Shaw v. Brisbine

• Decision Date: 04 May 1935
• Docket Number: 7768.
• Citation: 260 N.W. 710,63 S.D. 470
• Parties: SHAW v. BRISBINE et al. (BUTTE COUNTY BANK et al., Interveners).
• Court: South Dakota Supreme Court

260 N.W. 710

63 S.D. 470

SHAW v. BRISBINE et al. (BUTTE COUNTY BANK et al., Interveners).

No. 7768.

Supreme Court of South Dakota

May 4, 1935

Appeal from Circuit Court, Minnehaha County; Lucius J. Wall, Judge.

Action by Miner Shaw against T. M. Brisbine and others, comprising the State Banking Commission of the State of South Dakota and F. R. Strain, Superintendent of Banks of the State of South Dakota, in which the Butte County Bank of Belle Fourche, S. D., and another intervened. Judgment for plaintiff, and defendants and interveners appeal.

Affirmed.

Clair Roddewig, of Pierre, Irwin A. Churchill, of Huron, and Roy E Willy, of Sioux Falls, for appellants.

T. H Kirby and T. M. Bailey, both of Sioux Falls, for respondents.

CAMPBELL Judge.

Section 8957, R. C. 1919, as amended by chapter 96, Laws 1925 relating to directors, officers, and employees of state banks reads in part as follows: "* * * Each officer having access to or care of the funds and assets of the bank must furnish a surety company bond in an amount not less than twenty per cent of the capital stock of the bank; provided that in no case shall the bond for any such officer be less than $5000.00. All employees having access to or care of the funds and assets of the bank must furnish a surety company bond in an amount not less than Five Thousand ($5,000.00) Dollars, each of which bonds must have the approval of the superintendent of banks before it can be accepted; and when the same shall have been accepted by the board of directors of the bank or trust company, it shall be filed with the superintendent of banks. No bond having been so approved and accepted may be altered, canceled or terminated, by any one, until after thirty days written notice of the intention to alter, cancel or terminate such bond shall have been served upon the superintendent of banks, and no liability of any bonding company which shall have accrued prior to the time above mentioned shall terminate within less than one year after such bond shall have been canceled."

The Special Session of the Twenty-Third Legislature enacted chapter 4, Laws Special Session 1933, entitled, "An Act Providing for Fidelity Bonds for Officers and Employees of Banks, and Authorizing the State Banking Commission to Prescribe and Fix the Form and Amount of Such Bonds," which statute in its entirety reads as follows:

"Section 1. Bonds of Officers and Employees. Each officer and employee having access to or care of the funds and assets of a bank or trust company shall furnish a fidelity bond in such amount and in such form as is fixed and prescribed by the State Banking Commission. Such bond shall be accepted by the Board of Directors of the bank or trust company and filed in the office of the Superintendent of Banks. No bond having been so approved and accepted may be altered, cancelled or terminated by anyone until after thirty days written notice of the intention to alter, cancel or terminate such bond shall have been served upon the Superintendent of Banks and no liability of any bonding company which shall have accrued prior to the time above mentioned shall terminate within less than one year after such bond shall have been cancelled.

"Section 2. Section 8957 of the Revised Code of 1919, and Acts amendatory thereof are hereby repealed insofar as the same conflict with the provisions of Section One hereto."

Plaintiff is a resident, citizen, and taxpayer of this state, and also the duly licensed and acting agent for various surety companies lawfully engaged in the business of writing fidelity bonds in this state. Defendants are the superintendent of banks and the members of the state banking commission of this state. Plaintiff instituted the present action asking that defendants be restrained and enjoined from approving, accepting, and filing any fidelity bonds upon officers or employees of state banks or trust companies executed by "Lloyd's of London" as surety. The Butte County Bank and Jerauld County Bank, being two state banks who were desirous of having the fidelity of their officers and employees bonded by Lloyd's and of having such bonds approved, accepted, and filed, were permitted to intervene. Issue was joined, the facts were stipulated, and the matter came on for trial before the court. Findings, conclusions, and judgment were in favor of plaintiff awarding him the relief prayed in his complaint, from which judgment defendants and interveners have now appealed.

We need not undertake for the purposes of this opinion to determine just what kind of an institution, association, or corporation "Lloyd's of London" may be, nor just how its business is conducted or its insurance policies or fidelity bonds executed and issued. It is sufficient to say that it is stipulated by the parties that neither Lloyd's of London nor the individual underwriting members thereof nor the syndicates into which such underwriters are grouped are "surety companies" within the definition of the statutes of this state. It is further conceded that neither Lloyd's of London nor its underwriters nor their syndicates have complied or attempted to comply with any statutes of this state relating to insurance companies, and neither they nor any of them are authorized to do business as an insurance company within this state pursuant to section 9160, R. C. 1919, as amended by chapter 161, Laws 1929.

Appellants urge two contentions upon this...