French v. Toledo

• Decision Date: 09 November 1909
• Docket Number: 1172111722
• Citation: 81 Ohio St. 160,90 N.E. 160
• Parties: French v. City Of Toledo. Beck v. City Of Toledo.
• Court: Ohio Supreme Court

90 N.E. 160

81 Ohio St. 160

French v. City Of Toledo. Beck v. City Of Toledo.

Nos. 1172111722

Supreme Court of Ohio

November 9, 1909

Power of municipal corporations to license - Business of loaning on chattel mortgages - Section 1536-100, Revised Statutes construed.

Section 1536-100, Revised Statutes, authorizing municipal corporations to license and regulate chattel mortgage and salary loan brokers, does not authorize the exaction of a license from persons engaged, otherwise than as brokers, in the business of loaning money upon loans secured by mortgages on personal property.

The plaintiffs in error, Henry E. French and Frank Beck, were convicted of violations of an ordinance of the city of Toledo entitled, "An ordinance to regulate and license chattel mortgage and salary loan brokers." The ordinance was passed September 25, 1905, and is substantially the same as the ordinance set out in the next preceding case, Sanning v The City of Cincinnati, excepting that the license fee is only fifty dollars. On error the judgments were affirmed in the court of common pleas and in the circuit court.

Mr Curtis T. Johnson, for plaintiff in error, in both cases.

The powers of a municipality in Ohio are those conferred by the statute. The municipal corporations have no other powers than those expressly granted. The grant of power is strictly construed and limited to the express terms of the act. Townsend v. Circleville, 78 Ohio St. 122; Bloom v. Xenia, 32 Ohio St. 461; Ravenna v. The Pennsylvania Co. 45 Ohio St. 118.

This being the established law, the conclusion follows that the city of Toledo could, by ordinance, license and regulate chattel mortgage and salary loan brokers and nothing more. Brokers, as an entire class, are not within the regulating and licensing power of the city. The business of money lending is not within the regulating power granted to the city.

One who does not make bargains for others but buys and sells on his own account, with his own funds or on an account with the funds of his principal, is not a broker. City of Portland v. O'Neil, 1 Ore., 218.

The act of the legislature empowers the city to license and regulate "chattel mortgage and salary loan brokers." The ordinance of the city of Toledo passes beyond the statutory terms, and adding new elements to the legislative scheme, attempts an enactment regulating all persons whether brokers or not, who engage in the business of loaning money upon certain classes of security.

This clearly transcends the power granted.

A broker is an agent employed to effect bargains and contracts, as a middle man, between other persons for a compensation called brokerage. He takes no possession, as broker, of the subject-matter of the negotiations. Webster's International Dictionary; Rapalje & Lawrence's Law Dictionary; Bouvier Law Dictionary; 4 Am. & Eng. Ency. Law (2 ed.), 960; Words & Phrases, "broker."

Insofar as the statute undertakes to give conclusive effect to certain evidence, it is obnoxious to Section 1, Article XIV, Constitution of the United states and Article I, Section X, Constitution of the State of Ohio.

The ordinance is invalid because it denies to citizens equal protection of the laws and is an unjustifiable and unreasonable interference with the rights to liberty and of property. State v. Felton, 77 Ohio St. 554; Railway Co. v. Ellis, 165 U.S. 150; Miller v. Crawford, 70 Ohio St. 207; State v. Gardner, 58 Ohio St. 599; Cramer v. Trust Co., 72 Ohio St. 395; State v. Robins, 71 Ohio St. 273; Harmon v. State, 66 Ohio St. 249; Cleveland v. Construction Co., 67 Ohio St. 197; State v. Gravett, 65 Ohio St. 289; Williams v. Donough, 65 Ohio St. 499; Palmer v. Tingle, 55 Ohio St. 423; Fisher Co. v. Woods, 187 N.Y. 91.

This precise question has been passed upon by the supreme court of Mississippi. Rodge v. Kelly, 88 Miss. 209; Hyland v. Sharp, 88 Miss. 567; Connolly v. Sewer Pipe Co., 184 U.S. 564, 22 U. S. S.Ct. Rep., 440; Ex parte Sohncke, 148 Cal. 262; Bailey v. People, 190 Ill. 28, 83 Am.St. 116.

