Goldmann, Sullivan and Labrecque. The opinion of the court was delivered by Goldmann, S.j.a.d.
The First National Bank of Princeton (First National) appeals from a determination of the Commissioner of Banking and Insurance granting the application of Princeton Bank and Trust Company (Trust Company), a commercial state-chartered bank, to establish a branch bank office in Princeton Township. R.R. 4:88-8. The application was opposed by First National, a commercial federal-chartered bank; the Comptroller of the Currency (by his representative, the Chief National Bank Examiner for the Third Federal Reserve District), and The First National Bank of Somerset County, which has a branch in the Belle Mead section of Montgomery Township, Somerset County. Only First National appeals.
Trust Company began operations as a state bank in 1834 in the Borough of Princeton. Until May 1962 its main office and principal place of business was located at 12-14 Nassau Street in the borough. In 1957 it obtained permission from the Commissioner of Banking and Insurance to open a branch office at the Princeton Shopping Center in Princeton Township. The branch occupies premises originally intended for a store and having a frontage of 32.5 feet and some 2,000 square feet of floor area.
The site of Trust Company's proposed branch is a triangular-shaped plot at the southeast corner of State Highway Route 206 and the Mount Rose-Rocky Hill Road (also known as Cherry Valley Road) in Princeton Township. The latter road divides Princeton Township, in Mercer County, from
Montgomery Township, in Somerset County. The proposed service area of the branch lies 40% in Princeton Township and 60% in Montgomery Township; 30% of the housing is in Princeton Township and 70% in Montgomery.
William R. Cosby, president of Trust Company, testified that he initiated a study of the proposed branch site in March 1962. He personally looked over the area and consulted residents for their views regarding the need for a branch. Also consulted was Edmund D. Cook, a local realtor, who had for sometime past been studying the feasibility of locating branches in the areas surrounding Princeton Borough. Although Cosby said that the study had been initiated in March 1962, Cook testified that he had been authorized to negotiate for the proposed site at the close of 1961 or early in 1962, and that an option agreement for the purchase of the property had been entered into about March. The bank also obtained the services of a consultant, Norman G. Asbury, in May 1962.
At a meeting held April 11, 1962 President Cosby reported to the Trust Company board of directors regarding "recent developments with respect to the bank's main office and branch quarters." The board authorized its executive committee, with the advice of counsel, "to resolve all matters relating to the bank's quarters as expeditiously as possible." Thereafter, at a meeting held May 23, 1962, the executive committee adopted the following resolution:
"RESOLVED, that in accordance with the authority contained in the Banking Act of 1948 (Chapter 67, Laws of 1948) under Section 23 thereof (R.S. 17:9A-23), the principal office of this bank be changed, effective as of May 23, 1962, to the premises No. 5, Building C, Princeton Shopping Center, North Harrison Street, Princeton Township, New Jersey, which are presently occupied by a branch office of this bank, and that the President, with the advice of counsel, be empowered to file with the Department of Banking and Insurance a certificate of such change.
FURTHER RESOLVED, that the office located at 12-14 Nassau Street, Princeton Borough, New Jersey, heretofore the principal office, be maintained as a branch office."
A certificate of such change was duly filed with the Department of Banking and Insurance. The foregoing was done pursuant to N.J.S.A. 17:9A-23, which reads:
"A bank or savings bank may, without satisfying the requirements of section 22 [ N.J.S.A. 17:9A-22, "Change of principal or branch office; application; approval"], change the location of its principal office to a location then occupied by a branch office maintained by it. After such a change, the bank or savings bank may maintain a branch office at the location formerly occupied by its principal office, or it may discontinue business at such location. Such bank or savings bank shall file a certificate of such change in the department within one week from the date such change is made. A change in location effected pursuant to this section shall not be subject to the limitations imposed by subsections C or D of section 19 [ N.J.S.A. 17:9A-19, 'Branch offices; location; capital requirements']."
N.J.S.A. 17:9A-19, referred to in the statute just quoted, provides:
"A. Any bank or savings bank may, pursuant to a resolution of its board of directors or board of managers, establish and maintain branch offices, subject to the conditions and limitations of this article.
B. No bank or savings bank shall establish or maintain a branch office which is located outside the municipality in which it maintains its principal office; except that a bank or savings bank may establish and maintain a branch office or offices anywhere in the same county as that in which it maintains its principal office
(1) [relates to acquisition of the office or offices of a banking institution through merger]; or
(2) [relates to acquisition of the office or offices of a banking institution in liquidation or in contemplation of liquidation]; or
(3) when each proposed branch will be established in a municipality in which no banking institution has its principal office or a branch office.
Subsections (C) and (D) of section 19 set out the capital requirements for banks and savings banks intending to establish a branch office.
Soon after the purported interchange of the principal and branch offices, Trust Company's executive committee adopted a resolution on June 20, 1962 authorizing the proper officers of the bank to file with the Department of Banking and Insurance
an application for a branch office to be located at the southeast corner of Route 202 and Mount Rose-Rocky Hill Road in Princeton Township. This was done ...