Pue v. Hood
| Decision Date | 25 November 1942 |
| Docket Number | 449. |
| Citation | 22 S.E.2d 896,222 N.C. 310 |
| Parties | PUE et al. v. HOOD, Commissioner of Banks, et al. |
| Court | North Carolina Supreme Court |
On June 12, 1941, plaintiffs filed with the Secretary of State of North Carolina, a proposed certificate of incorporation of an Industrial Bank. The proposed certificate in all respects complied with the requirements of law. The prescribed organization tax and recording fees were paid. The Secretary of State referred the application to the Commissioner of Banks pursuant to the provisions of the statute. Michie's, sections 217(b) and 225(m). The Commissioner of Banks, after giving notice to the plaintiffs and other interested parties, held a public meeting in Greensboro at which he heard evidence and argument of counsel. Thereupon he found certain facts and concluded that in his opinion the public convenience and advantage will not be promoted by the establishment of the proposed bank. He then submitted his report to the State Banking Commission which directed the finding of additional facts and approved his conclusion. He thereafter certified his conclusion to the Secretary of State. Upon receipt of the certificate from the Commissioner of Banks the Secretary of State declined to issue the proposed charter. Plaintiffs then instituted this action in the Superior Court of Guilford County.
On motion of the defendants the cause was removed to Wake County and the defendants appeared and filed a demurrer to the complaint for that "the complaint does not state facts which, if true, would constitute a cause of action against the defendants, or either of them, or entitle the plaintiffs to the relief, or any part of the relief, prayed for in the complaint."
When the cause came on to be heard in the court below the demurrer was sustained and judgment was entered dismissing the action. Plaintiffs excepted and appealed.
Hobgood and Ward, of Greensboro, for appellants.
Harry McMullan, Atty. Gen., and George B. Patton and Hughes J Rhodes, Asst. Attys. Gen., for appellees.
A writ of certiorari is an extraordinary remedial writ and (except in certain instances immaterial here) lies for two purposes (1) as a writ of false judgment to correct errors of law; and (2) as a substitute for an appeal. Williams v Williams, 71 N.C. 427. Its object is only to bring up the record of an inferior court or of an officer or commission acting judicially and to prevent an improper deprivation of appeal. Hartsfield v. Jones, 49 N.C. 309. It issues from a superior to an inferior court, officer or commission acting judicially, and it lies only to review judicial or quasi judicial action. Hartsfield v. Jones, supra; 5 R.C.L., 258, § 10; Mechem, Public Officers, 666, § 1001. It is obtained on application supported by affidavit addressed to the appellate court having jurisdiction. Taylor v. Johnson, 171 N.C. 84, 87 S.E. 981; Bayer v. Raleigh & A. A.-L. R. Co., 125 N.C. 17, 34 S.E. 100.
On the other hand, the issuance of a writ of mandamus is an exercise of original and not appellate jurisdiction. Mechem, Public Officers, 625, § 931, and is never used as a substitute for an appeal.
Even so, and although this action originated in the Superior Court by the issuance of summons and filing of complaint, the plaintiffs argue and insist here that they seek a writ of certiorari for a review of the action of the Commissioner of Banks about which they complain. We will consider the appeal on their theory of the purpose and intent of the action.
They first attack the constitutionality of the act. Michie's, § 217(a) et seq.
In considering an application for this writ only such errors or defects as appear on the face of the record can be considered. Hartsfield v. Jones, supra; March v. Thomas, 63 N.C. 249; Short v. Sparrow, 96 N.C. 348, 2 S.E. 233; and the application must show merit. Taylor v. Johnson, supra; March v. Thomas, supra; Marler-Dalton-Gilmer Co. v. Clothing Co., 150 N.C. 519, 64 S.E. 366; Hunter v. Atlantic Coast Line R. Co., 161 N.C. 503, 77 S.E. 678; Mechem, Public Officers, 670, § 1010; Womble v. Gin Co., 194 N.C. 577, 140 S.E. 230; People's Bank & T. Co. v. Parks, 191 N.C. 263, 131 S.E. 637; Finch v. Com'rs, 190 N.C. 154, 129 S.E. 195.
