State ex rel. Dakota Trust Co. v. Stutsman

• Decision Date: 23 November 1912
• Citation: 24 N.D. 68,139 N.W. 83
• Parties: STATE ex rel. DAKOTA TRUST CO. v. STUTSMAN et al.
• Court: North Dakota Supreme Court

24 N.D. 68

139 N.W. 83

STATE ex rel.

DAKOTA TRUST CO.

v.STUTSMAN et al.

Supreme Court of North Dakota.

Nov. 23, 1912.

Syllabus by the Court.

Where prohibition proceedings are brought to restrain the Board of Railroad Commissioners, created by the statute of this state, from acting in alleged usurpation of powers in questioning the sufficiency of bonds given by the grain elevators under section 2247, Rev. Codes 1905, for the protection of the patrons of such warehouses, and from inquiring into the settlements made by the surety or bonding company with the creditors of an insolvent warehouse, and such bonds have expired by lapse of time before the appeal is heard, such appeal will not be ignored as a moot question; the matter being one of public interest, and the real matter in controversy being the authority and power of said commission.

Under section 2247, Rev. Codes 1905, which requires operators of grain elevators to file with the Board of Railroad Commissioners a bond running to the state with good and sufficient sureties to be approved by such commissioners, and conditioned for the faithful performance of their duties as public warehousemen, and under section 2242, Rev. Codes 1905, as amended by chapter 230 of the Laws of 1909, and which, among other things, gives to the Board of Railroad Commissioners the power “to investigate all complaints of fraud or oppression in the grain trade of this state and correct the same,” such board may examine into the sufficiency of such bonds both as to the form and the general business conduct and reliability of the sureties, and for such purpose may summon any witnesses before them that they please. Whether they can, in such cases, by court procedure or otherwise, compel the attendance of such witnesses and require testimony under oath is a matter not here determined.

In passing upon the sufficiency of bonds furnished by the elevator companies, or the necessity of requiring new bonds, the jurisdiction of the board is over the elevator companies rather than over the bonding companies or sureties. It has therefore no right, in case of a controversy between the ticket holders of an insolvent elevator company and a surety or bonding company, to summon the said bonding company before it and threaten to cancel its bonds unless it so appears and makes satisfactory settlement with the said ticket holders. It may not seek by such means to force a settlement. It may, however, inquire into the transaction for the purpose of satisfying itself as to the business reliability of said bonding company, and, if dissatisfied with the good faith or business methods of said surety, require other bonds to be given by the elevator companies.

While passing upon such bonds and performing such duties, such board is acting in a quasi judicial capacity, and cannot be controlled in the exercise of its discretion by mandamus or prohibition.

The mere fact that a surety company has been licensed by the Insurance Commissioners to do business within the state of North Dakota does not authorize such company to compel the approval of its bonds by the Board of Railroad Commissioners, if sufficient as to form and amount, if such commissioners are dissatisfied with the business habits or conduct of the surety, or for any other similar reason believes the bonds to be insufficient.

Mandamus cannot be brought by the surety on a bond to compel the acceptance or continued approval of such instrument. If proper at all, the proceeding should be brought by the principal, and not by the surety. The same is true of the writ of prohibition when sought to be obtained to prevent a board which is vested with the power of approval from disapproving its said bonds.

Additional Syllabus by Editorial Staff.

The term “ministerial” is generic rather than specific, and includes acts which are ministerial only and involve no judgment or discretion, and those which are quasi judicial; a purely ministerial act being one which a person performs on a given state of facts, in a prescribed manner, in obedience to the mandate of legal authority, without regard to his own judgment on the propriety of the act.

Appeal from District Court, Burleigh County; Winchester, Judge.

Action by the State on relation of the Da kota Trust Company for writ of prohibition to W. H. Stutsman and others, as Commissioners of Railroads of the State, and the Board of Railroad Commissioners. From a judgment for plaintiff, defendants appeal. Cause remanded, with directions.

