Court Opinion

ID: 3682152
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:27:38.154171+00
Date Added: 2024-06-11T14:09:10.255683
License: Public Domain

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This is a proceeding in equity by the plaintiff in his own behalf and in behalf of all others similarly situated as depositors in banks that have become insolvent and have closed, against the Depositors Guaranty Fund Commission, created pursuant to chapter 217, Session Laws, 1917 and chapter 200, Session Laws, 1923.
After alleging the membership of the Guaranty Fund Commission and the insolvency and closing of the Security State Bank of New England on November 17, 1920, the plaintiff, in substance, alleges the following matters: That the Guaranty Fund Commission was created to administer the Depositors Guaranty Fund Law, with power to make rules and regulations and with control of the fund collected for the purpose of paying depositors in insolvent banks; that, at the time when the Security State Bank of New England closed, the plaintiff had a deposit in the bank of $8059.00 and that he brings this action for himself and in behalf of all other depositors in that bank similarly situated, who have a common interest in the question and are too numerous to be brought in as parties plaintiff; that on the 17th of November, 1920, the said bank was declared insolvent and a receiver was put in charge of its affairs, with the usual powers with respect to the managing of its assets; "that the plaintiff duly presented his claim as an unsecured depositor to the receiver of said bank for the amount of $8059.00, the amount which he had on deposit at the time said bank was closed; which amount was duly allowed bysaid receiver as an unsecured deposit, and the same was certifiedto the Depositors Guaranty Fund Commission for payment out of the funds collected by said Commission and then held for payment of said deposits by law;" that the Commission refused and neglected to pay the amount of the deposit or to issue certificates of indebtedness against the Depositors Guaranty Fund in favor of the failed bank for the payment of the claim of this plaintiff and other depositors similarly situated, altho the Commission had sufficient funds on hand at that time to pay the same and have at all times since had sufficient funds to pay the unsecured depositors in said bank; that there are approximately $200,000.00 of unsecured deposits in the bank "which have been duly *Page 610 allowed by the receiver and certified to the Guaranty Fund Commission" and that the Commission has about $400,000.00 in the Guaranty Fund for the payment of unsecured depositors in the insolvent banks; "that the Security State Bank of New England, simultaneously with the Farmers State Bank of Havelock were the first banks to be declared insolvent of the numerous banks now in the hands of receivers, and its unsecured depositors entitled to be paid in the order of the priority of such insolvency and entitled to be paid in full out of the funds now held by the Guaranty Fund Commission for the payment of unsecured depositors in failed banks and said claim of the plaintiff, together with the other depositors similarly situated, is prior and superior to the claims of all other unsecured depositors in the other insolvent banks now in the hands of receivers." Plaintiff further alleges that he has no other speedy and adequate remedy at law and prays for judgment as follows: (1) that the Guaranty Fund Commission be ordered to pay to the receiver of the Security State Bank of New England the amount necessary to pay plaintiff's claim in full and also the claims of all other unsecured depositors similarly situated; (2) that if the Commission do not have sufficient funds on hand to pay all the unsecured depositors of the bank in full, it be directed to issue certificates of indebtedness in full against the Guaranty Fund, covering the claim of plaintiff and all other unsecured depositors similarly situated; (3) that the unsecured depositors of the Security State Bank of New England have a right prior and superior to the right of all other unsecured depositors in banks which became insolvent subsequent to the insolvency of the Security State Bank of New England; and (4) for such other relief as may seem just in the premises.
The answer is a voluminous document. It admits the membership of the Guaranty Fund Commission as alleged in the complaint except that since the first of July, 1923, the manager of the Bank of North Dakota displaced the State Examiner as ex-officio member. It admits the corporate character of the Security State Bank of New England and that it became insolvent and was put in the hands of a receiver.
The facts and matters alleged in the answer may be briefly stated as follows:
(1). That the Guaranty Fund Commission is not subject to suit, *Page 611 
especially as to matters of judgment or discretion in determining the liability of the Guaranty Fund.
(2). That the claims of plaintiff, and of all others similarly situated, were never acted on by the State Examiner and by him certified with the net amount due thereon to the Guaranty Fund Commission, pursuant to the act of 1917.
(3). That no facts had been certified to the Guaranty Fund Commission by the State Examiner before this action was commenced, or before July 1, 1923, bearing on the question of the liability of the Guaranty Fund to the plaintiff.
(4). That the Guaranty Fund Commission has made no final determination upon plaintiff's claim since July 1, 1923, but that it is acting upon all claims of depositors as rapidly as possibly and consistent with careful consideration, with due regard to justice, both to the claimants and the Guaranty Fund; that over eighty banks had closed at the time the answer was interposed and that depositors' claims against the Fund aggregated about eight million dollars, all all of which had to be examined by the Commission.
(5). That there is not enough money in the Guaranty Fund to pay the three banks that first closed; and that about eighty banks have closed since.
(6). That there are pending about twenty lawsuits against the Guaranty Fund Commission and that the funds of the Commission have been tied up in garnishment proceedings in numerous actions.
(7). That pursuant to the authority conferred by chapter 200, Sess. Laws 1923, a part of the Fund has been used to salvage assets of closed banks and is being otherwise used for the benefit of the Fund, as provided in the act; that the plaintiff denies the right of the Commission, under the act of 1923, to so use the Fund.
(8). That plaintiff asserts that the depositors in banks that closed prior to July 1, 1923, must be paid in the order in which the banks closed.
