No. 13753
IN THE SUPREME COURT OF THE STATE OF MONTANA
WESTERN BANK OF BILLINGS,
Petitioner and Appellant,
THE MONTANA STATE BANKING BOARD and
the PROPOSED RIMROCK BANK OF BILLINGS,
Respondents and Respondents.
Appeal from: District Court of the First Judicial District,
Honorable Peter G. Meloy, Judge presiding.
Counsel of Record:
For Appellant:
Berger, Anderson, Sinclair & Murphy, Billings, Montana
Arnold Berger argued, Billings, Montana
For Respondents:
Crowley, Haughey, Hansen, Toole and Dietrich, Billings,
Iontana
George Dalthorp argued, Billings, Montana
James H. Wood argued, Helena, Montana
Submitted: September 19,1977
- Decided: NO'i ' 1 1971,
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Filed :
M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion
of t h e Court:
This i s an appeal from t h e judgment of t h e d i s t r i c t c o u r t ,
Lewis and Clark County, a f f i r m i n g t h e d e c i s i o n of t h e respondent
Montana S t a t e Banking Board (Board) g r a n t i n g a c e r t i f i c a t e
of a u t h o r i z a t i o n t o respondent Rimrock Bank of B i l l i n g s
(Rimrock) f o r a new bank i n B i l l i n g s , Montana. Appellant i s
t h e Western Bank of B i l l i n g s (Western), t h e n e a r e s t e x i s t i n g
bank t o Rimrock's l o c a t i o n and t h e only p r o t e s t a n t t o appear
a t t h e hearing.
I n e a r l y February 1976, an a p p l i c a t i o n was presented t o
t h e Board seeking a c e r t i f i c a t e of a u t h o r i z a t i o n t o organize a
new Montana bank t o be c a l l e d t h e Rimrock Bank of B i l l i n g s
and t o be l o c a t e d i n t h e western p a r t of B i l l i n g s . The a p p l i -
c a t i o n c o n s i s t e d of t h e b a s i c a p p l i c a t i o n form provided by
t h e Board and completed by t h e a p p l i c a n t , t o g e t h e r w i t h 11
exhibits attached thereto. When t h e a p p l i c a t i o n was received
by t h e Board, the a p p l i c a n t was n o t i f i e d of c e r t a i n delinquencies
therein. A f t e r c o r r e c t i o n t h e Board f i l e d t h e a p p l i c a t i o n and
scheduled a hearing thereon f o r March 29, 1976. The Board
gave n o t i c e of t h e hearing a s required by law t o a l l f i n a n c i a l
i n s t i t u t i o n s w i t h i n 100 miles of t h e l o c a t i o n of t h e proposed
bank. L e t t e r s of p r o t e s t were f i l e d by two o r t h r e e banks,
b u t only Western appeared i n opposition t o t h e a p p l i c a t i o n
a t t h e hearing. A t t h e time s e t f o r commencement of t h e h e a r i n g ,
Western f i l e d a motion t o deny t h e a p p l i c a t i o n a s i n s u f f i c i e n t
a s a m a t t e r of law, o r , i n t h e a l t e r n a t i v e , t o v a c a t e t h e hearing
and g r a n t t h e a p p l i c a n t 60 days t o cure t h e a l l e g e d d e f i c i e n c i e s
i n the application. The Board took t h e motion under advisement
and proceeded w i t h t h e h e a r i n g . Both motions were l a t e r denied.
The h e a r i n g l a s t e d f o r two and one-half days. Rimrock
and Western p r e s e n t e d documentary evidence a s w e l l a s o r a l
testimony. Both e x e r c i s e d t h e i r r i g h t s of cross-examination.
The Board allowed Western t o submit a d d i t i o n a l evidence i n
t h e form o f e x h i b i t s approximately one month a f t e r t h e h e a r i n g .