In their complaint the plaintiffs do not attack the constitutionality of the Banking Act. Nor do they allege that the Commissioner of Banks had no power to act in the premises. In fact, they predicate their case upon the very statute they now seek to challenge. So far as this record discloses, this contention is presented for the first time in this Court. In any event, it is not a defect or "error of law" alleged in the complaint. As plaintiffs are not permitted to "change horses in the middle of the stream" or to obtain this relief except upon errors alleged, this contention will not be considered here. 16 C.J.S., Constitutional Law, p. 220, § 96; Simons v. Lebrun, 219 N.C. 42, 12 S.E.2d 644; Potts v. Life Ins. Co., 206 N.C. 257, 174 S.E. 123; Gorham v. Pacific M. L. Ins. Co., 214 N.C. 526, 200 S.E. 5; Walker v. Burt, 182 N.C. 325, 109 S.E. 43; Lipsitz v. Smith, 178 N.C. 98, 100 S.E. 247; Shipp v. Stage Lines, 192 N.C. 475, 135 S.E. 339; Warren v. Susman, 168 N.C. 457, 84 S.E. 760; Holland v. Dulin, 206 N.C. 211, 173 S.E. 310; 16 C.J.S., Constitutional Law, p. 220, § 96.
Does the complaint set forth such errors of law or defects in the proceedings before the Commissioner of Banks as would entitle plaintiffs to a review? The answer is No.
The subject matter of this action relates to the regulation of the conditions upon which, and the manner in which, banking corporations may be organized and incorporated with authority to engage in business as such. This is essentially legislative and administrative and not judicial.
While a banking institution is a private enterprise every depositor is, in a sense, an investor. Its stability and trustworthiness vitally affects the economic and business life of the community it serves and its solvency is a matter of public concern affecting the general welfare of the State.
It is wholly a creature of statute doing business by legislative grace and the right to carry on a banking business through the agency of a corporation is a franchise which is dependent on a grant of corporate powers by the State. 9 C.J.S., Banks and Banking, p. 32, § 4; Divide County v. Baird, 55 N.D. 45, 212 N.W. 236, 51 A.L.R. 296.
Noble State Bank v. Haskell, 219 U.S. 104, 31 S.Ct. 186, 188, 55 L.Ed. 112, 32 L.R.A.,N.S., 1062, Ann.Cas. 1912A, 487; Divide County v. Baird, supra; Schaake v. Dolley, 85 Kan. 598, 118 P. 80, 37 L.R.A.,N.S., 877, Ann.Cas.1913A, 254; 9 C.J.S., Banks and Banking, p. 35, § 7.
Hence, the State may limit the issuance of charters to those proposed institutions which will promote the public convenience and advantage. State ex rel. Dybdal v. State Securities Comm., 145 Minn. 221, 176 N.W. 759.
Who is to survey the field, ascertain the conditions, find the facts and make the conclusion that a proposed institution will or will not promote the public convenience and advantage?
It cannot be questioned that the legislature would have the authority to investigate and decide this question before authorizing incorporation of a bank. But surely the legislature cannot meet in session and determine the existence or nonexistence of this condition precedent which it has prescribed every time an application for a charter is received by the Secretary of State.
It may, instead, create an administrative, investigatory, fact-finding agency to perform this function, administrative and not judicial in nature.
The creation of such agencies and the delegation of investigatory, fact-finding, authority has never been considered a delegation of legislative power. State v. Harris, 216 N.C. 746, 6 S.E. 854; Cox v. Kinston, 217 N.C. 391, 8 S.E.2d 252. The legislature has always, without serious question, given such powers to administrative bodies.
While the legislature cannot delegate its power to make a law it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law-making power, and must, therefore, be a subject of inquiry and determination outside the halls of legislation. Field v. Clark, 143 U.S. 649, 12 S.Ct. 495, 36 L.Ed. 294; Durham Provision Co. v. Daves, 190 N.C. 7, 128 S.E. 593; Meador v. Thomas, 205 N.C. 142, 170 S.E. 110; Cox v. Kinston, supra.
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