The answer concludes with a prayer (1) that the action cannot be maintained against the defendants and that the same be dismissed on the merits; (2) "that if it be not adjudged that said action cannot be maintained and dismissed on the merits that it be adjudged that the same abate as prematurely brought" so that the defendants may comply *Page 612 
with the provisions of the statute and perform the duties required of them by it; (3) that if the court hold that the Commission be not authorized to exercise judgment with reference to the care and disbursement of the fund and with reference to the validity of claims against it, that the court instruct and advise the Commission as to its powers and duties; (4) that a declaratory judgment as to the meaning and effect and validity of chapter 126, Session Laws 1917 and chapter 200, Session Laws 1923, with reference to all matters in dispute between the parties be made by this court, pursuant to chapter 237, Session Laws 1923.
The plaintiff demurred. The court held that the demurrer searched the record and sustained the demurrer to the complaint, but overruled the demurrer to the answer.
The basic theory of the plaintiff is that depositors in banks that closed prior to July 1, 1923, when the new or amended act went into effect, are, as a matter of law, entitled to payment from the Guaranty Fund in the order of time in which the banks closed. Manifestly, if the law does not thus prescribe the order of payment, and if the Commission have some discretion in that regard, and there has been neither fraud nor abuse in the exercise thereof, payment cannot be compelled by the courts contrary to the statute, or the decision of the Commission in the lawful exercise of its discretion.
On the oral argument in this court, some difference of opinion between counsel for the respective parties developed as to the correct construction of the complaint. Counsel for the appellant contended that the complaint should be construed to the effect that the claim of the plaintiff as an unsecured depositor in the bank had been presented to the State Examiner and by him allowed and, in effect, certified to the Guaranty Fund Commission as an unsecured claim; then, as a conclusion, it was urged that there remained only a ministerial duty for the Guaranty Fund Commission and its treasurer to perform, namely, that of drawing the checks to pay the claims of the plaintiff and other depositors similarly situated. It was, on the other hand, contended by counsel for the respondent that the trial court did not so construe the complaint; that all of the parties to this action construed it, and the proper construction of it is, to the effect that the plaintiff's claim had been submitted to the receiver of the bank and by him allowed and by *Page 613 
him certified to the Commission; that the claims of plaintiff and those similarly situated with him had never, in fact, been submitted to the State Examiner and that no action by that officer had ever been taken thereon, pursuant to the requirements of the Depositors Guaranty Fund Law of 1917, or otherwise.
We are satisfied that respondent's contention is correct. We have italicised parts of the complaint which seem to point to the correct interpretation. The result is that something more than the performance of the ministerial duty of drawing a check or issuing a certificate remained to be performed before the treasurer of the Commission could be compelled to write a check in favor of the plaintiff. This interpretation leaves the complaint without an allegation of the essential fact that the State Examiner, under the law of 1917, the only person having authority to act upon claims against the Guaranty Fund, had acted upon the claim in suit, allowed it, and certified the fact of such allowance and the net amount due thereon, to the Commission. Section 15 of that act (1917) expressly provided that the State Examiner shall "certify to the Depositors Guaranty Fund Commission the amounts due to the several depositors of such insolvent banks and also, at the same time, certify any amounts that may be owing by said depositors to said bank, and the treasurer of the said Commission shall thereupon draw against the Depositors Guaranty Fund on deposit in the several banks in the amount thus certified and shall immediately transmit to such depositors the amounts due them, less any amounts that may be owing by said depositors to said bank." The performance of this duty could not be delegated to a receiver or any other person. It is clear that no duty to act on the part of the Commission arose merely because a receiver of a closed bank allowed claims of depositors and certified that fact to the Commission. The State Examiner was the only official recognized in the law as having authority to determine the net amount of the claim of a depositor in a closed bank, not against the bank itself, or its receiver, it must be noted, but against the Depositors Guaranty Fund. Although the claim might be valid in toto against the bank, it might be wholly invalid as a claim against the Guaranty Fund. From the determination of the State Examiner as to the amount of the deposit guaranteed and the offset, if any, the law of 1917 did not expressly provide an appeal. *Page 614 
It should also be noted that this suit is not against the State Examiner, as such, for the purpose of compelling him to act, or to perform a ministerial duty; it is against the Guaranty Fund Commission of which the State Examiner and the Governor were ex-officio members, under the law of 1917, but of which the former has not been a member since the law of 1923 became effective. The purpose of the action is to compel immediate payment in full of plaintiff's claim out of the Guaranty Fund.
It is strongly urged that under the law of 1917 it was the mandatory duty of the Guaranty Fund Commission to pay all claims against the Fund immediately and in the order in which banks became insolvent and closed. Assuming that the law of 1917 contemplated that payment be made immediately and in the order in which the banks closed, was it competent for the legislature to amend this act, as it did in 1923, so as to measure plaintiff's rights as to time and order of payment and procedure in acting on his claim by the new act, which unquestionably gives the Commission wide discretion in these respects?
