252 N.W.2d 227 (S.D. 1977), 11884, Application of Live Stock State Bank, Artesian, Application of

CourtSupreme Court of South Dakota
Writing for the CourtThe opinion of the court was delivered by: Dunn
Citation252 N.W.2d 227
PartiesApplication of the LIVE STOCK STATE BANK, ARTESIAN, South Dakota, to move its Main Office to Mitchell, South Dakota and to Establish a Branch Bank in Artesian, South Dakota.
Docket Number11884,11885.
Date07 April 1977

Page 227

252 N.W.2d 227 (S.D. 1977)

Application of the LIVE STOCK STATE BANK, ARTESIAN, South Dakota, to move its Main Office to Mitchell, South Dakota and to Establish a Branch Bank in Artesian, South Dakota.

Nos. 11884, 11885.

Supreme Court of South Dakota.

April 7, 1977

Argued Nov. 18, 1976.

Page 228

Lawrence J. Piersol, David L. Knudson, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for applicant and appellant, Live Stock State Bank.

R. Van Johnson, Asst. Atty. Gen., for appellant, State Banking Commission; William J. Janklow, Atty. Gen., Pierre, on brief.

David A. Gerdes, of May, Porter, Adam, Gerdes & Thompson, Pierre, for contestant and respondent, Commercial Trust and Savings Bank.

DUNN, Chief Justice.

On July 15, 1974, Live Stock State Bank of Artesian (Live Stock) applied to the State Banking Commission (the Commission) for permission to move its main office from Artesian to Mitchell and to establish a branch bank in Artesian. The matter was heard by the Commission on November 19 and 20, 1974, and on December 16, 1974. On May 23, 1975, the Commission approved the change of location and establishment of the branch bank. The Commercial Trust and Savings Bank of Mitchell (Commercial) appealed the decision to the Sixth Judicial Circuit Court. It raised five issues on appeal. They were:

(1) That the Commission was without jurisdiction or authority to allow a change of location of a bank charter beyond the town or city for which the charter was originally issued.

(2) That what the applicant was in effect doing was establishing a branch bank in Mitchell without purchasing or merging with one of the existing banks, which is prohibited by law.

(3) That the applicant failed to establish by substantial evidence a "need" of the city of Mitchell for additional banking facilities or the inadequacy of existing banking facilities.

(4) That the applicant, although adequately capitalized for its existing banking authority, failed to establish by substantial evidence that it met the new capitalization proposed in its application.

(5) That the Commission's decision was not concurred in by a majority of the Commission who had been present in person to see and hear all the witnesses, and thus denies the contestant

Page 229

substantive and procedural due process.

The trial court in its Memorandum Decision of January 16, 1976, ruled it would not substitute its judgment for that of the Commission on issues (3) and (4). Additionally, the court disagreed with Commercial's "reverse branching" argument issue (2), holding Live Stock's application clearly indicated the main office would be in Mitchell. The court did, however, hold that the Commission was without authority to approve the bank's move to Mitchell, issue (1). The application was reversed and remanded to the Commission with directions that it enter an order or decision denying the application. Live Stock and the Commission appealed. We reverse.

We would affirm the Commission's and trial court's findings on issues (2), (3) and (4) set out above. These findings are fully supported by the evidence. As to issue (5), it appears that a quorum of the Commission was present at all hearings and that the full Commission joined in the decision. While there was no appeal by Commercial, we nevertheless find that the Commission did afford due process in its hearings for all parties concerned.

Live Stock contends that the legislature intended to give the Commission in SDCL Title 51 the authority to comprehensively regulate the banking structure and banking practice. The Commission's authority to approve the transfer of the main office of a chartered bank to another town or city, Live Stock claims, should be viewed as an implied power under this regulatory scheme. Commercial responds that without a specific statute authorizing the Commission to approve such a transfer Live Stock can only move to Mitchell by establishing a branch bank there.

SDCL 51-16-1 establishes the division of banking and finance charges it "with supervision and control over the activities set forth in this title," and grants it jurisdiction over "such other activities as shall be conferred upon it by the Legislature." This broad grant of power over the banking industry in South Dakota, to be effective, must include "the authority to employ the means necessary for the exercise of that power." Board of Regents v. Carter, 1975, S.D., 228 N.W.2d 621, 629. It also gives the Commission power to act upon applications other than those enumerated in SDCL 51-16-15. "(T)he rule of express mention and implied exclusion should never be applied to defeat a plain legislative purpose." Rehurek v. Rapid City, 1937, 65 S.D. 542, 543, 275 N.W. 859. If the Commission does not have the power to supervise a change in location, banks, once chartered, would be free to move without restriction. See: State ex rel. Bank of Nashua v. Holt, 1941, 348 Mo. 982, 156 S.W.2d 708.

Several states do have specific statutes which permit a bank to relocate upon application and approval by the state banking board. Application of Bank of Rhame, 1975, N.D., 231 N.W.2d 801; Broadway National Bank v. Linwood State Bank, 1970, Mo., 456 S.W.2d 296; City National Bank of Austin v. Falkner, 1968, Tex.Civ.App., 428 S.W.2d 429. Unfortunately, we do not have such a specific statute in South Dakota's banking laws. The only mention of a power to regulate a bank's change in location is SDCL 51-17-21, which states:

"A bank may amend its articles of incorporation in the manner provided under chapter 47-2, upon amendment certified by its president, except that prior approval of the director shall be required for a bank to: change its name or location; acquire or abandon trust powers; change the number or par value of its shares of stock; change the amount of capital; or, extend its corporate existence. Such approval must be based upon a finding that the security of existing creditors will not be impaired by the proposed action. All such amendments shall be filed in the same manner as provided for original articles of incorporation."

Although Live Stock's application was not labeled an attempt to...

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3 cases
  • 339 N.W.2d 310 (S.D. 1983), 13738, Application of Application of Southern Hills Bank of Edgemont
    • United States
    • South Dakota Supreme Court of South Dakota
    • October 26, 1983
    ...444 (8th Cir.1964), cert. denied, 379 U.S. 970, 85 S.Ct. 667, 13 L.Ed.2d 562 (1965). See also, In re Live Stock State Bank, Artesian, 252 N.W.2d 227 (S.D.1977). We are unwilling to strip the State Banking Commission of its authority. Commission members have expertise in the field of banking......
  • 263 N.W.2d 674 (S.D. 1978), 12082, Application of Kohlman, Application of
    • United States
    • Supreme Court of South Dakota
    • March 20, 1978
    ...Administrative Law, § 72; 38 Am.Jur.2d, Gas and Oil, § 148; see also Application of Live Stock State Bank, Artesian, 1977, S.D., 252 N.W.2d 227. Where the legislature sufficiently prescribes a policy, standard, or rule for the guidance of the administrative body, authority may be delegated ......
  • 472 N.W.2d 766 (S.D. 1991), 17262, Matter of Homestake Min. Co.
    • United States
    • Supreme Court of South Dakota
    • June 26, 1991
    ...This Board has general statutory authority over mining permits and the transfer of permits. See, Application of Livestock State Bank, 252 N.W.2d 227, 229 (S.D.1977) expressing that the range of agency discretion and power extends beyond powers specified as set forth in governing statutes. T......

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