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Skokie Fed. S. & L. Ass'n v. Sav. & Loan Bd.

OCTOBER 13, 1967.

SKOKIE FEDERAL SAVINGS AND LOAN ASSOCIATION, A CORPORATION OF THE UNITED STATES; EVANSTON FEDERAL SAVINGS AND LOAN ASSOCIATION, A CORPORATION OF THE UNITED STATES; FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF WILMETTE, A CORPORATION OF THE UNITED STATES; PARK RIDGE FEDERAL SAVINGS AND LOAN ASSOCIATION, A CORPORATION OF THE UNITED STATES; PRUDENTIAL SAVINGS AND LOAN ASSOCIATION, A CORPORATION OF ILLINOIS; FIRST NATIONAL BANK OF SKOKIE, A NATIONAL BANKING ASSOCIATION; OLD ORCHARD BANK AND TRUST COMPANY, AN ILLINOIS BANKING CORPORATION, AND SKOKIE TRUST AND SAVINGS BANK, AN ILLINOIS BANKING CORPORATION, PLAINTIFFS-APPELLANTS,

v.

THE SAVINGS AND LOAN BOARD OF THE STATE OF ILLINOIS; JUSTIN HULMAN, COMMISSIONER OF SAVINGS AND LOAN ASSOCIATIONS OF THE STATE OF ILLINOIS; AND JERROLD L. MORRIS, ET AL., APPLICANTS FOR A PERMIT TO ORGANIZE DEVONSHIRE SAVINGS AND LOAN ASSOCIATION IN SKOKIE, ILLINOIS, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding. Judgment affirmed. MR. PRESIDING JUSTICE LYONS DELIVERED THE OPINION OF THE COURT.

This is an appeal by the plaintiffs (Skokie Federal Savings and Loan, et al.) brought under the provisions of the Administrative Review Act (Ill Rev Stats (1965) c 110, par 264, et seq.) from the entry of an order by the Circuit Court of Cook County, which order dismissed plaintiffs' complaint for administrative review upon the motion and in favor of the defendants, Savings and Loan Board of the State of Illinois (hereinafter sometimes referred to as the Board) and Justin Hulman as Commissioner of Savings and Loan Associations (hereinafter sometimes referred to as the Commissioner). Judgment was entered by the court below on March 21, 1966.

The instant action was occasioned when, on July 13, 1962, an application to the Director of Financial Institutions of the State (hereinafter sometimes referred to as the Director) for a permit to organize the Devonshire Savings and Loan Association in the Village of Skokie, Illinois, was caused to be filed by the above captioned defendant-applicants (Jerrold L. Morris, et al.). In response thereto, plaintiffs, comprised of numerous savings and loan and banking institutions in proximity to the proposed site of Devonshire, addressed objections to the Director. Issue being taken, the cause was thereafter set down for hearing before a hearing officer appointed by the Director.

Subsequently, there arose considerable delay due to a defect in the pleadings, which point is not germane to the issues here presented. The matter being resolved, hearings on the complaint (objections) were again conducted through 1964 and part of 1965 under the then existing jurisdiction of the Office of the Director. Pursuant to Legislative amendments effective August 1, 1965 (SB 1031 and SB 942) however, the administrative powers over the Savings and Loan Act (Ill Rev Stats (1965) c 32, par 701, et seq.) were transferred, en toto, from the Director of Financial Institutions to the newly formed Office of the Commissioner of Savings and Loan Associations (par 841), said Commissioner being substituted for the Director by such amendments throughout the Act and thereby becoming vested with jurisdiction over the instant application for a permit to organize and its related proceedings. (Pars 722 through 727 inclusive.)

These newly established provisions of the Act created in addition thereto the Savings and Loan Board, and conferred upon it, among other powers, the power to pass in review upon any order, decision, or action of the Commissioner. (Pars 857 through 859, inclusive.) Of particular significance to the case at bar, there was thus created an administrative body empowered to pass in judgment upon actions of the Commissioner in an area where, by comparison, none had theretofore existed (other than by appeal to the courts under the Administrative Review Act) during the period in which savings and loan associations were governed by the Director.

In accordance with these changes, hearings in the instant cause were thereafter continued before the Office of the Commissioner who, on December 23, 1965, entered an order approving the subject application and directed the issuance of a permit to organize Devonshire to the defendant-applicants. A copy of the aforesaid decision of the Commissioner was served upon and received by the plaintiffs on January 17, 1966.

In this regard, section 7-21 of the Savings and Loan Act (Ill Rev Stats (1965) c 32, par 861) provides:

"The Board shall upon the verified complaint in writing of any person setting forth facts which if proved would constitute grounds for reversal or change of any decision, order or action of the Commissioner grant a hearing thereon. If the aggrieved party desires such a hearing, he shall, within 10 days of receipt of notice of such decision, order or action, file written notice with the Board of intent to demand a hearing and shall, within 30 days of receipt of notice of such decision, order or action, file his verified complaint in writing. . . ." (Emphasis Supplied.)

In response to the adverse decision of the Commissioner, plaintiffs, on January 21, 1966, personally and by certified mail served notice upon the Board and Commissioner individually, the pertinent portions of which recited:

"Pursuant to Section 7-24 of the Illinois Savings and Loan Act, Ill Rev Stats, Ch 32, Sec 864, notice is hereby given that the objectors, a list of which is attached hereto, intend to seek review under the Administrative Review Act of the State of Illinois, Ill Rev Stats, Ch 110, Sec 264 et seq., of (1) the Order of the Commissioner of the Savings and Loan Associations, dated December 23, 1965, approving the application for a permit to organize the above association. . . ." (Emphasis Supplied.)

Shortly thereafter, on February 11, 1966, plaintiffs, by certified mail, served upon the Board and Commissioner individually letters with enclosed verified complaint in regard to this same cause, no response having been received by plaintiffs from either the Board or Commissioner in the interim. The letters, in addition to their reference to the enclosed complaint, advised the Board to set the cause down for hearing in compliance with the mandatory language of section 7-21 of the Act. By letter dated March 1, 1966, the Commissioner informed plaintiffs that the Board had denied their request for a hearing, "since notice of intent to demand a hearing was not filed" as required by said section 7-21 of the Act.

As a consequence thereof, the instant complaint for administrative review was filed by plaintiffs in the Circuit Court on March 7, 1966. Thereupon, the Board and Commissioner filed a motion to strike and dismiss, which motion, among other grounds, alleged plaintiffs' failure to comply with the jurisdictional requirements of section 7-21 of the Act. After a full hearing before the trial judge, an order was entered granting the motion, from which plaintiffs bring this appeal. No questions are raised on the merits of the Commissioner's findings, nor is the sufficiency of the February 11th notice disputed.

It is the plaintiffs' theory of the case: (1) that the Board's refusal to grant a hearing on its verified complaint was arbitrary, capricious, and contrary to law; and (2) that the court below erred in granting defendants' motion to strike and dismiss its complaint for administrative review.

It is the defendants' combined theory of the case (a separate brief and argument having been offered by the defendant-applicants, Jerrold L. Morris, et al.): (1) that plaintiffs' appeal should be dismissed for their failure to satisfy the mandatory and jurisdictional provisions of section 7-21 of the Act requiring written notice of intent to demand a hearing before the Board within 10 days of receipt of the adverse decision of the Commissioner; (2) that alternatively, the judgment should be affirmed for such noncompliance should this court determine that jurisdiction had properly attached to the Circuit Court; and (3) that in any event, plaintiffs' complaint fails to state a cause of action.

Numerous alternative theories of relief have been offered by the parties to this appeal, which propositions this court feels are not necessary for a ...


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