The Board i s s u e d an o r d e r g r a n t i n g Rimrock' s a p p l i c a t i o n
on August 3 , 1976. Western appealed from t h e o r d e r and t h e
d i s t r i c t c o u r t , Lewis and Clark County, a f f i r m e d t h e Board's
d e c i s i o n on January 3, 1977.
Findings of f a c t made by t h e Board and n o t challenged by
Western i n c l u d e t h e following background information :
Rimrock w i l l be l o c a t e d i n an a r e a which has experienced
r a p i d and s u b s t a n t i a l r e s i d e n t i a l and commercial growth over
t h e p a s t f i v e y e a r s and t h e evidence i n d i c a t e s t h a t continued
s i g n i f i c a n t growth i s l i k e l y i n t h e f u t u r e . The primary
s e r v i c e a r e a of t h e bank i n c r e a s e d i n population from about
20,000 i n 1970 t o over 25,000 i n 1975 and evidence i n d i c a t e s
t h e population i n t h e a r e a w i l l continue t o grow. In the f a l l
of 1975, t h e r e were approximately 254 b u s i n e s s e s i n t h e primary
s e r v i c e a r e a and by t h e time of t h e h e a r i n g i n March 1976,
t h a t number had i n c r e a s e d t o 293. The bank w i l l be loca ted n e a r
a r e g i o n a l shopping c e n t e r which opened on September 11, 1975,
c a l l e d t h e Rimrock Mall. A t t h e time of t h e h e a r i n g t h e r e were
50 b u s i n e s s e s i n o p e r a t i o n i n t h e Rimrock Mall and i t was pro-
j e c t e d t h a t w i t h i n one y e a r t h e r e would be approximately 50
a d d i t i o n a l b u s i n e s s e s and b u s i n e s s type o f f i c e s open i n t h e a r e a .
Gross s a l e s f o r b u s i n e s s e s i n t h e Rimrock Mall complex a r e
p r o j e c t e d t o be $24,000,000 f o r t h e y e a r 1976 and $32,000,000
f o r t h e year 1977. Evidence i n d i c a t e d t h a t f u t u r e development
i n t h e general a r e a of t h e Rimrock Mall i s l i k e l y . Rimrock
can reasonably be expected a t t h e end of t h e f i r s t f u l l t h r e e
years of operation t o have achieved a d e p o s i t volume of $5.5
m i l l i o n and t o show n e t operating earnings.
Western a s s i g n s nine i s s u e s f o r review which we c o n s o l i d a t e
into three principal issues:
1. Was Rimrock's a p p l i c a t i o n , a s f i l e d , s u f f i c i e n t t o
allow t h e Board t o proceed with t h e hearing?
2. Does t h e record contain s u f f i c i e n t evidence t o
support t h e conclusions of t h e Board and t h e d i s t r i c t c o u r t ?
3. Were t h e r e g u l a t i o n s under which t h e Board proceeded
l e g a l l y adopted?
The essence of t h e f i r s t i s s u e (encompassing Western's
f i r s t four b a s i c i s s u e s presented f o r review) i s whether
Rimrock's a p p l i c a t i o n a s f i l e d was s u f f i c i e n t t o allow t h e
Board t o proceed with t h e hearing. Western argues t h e a p p l i -
c a t i o n was t o t a l l y devoid of any "evidencpe t h a t e x i s t i n g banks
i n t h e a r e a were f a l l i n g s h o r t of o f f e r i n g adequate s e r v i c e s
t o a l l deserving bank customers i n t h e area" a s required by t h e
Montana Administrative Code (MAC) 8-3.22(6) -S1000(d), then
i n effect. Therefore, argues Western, the Board should not
have gone ahead w i t h t h e hearing and should n o t have issued t h e
c e r t i f i c a t e of a u t h o r i z a t i o n f o r t h e new bank.
