76 N.W.2d 722 (S.D. 1956), 9540, Wall v. Fenner

Docket Nº9540.
Citation76 N.W.2d 722, 76 S.D. 252
Opinion JudgeRENTTO, Judge.
Party NameMelvin WALL et al., Plaintiffs, v. Roy H. FENNER, as Superintendent of Banks of the State of South Dakota, et al., Defendants.
Attorney[76 S.D. 254] Phil Saunders, Atty. Gen., Benjamin D. Mintener and W. O. Knight, Asst. Attys. Gen., for defendants and appellants. Karl Goldsmith, Pierre, of counsel. [2] [76 S.D. 255] Frank R. McKenna and Milton Cameron, Sisseton, for plaintiffs and respondents.
Case DateMay 04, 1956
CourtSupreme Court of South Dakota

Page 722

76 N.W.2d 722 (S.D. 1956)

76 S.D. 252

Melvin WALL et al., Plaintiffs,

v.

Roy H. FENNER, as Superintendent of Banks of the State of

South Dakota, et al., Defendants.

No. 9540.

Supreme Court of South Dakota.

May 4, 1956

Rehearing Denied June 15, 1956.

Page 723

[76 S.D. 254] Phil Saunders, Atty. Gen., Benjamin D. Mintener and W. O. Knight, Asst. Attys. Gen., for defendants and appellants. Karl Goldsmith, Pierre, of counsel.

[76 S.D. 255] Frank R. McKenna and Milton Cameron, Sisseton, for plaintiffs and respondents.

RENTTO, Judge.

Plaintiffs and three other incorporators filed Articles of Incorporation for the Sisseton State Bank in the office of the Superintendent of Banks, together with an application for the approval thereof. The defendants, who constitute the State Banking Commission, denied the application for the 'reason that it appears the public convenience and necessity do not justify the organization

Page 724

of said new bank and that the said city of Sissetion and adjacent territory are now provided with adequate banking facilities'. In this proceeding for mandamus the action of the Commission was reviewed by the trial court and a judgment entered commanding the defendants to approve the proposed Articles of Incorporation. This appeal by the Commission is grounded on the claim that the trial court did not confine its review to the question of whether the Commission had abused its discretion in denying the incorporators' application for approval, but went further and substituted its determinator for that of the Commission.

State banks are engaged in a business subject to legislative control under the police power. Shaw v. Brisbine, 63 S.D. 470, 260 N.W. 710. That control extends to their inception as well as their subsequent operation. Floyd v. Thornton, 220 S.C. 414, 68 S.E.2d 334. In this day and age the chief function of commercial banks is the furnishing of bank credit which is the circulating medium of exchange by means of which most of the business transactions of this country are conducted. Because of this the stability of bank credit is a matter which concerns not only the stockholders and depositors of a bank, but also most of the other members of the community to the extent that it may be said to be 'affected with a public interest'. In the exercise of the police power for the public welfare the legislature may adopt such measures as it deems necessary and adapted to the stabilization of such credit. State ex rel. Sharpe v. Smith, 58 S.D. 22, 234 N.W. 764. It is generally recognized that too many banks in one locality are a source of financial weakness. Zollmann Banks & Banking, Vol. 9, Sec. 6092. Our legislature has sought to avoid this evil by providing in SDC [76 S.D. 256] 6.0304 that the application for a proposed bank shall not be approved 'if the public convenience and necessity do not justify the organization of such bank'. This it could properly do. 111 A.L.R. 143.

