Application of Trade Development Bank, No. 15014

CourtSouth Dakota Supreme Court
Writing for the CourtFOSHEIM; MORGAN and HENDERSON, JJ., HERTZ, Acting Justice, and DUNN; DUNN, Retired Justice, sitting for WUEST
Citation382 N.W.2d 47
PartiesIn the Matter of the Application of TRADE DEVELOPMENT BANK.
Decision Date19 February 1986
Docket NumberNo. 15014

Page 47

382 N.W.2d 47
In the Matter of the Application of TRADE DEVELOPMENT BANK.
No. 15014.
Supreme Court of South Dakota.
Argued Nov. 20, 1985.
Decided Feb. 19, 1986.

Ronald G. Schmidt, of Schmidt, Schroyer, Colwill & Zinter, P.C., Pierre, for appellant, Independent Community Bankers Ass'n of South Dakota, Inc.

Jeremiah Murphy, of Boyce, Murphy, McDowell & Greenfield, Sioux Falls, for appellee, Trade Development Bank.

William Srstka, Jr., of Duncan, Olinger, Srstka, Lovald & Robbennolt, Pierre, for appellee, South Dakota Banking Com'n.

FOSHEIM, Chief Justice.

Independent Community Bankers Association of South Dakota, Inc., (Independent Bankers) appeals from a circuit decision which recognizes the South Dakota Banking Commission's (Commission) authority to create and define a "special purpose bank." We reverse.

On July 11, 1984, Commission gave notice of its intent to adopt or amend the following two administrative rules:

20:07:12:01 Special purpose bank defined. A special purpose bank is a bank that has the powers defined in SDCL 51-15-1(1) and (5) except that it cannot take deposits from the general public.

General Authority: SDCL 51-16-14 1

Law Implemented: SDCL 51-15-1, 1 51-16-14

20:07:10:05 Conditions of Approval. The commission shall condition its approval of new banks, branch banks, detached

Page 49

drive-in facilities, and moves of office on possession by the bank of federal deposit insurance corporation insurance of accounts or a similar insurance approved by the commission and the approval of the application by the federal deposit insurance corporation or federal reserve bank. This section does not apply to the approval of a special purpose bank.

General Authority: SDCL 51-16-14

Law Implemented: SDCL 51-15-1, 51-17-16 1

On August 1, 1984, Trade Development Bank (Trade Development) filed an application seeking Commission's approval of a charter for a "special purpose bank" under the proposed rules. The hearing on the adoption of the rules was held on August 9, 1984, and the rules became effective October 9, 1984.

Pursuant to the notice of the hearing on the application, the Independent Bankers requested, by letter, that they be allowed to become a party in opposition. The request was granted. Trade Development objected, however, and claimed that Independent Bankers had failed to show "a pecuniary interest [that] would be directly and immediately affected," as required by SDCL 1-26-17.1 for a non original party to intervene. 2 Independent Bankers made a motion to dismiss the application on jurisdictional grounds. They argue that Commission was unauthorized as a matter of law to redefine "bank," which is already defined by SDCL 51-15-1.

A hearing on Trade Development's application was held October 2, 1984. Commission entered Findings of Fact and Conclusions of Law and a decision was made granting Trade Development's application on November 29, 1984. Independent Bankers objected and took exception to several provisions. An appeal to the circuit court was made and oral argument held. Commission's decision was affirmed and Independent Bankers appeal.

I.

Trade Development initially argues that Independent Bankers have no standing to intervene. The record reveals no objection by Trade Development to the findings and conclusions of Commission which recognized Independent Bankers' standing to intervene. Further, the record does not contain a notice of review by Trade Development to the circuit court on appeal under SDCL 1-26-36.1 or a notice of review to the Supreme Court on appeal under SDCL 15-26A-22. This question, therefore, is not preserved on appeal. In re Application of Northwestern Bell Telephone Co., 326 N.W.2d 100, 104 (S.D.1982); State v. Holland, 346 N.W.2d 302, 306 (S.D.1984).

II.

There is no specific legislative grant of authority to Commission to create classifications of banks. See SDCL title 51. Silence alone is insufficient. Therefore, the key question we address is whether the creation of this new "special purpose bank" exceeded authority delegated by statute 3 to Commission for the "management and administration" of banks or in the charter application process for banks and banking entities. SDCL Secs. 51-16-14, -15; 51-17-15, -16. 4

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In St. Charles Bank v. Wingfield, 36 S.D. 493, 155 N.W. 776 (1915), this court held that the Banking Act of 1915, Secs. 53-54, providing for the making of rules for the "government" 5 of banks, did not confer on the bank examiner the authority to enact rules and regulations as his judgment may dictate encompassing all matters not covered by some particular provision of the statute. To confer such authority would have delegated legislative power in contravention of the State Constitution. Id. at 500, 155 N.W. at 778. The examiner could, however, adopt and promulgate any rule necessary or proper in the discharge of particular, imposed administrative duties. Id. at 506, 155 N.W. at 780.