Western's contention i s tantamount t o saying t h a t t h e
s l i g h t e s t d e f e c t i n t h e a p p l i c a t i o n a t t h e time of t h e adminis-
t r a t i v e hearing, deprives the Board of j u r i s d i c t i o n t o proceed
with t h e hearing. W have found no law and have been c i t e d
e
none g i v i n g any support t o t h a t premise. To t h e c o n t r a r y i s
Columbine S t a t e Bank v. Banking Board, Colo.App.1973, 505 P.
2d 391, where t h e c o u r t r a t h e r summarily d e a l t with a s i m i l a r
contention, holding t h a t t h e j u r i s d i c t i o n of t h e Board was
n o t l o s t by a f a i l u r e t o provide a l l required information i n
the application. See: Wyoming Bancorporation v. Bonham,
Wyo. 1974, 527 P.2d 432; American Farm Lines v. Black B a l l
F r e i g h t Service, 397 U.S. 332, 90 S.Ct. 1288, 25 L ed 2d 547.
The a p p l i c a t i o n contains a g r e a t d e a l of d e t a i l e d informa-
t i o n a s required by t h e r e g u l a t i o n s . I t had been accepted
by t h e Department of Business Regulations a s conforming t o
i t s requirements and thereupon f i l e d . Western concedes t h a t
t h e a p p l i c a t i o n complied with every s e c t i o n and subsection
of t h e r e g u l a t i o n s except one. Western remained s i l e n t a s t o
t h i s a l l e g e d d e f e c t u n t i l i t f i l e d i t s motion t o dismiss t h e
a p p l i c a t i o n or t o continue t h e hearing a t a time when t h e
Board, counsel f o r a l l p a r t i e s , numerous w i t n e s s e s , and t h e
r e p o r t e r were assembled i n Helena f o r t h e purpose of commencing
t h e hearing. Rimrock then o f f e r e d t o amend i t s a p p l i c a t i o n
t o remedy t h e a l l e g e d d e f e c t while maintaining t h e a p p l i c a t i o n
was s u f f i c i e n t . The Board took t h e motion under advisement and
proceeded with t h e hearing. A t t h e end of t h e h e a r i n g , Rimrock .
moved t o amend t h e a p p l i c a t i o n t o conform t o t h e evidence. The
Board took t h i s motion under advisement a l s o , and u l t i m a t e l y
denied a l l motions, r u l i n g t h a t t h e a p p l i c a t i o n was adequate
a s f i l e d and t h e r e f o r e no amendments were necessary.
Applications i n a d m i n i s t r a t i v e proceedings a r e roughly
analogous t o pleadings i n c i v i l a c t i o n s . Many a u t h o r i t i e s hold
t h a t t e c h n i c a l r u l e s of pleadings such a s sometimes govern c i v i l
o r c r i m i n a l a c t i o n s a r e n o t a p p l i c a b l e t o pleading o r a p p l i c a -
t i o n s f i l e d with a d m i n i s t r a t i v e agencies. See: Community of
Woodston v. S t a t e Corporation Commission, 186 Kan. 747,
353 P.2d 206 (1960). P r o f e s s o r Davis i n h i s w r i t i n g s on
a d m i n i s t r a t i v e law emphasizes t h e unimportance of p l e a d i n g i n
t h e a d m i n i s t r a t i v e process and s t a t e s t h a t t h e important
t h i n g i s t h a t t h e p a r t i e s a f f e c t e d by o r d e r s of an adminis-
t r a t i v e body be f u l l y heard. Davis, A d m i n i s t r a t i v e Law T e x t ,
3rd Ed. 1972, 58.02, pp. 196,197. See Also: 2 Am J u r 2d
A d m i n i s t r a t i v e Law, 5 5 370,371, pp. 179,180.
Should t h e pleadings i n an a d m i n i s t r a t i v e proceeding be
construed by s t r i c t e r s t a n d a r d s than pleadings i n c i v i l liti-
gation? Rule 8 ( f ) , Montana Rules of C i v i l Procedure, provides:
" A l l pleadings s h a l l be s o construed a s t o do
substantial justice ."
