Court Opinion

ID: 9688148
Source: CourtListenerOpinion
Date Created: 2023-08-24 17:35:37.585308+00
Date Added: 2024-06-11T12:05:11.299566
License: Public Domain

C. F. KELSCH, District Judge
(concurring specially).
I concur in the opinion of the court, with one important exception. I do not agree with the inference or implied conclusion that the State Banking Board, as now established under our statute, constitutes a fair and impartial administrative tribunal before which any financial institution under its jurisdiction can have a fair and impartial hearing; from which I dissent and desire to state my reasons therefor.
It is well settled in this State:
(1) That where the constitutionality of a statute depends upon the power of the legislature to enact it, its validity must be tested by what might be done under color of the law and not what has been done.
Herr v. Rudolf, 75 N.D. 91, 25 N.W.2d 916
(2) That this court has no power to declare any legislative enactment or law of this State unconstitutional, unless at least four of the Judges decide that its invalidity is clear beyond a reasonable doubt.
Section 89 of the State Constitution;
State ex rel Mason v. Baker, 69 N.D. 488, 288 N.W. 202
An analysis of out banking laws, in so far as they relate to a determination of the insolvency of any financial institution under its jurisdiction, discloses that they not only authorize but expressly require:
(1) That the state examiner, while acting in a purely administrative capacity, must find and determine whether the fi*520nancial institution which he has examined is, in fact, insolvent;
(2) That the State Banking Board, while acting 'in a purely administrative capacity, must approve or disapprove the examiner’s findings that the bank which he has examined is, in fact, insolvent; and
(3) That the state examiner and the State Banking Board, while acting in a quasi-judicial capacity, must sit in judgment to review and pass upon the necessity, reasonableness or validity of its prior decision that the financial institution involved was, in fact, insolvent.
I am firmly convinced:
(1) That the legislative scheme which unites investigative authority, accusatory and adjudicatory functions, in one administrative agency is unsound in principle, unwise in public policy, inconsistent with common experience and violative of the fundamental requirement of due process of law, as established by the recent decisions of the Supreme Court of the United States.
In re Murchison, 349 U.S. 133, 75 S.Ct. 623, 99 L.Ed. 942;
Kinsella v. United States, 361 U.S. 234, 80 S.Ct. 297, 4 L.Ed.2d 268;
Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287;
Morrisey v. Brewer, 408 U.S. 471, 92 S.Ct. 2593, 33 L.Ed. 484;
Gibson v. Berryhill, 411 U.S. 564, 93 S.Ct. 1689, 36 L.Ed.2d 488
(2) That where the state examiner and the other members of the State Banking Board are required by statute, while acting in a purely administrative capacity, to determine whether the financial institution in issue is, in fact, insolvent, that in such case it is reasonable to find and conclude that each member has a vital, personal interest in the outcome of the proceeding before the board, while it is acting in a quasi-judicial capacity; and consequently it is unreasonable and inconsistent with common experience to believe and to find that any member would admit that he made a mistake, that he acted arbitrarily or in bad faith in breach of his official duties. On the contrary, their self-interest would actuate and persuade them to use and exercise all of the power and influence of their official position to defend and justify their prior decision that the bank in issue was, in fact, insolvent.
(3)That where the members of an administrative agency are required to prejudge the issue which they are to ’try upon the merits, they cannot, by reason of their bias and prejudice, act as independent or impartial decision makers;
Goldberg and Morrisey, supra
That such legislative policy is, in my judgment, not only repugnant to and inconsistent with but also offends the principle of fundamental fairness essential to constitute due process of law.
Kinsella, supra
While courts have no power to legislate by judicial fiat, (Shermoen v. Lindsay, N.D. 163 N.W.2d 738) I firmly believe I have the right and the explicit duty to recommend the enactment of timely, remedial legislation, so as to provide, in effect:
(1) That the state examiner be removed as a member and chairman of the State Banking Board, so that he will have no authority to act in a quasi-judicial capacity.
(2) That the State Banking Board be relieved and absolved from the duty and responsibility of approving or disapproving the state examiner’s findings that any bank under its jurisdiction, which he has examined, is insolvent, while acting in a purely administrative capacity, so that the board will not have to sit in judgment of and be required to pass upon the necessity, reasonableness or validity of its prior decision by approving the state examiner’s report.
(3) That the board should not only have the right but the clear legal duty to review the state examiner’s findings on insolvency and to either approve or reject the same, if the clear weight of the evidence before it justifies such a determination.
*521I firmly believe that the enactment of such remedial legislation:
(1) Would remove the serious doubt, which now exists, as to the constitutional validity of our statutes; and whether the State Banking Board, as now established, constitutes a fair and impartial administrative tribunal before which a fair and impartial hearing can be had by any financial institution under its jurisdiction;
(2) Would protect every financial institution in this State from the unreasonable, arbitrary or oppressive action of the state examiner;
(3) Would protect both the public and private interests in the financial institutions of this State in case of an emergency;
(4) Would protect and safeguard the right of all financial institutions in this State to the constitutional guarantee of due process of law; and
(5) Would put an end to the protracted, highly expensive, needless and unjust litigation that has been before this court in this controversy between these parties; and thereby make a substantial contribution to the improvement of administrative justice in this State.