The important and necessary place of banking in the present economic and industrial system, its close relation to the general welfare and the public interest, and the universal calamity that would result with its general collapse, have led the legislature to enact statutes of a regulatory and restrictive nature, but deemed necessary in the interest of public safety. It was settled early in the history of this state that the legislature could permit it to be conducted upon such conditions and subject to such regulations as it saw fit to prescribe, or even "forbid it altogether." In State ex rel. Goodsill v. Woodmansee, 1 N.D. 246, 11 L.R.A. 420, 46 N.W. 970, this court sustained the validity of the original act providing for the organization and government of state banks, saying, among other things, at page 250, in the official report: "But, as a matter of precedent and authority, the legislative prerogative, in the exercise of its police power in promoting the public safety, not only to regulate and restrict the business of banking, but also to grant the right to one class, and to prohibit to others, or even to forbid italtogether, has never been questioned in the courts, and the legislatures of other states have frequently exercised the right of supreme control over the business." The public interest involved is sufficient to warrant the State in exercising control over the banking *Page 615 
business, and, as said by our own court in the case cited, to prohibit the business of banking entirely, except upon such conditions as it may prescribe. See also Weed v. Bergh,141 Wis. 569, 25 L.R.A.(N.S.) 1217, 124 N.W. 664; Schaake v. Dolley,85 Kan. 598, 37 L.R.A.(N.S.) 877, 118 P. 80, Ann. Cas. 1913A, 254. Our State has established a thoroughgoing system of regulation and inspection of banks, charging the cost thereof against the banks; in 1917, the legislature enacted chapter 126 of the Session Laws of 1917, known as the Depositors Guaranty Fund Law. The direct purpose of this law is to insure the repayment of deposits made by individuals in banks chartered and from time to time inspected and examined by state authority. The constitutionality of a law of this general character was sustained, under the police power, by the Supreme Court of the United States in Noble State Bank v. Haskell, 219 U.S. 104, 55 L. ed. 112, 32 L.R.A.(N.S.) 1062, 31 Sup. Ct. Rep. 186, Ann. Cas. 1912A, 487, and has been many times upheld in the state courts. All regulations, like inspections, periodical examinations and reports that are required from the banks from time to time, are in the interest of public safety. They are not passed solely out of regard for the financial interest of stockholders or of depositors in banks; they rest upon the broader base that the public welfare and the stability of public business and commercial relations depend, to a great extent, upon honesty and soundness in the banking business. A unit thereof, in the form of a single bank, cannot collapse with out a perceptibly detrimental effect upon the public interest.
The Guaranty Fund Law has a more direct relation to the interests of depositors in banks than the general statutes regulating the business of banking and providing for the examination of state banks. It compels co-operation by banks in advance in order to insure the safety of deposits of money. This act deals specifically with the interests of one class of the general public directly interested in sound banking methods, namely, depositors; other regulatory laws, like those requiring examinations and reports, while they operate in the interest of depositors, are primarily a recognition of the fact that the general public is vitally interested in sound and honest banking methods. Whether the law be passed in the express interest of a designated portion of the general public, or of the public as a whole, the act must be classed as a regulatory measure and find its justification in the police power. It is a *Page 616 
legislative recognition of the law that confidence is the basis of credit; that when confidence takes wings, the structure of credit collapses.
It is evident that extensive bank failures were not anticipated by the legislature of 1917, which enacted the original Guaranty Fund Law. Section 15 of that act provided that when a bank within the act suspended or became insolvent, the State Examiner must determine "the pro rata amount due from each bank necessary to pay the unsecured depositors in full and cause the same to be certified to the Depositors Guaranty Fund;" this section then required the State Examiner at the same time to "certify to said Depositors Guaranty Fund Commission the amounts due to the several depositors of such insolvent bank and also, at the same time, certify any amounts that may be owing by said depositors to said bank." The treasurer of the commission "shall thereupon draw against the Depositors Guaranty Fund on deposit in the several banks in the amount thus certified, and shall immediately
transmit to such depositors the amounts due them, less any amounts that may be owing by said depositors to such bank." If the fund on hand be inadequate to pay the claims, certificates of indebtedness were to be issued, negotiable in form, in favor of the bank and such certificates were to be paid out of the first money accruing to the Fund. Section 16 provided that the commission, for the use and benefit of the fund, should be subrogated to the rights of depositors paid and might participate in the assets of the insolvent bank; this right the State Examiner was required to enforce.
The legislature of 1923, when chapter 200 of the laws of that session was enacted, had before it a serious condition, caused by the closing of a large number of banks, the first of which went down in 1920, with large claims, actual and potential, against the Guaranty Fund. The situation, contrary to that which was before the legislature in 1917, clearly disclosed that it would be possible to pay immediately or within a reasonable time, from assessments levied against functioning banks, only a comparatively small number of the depositors in the banks then closed, without imposing burdens on open banks that would lead to general insolvency and collapse of the state banking system. Whether the power exist to impose such a burden, we need not decide. It was also evident from the extent of the liabilities of closed banks to depositors and consequent potential and probable liability of the Guaranty Fund *Page 617 
to such depositors, that if the depositors were paid in full by levying assessment to the maximum legally permissible, as well as practically possible, under the law, in the order in which banks closed, the result would be that depositors in banks which closed last, or even a few months after those which first suspended, could not be paid any portion of their claims for a long period. Consequently, and doubtless in the interest of justice, as it seemed to the legislature, the provision for payment to depositors under the law of 1917, as made in § 15 thereof, was fundamentally changed. It is provided in § 21, chapter 200, Session Laws 1923, that if the Guaranty Fund be insufficient to pay the claims of depositors duly allowed, the Commission may pro rate payments upon certificates of indebtedness from the fund on hand. That is, the legislature decided that instead of exhausting the Fund in paying depositors in banks that first closed and leaving others to wait for an indefinite period, it would be more just and equitable to provide that as many claimants as possible should receive a dividend upon their claims within a reasonable time.
In further contrast with the provisions of §§ 15 and 16, Act of 1917, supra, § 22 of the law of 1923 provides that to the extent of deposits allowed as guaranteed the Guaranty Fund Commission is subrogated to the rights of such depositors to participate in the assets of "such closed bank," and that such right shall be enforced by the Secretary of the Commission; that from time to time, as the assets are liquidated and cash realized thereon, the same shall be pro rated as a payment upon the certificates issued"to the guaranteed depositors of the closed bank from which suchpayment had been received until full payment is made to the holder of such certificate." The surplus remaining after payment to holders of certificates as aforesaid is turned into the Fund and becomes available for payment as a general dividend upon all outstanding certificates of indebtedness.
