court, by suit in the nature of mandamus. This is not to compel him to act, because he has already acted; not an appeal, because there has been no judgment of a tribunal from which an appeal can be taken. It is an original suit, the subject matter of which is the refusal of the certificate of charter in the circumstances of the particular case, as they actually exist, whether or not they were considered by the superintendent of banks. If on the trial of that suit the court, after hearing evidence, is of the opinion "that the facts and circumstances authorize and require the granting" of a certificate, the court renders judgment directing the superintendent to issue the permit; whereupon he must issue a certificate without further question. It is the court's opinion based on the facts and circumstances as made to appear by the evidence submitted at the trial that determines whether a certificate shall issue. The instant case is on demurrer to the petition. The court could well say that the application complied with requirements of the law, and that the allegations of fact in the petition as amended, if sustained by evidence submitted at the trial, would authorize and require the conclusion that the character and general fitness of the applicants are such as to command the confidence of the community in which the bank is to be located, that the public convenience and advantage will be promoted by establishment of the bank, and that such establishment as proposed is expedient and desirable. The allegations of such character are sufficient to state a cause of action for the relief sought, and it was erroneous to dismiss the action on general demurrer. The case does not come within the general rule as stated in the Code, § 64-102, inhibiting the issuing of the writ of mandamus "to a public officer who has an absolute discretion to act or not, unless there is a gross abuse of such discretion." The ruling inMcGinty v. Gormley, 181 Ga. 644 (2) (183 S.E. 804), relating to discretion of the superintendent of banks in the matter of closing insolvent banks, did not involve any such question as that presented in the instant case, and is not a precedent for a different ruling.
Judgment reversed. All the Justices concur. *Page 328