The statute of April 20, 1904, provides:

"In the trial of any action the fact that such party exhibit a sign indicating such business or calling, or such proprietorship or management, shall be conclusive evidence of the liability of such party to pay the license therefor."

The statute does not raise a mere presumption but under the construction adopted the facts mentioned are allowed conclusive force. This we submit is contrary to law.

This court has passed upon a similar enactment contained in the Valentine Law. Hammond v. State, 78 Ohio St. 15.

Mr. Charles S. Northup, city solicitor, and Mr. Ralph Emery, for defendant in error.

The phrase "chattel mortgage and salary loan brokers" in the statute follows immediately after the term "pawnbrokers" so that even upon a strict technical construction of the statute the word broker would have the same meaning in both cases according to the rule of interpretation announced in the case of Raymond v. Cleveland, 42 Ohio St. 529; Rhodes v. Weldy, 46 Ohio St. 234.

The term pawnbroker, occurring in the same statute as stated, has a well settled meaning and is defined as one who makes a business of loaning money on the security of personal property pledged or deposited in his keeping. Webster's International Dictionary; Section 4387, Revised Statutes.

It appears, therefore, that as a pawnbroker is one who loans money upon the security of personal property deposited in his keeping to be forfeited in case of non-payment of the loan, a chattel mortgage and salary loan broker is one who loans money upon the security of per- sonal property transferred to him by mortgage, bill of sale or other contract involving the forfeiture of such property for non-payment of the loan or upon assignment, bill of sale or other conveyance of salary or wages, and the municipality has the power to regulate both classes of business.

In support of the validity of the ordinance and particularly of the provisions of Section 598, we submit the decision of this court in Marmet v. State, 45 Ohio St. 63.

SUMMERS J.

The affidavit upon which the prosecution of French was based, is as follows:

"AFFIDAVIT FOR CITY WARRANT.

"The State of Ohio, Lucas County, City of Toledo, ss.:

"Before me, Frampton Price, Deputy Clerk of the Police Court of the City of Toledo, Lucas County, Ohio, personally appeared Charles S. Northup who being duly sworn according to law, on his oath deposes and says, that on the 27th day of November A. D. 1906, at the city of Toledo, county of Lucas and state of Ohio, one Henry E. French was unlawfully engaged, under the name of Union Loan Company, in the business of loaning money upon loans secured by mortgages on personal property, without first having obtained a license from the mayor of said city so to do; contrary to the form of the ordinance in such cases made and provided.

"(Affiant) CHARLES S. NORTHUP.

"Sworn to and subscribed before me, this 20th day of December A. D. 1906.

"(Seal) FRAMPTON PRICE,

"Deputy Police Clerk."

The affidavit upon which the prosecution of Beck was based is as follows:

"AFFIDAVIT FOR CITY WARRANT.

"(Filed February 4, 1907.)

"Before me, Louis E. Krieger, Clerk of the Police Court of the City of Toledo, personally appeared Frank A. Boyer who being duly sworn according to law, on his oath deposes and says that from, to-wit: the 1st day of January, 1907, to the 25th day of January, 1907, at the city of Toledo, Lucas county, state of Ohio, one Frank Beck, being then and there in the employ of H. Lillie Mackey and Frank J. Mackey, co-partners doing business under the firm name and style of the Ohio Mortgage & Loan Company, which said co-partnership was at the city aforesaid and at the time aforesaid unlawfully engaged in the business of loaning money upon loans secured by mortgage on personal property, without first having obtained from the mayor of said city a license so to do, was then and there engaged, as such employe, in the business of loaning money upon loans secured by mortgages on personal property without said Beck first having obtained a license from the mayor of said city so to do, contrary to the form of the ordinance of said city in such case made and provided.

"(Affiant) FRANK A. BOYER.

"Sworn to and subscribed before me, this 4th day of February A. D. 1907.

"(Seal) LOUIS E. KRIEGER,

"Police Clerk."

The statute, paragraph 30 of Section 1536-100, Revised Statutes authorizes municipal corporations to regulate and license "chattel mortgage and salary loan brokers." The affidavit in the French case does not charge that he, as a broker, either chattel...