Petitioner in No.19, a national bank in Florida, having been
granted permission by the Comptroller of the Currency of the United
States, operated two off-premises services. (1) The bank operated
an armored car (a "mobile drive-in"), equipped with a glass window
and customer's service counter and staffed by a driver-guard and
teller (both bank employees). The armored car delivered cash in
exchange for checks and received cash and checks at the depositors'
premises, the bank insuring the funds during transit. (2) In a
shopping center about a mile from the home premises, the bank
maintained a secured receptacle, to which customers had keys,
equipped with a writing table and bank forms. Monies and night bags
were left at this facility, which was serviced daily by the armored
car, the teller recording deposits by the customer's number and the
driver-guard verifying all items collected by the teller. For these
off-premises services, the bank used a "Comprehensive Dual Control
Contract" and transmittal slips which specified that, in
transporting funds, the bank acted as agent for the customer, and
that funds would not be deemed deposited until delivered at the
bank. Under § 7 of the McFadden Act, a national bank may establish
and operate a "branch" only under such conditions as state law
would authorize a state bank to establish and operate such a
branch. The Florida Comptroller requested petitioner bank to cease
both services as violative of Florida law, which prohibits branch
banking altogether. Thereupon, the bank brought suit in the
District Court for declaratory and injunctive relief. The United
States Comptroller intervened on the bank's side, and several state
banks intervened in support of the Florida Comptroller. The
District
Page 396 U. S. 123
Court held for petitioners, concluding that the services did not
constitute branching within the meaning of § 7(f) of the McFadden
Act, which, as set forth in 12 U.S.C. § 36(f), defines a "branch"
as including
"any branch bank, branch office, branch agency, additional
office, or any branch place of business . . . at which deposits are
received, or checks paid, or money lent."
The Court of Appeals reversed.
Held:
1. The policy of "competitive equality" between national and
state banks is firmly embedded in the statutes governing the
national banking system, and, under the McFadden Act, a national
bank may establish a "branch" within the meaning of the federal
definition in 12 U.S.C. § 36(f) only under the same conditions as
state law would authorize a state bank to do so,
First National
Bank of Logan v. Walker Bank & Trust Co., 385 U.
S. 252. Pp.
396 U. S.
130-133.
2. The term "branch bank" in 12 U.S.C. § 36(f) includes any
place for receiving deposits apart from the chartered premises.
Here (regardless of the formal arrangements between the bank and
its contracting customers), at the time a customer delivers money
either to the armored car or the stationary receptacle, the bank
has received a deposit within the meaning of that provision, and
the place of the delivery is an "additional office or . . . branch
place of business . . . at which deposits are received" within the
federal definition of a branch bank in the statute. Pp.
396 U. S.
134-137.
3. Since Florida does not permit branching privileges to state
banks, the congressional policy of competitive equality forecloses
the Comptroller of the Currency from modifying that standard. P.
396 U. S.
138.
400 F.2d 548, affirmed.
Page 396 U. S. 124
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
In these cases, we are called upon to construe § 7 of the
McFadden Act of 1927, 44 Stat. 1228, as amended, 12 U.S.C. § 36, as
it relates to the definition of a branch bank for the purpose of
determining the scope of branch banking available to a national
bank in a State that prohibits branches for state banks.
12 U.S.C. § 36(f) provides in pertinent part:
"(f) The term 'branch' as used in this section shall be held to
include any branch bank, branch office, branch agency, additional
office, or any branch place of business . . . at which deposits are
received, or checks paid, or money lent."
Florida prohibits all branch banking by state chartered banks;
by statute, a Florida bank may "have only one place of doing
business," and all the business of the
Page 396 U. S. 125
bank is to be carried on at that place, "and not elsewhere."
[
Footnote 1] The issue must be
resolved by determining what constitutes a "branch" or "additional
office"; there is a threshold question of the extent to which this
is governed by federal law.
The First National Bank in Plant City, Florida, is a national
banking association organized and operated pursuant to the National
Bank Act, 12 U.S.C. § 21
et seq.; it sought and received
from the United States Comptroller of the Currency permission to
operate two services for the convenience of customers; one was an
armored car messenger service and the other an off-premises
receptacle for the receipt of packages containing
Page 396 U. S. 126
cash or checks for deposit. The Comptroller's letter authorizing
the armored car messenger service relied upon paragraph 7490 of the
Comptroller's Manual for National Banks, [
Footnote 2] a relatively recent ruling which
specifically authorizes such a service. A second letter authorizing
construction of an off-premises receptacle authorized such a
service "as an incident to" the bank's ordinary business. Both
letters contained explicit instructions to First National designed
to insure that deposits so received would not become bank
liabilities until actually in the hands of the bank teller at the
chartered office or regular "banking house", and that checks cashed
for customers would be deemed paid at the bank when the cash was
handed to the messenger, not when the cash was delivered to the
customer by the armored car teller.