Some of the changes made by the act of 1923, not already indicated, so far as pertinent to any matter involved in this appeal, are as follows: The commission acts on all depositors' claim against the fund; under the old law, the State Examiner acted thereon; provision is made for a hearing on all claims disallowed; no such provision was made in the original act; it is expressly provided that the decision of the commission shall be final; the commission may pro rate payments from the *Page 618 
fund and may use the fund in giving temporary aid to open banks and in salvaging assets of closed banks, when so doing seems likely to benefit the fund and depositors in closed banks; the original act was silent or contained no express provisions on these points; whether the power could have been implied need not be decided. The State Examiner is no longer a member of the commission. Other changes are referred to in the course of the opinion.
It will be perceived that the legislature of 1923 undertook to change substantially, not only the time and manner of paying the claims of depositors in closed banks, but the relation of depositors to the Guaranty Fund and of the Guaranty Fund to the individual banks. It, therefore, becomes necessary to determine to what extent, if any, depositors in banks that had closed before the law of 1923 went into effect, but whose claims had not been submitted to or acted on by the State Examiner and by him certified to the commission, had acquired vested rights or vested interests in the fund which at that time had been accumulated by the Commission pursuant to the law of 1917. Specifically, in the case at bar, had the right of the plaintiff to participate in the Guaranty Fund become a vested right or a vested interest which the legislature of 1923 could not disturb or substantially change? If his right or interest had become vested, it is contended that the legislature of 1923 possessed no power either to take it from him, or to postpone materially his enjoyment of it, by giving the commission discretion as to the time and order of payment where, it is assumed, none existed before.
The phrase "vested right" or "vested interest" has been frequently defined by the courts. It would serve no useful purpose to enter into a lengthy discussion as to the meaning and proper application of the phrase in every case that may arise. There is a vested right in an accrued cause of action; Sutherland, Stat. Constr. § 480; a vested right of action is property in the same sense as tangible things are property and is equally protected against arbitrary interference; Cooley, Const. Lim. 5th ed. 445; a vested right is an immediate fixed right topresent and future enjoyment, or where the interest does not depend upon a period or an event that is uncertain; the right is vested when the enjoyment thereof has become the property of some person as a present interest; the right is expectant, not vested, when it depends on the continued *Page 619 existence of the present condition of things until the happening of some future event; the right is contingent, not vested, when it comes into existence only on an event or condition which may not happen; Pearsall v. Great Northern R. Co. 161 U.S. 646, 40 L. ed. 838, 16 Sup. Ct. Rep. 705; a right is not vested so long assomething remains to be done to consummate it and to fix theright of the citizen to enjoy it; it seems to be a right orinterest in property not open to doubt or controversy. Moore v. State, 43 N.J.L. 203, 39 Am. Rep. 558; Evans-Snider Buel Co. v. McFadden, 58 L.R.A. 900, 44 C.C.A. 494, 105 Fed. 293; Downs v. Blount, 31 L.R.A.(N.S.) 1076, 95 C.C.A. 289, 170 Fed. 15, 20. A vested right is "an immediate right of present enjoyment, or a present fixed right of future enjoyment." 4 Kent, Com. 202.
In several of the adjudicated cases, the courts appear to define and apply the phrase "vested right" or "vested interest" not in a close, narrow, or technical sense, but rather as meaning a right or interest which in equity and good conscience the state should recognize and protect and of which the individual cannot be deprived arbitrarily without injustice. In Evans-Snider-Buel Co. v. McFadden, supra, in a carefully considered opinion, Justice Thayer says: "It may be difficult in some cases to fix the precise date at which a right can be said to be fully vested, and for that reason to have become property within the meaning of the Federal Constitution, when the right in question is purely ofstatutory creation or has been acquired by pursuing some remedy which the law affords to suitors, and is in no sense anobligation arising out of contract. . . . When called upon to solve questions like the one in hand, the courts have never deemed it necessary to close their eyes to the equity of the case, but have frequently permitted their judgments to be influenced by the consideration that that which the legislaturehas done in the way of disturbing rights acquired under existinglaws was morally right, and in accordance with justice and fair dealing." See also Diamond State Iron Co. v. Husbands, 8 Del. Ch. 205, 68 A. 240. (Italics are ours).
We think plaintiff's claim was, at most, an imperfect, inchoate degree of property and not a vested right or interest. See 2 Bl. Com. p. 442; Coles v. Madison, Breese (Ill.) 115, 12 Am. Dec. 165. A cause of action in his favor and against the commission had not come into existence *Page 620 
when the new law went into effect for the reason that the Bank Examiner had certified nothing pertaining thereto to the commission, as required by the old law. If the plaintiff acquired a vested right in that portion of the Guaranty Fund which had been collected at the time the bank closed merely because he was a depositor therein, then all depositors in banks that closed before the law of 1923 went into effect acquired a similar vested right to payment in full from that part of the fund which had been accumulated through assessments made prior to July 1, 1923, in the order in which the banks closed. If that were the correct construction of the statute, it would operate to deprive the overwhelming majority of the depositors in closed banks of any payment whatever on their claims from the existing, altogether inadequate Guaranty Fund. Payment as to them would necessarily be postponed to such remote period as would be required to replenish the fund. The result would be that a plan obviously devised to protect all depositors equally would, through judicial construction, be made to give full protection to some and practically no protection to others. The difficulties, complications and injustice that would arise from such a construction of the law would render its administration cumbersome and costly, would to a great extent defeat the legislative purpose common to the act of 1917 and to that of 1923. These considerations doubtless influenced the legislature to enact chapter 200, Session Laws 1923. Whether approval of a claim as guaranteed by the State Examiner would have created a vested right which the legislature could not have disturbed by subsequent legislation, is not decided. But see Louisiana ex rel. Folsom v. New Orleans, 109 U.S. 285, 27 L. ed. 936, 3 Sup. Ct. Rep. 211.
