Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-11-25
COMMISSIONERS
May REGULATE
elevator BONDS
Authorized by Supreme Court
TO Inquire Into Surety
Settlements
Test Case was Brought 10
Decide Law for Guidance
| In Future Actions
Board Upheld When Full Set.
Element was Demanded In
Turtle Lake Case

The contention OF the board Of. railroad
| commissioners that they have the right to NJ
| ouirc into the business methods and settle
| merits made by 4 bonding company, appear
! ing as surety on elevator bonds, mas bceh
| upheld by the supreme court of the state.
]. Where prohibition proceedings are
brought to restrain the Board OF Railroad
commissioners created by the statute OF TINS
state, from acting in alleged usurpation OF
powers in questioning the sufheiency OF
bonds given by the grain elevators under
section Ss4i, K. c. 1905, for the protection
of the patrons of such warehouses, and from
inquiring into the settlements made by tne
surety or bonding company, with the credi-
tors of an i~nsoivcnt 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 beng the autnoruy ana
power of SAID commission. 49,,
2. Under section 22i7, r. c. 1905, which
| requires operators OF grain elevators 70 me
| with the Board of Railroad commissioners
! sufficient ~suretics to be approved by such
| commissioners and conditioned for the faith
| full performance of their duties as public ware.
| housemen, and under section s.4s,, x; 7.
1905. as amended by chapter $50 of the Laws
gives to the Board OF Railroad Commission
crs the power ''to investigate all complaints
OF. fraud or oppression in the grain trade OF
this state and correct the same such boarh.
may examine into the sufficiency, OF sucl,
business conduct and reliability of the SUR
cites, and for such purpose may summon
any witnesses before them that they please.
I! Whether they can, in such cases. by court
ar,cc of such witnesses and require testimony
under oath is a matter not here determined.
3. In passing upon the sufhciency of bonds
furnished by the elevator companies, or the
necessity Of requiring. new bonds. the Juris-
diction of the board is over the elevator
companies rather than over the bonding COM
| panies or %surcties. 1t has therefore no right
in case of a controversy between the ticket
holders of an insolvent elevator company
and a surety on bonding company, to sum,
threaten to cancel its bonds unless It 80 up.
| pears and makes satisfactory settlement with
The said ticket-holdcrs 1t may not seek
by such means to force a settlement. 1t may
| 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.
4. While passing. upon such bonds and
| performing suc, duties, such board is act
ing in a quasi judicial capacity, and canno,
he controlled in the exercise Of its discretion
by m%andamus, or prohibition.
5. The mere fact that a surety company
has been licensed by the insurance commits
%sionc,s to do business within the STATE, OF
North Dakota does not authorize such a
company to compel the approval of its bonds
by the board of railroad commissioners, II
sufficient as to form and amount, if such
commissioners are dissatisfied with the bust
ness habits or conduct Of the surety, or for
any other similar reason believes the bonds
to be insufficient.
8. a mandamus cannot be brought by the
surety on a bond to compel the acceptance
or continued approval OF such instrument, II
proper at all the proceedings should be
brought BY the principal, and not by. the
prohibition when sought to be obtained to
prevent a board which is vested with the
power of approval from disappearing its said
bonds.
The action was brought by the Dakota
Trust company against the members OF the
district court. where an order was entered
prohibiting the commission from cancelling
certain warehouse bonds, written by the
plaintiff, growing out of an unsatisfactory
of Samuel HITLER of Turtle Lake, the com
pany having compromised claims against Kit
tier, whereas the commission commended full
settlement should be made, and upon the re-
fusal Of the company to comply wieh the
demands Of notice given by the commission
to take the place of the bonds written by
this trust company for other elevators. The
district court held the commission had NO
authority to cancel or refuse to approve the
bonds written by any company. authorized tc
do business in the state and the question was
submitted to the supreme court so the matter
might be settled and the commission have 4
rule to guide them i'll future actions, being
merely a test case.
Before the case was decided the trust
company paid all the claims against they
and nave complied with the demands of the
commission and are in good standing will
the department in every way.