Opinion
No. 68-481
Decided February 10, 1971.
Building and Loan Associations — Establishment and relocation of offices — Regulation by state Superintendent of building and loan associations — Quo warranto not available to oust association from franchise, when — Adequate statutory remedy available.
An action in quo warranto does not lie to oust a building and loan association from its franchise, for establishing a new main office and a new branch office at the location of its former main office allegedly without the approval of the Superintendent of Building and Loan Associations, inasmuch as the statutes governing building and loan associations provide adequate enforcement provisions which are available to the superintendent for use in such circumstances.
IN QUO WARRANTO.
From 1909 until the present time respondent, Superior Savings and Loan Association, has conducted a savings and loan business in Cleveland. Respondent's main office was located at 6712 Superior Avenue and it also operated a branch office at 13515 Euclid Avenue.
Based upon the fact that its primary customers, who were of Lithuanian extraction, had moved away from the neighborhood of its main office, respondent, in 1966, applied to the relator, Superintendent of Building and Loan Associations, for permission to establish a branch office at 798 East 185th Street. The application was approved by relator, but, pursuant to local standards for location of branch offices as promulgated by relator, the approval was conditioned upon the dissolution of the St. Clair Savings Association which was located at 813 East 185th Street in close proximity to the proposed new branch. At that time, St. Clair made no objection as it intended to become a national bank and was therefore considering dissolution. However, St. Clair's plans to become a national bank were abandoned and it did not dissolve.
Respondent then filed an application to move its main office to the 185th Street location and relator advised respondent that the Superior Avenue office would be required to be closed at the same time the new main office opened. Thereupon respondent made application to maintain a branch office at the location of its former main office on Superior Avenue, which latter application was never acted upon. Respondent proceeded to open the new main office and continued operation of the old main office as a branch. Neither of those changes was approved by relator.
Relator filed the present action in quo warranto in this court, alleging that respondent has established a new main office and a new branch office without the previous written approval of relator, in violation of R.C. 1151.05, and praying that respondent be ousted from its franchise.
Mr. Paul W. Brown, attorney general, and Mr. James G. Kahle, for relator.
Messrs. Diehm Farber and Mr. Frank G. O'Bell, for respondent.
The determinative issue in this action is whether relator, by attacking the corporate franchise of respondent in quo warranto, has chosen the proper remedy.
Quo warranto is a high prerogative writ of an extra-ordinary nature which "is to be used generally with caution and discretion, and in the public interest." State, ex rel. Herbert, v. Standard Oil Co. (1941), 138 Ohio St. 376, 383.
In State, ex rel. Klapp, v. Dayton Power Light Co. (1967), 10 Ohio St.2d 14, it was held that an action in quo warranto was not maintainable where it would have the effect of bypassing a statutory scheme of regulation enacted by the General Assembly to govern public utilities.
This court recognized the "quasi-public" character of building and loan associations in State, ex rel. Bettman, v. Court of Common Pleas (1931), 124 Ohio St. 269. It was there held that "the method prescribed by the Legislature for the regulation, supervision and control of the affairs of building and loan associations and the method of procedure prescribed for their dissolution * * *" was "specific, adequate, complete and exclusive * * *."
Thus, if the statutes governing building and loan associations provide adequate means for the enforcement of their provisions, then quo warranto is not the appropriate remedy; i.e., if there is an adequate remedy in the ordinary course of the law, quo warranto does not lie.
An examination of the statutes regulating building and loan associations reveals that specific enforcement provisions are included therein.
R.C. 1155.02 provides, in part:
"The Superintendent of Building and Loan Associations shall see that the laws relating to building and loan associations * * * are executed and enforced."
In the event a building and loan association fails to comply with the laws relating to it, provision is made in R.C. 1155.17 for forfeiture of "not less than fifty nor more than one thousand dollars."
In addition, R.C. 1157.01 provides:
"If upon examination the Superintendent of Building and Loan Association tfinds that the affairs of a domestic building and loan association are in an unsound or unsafe condition, that it is conducting its business in whole or in substantial part contrary to law, that it is failing to comply with the law, or that its affairs are not being conducted for the best interests of its depositors, shareholders, or creditors, he may, with the written approval of the Director of Commerce, forthwith take possession of the business and property of such building and loan association."
We are of the opinion that the statutory enforcement provisions set forth above provide an adequate method by which relator can perform his duty to "see that the laws relating to building and loan associations * * * are executed and enforced."
Therefore, the writ of quo warranto is denied.
Writ denied.
O'NEILL, C.J., SCHNEIDER, MANOS, STERN and LEACH, JJ., concur.
HERBERT, J., concurs in the judgment.
MANOS, J., of the Eighth Appellate District, sitting for DUNCAN, J.
I concur in the judgment in this case. However, prior decisions of this court, in other quo warranto litigation, seem to represent something less than consistency.
I would prefer that we have used the case at bar for a full analysis of this entire area of the law and, if necessary, to overrule, modify or distinguish some of our past pronouncements upon the subject of quo warranto.