In determining the question whether any vested right of the plaintiff, or of others similarly situated, was violated by the law of 1923, regard must be had for the purpose the legislature had in view. It is a familiar rule that there is no vested right in wrong; with particular reference to the situation before us, it may likewise be said that there is no vested right in inequity. Considering, for the moment, that aspect of the legislative purpose which bore directly upon the interest of depositors in banks, as apart from the general public interest, that purpose could be fully accomplished under the law of 1917, operating under normal conditions as then known, understood and anticipated *Page 621 
by the legislature. Abnormal and unforeseen calamities overtook the banking business during the period intervening the enactment of the law of 1917 and that of 1923, apparently commencing in 1920, with the result that the legislative purpose, the same in each instance, both with respect to the public interest and the specific interest of individual depositors, could have been but very inadequately accomplished in the manner prescribed by the act of 1917, but could be, to a greater, and, in the judgment of the legislature, a more equitable extent, attained by the plan prescribed in the law of 1923. In the legislative judgment, the beneficent purpose of the law, from the general standpoint of the public interest, as well as from the viewpoint of individual depositors, would be better served by providing an equitable, pro rata distribution of the Guaranty Fund among a large number of depositors than by paying all the depositors in one, two or three banks, while leaving the depositors in eighty or a hundred banks to wait indefinitely for payment from the guaranty fund. We think that the general statement of the rule in 2 Story, Const. 5th ed. 674, applies to the situation presented in the record. "A party has no vested right in a rule of law which would give him aninequitable advantage over another; and such rule may, therefore, be repealed and the advantage thereby taken away." (Italics are ours.) The assessment, creation, and administration of the fund, from whatever standpoint considered, are made pursuant to a legislative policy, which may be changed at will; the payment of the assessment is compulsory, (failure to pay it is followed by results substantially identical with those that follow when special assessments against property are not paid, the property — here the right to do a banking business — may be taken) does not rest upon contract in any respect, and the legislative wisdom which dictated the adoption of that policy may likewise alter or abandon it. We are, therefore, of the opinion that the depositors in closed banks, who had taken no steps to have their claims determined, liquidated, and allowed in the manner provided by the act of 1917, or concerning which facts had not been certified to the Commission, as provided in that law, prior to July 1, 1923, had no such vested right or interest in the continuance of the plan of payment from the Guaranty Fund provided in that act as to render it incompetent for the legislature to change this plan in 1923 so as to provide for the paying of dividends upon a large number of *Page 622 
claims, according to the sound discretion of the commission, rather than to pay the depositors in one or two banks in full, while leaving all others to wait indefinitely.
The State undertakes to perform a service to depositors not in any manner founded on contract; that service and the compensation provided in the act are somewhat analogous to the situation presented in the pension cases. It is held that the pension is a bounty, and that the beneficiary, even though the municipality may have deducted a part of his salary to create a pension fund, has no vested interest therein which may not be taken away by subsequent changes in the statutes. See Pecoy v. Chicago,265 Ill. 78, 106 N.E. 435; Pennie v. Reis, 132 U.S. 464, 33 L. ed. 426, 10 Sup. Ct. Rep. 149; Friel v. McAdoo, 101 A.D. 155, 91 N Y Supp. 454; Head v. Jacobs, 150 Ky. 290, 150 S.W. 349; Gibbs v. Minneapolis, 125 Minn. 174, 145 N.W. 1075, Ann. Cas. 1915C, 749; Eddy v. Morgan, 216 Ill. 437, 75 N.E. 174.
The question as to the suability of the Guaranty Fund Commission is not free from difficulty. The State, through the agency of the Commission, undertakes to render a service, it is true, to a class of citizens, namely the depositors in closed banks, but the broad basis upon which the exercise of the power rests is the safety and welfare of the State and of its citizens as a whole, rather than the interest of the individuals who make deposits in banks. In executing this purpose in the interest of the public safety, the State is acting in a governmental capacity; it necessarily must create a suitable agency through which to act and such agency is the Guaranty Fund Commission. It is but an arm or a branch of the executive department of the State in executing a specific legislative policy, and is not suable without the consent of the State. In performing their duties under this act, the Commission act as executive officers, administering a fund in which the State has at least a possessory interest in order to carry out the purpose of the law. Lankford v. Platte Iron Works Co. 235 U.S. 461, 59 L. ed. 316, 35 Sup. Ct. Rep. 173. See also Miller Supply Co. v. State Bd. of Control,72 W. Va. 524, 78 S.E. 672; State ex rel. Louisiana Trust  Sav. Bank v. Board of Liquidation, 136 La. 571, 67 So. 370.