Relying on these letters, First National offered an armored car
service and a secured receptacle for receipt of monies intended as
deposits. The bank advertised "Full Service Banking at your
doorstep . . ." and a "mobile drive-in . . . where customers may be
served. . . ." A more detailed examination of the services shows
that customers having an account with First National could, upon
signing a "Comprehensive
Page 396 U. S. 127
Dual Control Contract," [
Footnote 3] arrange to have the armored car call at their
place of business to pick up cash and checks for deposit, or to
bring cash to them in exchange for checks delivered to the armored
car teller. The contract provided that, in each situation, the
bank's armored car messenger would be the agent of the customer.
Additionally, proffered deposits were accompanied by a transmittal
slip upon which the customer itemized the funds being deposited in
the same manner as with deposits made at the chartered office of
the bank. The transmittal slip contained a "Contract" which
provided that, in this off-premises transaction, the bank was the
agent of the customer, and that
"the transmittal of said currency, coin and checks, shall not be
deemed to be a deposit until delivered into the hands of the bank's
tellers at the said banking house. [
Footnote 4] Sums
Page 396 U. S. 128
of cash for transmission to the customer were accompanied by a
charge slip indicating that the customer's account had been charged
for the amount of the order."
The armored car was owned and controlled by the bank; the teller
and driver-guard in the car were bank employees. The bank paid the
cost of armored car operations and assumed complete responsibility
for the monies, checks, and deposits during transit by means of an
insurance policy bought and paid for by it to protect the customer
and the bank. The armored car service operated six days per week in
Plant City and the surrounding trade area in Hillsborough and Polk
Counties. The armored car had a plate glass window, a sliding
drawer, and a counter on one side where customers might be served.
The truck bore the name of the bank and had two-way radiophone
communication with the bank. All movements and routing of the
armored car were directed by the bank. First National handled about
$1,000,000 per week through the armored car.
The stationary off-premises receptacle for receipt of monies
intended for deposit was located in a shopping center one mile from
First National's banking house in a space leased by the bank. The
facility consisted of a secured receptacle for monies and night
bags, together
Page 396 U. S. 129
with a writing table supplied with envelopes and transmittal
slips identical to those used by the armored car messenger service.
The envelopes recited that the funds transported were accepted in
accordance with the contract printed on the transmittal slip. A
sign at the receptacle recited that the messenger who collected the
funds acted as agent for the customer, that funds would not be
deemed to have been deposited until delivered at the bank's
premises, and that insurance on the funds was provided by the bank.
Customers maintaining an account with the bank who had signed the
Comprehensive Dual Control Contract were issued a key to open the
off-premises depository to drop off the night pouches in the
receptacle. The armored car serviced the receptacle daily. The
armored car teller, upon making pickups of such night pouches,
promptly identified all monies and other items placed in the
depository and immediately recorded them by the depositor's number.
The driver-guard verified all items collected by the teller and
signed the written bank record identifying the monies obtained at
the stationary depository.
On September 28, 1966, the Comptroller of the State of Florida,
respondent herein, addressed a letter to First National advising it
that the proposed depository then under construction and the
provision of an armored car messenger service would each violate
the prohibition under Florida law against branch banking. The
letter requested that First National cease and desist all such
operations.
First National then sued in the United States District Court for
the Northern District of Florida seeking declaratory and injunctive
relief against respondent. The United States Comptroller intervened
as plaintiff on the side of First National; several state banks
intervened to support the Florida Comptroller. The District Court
granted judgment for petitioners, 274 F.Supp.
Page 396 U. S. 130
449 (D.C.N.D. Fla.1967). The Court of Appeals reversed, 400 F.2d
548 (C.A. 5th Cir.1968). We affirm the Court of Appeals.