W hold t h a t pleadings and a p p l i c a t i o n s i n an a d m i n i s t r a t i v e
e
m a t t e r should a l s o be construed a s t o do s u b s t a n t i a l j u s t i c e .
Assuming, f o r t h e moment, t h a t t h e a p p l i c a t i o n f a i l e d t o
c o n t a i n evidence on one s p e c i f i c p o i n t , t h a t e x i s t i n g banks
i n t h e a r e a were f a l l i n g s h o r t of providing adequate s e r v i c e s ,
a s a l l e g e d by Western, i t i s a p p r o p r i a t e t o i n q u i r e a s t o
whether s u b s t a n t i a l r i g h t s of Western were p r e j u d i c e d thereby.
!
S e c t i o n 82-4216(7), R.C.M. 1947. I n M a r t e l l o v . Darlow and
Lovely, 151 Mont. 232, 236, 441 P.2d 175 (1968), i t i s s t a t e d :
"* * * On a p p e a l , p r e j u d i c e i s never presumed b u t
i t must a f f i r m a t i v e l y appear t h a t t h e e r r o r h a s
a f f e c t e d a s u b s t a n t i a l r i g h t of t h e p a r t y on t h e
m e r i t s of t h e c a s e . (Conway v. Fabian, 108 Mont.
287, 89 P.2d 1022.)"
Western contends i t was denied r i g h t s of d i s c o v e r y by
reason of t h e f a i l u r e of t h e a p p l i c a t i o n t o c o n t a i n any evidence
on t h e p o i n t . Western d i d n o t , however, a t any s t a g e of t h e
proceedings p o i n t out how f u r t h e r d i s c o v e r y would have a s s i s t e d
i t i n r e b u t t i n g adverse evidence p r e s e n t e d a t t h e h e a r i n g . More-
over t h e evidence most damaging t o Western on t h e q u e s t i o n of
t h e adequacy of i t s s e r v i c e s was t h e testimony of i t s own
p r e s i d e n t , Lawrence F. Walton. Western has never suggested
t o t h e Board o r t o t h e c o u r t s what f u r t h e r evidence i t could
have o r would have presented on t h i s i s s u e . W note t h a t
e
subsequent t o t h e hearing, Western asked and was granted t h e
r i g h t t o submit a d d i t i o n a l evidence on another p o i n t , b u t
o f f e r e d no new evidence on t h i s i s s u e . W f a i l t o s e e where
e
Western has been prejudiced, even i f t h e a p p l i c a t i o n omitted
evidence on t h e one point a s a l l e g e d .
W hold t h e a p p l i c a t i o n was s u f f i c i e n t t o give t h e
e
Board j u r i s d i c t i o n t o proceed with t h e hearing.
The Board and t h e d i s t r i c t c o u r t found t h a t t h e a p p l i c a -
t i o n a s f i l e d s a t i s f i e d t h e requirements of the r e g u l a t i o n s .
While i t i s n o t necessary t o t h i s d e c i s i o n i n view of our
holdings above, we w i l l d i s c u s s t h i s i s s u e .
Section 5-6U, R.C.M. 1947, p r e s c r i b e s t h e s t a t u t o r y
minimum standards under which an a p p l i c a t i o n f o r a new bank
i s t o be determined and r e q u i r e s t h e Board t o adopt a p p r o p r i a t e
r u l e s t o t h a t end. Section 5-611, provides:
"Rules adopted by board--new banks. The board
s h a l l adopt r u l e s necessary f o r t h e a d m i n i s t r a t i o n
of t h i s a c t i n accordance with t h e Montana Adminis-
t r a t i v e Procedure Act [82-4201 t o 82-42251.