This action was originally brought in the form of a petition for a writ of prohibition against the Board of Railroad Commissioners of the state of North Dakota to prohibit them from exercising what is claimed to be usurped and unwarranted powers. The petition alleged, among other things, that the plaintiff was a corporation duly authorized to carry on the business of a surety company in the state of North Dakota; that one Samuel Kittler was from on or about the 17th day of September, 1909, continuously until on or about the 20th day of December, 1910, engaged in the business of operating a public grain warehouse at Turtle Lake, in the county of McLean; that, in order to comply with the laws of said state, he had procured the petitioner to execute and deliver to the Board of Railroad Commissioners a bond which in all things complied with the laws of this state; that, while said Kittler was engaged in conducting said business, he issued sundry storage tickets to divers persons; that on or about the 20th day of December, 1910, he became insolvent; that thereupon the petitioner bond company, with the utmost diligence and good faith, sought to ascertain the persons to whom it had become liable on its bond before mentioned and the amount of its liability to such persons; and that upon obtaining such information it immediately set about to adjust its liability, and “promptly paid to each of said claimants the amount or sum of money which each of said claimants agreed to accept in satisfaction of his or her claim, save two claims, both of which are still in dispute, and that it stands ready at all times and is able and willing to pay the holders of said unsatisfied claims whatever amount may be found to be justly due; that in the course of its investigation it discovered that many of the storage tickets were false, and that said warehouseman had falsely and fraudulently, and with the intent to cheat and defraud said petitioner, misstated the quality of the grain received by him; that, by reason of the frauds aforesaid, such petitioner had disputed its liability for the face value of such false and fraudulent storage tickets, and had compromised the respective claims with the exception of the two before mentioned, for less than their face value; that on or about the 3d day of May, 1911, the defendant Board of Railroad Commissioners, without any authority or jurisdiction, served upon said petitioner a writing and purported order in words and figures as follows, to wit: In the matter of the claims of holders of storage tickets against Samuel Kittler, of Turtle Lake. The Commission, having investigated the same, finds that all tickets owned by the petitioners are valid and should be paid in full without discounting or scaling; it is further found that the Dakota Trust Company, the sureties on the elevator bond of the said Samuel Kittler, has without just cause compromised many of the claims of said ticket holders at 50 cents on the dollar. It is therefore ordered that the said Dakota Trust Company do and is hereby directed to pay said claims in full to the holders of said storage tickets within 30 days from the date of this notice.” That said petitioner ignored and refused to obey said order, and that therefore, and on the 13th day of June, said Board of Railroad Commissioners served upon said petitioner a notice or citation and copy of resolution in words and figures as follows, to wit: “In compliance with a resolution adopted by the Commission on Saturday, the 10th inst., a copy of which I am sending you, I am writing you, giving notice that your company will be required to appear before the Commission on Saturday, June 24th, to show cause why all the bonds issued by your company in support of elevator licenses shall not be canceled. Please acknowledge receipt of this letter and the copy of the resolution and oblige, Respectfully yours, [Signed] The Board of Railroad Commissioners, by Thomas Hall, Secretary.” Attached to this notice as before stated was a copy of the following resolution: “In the matter of the failure and neglect of the Dakota Trust Company to comply with a certain order issued by the Board of Railroad Commissioners, requiring them to redeem certain warehouse receipts and to make settlements with the holders thereof; said receipts having been issued by Samuel Kittler of Turtle Lake, doing business as a public warehouseman and whose license is supported by the bond of the said Dakota Trust Company. Be it resolved, that the secretary be instructed to notify and require the Dakota Trust Company of Fargo to appear before this Commission at its office in the city of Bismarck on the 24th day of June, 1911, at 2 o'clock in the afternoon of said day, and show cause, if any there be, why the Commission should not cancel the bonds of the said Dakota Trust Company, given in this state, to wit: (Here follow the names of 30 elevator companies.) Because of its failure to effect a settlement satisfactory to this Commission with the holders of certain warehouse receipts issued by Samuel Kittler of Turtle Lake. Be it further resolved, that the secretary notify and require each of the above-named elevator companies or warehousemen to secure and have ready on said date of June 24th new bonds or undertakings satisfactory to this Commission to take the place of the said Dakota Trust Company's bonds, in the event they are then ordered canceled by this Commission. Done at Bismarck, N....