The State of Oklahoma enacted a Depositors Guaranty Fund Law many years ago very similar to the Depositors Guaranty Fund Law enacted by the legislature of North Dakota in 1917. In Lovett v. *Page 623 
Lankford, 47 Okla. 12, 145 P. 767, the Supreme Court of Oklahoma held that the Guaranty Fund was a state fund, created in the exercise of the power invoked when taxes are levied for the support of the common schools, that such fund was a state or public fund, and concluded that the State Banking Board was not subject to suit by a depositor asserting a claim against the fund for the reason that such a suit would, in fact, be a suit against the State. The members of the Oklahoma Banking Board, other than the State Examiner, are appointed by the Governor. This construction of the Oklahoma Act was sustained by the Supreme Court of the United States in Lankford v. Platte Iron Works,235 U.S. 461, 59 L. ed. 316, 35 Sup. Ct. Rep. 173. The Oklahoma Court, in Lovett v. Lankford, supra, says, among other things: "In considering §§ 300 and 303 together, it will be seen that the law has specifically confided to the Banking Board and the Bank Commissioner the duty and authority to determine the validity of claims against the Depositors Guaranty Fund. By this section it is not only their duty to determine when a claim is valid against the bank, but they must further determine whether such claim is protected and required to be paid from the Depositors Guaranty Fund. Lankford v. Oklahoma Engraving  Printing Co. 35 Okla. 404, 130 P. 278." The court further says: "Defendants in error (The Banking Board) constitute a part of the executive department of the State. They are required to pass upon the validity of the claim in question, and as to whether it was protected by § 303, supra, and was entitled to be paid out of the Depositors Guaranty Fund. It was their duty to construe the law and apply it to the facts before them. . . . From the foregoing it is clear that defendants constitute a part of the executive department of the state government and that they were vested with the exercise of discretion and judgment in the premises; and their action cannot be reviewed or reversed in a proceeding for a writ of mandamus."
It is sought to distinguish the Oklahoma holdings on the ground that the State Examiner is a constitutional officer in that state. He is enumerated with other officers in the Constitution as a repository of executive power. The authority, however, which he exercises is conferred upon him by statute and he is made amember of the Banking Board by statute in that state. Section 71 of the North Dakota Constitution *Page 624 
vests the executive power of the State in the Governor. It is his duty, as a repository of the supreme executive power, to supervise the enforcement and administration of laws enacted for the purpose of putting into execution legislative policies. The Governor is an ex-officio member of the Guaranty Fund Commission, of the State Banking Board, and, of course, of other boards. The Constitution of the State of Oklahoma vests the general executive authority of the state in the Governor and other enumerated officials, including the State Examiner and, by implication, the Bank Commissioner. Section 1, art. 6 and § 1, art. 14. The Bank Commissioner in Oklahoma, like the State Examiner in North Dakota, is appointed by the Governor. In both states, the power or authority that carries out legislative policy expressed in statutes, like the Guaranty Fund Act, is, in general, of an executive nature.
The reference to the fact that the examiner is a constitutional officer in Oklahoma, made in the case of State ex rel. Taylor v. Cockrell, 27 Okla. 630, 112 P. 1000, is not made for the purpose of attributing to him any different or greater authority because of that fact, but in order to answer the question before the court in that case as to whether the examiner had the right to examine books and accounts of the Bank Commissioner, who, under certain statutes, was, at that time, charged with the duty of administering the affairs of insolvent banks. It is difficult to perceive any distinction in principle that can be rested upon the proposition that the office of State Examiner in North Dakota is created by statute, while in Oklahoma it is created by the Constitution, when in both states the duties and powers of the Examiner are prescribed by statute. In North Dakota, the Governor, a constitutional officer, is a member of the Commission. Our conclusion is that there is no distinction in principle and that the Oklahoma decisions are in point, unless the Guaranty Law of Oklahoma is substantially different from the North Dakota Act of 1917. It is not necessary to review the Oklahoma law at length. We have examined that act and there is no substantial difference requiring a different conclusion.
In referring to the Oklahoma decisions, it was suggested by counsel for one of the parties that the Oklahoma Court, in arriving at the conclusion that the Guaranty Fund was in effect a state fund, was not embarrassed by a constitutional provision similar to section 186 of our *Page 625 
Constitution, which provides that "no money shall be paid out of the state treasury except upon appropriation by law. . . ." Section 55 of article 5 of the Oklahoma Constitution provides: "No money shall ever be paid out of the treasury of this state, nor any of its funds, nor any of the funds under its management,
except in pursuance of an appropriation by law. . . ." It will be noticed that the North Dakota constitutional provision is not so comprehensive as that of Oklahoma. The Oklahoma Court in State ex rel. Taylor v. Cockrell, supra, held that the Guaranty Fund was "under the management of the state" in any event, even if it was not a state fund. Notwithstanding the constitutional provision adverted to, the Oklahoma Court, in cases decided subsequent to State ex rel. Taylor v. Cockrell, supra, had no difficulty in arriving at the conclusion that the Depositors Guaranty Fund was a state fund, and that disbursements therefrom might, notwithstanding, be made without the formality of a legislative appropriation.
On the question of the suability of the Guaranty Fund Commission, reference is made in briefs of counsel for the appellant to some North Dakota decisions in support of the contention that the Guaranty Fund is not a public fund. The first case cited is State ex rel. Olson v. Jorgenson, 29 N.D. 173, 150 N.W. 565, where the State Hail Insurance Law and the fund created thereby, chapter 23, Session Laws 1911, was under consideration. The fund collected under that act consisted of voluntary payments
or contributions by individuals who desired to participate in the supposed benefits of the law. The State was merely the custodian of a fund voluntarily contributed for the sole benefit of the contributors themselves. Of course no appropriation was necessary to authorize disbursements therefrom. It was very properly held that it was not a state fund, or public fund, or "money" within the contemplation of § 186 of the state Constitution. State ex rel. Linde v. Taylor, 33 N.D. 76, p. 109, L.R.A. 1918B, 156, 156 N.W. 561, Ann. Cas. 1918A, 583, is likewise cited. That case affirms the rule laid down in State ex rel. Olson v. Jorgenson, supra, with respect to the characteristics of a public fund and holds that the language in that case is applicable to the State Bonding Fund and that the Bonding Fund was not a public fund within the contemplation of § 186 of the Constitution so as to require a legislative appropriation before disbursements could legally be made therefrom. State ex rel. Stearns v. Olson, 43 N.D. *Page 626 
619, 175 N.W. 714, also cited by counsel, is a case in which the question was involved as to the right or duty of the state auditor to audit claims against the Workmen's Compensation Fund. It was there held that the Workmen's Compensation Fund was not a public fund or "money" within the meaning of section 186 of the Constitution, so as to require legislative appropriation before the same could be legally paid to claimants.