"In p a r t i c u l a r , t h e board s h a l l adopt r u l e s con-
cerning t h e a u t h o r i z a t i o n of new banks. Such r u l e s
s h a l l contain minimum standards under which an
a p p l i c a t i o n f o r a new bank s h a l l be determined i n -
cluding the following:
"(1) a persuasive showing t h a t t h e r e i s a reason-
a b l e public n e c e s s i t y and demand f o r a new bank a t
t h e proposed l o c a t i o n ;
(2) t h a t t h e bank w i l l be owned and managed
by persons of good moral c h a r a c t e r and f i n a n c i a l
i n t e g r i t y , and w i l l be s a f e l y and soundly operated;
"(3) a persuasive showing t h a t t h e new bank w i l l
have a s u f f i c i e n t volume of business t o a s s u r e
solvency and t h a t establishment of t h e new bank w i l l
be i n t h e p u b l i c i n t e r e s t . " ,
Pursuant t o t h e s t a t u t o r y mandate, t h e Board adopted
r u l e s s e t t i n g f o r t h a number of requirements f o r a p p l i c a t i o n s
including t h e s p e c i f i c a t i o n t h a t it contain " (c) evidence
demonstrating a persuasive showing of public n e c e s s i t y and
demand a s required by Rule 8-3.22(6)-S1OOOtl. MAC J 8-3.22(2)-
P2230. Rule 8-3.22(6)-S1000 provided i n p a r t :
"8-3.22(6)-SlOOO PERSUASIVE S O I G O REASONABLE
H WN F
PUBLIC NECESSITY AND DEMAND.
"(1) The a p p l i c a n t s f o r a u t h o r i t y t o organize a
new bank must present t o t h e Board e x h i b i t s , research
d a t a , and d e t a i l e d p r o j e c t i o n s t o make a persuasive
showing t h a t t h e r e i s a reasonable n e c e s s i t y and
demand f o r a new bank a t t h e proposed l o c a t i o n . Such
information s h a l l include b u t n o t be l i m i t e d t o :
"(d) Evidence t h a t e x i s t i n g banks i n t h e a r e a
a r e f a l l i n g s h o r t of o f f e r i n g adequate
s e r v i c e s t o a l l deserving bank customers
i n t h e area."
Rule 8-3.22(6)-S1000 appears t o r e q u i r e t h a t evidence
be contained i n t h e a p p l i c a t i o n i t s e l f . The s t a t u t e , s e c t i o n
5.611, contains no such requirement, s t a t i n g only t h a t t h e
Board should adopt r u l e s containing "minimum standards under
which an a p p l i c a t i o n f o r a new bank s h a l l be determined''.
This tends t o i n f e r t h a t such evidence i f presented a t a hearing
r a t h e r than i n t h e a p p l i c a t i o n i t s e l f would be s u f f i c i e n t . The
r e g u l a t i o n l i s t i n g t h e s p e c i f i c i t e m s (S1000) s t a t e s merely
t h a t t h e a p p l i c a n t must present t h e s p e c i f i c information t o
t h e Board without specifying t h a t i t be i n t h e a p p l i c a t i o n
itself. Rimrock suggests t h e Board may not have intended t o
r e q u i r e t h a t t h e evidence i t s e l f be contained i n t h e a p p l i c a t i o n ,
and i f i t d i d , t h e r e g u l a t i o n was beyond t h e s t a t u t o r y a u t h o r i t y
therefor. I n view of our conclusions, i t i s unnecessary t o
determine t h e s e i s s u e s .
Rimrock contends t h a t t h e a p p l i c a t i o n does, indeed,
contain evidence which by inference tends t o show tha't
e x i s t i n g banks i n t h e a r e a , p a r t i c u l a r l y Western, were
f a l l i n g s h o r t of o f f e r i n g adequate s e r v i c e t o a l l deserving
bank customers. W take note of the b a s i c a p p l i c a t i o n which
e
c o n t a i n s a p r o j e c t i o n of t h e volume of business Rimrock might
expect a t t h e end of i t s f i r s t t h r e e years i n business and
t h e e x h i b i t a t t a c h e d t o t h e a p p l i c a t i o n , which i s an economic
f e a s i b i l i t y study prepared by Rimrock's e x p e r t , Dean C .