Federal Statute and Policy
The conditions under which national banks may establish branches
are embodied in § 7 of the McFadden Act, 44 Stat. 1228, as amended,
codified in 12 U.S.C. § 36. One such condition is that a "branch"
may be established only when, where, and how state law would
authorize a state bank to establish and operate such a branch, 1
U.S.C. § 36(C). [
Footnote 5]
First National Bank of Logan v. Walker Bank & Trust
Co., 385 U. S. 252
(1966).
We have noted that the State of Florida permits no branch
banking under a statute providing that banks are to "have only one
place of doing business"; the business of the bank may be
transacted at that place "and not elsewhere." [
Footnote 6] The parties agree generally that the
McFadden Act permits national banks to branch if and only if the
host State would permit one of its own banks to branch; the Florida
Bank Comptroller insists that the State of Florida unequivocally
forbids off-premises banking
Page 396 U. S. 131
of any kind. Thus, the lines are clearly drawn; the question
presented is whether the activities of First National authorized by
the United States Comptroller are branch banking.
At the outset, we note that, while Congress has absolute
authority over national banks, the federal statute has incorporated
by reference the limitations which state law places on branch
banking activities by state banks. Congress has deliberately
settled upon a policy intended to foster "competitive equality."
Walker Bank, 385 U.S. at
385 U. S. 261.
State law has been utilized by Congress to provide certain
guidelines to implement its legislative policy.
We need not review the legislative history of the McFadden Act
and prior national bank legislation as it relates to this problem;
that task was performed by Mr. Justice Clark in
Walker Bank,
supra, where a unanimous Court noted that the McFadden Act was
a response to the competitive tensions inherent in a dual banking
structure where state and national banks coexist in the same area.
That Act reflects the congressional concern that neither system
have advantages over the other in the use of branch banking. A
House Report shows that, in 1926, there was congressional concern
to protect national banks from the unrestricted branch bank
competition of state banks:
"The present situation is intolerable to the national banking
system. The bill proposes the only practicable solution by stopping
the further extension of state-wide branch banking in the Federal
reserve system by State member banks and by permitting national
banks to have branches in those cities where State banks are
allowed to have them under State laws."
H.R.Rep. No. 83, 69th Cong., 1st Sess., 7 (1926).
Page 396 U. S. 132
The bill to which this report was addressed failed to pass in
the Senate. In tracing the legislative history of the bill which
passed the following year, this Court in
Walker Bank,
supra, observed:
"The intent of the Congress to leave the question of the
desirability of branch banking up to the States is indicated by the
fact that the Senate struck from the House bill the time
limitation, thus permitting a subsequent change in state law to
have a corresponding effect on the authority of national banks to
engage in branching. The Senate Report concluded that the Act
should permit 'national banks to have branches in those cities
where State banks are allowed to have them under State laws.'"
385 U.S. at
385 U. S. 258,
quoting from S.Rep. No 473, 69th Cong., 1st Sess., 14 (1926).
At the time of its enactment into law, Representative McFadden
stated that:
"As a result of the passage of this act, the national bank act
has been so amended that national banks are able to meet the needs
of modern industry and commerce and
competitive equality
has been established. . . ."
68 Cong.Rec. 5815 (1927). (Emphasis supplied.)
When the economic depression of the 1930's brought on widespread
bank failures, Congress responded by amending the McFadden Act with
the passage of the Banking Act of 1933, which further strengthened
the policy of competitive equality. Some Members argued that bank
failures were due to the undercapitalization of small rural banks
and sought to authorize national banks to engage in branch banking
without regard to state law; but that approach was rejected. As
finally passed, the Act was reported to the House by one of
Page 396 U. S. 133
the members of the Conference Committee, Representative Luce,
with this statement:
"In the controversy over the respective merits of what are known
as 'unit banking' and 'branch banking' . . . branch banking has
been steadily gaining in favor. It is not, however, here proposed
to give the advocates of branch banking any advantage.
We do
not go an inch beyond saying that the two ideas shall compete on
equal terms an only where the States make the competition possible
by letting their own institutions have branches."
385 U.S. at
385 U. S. 260,
quoting from 77 Cong.Rec. 5896 (1933). (Emphasis supplied.) The
policy of competitive equality is therefore firmly embedded in the
statutes governing the national banking system. The mechanism of
referring to state law is simply one designed to implement that
congressional intent and build into the federal statute a
self-executing provision to accommodate to changes in state
regulation.
