The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-12-30

OF bonding companies are naturally
greatly elated over the decision as it
threatened to practically deprive all
bonding companies Of official business
in this state and it also gave the in
surance commissioner such wide
powers as to make it possible for him
to practically exclude bonding COM
panies for private concerns il he saw
fit.
Many attorneys prior to the time
the action was placed in the hands Of
Lawrence & Murphy, of Fargo, took
the position the law was u~nconstitu-
tional in several phases and the
decision favorable to the bonding
companies had been generally
anticipated.
Bonds will continue to be furnish
ed by the different companies as
formerly. The rates are now uniform
among the companies both Of this and
other states and the cut rate bust
ness formerly conducted is supposed
to have ended a year ago.
The syllabus is as follows:
State of North Dakota in supreme
court. State Of North Dakota, ex rel.
Andrew Miller, attorney general. and
Max Stern, relator, plaintiffs, VS..
Walter c. Taylor. commissioner of
insurance Of the state of North Da-
kota, and as such commissioner of in
surance, Gunder Olson, state treasurer
of the state OF North Dakota, and as
such treasurer, defendants.
BY chapter 1914, laws of 1918, en-
titled, IAN act establishing a state
bonding department in the Office Of
the commissioner of insurance, pro-
viding for the maintenance thereof,
and creating a reserve therefor, pre-
scribing the duties of officers connect
ed Herewith, providing for the pay
ment of premiums and indemnities for
losses, and providing for the disposal
Of the surplus after such reserve has
been created" it was attempted to
stablish a bonding department, to
township and school district officials,
at the expense of the subdivisions of
which they are officials. 1t is held:
1. Following state VS.. Bulge, IA N.
D. 532 (the capital commission case)
that said chapter 1914 Ia invalid as an
unwarranted delegation of legislative
power to administrative officers, for
| the reason that said chapter provides
for the payment Of premiums by the
subdivisions Of the state, which
premiums constitute a bonding fund,
and it attempts to give to the com
missioner of insurance the arbitrary
lpower, to determine how much of
such fund shall be applied to the
payment Of losses and how much to
the payment Of deputies, clerk hire
and other expenses Of the department,
and particularly, because no limita-
ton Is placed Upon the amount which
may be devoted to the last mentioned
subject.
2. Following state VS.. Blaisdell, %
N. D. So, said chapter 194 Is invalid,
| as an unwarranted delegation OF
| judicial power to purely administra-
| tive officials, in that it commits to
the commissioner of insurance the
| sole right to determine the amount
due subdivisions whose official duties,
and also delegates to the auditing
board the power to determine when
bonds Of insured officials shall be
| cancelled, which are judicial func-
tons.
3. Said chapter 1914 is also invalid
because it provides for taking the
property Of counties, cities and other
subdivisions of the state, without due
process of law, in that it is an at
tempt to authorize the commissioner
of insurance to determine the amount
due to any such subdivision whose
official it is claimed has defaulted,
Or been guilty of m~alfeasance in Off :
ce, without notice to such subdivision,
or any opportunity for a hearing or
the subject. or n other provision
for determining, by means OF any
channel for the administration Of
justice, n question of liability which
may arise between the subdivisions
and the bonding department. It is
attempted to constitute the insurance