Vandygriff v. First Savings & Loan Association

In March 1979, a group of organizers (plaintiffs) were granted a charter for Citizens Security Savings and Loan Association (Citizens) in Borger, Texas, by order of the Savings and Loan Commissioner of Texas, L. Alvis Vandygriff (plaintiff). The commissioner granted the charter after issuing a final denial of an earlier application for the charter, which was filed by a group of organizers consisting of many of the same community members who received the grant. The grant followed a meeting that took place during the month between the first application’s denial and the second application’s filing, wherein the commissioner was visited by five of the organizers who wanted to learn how to correct their application and to present a different view of the economic conditions related to the charter. First Savings and Loan Association of Borger, Texas (First Savings & Loan) (defendant) challenged the charter in state district court, having been an interested party to the initial application but not present for the meeting between the commissioner and the organizers. In the hearing of the second application, the commissioner admitted to the meeting and declared that his decision was based only upon the administrative record. The record for the first application was not admitted because there were new organizing members, a new application fee paid, new notices issued, new funds deposited, and a new location presented. However, the court of civil appeals concluded that the meeting was an unlawful ex parte communication, after finding that the second application was a continuation of the first; reversed the district-court judgment; and set aside the commissioner’s order. Vandygriff appealed.