We reject the contention made by
amicus curiae National
Association of Supervisors of State Banks to the effect that state
law definitions of what constitutes "branch banking" must control
the content of the federal definition of § 36(f). [
Footnote 7] Admittedly, state law comes into
play in deciding how, where, and when branch banks may be operated,
Walker Bank, supra, for, in § 36(c), Congress entrusted to
the States the regulation of branching as Congress then conceived
it. But to allow the States to define the content of the term
"branch" would make them the sole judges of their own powers.
Congress
Page 396 U. S. 134
did not intend such an improbable result, as appears from the
inclusion in § 36 of a general definition of "branch." On this
point, the language of the Court of Appeals perhaps overstated the
relation of state law to the problem, since the threshold question
is to be determined as a matter of federal law, having in mind the
congressional intent that so far as branch banking is concerned
"the two ideas shall compete on equal terms and only where the
States [allow] their own institutions [to] have branches." In
short, the definition of "branch" in § 36(f) must not be given a
restrictive meaning which would frustrate the congressional intent
this Court found to be plain in
Walker Bank, supra.
[
Footnote 8]
Federal Definition of Branch Bank
Against this background, we turn to the question whether the
off-premises business activities conducted by First National
amounted to "branch" banking within the meaning of the McFadden
Act. Since national banks are "necessarily subject to the paramount
authority of the United States,"
First National Bank in St.
Louis v. Missouri, 263 U. S. 640,
263 U. S. 656
(1924), we consult that part of the McFadden Act that defines the
term "branch." 12 U.S.C. § 36(f) provides:
"(f) The term 'branch' as used in this section shall be held to
include any branch bank, branch office, branch agency, additional
office, or any branch place of business . . . at which deposits are
received, or checks paid, or money lent. "
Page 396 U. S. 135
Although the definition may not be a model of precision, in part
due to its circular aspect, it defines the minimum content of the
term "branch"; by use of the word "include" the definition suggests
a calculated indefiniteness with respect to the outer limits of the
term. However, the term "branch bank," at the very least, includes
any place for receiving deposits or paying checks or lending money
apart from the chartered premises; it may include more. It should
be emphasized that, since § 36(f) is phrased in the disjunctive,
the offering of any one of the three services mentioned in that
definition will provide the basis for finding that "branch" banking
is taking place. Thus, not only the taking of deposits, but also
the paying of checks or the lending of money could equally well
provide the basis for such a finding. Although the District Court
briefly discussed the possibility that checks were being paid, we
confine ourselves to the question of whether deposits were
received. Specifically, we must resolve the question whether the
mobile armored car service and stationary deposit receptacle,
singly or together, fall within the ambit of that section. As to
the receiving of deposits, the functions of the two facilities are
essentially the same, hence they may be considered together.
First National and the Comptroller of the Currency urge that the
challenged activity does not amount to branch banking under §
36(f). First National relies heavily, if not, indeed, entirely,
upon carefully drawn contracts with its customers who use armored
car or deposit receptacle services. The bank urges that, "deposit"
being a word of art, the determination of when a deposit is made is
not a casual one, inasmuch as that determination fixes important
legal relationships of the parties.
The bank also urges that creation of a deposit being purely a
matter of intent, the issue is governed exclusively
Page 396 U. S. 136
by the private contract. Since these contracts must be
interpreted under state law, the argument runs, no "deposit" is
actually received as such until monies delivered to the armored car
or the receptacle are physically delivered into the hands of a bank
teller at the chartered premises. Until such time, the bank may
not, under the contracts, be held to account for the customer's
funds.
We have no difficulty accepting the bank's argument that the
debtor-creditor relationship is a creature of contract and that the
parties can agree that, until monies are physically delivered to
the bank, no deposit will be credited to the customer's account.
[
Footnote 9] We are satisfied,
however, that the contracts have no significant purpose other than
to remove the possibility that the monies received will become
"deposits" in the technical and legal sense until actually
delivered to the chartered premises of the bank.
We do not challenge the right of the contracting parties to fix
rights and risks as between themselves; nothing in the law
precludes the parties from agreeing, for example, that the bank
does not assume the status of bailee, with liability for loss of
money in transit. But while the contracting parties are free to
arrange their private rights and liabilities as they see fit, it
does not follow that private contractual arrangements, binding on
the parties under state law, determine the meaning of the language
or the reach of § 36(f).