There is nothing in any of these decisions in any way inconsistent with the conclusions we have reached in the instant case. With reference to the Workmen's Compensation Fund the statute expressly authorized suits to be brought against the officers charged with the duty of administering the law. Under the original Hail Insurance Act of 1911, involved in the case of State ex rel. Olson v. Jorgenson, supra, while no provision was made for suit against the Insurance Commissioner, provision was made for arbitration in case of dispute and the decision of the arbitrators was declared to be final. In the case at bar, the fund is collectible by the compulsory process of the State and if the bank does not pay the assessment made, the valuable property right, given when the charter is granted, to do a banking business may be taken away. The fund remains on deposit in banks throughout the State; it is retained by the contributing banks until withdrawn by the Commission for use pursuant to the act. The law, in effect, designates each contributing bank a special depository of the assessment made against and due from it. Sess. Laws 1923, § 10, chap. 200. It is not necessary to determine who has legal title to the fund. The State of North Dakota, in any event, has a possessory interest therein which can be vindicated against all the world, except such as have acquired a vested right or interest in the fund. That fund is under the law used by the State in performing governmental functions for the protection, the safety, and welfare of its citizens. It does not necessarily follow that the fund is "money," within the meaning of that section, so as to require a prior legislative appropriation, as contemplated by section 186 of the Constitution, to authorize disbursements from it. The assessment or contribution is appropriated to the purpose of the statute at the moment the levy has been legally made. It never reaches thestate treasury. The fund is under the control of the contributors, subject to draft by the commission, but at all times outside the treasury of *Page 627 
the State. This view is in no wise affected by the fact that the State Treasurer is ex-officio treasurer of the Commission. Payments from the fund are not payments "out of the State Treasury" within the meaning of the constitutional provision. See People ex rel. Einsfeld v. Murray, 149 N.Y. 367, 33 L.R.A. 344, 348, 44 N.E. 146.
The assessment to create the fund is somewhat analogous to a special assessment and must be referred to the sovereign power to levy a tax. See Noble State Bank v. Haskell, 219 U.S. 104, 55 L. ed. 112, 32 L.R.A.(N.S.) 1062, 31 Sup. Ct. Rep. 186, Ann. Cas. 1912A, 487, and Rolph v. Fargo, 7 N.D. 640, 652, 42 L.R.A. 646, 76 N.W. 242. It is not a license fee that must be paid as a prerequisite to engaging in business, or that is exacted for the purpose of raising a fund to be expended in regulating a business. It is levied for a public purpose in execution of a design proper and justifiable under the police power. It seems to the writer that the exaction from the banks, made in order to create the Guaranty Fund, is a species of taxation that rests upon the same general principles as special assessments; that the justice of imposing this special burden upon individual banks must be vindicated upon the assumption — underlying special assessments generally — that the contributors, while bearing the cost of a scheme which operates to the advantage of the public at large, will suffer no material loss because of the increased public confidence and security and the consequential increase in revenue-producing business. See State, New Jersey R.  Transp. Co., Prosecutors, v. Newark, 27 N.J.L. 190; Ellison v. LaMoure,30 N.D. 43, 151 N.W. 988; Rolph v. Fargo, 7 N.D. 640, 42 L.R.A. 646, 76 N.W. 242.
The fund, thus created, is a public fund, created through the exercise of the taxing power, for a public or governmental purpose, and to be controlled by a state agency in the public interest. Under the facts this view is consistent with the holding that it is not "money" within § 186 of the Constitution. See People ex rel. Einsfeld v. Murray, supra.
There is no conflict between the suggestion that the assessment is analogous to a special assessment and the levy thereof is, to that extent, an exercise of the power to tax, and our conclusion that the Guaranty Fund Law is a regulatory measure enacted under the police power. The legislative policy to assess the cost of public improvements against *Page 628 
the property benefited thereby finds sanction in the police power; while the levy of assessments to pay the cost thereof against property benefited is an exercise of the sovereign power to levy a tax. See Rolph v. Fargo, supra. It is elementary that the sovereign, in executing a policy adopted under the police power, may find it necessary to exercise the power of taxation. There is, in legal theory, no inconsistency or conflict in the exercise of these powers in the execution of the same governmental design.
Having held that the Commission is not subject to suit without the consent of the State, we must next ascertain if there is authority to maintain this action in the constitution or the general statutes on the subject.
Section 22 of the Constitution of North Dakota provides that:
"All courts shall be open, and every man for any injury done him in his lands, goods, person or reputation shall have remedy by due process of law, and right and justice administered without sale, denial or delay. Suits may be brought against the state in such manner, in such courts, and in such cases, as the legislative assembly may, by law, direct."
The right to maintain a suit against the State, therefore, exists only as provided by statute. No provision is made, either in the Law of 1917 or that of 1923, for suits against the Guaranty Fund Commission or against the State upon any matters arising out of the administration of the law.
Section 8175, Comp. Laws 1913, reads as follows:
"An action respecting the title of property or arising upon contract may be brought in the district court against the state the same as against a private person. When such actions are not of a local nature, they shall be brought in the County of Burleigh. . . ."