In Livestock State Bank v. State Banking Commission, 80 S.D. 491, 127 N.W.2d 139 (1964), we held that a rule prohibiting branch banks more than 50 miles from a main bank was an unlawful attempt by Commission to exercise legislative powers. Since the legislature by statute had put restrictions on the location of branch banks, there was an implied legislative intent to exclude other restrictions under the rule of express mention and implied exclusion. Id. at 495, 127 N.W.2d at 141. "By adopting [the branch bank rule]...

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6 practice notes
  • First Nat. Bank of Minneapolis v. Kehn Ranch, Inc., Nos. 15041
    • United States
    • Supreme Court of South Dakota
    • October 1, 1986
    ...a notice of review, has not preserved the propriety of that decision as an issue on appeal. In re Application of Trade Development Bank, 382 N.W.2d 47 Bank's strongest argument is that the jury's failure to quantify a damage award prior to apportioning fault is contrary to Minnesota law. Mi......
  • Permann v. South Dakota Dept. of Labor, Unemployment Ins. Div., No. 15390
    • United States
    • Supreme Court of South Dakota
    • April 21, 1987
    ...reviewable by this court. Modern Merchandising v. Dept. of Revenue, 397 N.W.2d 470 (S.D.1986); Application of Trade Development Bank, 382 N.W.2d 47 (S.D.1986); Matter of Public Util. Com'n Declar. Ruling, 364 N.W.2d 124 (S.D.1985); Matter of Change of Bed Category of Tieszen, 343 N.W.2d 97 ......
  • Day v. John Morrell & Co., Nos. 17703
    • United States
    • Supreme Court of South Dakota
    • April 20, 1992
    ...with the notice of review requirements of SDCL 1-26-36.1 and her failure to brief the issue. See, Application of Trade Development Bank, 382 N.W.2d 47 (S.D.1986) (standing issue not preserved for appeal because the record does not contain a notice of review); Matter of Midwest Motor Exp., I......
  • In re Trade Finance Bank, Bankruptcy No. 89-40119. Adv. No. 92-4056.
    • United States
    • United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — District of South Dakota
    • February 10, 1994
    ...defined in SDCL 51-15-1(1) and (5)9 except that it cannot take deposits from the general public." Application of Trade Development Bank, 382 N.W.2d 47, 48 (S.D.1986). In July 1984, the banking commission noticed its intent to fulfill this desire by amending or adopting two of its administra......
  • Request a trial to view additional results
6 cases
  • First Nat. Bank of Minneapolis v. Kehn Ranch, Inc., Nos. 15041
    • United States
    • Supreme Court of South Dakota
    • October 1, 1986
    ...a notice of review, has not preserved the propriety of that decision as an issue on appeal. In re Application of Trade Development Bank, 382 N.W.2d 47 Bank's strongest argument is that the jury's failure to quantify a damage award prior to apportioning fault is contrary to Minnesota law. Mi......
  • Permann v. South Dakota Dept. of Labor, Unemployment Ins. Div., No. 15390
    • United States
    • Supreme Court of South Dakota
    • April 21, 1987
    ...reviewable by this court. Modern Merchandising v. Dept. of Revenue, 397 N.W.2d 470 (S.D.1986); Application of Trade Development Bank, 382 N.W.2d 47 (S.D.1986); Matter of Public Util. Com'n Declar. Ruling, 364 N.W.2d 124 (S.D.1985); Matter of Change of Bed Category of Tieszen, 343 N.W.2d 97 ......
  • Day v. John Morrell & Co., Nos. 17703
    • United States
    • Supreme Court of South Dakota
    • April 20, 1992
    ...with the notice of review requirements of SDCL 1-26-36.1 and her failure to brief the issue. See, Application of Trade Development Bank, 382 N.W.2d 47 (S.D.1986) (standing issue not preserved for appeal because the record does not contain a notice of review); Matter of Midwest Motor Exp., I......
  • In re Trade Finance Bank, Bankruptcy No. 89-40119. Adv. No. 92-4056.
    • United States
    • United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — District of South Dakota
    • February 10, 1994
    ...defined in SDCL 51-15-1(1) and (5)9 except that it cannot take deposits from the general public." Application of Trade Development Bank, 382 N.W.2d 47, 48 (S.D.1986). In July 1984, the banking commission noticed its intent to fulfill this desire by amending or adopting two of its administra......
  • Request a trial to view additional results

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