State ex rel. Dybdal v. State Securities Commission

Decision Date05 March 1920
Docket Number21,539
Citation176 N.W. 759,145 Minn. 221
PartiesSTATE EX REL. T. E. DYBDAL AND OTHERS v. STATE SECURITIES COMMISSION AND OTHERS
CourtMinnesota Supreme Court

Upon the relation of T. E. Dybdal and others the supreme court granted its writ of certiorari directed to the State Securities Commission and others to review the order and proceedings of the commission denying the application of relators for a certificate authorizing them to operate a bank at Elbow Lake to be known as the Farmers Service State Bank. Affirmed.

SYLLABUS

Bank and banking -- certificate to do business -- act 1919 constitutional.

1. Laws 1919, c. 86, providing for the granting by the State Securities Commission of a certificate of authority to do business as a bank, is enacted in the exercise of the police power and is constitutional, though it limits in the interests of the public the right to engage in banking; and the policy of the restriction, it being within constitutional limits, is for the legislature and not for the courts.

State Securities Commission -- administrative powers -- act constitutional.

2. The commission is an administrative body. The statute does not confer upon it judicial nor legislative powers and is not unconstitutional upon that ground, and in conferring upon it administrative powers with authority to determine facts and exercise its judgment in carrying out the purposes of the statute it is not constitutionally objectionable.

Reasonable public demand for new bank.

3. The statute provides for the granting of a certificate if there exists, among other things, a reasonable public demand for the bank. By a reasonable public demand the statute intends such a desire upon the part of the community for the bank as will make its coming welcome and insure an amount of business sufficient to promise it success. It may come from the natural desire of the community and upon its own initiative or it may be the result of propaganda.

State Securities Commission -- review of action upon writ of certiorari.

4. In reviewing on certiorari the determination of the commission the court can go no farther than to inquire whether it kept within its jurisdiction, whether it proceeded upon the proper theory of the law, whether its action was arbitrary or oppressive or unreasonable and so the exercise of its will and not of its judgment, and whether there was evidence upon which it might make the determination which it made. The responsibility for a correct determination, subject to the conditions stated, rests upon the commission and not upon the court.

Finding sustained.

5. Viewing the record in accordance with the rule stated it is held that the determination of the commission that there was no reasonable public demand for the proposed bank is sustained.

Todd Fosnes & Sterling, for relators.

E. J. Scofield, for respondents.

Clifford L. Hilton, Attorney General, and Montreville J. Brown, Assistant Attorney General, for State Securities Commission.

OPINION

DIBELL, J.

Certiorari to the State Securities Commission to review its order denying the application of the relators for a certificate authorizing them to transact business as the Farmers Service State Bank at Elbow Lake in Grant county.

1. The statute, hereinafter quoted, was enacted in the exercise of the police power. It intends, in the interest of the public, to insure safe banking. It does not intend to create a monopoly nor to deter private individuals from engaging their activities in banking, except insofar as a proper regulation of banks in the interest of the public has such effect. That the business of banking is so intimately connected with the general welfare of the public that it may be constitutionally regulated under the police power is not open to question. Noble State Bank v. Haskell, 219 U.S. 104, 31 S.Ct. 186, 55 L.Ed. 112, 32 L.R.A. (N.S.) Ann. Cas. 1912A, 487; Shallenberger v. First State Bank, 219 U.S. 114, 31 S.Ct. 189, 55 L.Ed. 117; Weed v. Bergh, 141 Wis. 569, 124 N.W. 664, 25 L.R.A. (N.S.) 1217; State v. Woodmansee, 1 N.D. 246, 46 N.W. 970, 11 L.R.A. 420; In re Lunghino & Sons, 176 A.D. 285, 163 N.Y.S. 9; Schaake v. Dolley, 85 Kan. 598, 118 P. 80, 37 L.R.A. (N.S.) 877, Ann. Cas. 1913A, 254; State v. Hill (W. Va.) 100 S.E. 286. The policy of the restriction, being within constitutional limits, is for the legislature and not for the courts.

2. The statute is not unconstitutional as conferring judicial or legislative power upon the commission.

The commission is an administrative body. Judicial power is not conferred upon it. That it determines facts or passes upon questions which may affect parties and exercises judgment and discretion does not imply that it has judicial power. See State v. Clough, 64 Minn. 378, 67 N.W. 202; Steenerson v. Great Northern Ry. Co. 69 Minn. 353, 72 N.W. 713; Hunstiger v. Kilian, 130 Minn. 474, 153 N.W. 869, 1095. Neither is legislative power conferred upon the commission. The statute is complete and effective in itself. That the legislature may delegate to commissions and boards administrative functions in carrying out the purposes of a statute is not to be questioned. 1 Dunnell, Minn. Dig. & 1916 Supp. § 1600, and cases cited. And it may confer upon a board or commission authority or discretion to be exercised in carrying out the purposes of a statute. See Williams v. Evans, 139 Minn. 32, 165 N.W. 495, 166 N.W. 504, L.R.A. 1918F, 542, and cases cited and reviewed.

3. The statute provides for a hearing before the commission. The conditions which must exist if the application is granted are stated as follows:

"If the applicants are of good moral character and financial integrity, and if there is a reasonable public demand for such bank in such location, and if the organization expenses being paid by the subscribing shareholders does [sic] not exceed the necessary legal expenses incurred in drawing incorporation papers and publication and recording thereof, as required by law, and if the probable volume of business in such location is sufficient to insure and maintain the solvency of the new bank, and the solvency of the then existing bank or banks in such locality, without endangering the safety of any bank in said locality as a place of deposit of public and private money, and if the state securities commission is satisfied that the proposed bank will be properly and safely managed, such application shall be granted, otherwise it shall be denied. In case of the denial of such application, the state securities commission shall specify the grounds for such denial and the supreme court upon petition of any person aggrieved may review by certiorari any such order or determination of the commission." Laws 1919, p. 87, c. 86, § 3.

Five things must appear to authorize the granting of a certificate:

(1) That the applicants are of good moral character and financial integrity.

(2) That there is a reasonable public demand for a bank in the location.

(3) That the organization expenses paid by the subscribing shareholders do not exceed the legal expenses incurred in drawing incorporation papers and publication and recording.

(4) That the volume of business in the location is sufficient to insure and maintain the solvency of the new bank and the solvency of the then existing banks in such locality without endangering the safety of any bank in said locality as a place of deposit of public and private money.

(5) That the commission is satisfied that the bank will be properly and safely managed.

The commission found that there was not a reasonable public demand for the proposed bank and denied the application upon that ground. It found no other fact.

It is difficult to give to the words "reasonable public demand" a clearer meaning than they carry without definition. They do not necessarily imply a public outcry or agitation for additional banking facilities. They do not necessarily negative the existence of adequate banking accommodations. They suppose upon the part of the community a desire of a character so substantial as to make the bank welcome and insure an amount of business sufficient to promise it success. The demand may come from the...

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