Because the purpose of the statute is to maintain competitive
equality, it is relevant in construing "branch" to consider not
merely the contractual rights and liabilities created by the
transaction, but all those aspects of the transaction that might
give the bank an advantage
Page 396 U. S. 137
in its competition for customers. Unquestionably, a competitive
advantage accrues to a bank that provides the service of receiving
money for deposit at a place away from its main office; the
convenience to the customer is unrelated to whether the
relationship of debtor and creditor is established at the moment of
receipt or somewhat later.
We need not characterize the contracts as a sham or subterfuge
in order to conclude that the conduct of the parties and the nature
of their relations bring First National's challenged activities
within the federal definition of branch banking. Here, penetrating
the form of the contracts to the underlying substance of the
transaction, we are satisfied that, at the time a customer delivers
a sum of money either to the armored truck or the stationary
receptacle, the bank has, for all purposes contemplated by Congress
in § 36(f), received a deposit. The money is given and received for
deposit even though the parties have agreed that its technical
status as a "deposit" which may be drawn on is to remain inchoate
for the brief period of time it is in transit to the chartered bank
premises. The intended deposits are delivered and received as part
of a large-scale continuing mode of conducting the banking business
designed to bring basic bank services to the customers.
Since the putative deposits are, in fact, "received" by a bank
facility apart from its chartered place of business, we are
compelled, in construing § 36(f), to view the place of delivery of
the customer's cash and checks accompanied by a deposit slip as an
"additional office, or . . . branch place of business . . . at
which deposits are received." [
Footnote 10]
Page 396 U. S. 138
Here we are confronted by a systematic attempt to secure for
national banks branching privileges which Florida denies to
competing state banks. The utility of the armored car service and
deposit receptacle are obvious; many States permit state chartered
banks to use this eminently sensible mode of operations, but
Florida's policy is not open to judicial review any more than is
the congressional policy of "competitive equality." Nor is the
congressional policy of competitive equality with its deference to
state standards open to modification by the Comptroller of the
Currency. [
Footnote 11]
Affirmed.
* Together with No. 34,
Camp, Comptroller of the Currency v.
Dickinson, Comptroller of Florida, et al., also on writ of
certiorari to the same court.
[
Footnote 1]
Florida Stat . § 659.06(1)(a) (1965) provides:
"659.06
Place of transaction business; school savings;
drive-in facilities. -- "
"(1)(a) Any bank or trust company shall have only one place of
doing business, which shall be located in the community specified
in its original articles of incorporation, and the business of the
bank or trust company shall be transacted at its banking house so
located in said community specified, and not elsewhere. . . ."
"
* * * *"
"(2) With the prior written approval of the commissioner a bank
may operate a drive-in facility or walk-up facility providing one
or more tellers to serve patrons in vehicles and on foot. It shall
not be necessary that such facility be a part of or physically
connected to the main banking room or building of the bank if the
facility is located on the property on which the main banking house
is situated or on property contiguous thereto. Property which is
separated from the property on which the main banking house is
situated only by a street, walkway or alleyway shall, for the
purposes of this subsection, be deemed contiguous to the property
on which the main banking house is situated."
"The operation of any drive-in or walk-up facility which is not
located on the property on which the main banking house is situated
or on property contiguous thereto shall constitute a violation of
subsection (1); provided, however, subsection (2) shall not apply
to any facilities existing on or prior to January 1, 1965."
[
Footnote 2]
Comptroller's Manual for National Banks � 7490.
"
Messenger Service"
"To meet the requirements of its customers, a national bank may
provide messenger service by means of an armored car or otherwise,
pursuant to an agreement wherein it is specified that the messenger
is the agent of the customer, rather than of the bank. Deposits
collected under this arrangement are not considered as having been
received by the bank until they are actually delivered to the
teller at the bank's premises. Similarly, a check is considered as
having been paid at the bank when the money is handed to the
messenger as agent for the customer."
[
Footnote 3]
"
Comprehensive Dual Control Contract"
"As agent for the undersigned depositor, The First National Bank
Messenger will transport monies of the depositor to and from the
banking house."
"Under the Comprehensive Dual Control Contract, all monies,
transported solely in padlocked money bags furnished by bank, shall
be opened only under the dual control of two bank's tellers. For
this purpose, bank will retain a pass key for depositor's bag(s); a
key for each bag will be furnished depositor. The depositor
expressly authorizes the service described and agrees to accept the
bank's count of monies as final."
"The First National Bank in Plant City maintains hazard
insurance covering holdup, employee fidelity, etc., for the benefit
of the depositor for all amounts delivered to bank's messenger for
delivery to bank and for all amounts requisitioned by depositor for
delivery from bank to depositor. Unless otherwise authorized in
writing, only the undersigned shall be permitted to receipt the
bank's messenger for monies delivered to depositor. . . ."