Coddington, of t h e research firm of B i c k e r t , Browne, Codding-
ton & Associates, I n c . of Denver, Colorado. W summarize
e
Rimrock's arguments on t h i s i s s u e :
1. The a p p l i c a t i o n s t a t e s t h a t Western i s t h e only
commercial bank i n t h e proposed i n s t i t u t i o n ' s primary s e r v i c e
a r e a containing about 25,000 people. The f e a s i b i l i t y study
s t a t e s t h a t Western had n o t grown r a p i d l y and had a low r a t e
of market p e n e t r a t i o n i n i t s a r e a . From t h e s e f a c t s t h e
deduction follows t h a t Western i s f a l l i n g s h o r t of o f f e r i n g
adequate s e r v i c e s t o a l l deserving customers i n t h e a r e a .
I n o t h e r words, i f Western were o f f e r i n g adequate s e r v i c e s t o
a l l deserving customers, i t would have had a g r e a t e r market
p e n e t r a t i o n and would have grown considerably f a s t e r .
2. The f a c t t h a t Western i s t h e only commercial bank
i n an a r e a containing some 25,000 people shows a l a c k of l o c a l
a r e a competition f o r t h e bank. Lack of competition may n o t
be conducfiPe t o good banking s e r v i c e s , and t h a t combined with
t h e slow growth r a t e tends t o i n d i c a t e a f a i l u r e t o o f f e r
s e r v i c e s which t h e g r e a t majority of banking customers i n t h e
a r e a considers adequate, o r a t l e a s t a t t r a c t i v e enough t o
motivate them t o bank t h e r e .
3. The f e a s i b i l i t y study contains t h i s comment:
"Western Bank of B i l l i n g s i s t h e only commercial
bank i n t h e proposed i n s t i t u t i o n ' s primary s e r v i c e
a r e a . Western Bank opened i n 1970 and, with $5.5
m i l l i o n i n September 1975 d e p o s i t s , t h i s bank has
n o t grown r a p i d l y . This i s p a r t i a l l y a t t r i b u t a b l e
t o c a p i t a l i z a t i o n problems p r i o r t o opening, owner-
s h i p changes, and a r e l a t i v e l y u n a t t r a c t i v e banking
facility * * *."
A t t h e hearing evidence was presented through Western's
witnesses of continuing c a p i t a l i z a t i o n problems r e s u l t i n g
i n Western's i n a b i l i t y t o ameliorate i t s d r i v e - i n problems,
enlarge i t s parking l o t , and maintain an adequate supply
of s a f e t y d e p o s i t boxes because of t h e s t a t u t o r y l i m i t on
c a p i t a l investment i n r a t i o t o t h e bank's c a p i t a l s t r u c t u r e .
Evidence a t t h e hearing a l s o i l l u s t r a t e d how ownership changes
of Western r e s u l t e d i n an unfavorable a t t i t u d e i n t h e
community, discouraging deserving customers i n t h e a r e a from
using t h e bank.
4. The a p p l i c a t i o n p r o j e c t s t h a t w i t h i n t h r e e years
Rimrock would have d e p o s i t s of $5.5 m i l l i o n and would have
n e t p r o f i t s i n t h e t h i r d year of operation. This p r o j e c t e d
success tends t o i n d i c a t e t h a t o t h e r banks may n o t be o f f e r i n g
adequate s e r v i c e s t o a l l deserving customers o r a new bank
would n o t be s o popular.
5. The a p p l i c a t i o n shows t h a t t h e n e a r e s t downtown
B i l l i n g s bank i s n e a r l y f o u r miles through c i t y s t r e e t s from
~ i m r o c k ' sl o c a t i o n . The o t h e r banks a r e t h e r e f o r e not i n a
l o c a t i o n adequate t o serve a l l deserving bank customers i n
the a r e a . Testimony a t t h e hearing i l l u s t r a t e d how important
i t i s f o r small businessmen and some housewives t o have banking
f a c i l i t i e s i n a convenient l o c a t i o n .