The legislature could have retained in itself the authority to make this fact determination. The impracticability of such retention is obvious. As an alternative it could properly create an administrative, investigatory, fact finding agency to perform this function, administrative and not judicial in nature. Weer v. Page, 155 Md. 86, 141 A. 518; Pue v. Hood, 222 N.C. 310, 22 S.E.2d 896. That is what our legislature did. SDC 6.0304 makes it the duty of the Commission to determine whether the Articles of Incorporation of a state bank shall be approved or denied. It further provides that 'Such application shall not be approved if the provisions of law relating to banks have not been complied with, or if the corporation has been organized for malicious or speculative purposes, or for any purpose other than the legitimate business of banking; or if the public convenience and necessity do not justify the organization of such bank, or if the organizers thereof do not possess the adequate and necessary qualifications and fitness to manage the business of banking'. When the Commission acts on an application it must, in carrying out this legislative mandate, determine questions of fact. In making such determination the Commission of necessity exercises a discretion. However this statute does not give to the Commission an unlimited or...

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21 practice notes
  • 308 N.W.2d 559 (S.D. 1981), 13277, Oahe Conservancy Subdistrict v. Janklow
    • United States
    • South Dakota Supreme Court of South Dakota
    • July 15, 1981
    ...a fund which may or may not ultimately be needed, or it might conclude that the budget submitted exceeded such needs. In Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722 (1956), we concluded that the authority of the State Banking Commission to determine whether the articles of incorporation of a......
  • 115 N.W.2d 883 (S.D. 1962), 9935, Haman v. First Nat. Bank in Sioux Falls
    • United States
    • South Dakota Supreme Court of South Dakota
    • June 19, 1962
    ...the services of a bank on its terms or not at all. We have said that commercial banking is affected with public interest. Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722. Banks are franchised and statutorily protected against open competition. Most communities of this state have only one bank. C......
  • 213 N.W.2d 459 (S.D. 1973), 11238, Valley State Bank of Canton v. Farmers State Bank of Canton
    • United States
    • South Dakota Supreme Court of South Dakota
    • December 20, 1973
    ...factors are disregarded. It may even be destroyed. We have said that banking is affected with a 'public interest'. Wall v. Fenner, 1956, 76 S.D. 252, 76 N.W.2d 722. This decision is still appropriate in its view that banking stability is a matter which concerns not only directors, stockhold......
  • 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
    ...Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 669, 4 L.Ed. 629, 667 (1819) (Story, J., concurring). See also, Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722 (1956); State v. Scougal, 3 S.D. 55, 75, 51 N.W. 858, 865 (1892) (for South Dakota decisions recognizing that banking is "af......
  • Request a trial to view additional results
21 cases
  • 308 N.W.2d 559 (S.D. 1981), 13277, Oahe Conservancy Subdistrict v. Janklow
    • United States
    • South Dakota Supreme Court of South Dakota
    • July 15, 1981
    ...a fund which may or may not ultimately be needed, or it might conclude that the budget submitted exceeded such needs. In Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722 (1956), we concluded that the authority of the State Banking Commission to determine whether the articles of incorporation of a......
  • 115 N.W.2d 883 (S.D. 1962), 9935, Haman v. First Nat. Bank in Sioux Falls
    • United States
    • South Dakota Supreme Court of South Dakota
    • June 19, 1962
    ...the services of a bank on its terms or not at all. We have said that commercial banking is affected with public interest. Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722. Banks are franchised and statutorily protected against open competition. Most communities of this state have only one bank. C......
  • 213 N.W.2d 459 (S.D. 1973), 11238, Valley State Bank of Canton v. Farmers State Bank of Canton
    • United States
    • South Dakota Supreme Court of South Dakota
    • December 20, 1973
    ...factors are disregarded. It may even be destroyed. We have said that banking is affected with a 'public interest'. Wall v. Fenner, 1956, 76 S.D. 252, 76 N.W.2d 722. This decision is still appropriate in its view that banking stability is a matter which concerns not only directors, stockhold......
  • 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
    ...Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518, 669, 4 L.Ed. 629, 667 (1819) (Story, J., concurring). See also, Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722 (1956); State v. Scougal, 3 S.D. 55, 75, 51 N.W. 858, 865 (1892) (for South Dakota decisions recognizing that banking is "af......
  • Request a trial to view additional results

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