[
Footnote 4]
"
Contract"
"First National Bank, Plant City, Fla., as messenger and agent
for Principal named on front side hereof, agrees to transmit the
currency, coin and checks detailed on the front side hereof to the
bank's offices at 302 West Haines Street, Plant City, Fla., for
deposit to Principal's account. It is agreed and understood by
Principal and the bank that, in transmitting said currency, coin
and checks, the bank is acting solely as agent for said Principal
and that the transmittal of said currency, coin and checks, shall
not be deemed to be a deposit until delivered into the hands of the
bank's tellers at the said banking house."
"The bank maintains hazard insurance covering holdup, employee
fidelity, etc. for the protection of the Principal for all amounts
and items delivered to the bank's messenger by said Principal."
[
Footnote 5]
The National Bank Act, 44 Stat. 1228, 12 U.S.C. §§ 36(c)(1) and
(2) provides:
"(c) A national banking association may, with the approval of
the Comptroller of the Currency, establish and operate new
branches: (1) within the limits of the city, town or village in
which said association is situated, if such establishment and
operation are at the time expressly authorized to State banks by
the law of the State in question, and (2) at any point within the
State in which said association is situated, if such establishment
and operation are at the time authorized to State banks by the
statute law of the State in question by language specifically
granting such authority affirmatively and not merely by implication
or recognition, and subject to the restrictions as to location
imposed by the law of the State on State banks."
[
Footnote 6]
See n 1,
supra.
[
Footnote 7]
In their briefs before this Court, the litigants are all in
agreement that federal law alone applies to resolve the threshold
question whether the challenged activity falls within the
definition of "branch." Reply Brief for the Comptroller of the
Currency 2; Respondents' Brief 41, 44.
[
Footnote 8]
Representative McFadden described the definitional section of
the Act as providing that:
"Any place outside of or away from the main office where the
bank carries on its business of receiving deposits, paying checks,
lending money, or transacting any business carried on at the main
office, is a branch."
68 Cong.Rec. 5816 (1927).
[
Footnote 9]
5A A. Michie on Banks and Banking §§ 4a, 5, 14, 15 and 17
(1950); 10 Am.Jur.2d Banks § 358 (1963); 9 C.J.S. Banks and Banking
§ 269 (1938).
[
Footnote 10]
We need not here try to draw fine distinctions around relatively
isolated, sporadic, and inconsequential transactions where a bank
employee carries cash to a customer to cash a check, or secures a
signature on a note in exchange for a check delivered off
premises.
[
Footnote 11]
In 1963, Comptroller Saxon, author of � 7490 in the
Comptroller's Manual for National Banks,
supra, n 2, declared that
"[t]he branching powers of National Banks should, in my
judgment, not be limited according to those policies which the
individual States find appropriate to meet their local needs
through State-chartered banks."
Saxon, Branching Powers and the Dual Banking System, 101
Comp.Currency Ann.Rep. 316, 318 (1963).
During the course of the congressional debates over what became
the McFadden Act, Representative Stevenson remarked:
"[Y]ou have branches in the Federal reserve system established
by the dictum of the Comptroller of the Currency, who has assumed
to say that he can allow a national bank to establish as many
agencies for receiving deposits and paying checks as he sees fit. .
. . I will show presently that we cut that out, root and
branch."
66 Cong.Rec. 1627.
MR. JUSTICE DOUGLAS, dissenting.
It will come as a shock, where common sense is the guide, to
learn that an armored car picking up merchants' cash boxes and
checks is a branch bank. Conceivably a bank could use an armored
car as a place of business by stationing it at designated places
during designated hours for opening accounts, receiving deposits,
making
Page 396 U. S. 139
loans, and the like. But no armored car was so used in these
cases.
Federal law stated in the McFadden Act, 12 U.S. C, § 36(f),
defines "branch" as any facility "at which deposits are received,
or checks paid, or money lent." And Congress provided that national
banks may establish "branches" whenever, wherever, and however
state banks may do so.
First National Bank of Logan v. Walker
Bank & Trust Co., 385 U. S. 252,
385 U. S.
261-262. The opinion of the Court leaves the impression
that the McFadden Act created "competitive equality" between
national and state banks across the board. But, as we stated in the
Walker Bank case, that Act "intended to place national and
state banks on a basis of
competitive equality' insofar as
branch banking was concerned." Id. at 385 U. S. 261.