In the enactment of this statute, the legislative policy with respect to the protection of rights when infringed by the State is clearly expressed. It seems to have been the intention to make no distinction with respect to the right of an individual in so far as the remedy was concerned to redress wrongs or to enforce his right "arising upon contract" merely because the adversary was the state. Under the facts in the pleadings and the Depositors Guaranty Fund Law, is the relation between the state and depositors in closed banks in any sense one of contract, *Page 629 
express or implied? We do not think so. We have seen that the fund is to be used for a purpose proper under the police power; and that it is created through the exercise of the power of taxation. See Noble State Bank v. Haskell, supra, Lovett v. Lankford, 47 Okla. 12, 145 P. 767, and Lankford v. Platte Iron Works Co. 235 U.S. 461, 59 L. ed. 316, 35 Sup. Ct. Rep. 173. The end in view is governmental in character; the means which the legislature deemed best calculated to attain that end require the exercise of sovereign powers. The essential elements of the causes comprehended in the class familiarly known in the law as actions ex contractu are wholly lacking.
A word may be added with respect to the practical consequences of a holding that the commission is subject to suit. As observed by the Supreme Court of the United States in Lankford v. Platte Iron Works Co. supra, the scheme of the act "may be embarrassed if not defeated by subjecting the banking board to incessant judicial inquiries as to its administration." The record gives a hint of what may develop. Some twenty lawsuits are already pending; others may be, doubtless are, brewing; thousands of claimants — potential litigants — are involved. The time and funds of the commission would be consumed in litigation. Doubtless this powerful consideration influenced the legislature in giving ample opportunity for hearing before the commission, but without appeal from its decisions. In government and public administration, someone must be entrusted with power of final decision. Under the facts here, the commission may make final decisions without encroaching on the judicial function. See Luther v. Borden, 7 How. 1, 12 L. ed. 581; Den ex dem. Murray v. Hoboken Land  Improv. Co. 18 How. 272, 15 L. ed. 372. The presumption is that these officials, like judicial and other officers, will do their duty faithfully, impartially and honestly.
Nothing that has been said can be construed as a holding that a depositor may not in a proper case proceed against the Guaranty Fund Commission or its officers. It is not intended to be held that a depositor or other person may under no circumstances maintain an action in the proper forum, having for its object to require the Guaranty Fund Commission or its officers to perform an official or legal duty not of a governmental character, owing to a class of persons of whom such depositor or person is a member. While the rule is that a suit cannot be *Page 630 
maintained against the sovereign without its consent, it is equally well established that a clear official duty, not involving the exercise of discretion, may be enforced when performance thereof is arbitrarily refused; and that if a person will receive injury because an official is about to violate an official or legal duty, for which adequate compensation cannot be had at law, such conduct may be enjoined. Board of Liquidation v. McComb, 92 U.S. 531, 23 L. ed. 623. To state the matter somewhat differently, if the plaintiff in the instant case simply occupied the position of a creditor demanding payment of a liquidated claim against the state from an administrative or executive officer charged with the ministerial duty of paying him the money, and that the defendants arbitrarily refused to make such payment, it is not intended to be held that the plaintiff might not compel performance of such duty in a proper proceeding. See State ex rel. Stearns v. Olson, 43 N.D. 619, 175 N.W. 714. See also Cunningham Case, 109 U.S. 452, 27 L. ed. 994, 3 Sup. Ct. Rep. 292, 609; Rolston v. Missouri Fund Comrs. (Rolston v. Crittenden) 120 U.S. 390, 412, 30 L. ed. 721, 728, 7 Sup. Ct. Rep. 599. The proceeding suggested would aid in furthering the legislative purpose by compelling the performance of a duty enjoined upon public officials by legislative enactment in cases where legal rights were infringed in excess of official authority or in disregard of legal duty. It is not necessary at this time to decide or to discuss further under what circumstances such an action may be maintained.
It seems plain that if the plaintiff and other persons similarly situated can control the action of the defendants in a suit at law or in equity, in acting on their claims in the absence of fraud, or arbitrary action or nonaction contrary to statute, that the decree entered would affect the State in its sovereign capacity, and more or less directly interfere with it in the performance of governmental functions. The entire act is grounded, as we have held, upon the proposition that the public safety and the general welfare will be subserved by the administration of its provisions; a part of the act provides for the compulsory payment, the collection and disbursement of a fund in execution of the general design; to direct the time, the manner or the method of disbursing such fund would be an interference by the courts with the exercise of governmental functions and a judicial administration of a law enacted *Page 631 
pursuant to the police power and in furtherance of the public interest, the public safety, and the public welfare. We do not believe that it was the intention of the legislature or of the constitution that the courts should have any such power unless expressly authorized by the statute under consideration in a given case.
In order to guard against a misconception or misunderstanding as to the legal effect of our conclusions, it should be reiterated that the Guaranty Fund Commission is not, by this decision, put beyond or above the law and the constitution. The rights of the citizen to due process, to the maintenance of the legal sanctity of the obligation of a contract, to the equal protection of the law, and to the enjoyment of the rights guaranteed by the constitution of the state and of the nation, will be open to vindication and their violation to redress against the commission, no less than against any person, natural or artificial. Neither the Guaranty Fund Commission nor any officer may, under our legal system, set the Constitution at defiance; officers and private individuals alike must obey it and respect the rights of persons thereunder. No such rights are in jeopardy in the case at bar and if any such rights be endangered by the Commission in the future, no injured person will be denied the redress or the remedies to which he is entitled under the fundamental law of the land.
What has been said applies with equal force to the complaint in intervention. For the reasons heretofore stated, that complaint likewise fails to state a cause of action.
The question of the right of the Guaranty Fund Commission, or of any state officer, to temporarily use the fund to assist open banks or salvage the assets of closed banks for the benefit of the guaranty fund, is in no manner involved or decided. An expression of opinion thereon would be obiter and purely gratuitous.
The order of the trial court sustaining the demurrer to the complaint and overruling the demurrer to the answer is affirmed.
BIRDZELL, NUESSLE, and CHRISTIANSON, JJ., concur.