Gaulkin, Collester and Labrecque. The opinion of the court was delivered by Collester, J.A.D.
This is an appeal from a decision of the Commissioner of Banking and Insurance which approved the application of the proposed Hamilton State Bank for a charter for a bank to be located in Hamilton Township, Mercer County. The appellants are the First National Bank of Hamilton Square and the Yardville National Bank, both located in Hamilton Township.
The application for a charter by the Hamilton State Bank was made pursuant to N.J.S.A. 17:9 A -9. Attached to the certificate of incorporation were affidavits made by 48 incorporators setting forth the information required by the statute. Hearings upon the application were conducted pursuant to N.J.S.A. 17:9 A -11(D) during which the appellants opposed the granting of a charter. At the conclusion of the hearings the Commissioner found that the interest of the public would be served by the establishment of the proposed bank and that conditions in the locality in which the bank would transact business afforded reasonable promise of a successful operation. He approved the issuance of a charter conditioned upon release by the incorporators of 20% of their subscriptions, which were to be sold to residents and business men of Hamilton Township at the same price paid by the incorporators.
Appellants raise three grounds of appeal: (1) the Commissioner erred in ruling that incorporators of the proposed new bank were not subject to cross-examination by the objectors; (2) the evidence presented did not support the decision, and (3) the Commissioner erred in barring the objectors'
right to examine into the possible interest of the applicant's expert witness in the outcome of the hearings.
Our disposition of this appeal renders it unnecessary to consider appellants' second point, because of our conclusion that, for reasons hereinafter expressed, the case must be remanded for additional testimony and new or amended findings.
At the outset of the hearings respondent's certificate of incorporation, statutory affidavits of the incorporators, subscription agreements and biographical sketches of the 48 incorporators were received as exhibits. Thereafter, during the course of the hearings the objectors requested that the incorporators be produced for the purpose of examination and cross-examination on the facts set forth in the exhibits. They argued that they were entitled to ascertain through such examination whether the incorporators were the true and only parties in interest, whether they had any interest from a community viewpoint in organizing a new bank or were merely investing to profit from the stock, and if they intended to live up to their subscription agreements.
The Commissioner first directed that the incorporators be produced for examination. Respondent then applied to this court for leave to take an interlocutory appeal from the ruling. The application was subsequently withdrawn when the Commissioner permitted supplemental affidavits to be filed by the incorporators setting forth, among other things, the affiant's residence, the extent to which he was engaged in business in Hamilton Township, whether he had entered into an agreement to sell or dispose of the shares of stock for which he had subscribed, and his continued intention to accept and pay for the same. The objectors still insisted on the right to have the incorporators called as witnesses. The Commissioner then rescinded his previous order that the incorporators be produced and ruled that he would direct that they would be called only if just cause could be shown by the objectors that they were not true parties in interest, did not intend to pay their subscriptions, or had falsified
their affidavits. He also indicated that the ruling applied if the objectors desired to call the incorporators as their own witnesses.
Appellants allege that the incorporators' affidavits filed pursuant to N.J.S.A. 17:9 A -9, the subscription agreements, and the biographical sketches necessarily serve as a basis for the Commissioner's finding that all of the capital stock was subscribed for and would be paid as specified in the certificate of incorporation, and that no fees, commission or other compensation had been paid for the promotion of the bank or for the sale of stock. N.J.S.A. 17:9 A -11(D). They argue that they are entitled to examine or cross-examine the incorporators on the facts set forth in the exhibits. They further argue that the ruling requiring them to show good and sufficient cause before the Commissioner would direct the incorporators to appear as witnesses, or permit the objectors to subpoena them, was unreasonable.
Respondent bank claims that the objectors had no right to cross-examine the incorporators and that the Commissioner's ruling precluding such examination without first showing just cause to do so should be upheld. Respondent argues that N.J.S.A. 17:9 A -11(D), which sets forth the criteria that the Commissioner shall follow, does not require the submission of affidavits of the incorporators; that the affidavits required by N.J.S.A. 17:9 A -9 are merely a prerequisite to obtain a hearing, and that if the objectors had ...