Without weighing t h e m e r i t s of any p a r t i c u l a r one of
t h e s e p o i n t s , we hold t h e Board and t h e d i s t r i c t c o u r t were
not in e r r o r i n finding t h a t the application as f i l e d s a t i s -
f i e d t h e requirements of t h e r e g u l a t i o n s .
The second p r i n c i p a l i s s u e presented f o r review r e l a t e s
t o whether t h e record contains s u f f i c i e n t evidence t o support
t h e conclusion of t h e Board and t h e d i s t r i c t c o u r t .
Section 82-4216, R.C.M. 1947, provides f o r j u d i c i a l
review of agency a c t i o n and so f a r a s i t r e l a t e s t o t h e s u f f i -
ciency of t h e evidence provides:
"(7) The c o u r t s h a l l not s u b s t i t u t e i t s judgment
f o r t h a t of t h e agency a s t o t h e weight of t h e
evidence on questions of f a c t . *** The c o u r t
may reverse o r modify the d e c i s i o n i f s u b s t a n t i a l
r i g h t s of t h e a p p e l l a n t have been prejudiced because
t h e a d m i n i s t r a t i v e f i n d i n g s , i n f e r e n c e s , conclu-
sions o r decisions are:
" ( e ) c l e a r l y erroneous i n view of t h e r e l i a b l e ,
probative and s u b s t a n t i a l evidence on the' whole
record ** *.Ir
This Court has repeatedly held t h a t i t s function on appeal
i s t o determine whether t h e r e i s s u b s t a n t i a l evidence i n
t h e record t o support t h e judgment. Strong v. Williams,
154 Mont. 65, 460 P.2d 90 (1969).
Western makes no general challenge t o t h e s u f f i c i e n c y of
t h e evidence t o f u l f i l l t h e minimum s t a t u t o r y standards con-
t a i n e d i n s e c t i o n 5-611, under which an a p p l i c a t i o n f o r a
new bank i s t o be determined. It does challenge t h e s u f f i c i e n c y
of t h e evidence presented, even a t t h e h e a r i n g , t o i n d i c a t e
t h e inadequacy of s e r v i c e s t o t h e a r e a of o t h e r banks. However
t h e testimony of Western's p r e s i d e n t , without more, i s s u f f i -
c i e n t a s t o i t s own d e f i c i e n c i e s i n s e r v i c e . With r e s p e c t
t o o t h e r banks, t h e testimony a s t o t h e d i s t a n c e s involved and
t h e d i f f i c u l t i e s i n reaching them through c i t y t r a f f i c
c o n s t i t u t e s s u b s t a n t i a l evidence. W f i n d no merit i n
e
Western's contentions a s t o t h e s u f f i c i e n c y of evidence.
Western a l s o objected t o t h e testimony of Rimrock's
e x p e r t w i t n e s s , Dean C. Coddington, and t o t h e a d m i s s i b i l i t y
of t h e f e a s i b i l i t y study prepared by him. W note t h a t
e
Western concedes t h a t M r . Coddington was e d u c a t i o n a l l y and
p r o f e s s i o n a l l y q u a l i f i e d t o conduct a f e a s i b i l i t y study and
t o express an opinion thereon, b u t contends t h a t some of t h e
f a c t s upon which he based h i s opinion were inaccurate o r
inadequate. W conclude t h a t whatever merit any p a r t i c u l a r
e
p o i n t of a t t a c k may have, t h e a t t a c k s go t o t h e weight of
t h e evidence r a t h e r than t o t h e a d m i s s i b i l i t y of e i t h e r t h e
testimony o r t h e study. W a l s o note t h a t t h e record c o n t a i n s
e
a g r e a t d e a l of evidence from o t h e r witnesses which tends t o
corroborate t h e f a c t u a l b a s i s f o r M r . Coddington's testimony.