(Italics added.) There was no other or additional overriding
principle of "competitive equality" that limited off-premises
services of national banks to those that state banks could
provide.
Among those off-premises activities of national banks was the
furnishing of armored car messenger services, which, we are advised
by the Comptroller of the Currency, antedated by many years the
1927 McFadden Act. One can read the legislative history of the Act
without finding any hint that Congress was providing "competitive
equality" as respects armored car messenger services.
As stated by the District Court, "If no branch is involved here,
there is no requirement that the national bank's practice must
conform to that of the state banks." 274 F. Supp. 449, 453.
The services rendered in these cases were undertaken only after
approval by the Comptroller of the Currency, who attached a
condition that "the messenger is the
Page 396 U. S. 140
agent of the customer, rather than of the bank." [
Footnote 2/1] I thought it was elemental
law that a bank deposit cannot arise without some unequivocal act
whereby both parties express their consent to the creation of the
status of debtor and creditor. The District Court, which is a more
faithful exponent of local law than are we, so ruled. 274 F. Supp.
at 454. Certainly the Comptroller, who is the supervisory agent for
policing § 36, has some authority to define "deposits" as used in §
36(f), and this case affords no excuse for disparaging him. This is
not a government by administrative fiat; the exercise of
administrative discretion is normally subject to judicial review.
When it comes to an administrator's construction of a statutory
term in the law that he supervises, however, we have allowed his
expertise great leeway in the definition, [
Footnote 2/2] only rarely disturbing it.
Page 396 U. S. 141
The Comptroller's definition of "deposits" should be honored
here. For where the risk is on the customer that his cash and
checks may never reach he bank, he cannot in good sense or in good
law be deemed to have made a deposit while the funds are in
transit.
By the standards of administrative law honored until today, the
Comptroller was justified in defining "deposits" to make the
armored cars messengers of the customers, not agents of the bank.
So, whether common sense or the law is our standard, the judgment
of the Court of Appeals should be reversed. The Comptroller's
authorization of these armored car activities as being permissible
under the National Bank Act was an interpretation of the Act which,
as MR. JUSTICE STEWART says in his dissent, cannot be said to be
"not a reasonable one."
[
Footnote 2/1]
Par. 7490, Comptroller's Manual for National Banks. This
paragraph provides:
"To meet the requirements of its customers, a national bank may
provide messenger service by means of an armored car or otherwise,
pursuant to an agreement wherein it is specified that the messenger
is the agent of the customer, rather than of the bank. Deposits
collected under this arrangement are not considered as having been
received by the bank until they are actually delivered to the
teller at the bank's premises. Similarly, a check is considered as
having been paid at the bank when the money is handed to the
messenger as agent for the customer."
[
Footnote 2/2]
See SEC v. New England Electric System, 384 U.
S. 176,
384 U. S. 185;
Udall v. Tallman, 380 U. S. 1,
380 U. S. 16;
United States v. Drum, 368 U. S. 370,
368 U. S.
374-376;
NLRB v. Coca-Cola Bottling Co.,
350 U. S. 264,
350 U. S. 269;
Unemployment Compensation Comm'n v. Aragon, 329 U.
S. 143,
329 U. S.
153-154;
NLRB v. Hearst Publications, Inc.,
322 U. S. 111,
322 U. S.
130-131;
Gray v. Powell, 314 U.
S. 402,
314 U. S.
411-413;
Rochester Telephone Corp. v. United
States, 307 U. S. 125,
307 U. S.
145-146; Jaffe, Judicial Review: Question of Law, 69
Harv.L.Rev. 239, 261 (1955); Nathanson, Administrative Discretion
in the Interpretation of Statutes, 3 Vand.L.Rev. 470, 490-491
(1950).
MR. JUSTICE STEWART, dissenting.
I wholly agree with the Court that federal law is to be applied
in determining whether the activities of a national bank constitute
branch banking under the exclusive definition contained in the
National Bank Act, 12 U.S.C. § 36(f). Whether the activities here
in question constitute branch banking under that standard seems to
me an extremely close question. That being so, I would defer to the
determination of the Comptroller of the Currency. He is the
official charged with administering these provisions of the Act,
and I cannot say his determination was not a reasonable one.
See Udall v. Tallman, 380 U. S. 1,
380 U. S.
16-18.