(dissenting). The Colonial Savings and Loan Association of Roselle Park has contracted to purchase the assets of the Excelsior Building and Loan Association of Elizabeth. Performance is conditioned upon the approval of the Commissioner of Banking and Insurance of the establishment of a branch office by Colonial in Elizabeth in an entirely different area of that city than where the Excelsior office has been doing business for 25 years. Colonial applied to the Commissioner for approval pursuant to N. J. S. A. 17:12A-21, subd. B which provides:
“Notwithstanding any of the other provisions or limitations of this section, any association into which another association has been merged or which has acquired, by purchase, reorganization, or in any other manner, all or a substantial portion of the assets of another association, may, with the permission of the commissioner, and under such terms and conditions as he may prescribe, maintain the office previously maintained by such other association, or a suitable substitute therefor, as a branch office; provided, however, that the commissioner shall first determine that the maintenance of such branch is in the public interest and will be of benefit to the\ area served by such branch and to the members of the association.” (Emphasis supplied.)
I deem it unnecessary to determine whether the competing institutions are entitled to a full hearing as the majority holds, for as I view the facts of the instant case and the applicable law, the Commissioner has no statutory authority to grant Colonial's application for a branch office at a location completely divorced from the immediate area where the Excelsior office is presently maintained in Elizabeth.
In all situations where a hearing is expressly required (which would exclude subsection B) the Commissioner is obliged to determine, as a condition precedent to the approval of the application, that the proposed office “will not result in undue injury to any other association or Federal associa*510tion in the area” where it is proposed to locate the office. This finding must precede the approval of (1) a new savings and loan association (N. J. S. A. 17:124-16.1); (2) the independent establishment of a branch office in the same municipality as the principal office is located (N. J. S. A. 17:124-21, subd. 4); (3) the independent establishment of a branch office in another municipality of the same county wherein the principal office is located (N. J. S. A. 17:124-21, subd 4) (in this situation a branch may not be established where a principal or branch office of another association is already operating in the municipality, but offices outside the municipality and not more than five miles distant from the situs of the proposed branch are recognized as parties in interest); (4) where a principal office is removed from one municipality to another (N. J. S. A. 17:124-24); (5) where a branch office is moved from one location to another (N. J. S. A. 17:12A-21, subd. 0) (subsection C incorporates the procedural aiid substantive requirements of subsection A).
Significantly, subsection B omits the required finding of an absence of “undue injury” and only requires “that the commissioner shall first determine that the maintenance of such branch is in the public interest and will be of benefit to the area served by such branch and to the members of the association.”
Geographic location within the municipality is a major factor in the competitive combat between savings and loan associations. Practical proof of this observation is found in the instant case where Colonial seeks a more strategic competitive situs, nearly a mile from the location of Excelsior’s present headquarters. Statutory cognizance of this significant factor is evidenced by the agency determination of absence of “undue injury” to other associations in the area which is required in all instances of new offices established or old offices relocated, except under subsection B and also where a principal office is relocated within the same municipality (N. J. S. A. 17:124-24). Where a finding of “undue injury” is required to be made it clearly anticipates *511that other associations maintaining offices in the immediate area are to be recognized as parties in interest.
There was a calculated intention on the part of the Legislature in omitting this required finding in subsection B. That section permits an association which merges with or acquires the assets of another to “maintain the office previously maintained by such other association, or a suitable substitute therefor, as a branch office,” upon approval of the Commissioner. The meaning of the omission is appreciated if it once be acknowledged that subsection B anticipates a branch office conducted at the same locational situs as the previous office, and “suitable substitute” connotes no more than a branch office in the same immediate area as the office formerly maintained. If so construed it is clear that competitive associations have no recognized interest in the operation of a branch office in the same immediate area where another office was formerly maintained. The status quo cmte is unchanged.
The legislative history of the treatment accorded branch offices bears out the restrictive interpretation advanced. The initial statutory treatment (accorded generally to savings and loan associations) was merely “An act to encourage the establishment of mutual loan and building associations,” enacted February 28, 1849 (Laws of 1849, p. 227). By 1903 the need for comprehensive regulatory legislation (Warren, New Jersey Building and Loan History, Records —1936) resulted in L. 1903, c. 218. Section 16 of that enactment prohibited the establishment of branch offices. The prohibition was continued in 1925 by a further comprehensive enactment which displaced the 1903 legislation. L. 1925, c. 65, sec. 17. Indeed, not until 1952 was the prohibition against the independent establishment of branch offices removed, L. 1952, c. 204, sec. 1, and even then it was strictly circumscribed. N. J. S. A. 17:12A~21, subd. A.
The first merger provision (which would be the statutory antecedent of the present subsection B, N. J. S. A. 17:12A-21, subd. B) appears in L. 1932, c. 94, sec. 1, and this provided that a branch office might be conducted for a period “not to exceed two years” “in the place or places in which the affairs *512of such merging or consolidating association * * * has been conducted.” The Commissioner’s approval was required. By L. 1942, c. 163, sec. 1, the time limitation was removed, but there is no persuading indication that the branch office arising from the merger might be located other than where the affairs of the former association had been conducted. The descriptive phrase “suitable substitute” first appeared in L. 1946, c. 56, sec. 21, and by the parity of reasoning advanced heretofore it cannot be persuasively contended that this phrase contemplates the relocation into an entirely new area which Colonial seeks here.
The legislative policy is clear. Branch offices are not to be established at random. The aim is to hit the evil at its source and the legislative endeavor must be construed in this light. Lynch v. Borough of Edgewater, 8 N. J. 279, 286 (1951). And once the purpose and design is recognized the statute should not be construed to permit a subversion of the policy, Grogan v. DeSapio, 11 N. J. 308, 322 (1953), either directly or indirectly. In the instant situation Excelsior was selling out. It had no intention whatever of changing its principal office to a new area of the city to continue or enlarge its operation. There was no apparent justification in view of the small size of the association for it to incur obligations of considerably enlarged rental charges incident to the central business portion of the city, and furnishings and embellishments of quarters appropriate thereto for full-time operation. The contract of purchase itself provided that if the purchaser Colonial so directed, Excelsior was to cause a transfer of its principal office to a location selected by Colonial. Thereafter Excelsior would pass out of existence; Colonial would have a branch office.
I would reverse the agency determination and direct a dismissal of the application.
For remandment — Chief Justice Vanderbilt, and Justices Oliphant, Jacobs and Weintraub — 4.
For affirmance- — Justices Heher and Wachenfeld — 2.
For reversal — Justice Burling — 1.