W f i n d t h e evidence presented amply f u l f i l l s each and
e
every one of t h e s t a t u t o r y and r e g u l a t o r y requirements f o r
a new bank.
The t h i r d p r i n c i p a l i s s u e on appeal concerns Western's
challenge t o t h e l e g a l i t y of t h e r e g u l a t i o n s under which t h e
Board proceeded on t h e grounds they were adopted without a
hearing, a n d , t h e r e f o r e , Western contends t h e Board d i d n o t
have j u r i s d i c t i o n t o e n t e r t a i n t h e a p p l i c a t i o n of Rimrock o r
any o t h e r proposed bank. The circumstances were t h a t a f t e r
t h e Board published n o t i c e of i t s i n t e n t t o adopt MAC Rule
8-3.22(6)-S1000 i n 1973, it received a p e t i t i o n requesting
a public hearing on t h e proposed r u l e s . Section 82-4204,
R.C.M. 1947, provides i n p e r t i n e n t p a r t :
" P r i o r t o t h e adoption, amendment o r r e p e a l of
any r u l e , t h e agency s h a l l :
" ( a ) Give w r i t t e n n o t i c e of i t s intended a c t i o n .
* * *,
(b) Afford i n t e r e s t e d persons fourteen (14)
I'
days t o submit d a t a , views o r arguments, o r a l l y
o r i n w r i t i n g . I n the c a s e of s u b s t a n t i v e
r u l e s , opportunity f o r o r a l hearing s h a l l be
granted i f requested by e i t h e r t e n per c e n t
(10%) o r twenty-five (25) of t h e persons who
w i l l be d i r e c t l y a f f e c t e d by t h e proposed
rule ** *.I'
The p e t i t i o n requesting t h e hearing contained 27
s i g n a t u r e s without any r e c i t a t i o n t h a t any of t h e persons
signing would be d i r e c t l y a f f e c t e d by t h e proposed r u l e .
I n v e s t i g a t i o n by t h e Board revealed t h a t 16 of t h e s i g n a t o r i e s
were connected with t h e F i r s t C i t i z e n s Bank of B i l l i n g s and
i t was undetermined what i n t e r e s t s , i f any, the remaining
s i g n a t o r i e s had i n t h e proposed r u l e s . The Board t h e r e f o r e
r e j e c t e d t h e form on t h e grounds t h a t i t was n o t a q u a l i f i e d
p e t i t i o n and so n o t i f i e d t h e p r e s i d e n t of t h e F i r s t C i t i z e n s
Bank, one of t h e s i g n e r s . In h i s l e t t e r t o the president,
t h e D i r e c t o r of t h e Department of Business Regulations explained
i n d e t a i l t h e Board's reasons f o r adopting the proposed r u l e .
Nothing f u r t h e r was heard from t h e s i g n e r s , and t h e r u l e was
adopted. I t went unchallenged by anyone u n t i l Western r a i s e d
t h e i s s u e i n t h i s case on appeal t o t h e d i s t r i c t c o u r t t h r e e
years l a t e r .
I n our opinion, t h e r e i s no m e r i t t o w e s t e r n ' s challenge
t o t h e v a l i d i t y of t h e r u l e making process. I n any event,
t h i s i s s u e was r a i s e d f o r t h e f i r s t time on appeal from t h e
administrative action. Section 82-4216(1), R.C.M. 1947,
p r o h i b i t s t h e r a i s i n g on appeal of any question n o t r a i s e d
before t h e a d m i n i s t r a t i v e agency except t h e v a l i d i t y of t h e
s t a t u t e under which t h e agency i s proceeding, unless i t i s
shown t o t h e s a t i s f a c t i o n of t h e Court t h a t t h e r e was good
cause f o r f a i l u r e t o r a i s e t h e question before t h e a d m i n i s t r a t i v e
agency. Good cause was not shown here.
The order of t h e d i s t r i c t c o u r t i s affirmed.
W Concur:
e
. C
Chief J u s t i c e I
Justices .
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