Juhan v. State

Decision Date05 June 1918
Docket Number(No. 4544.)
Citation216 S.W. 873
PartiesJUHAN v. STATE.
CourtTexas Court of Criminal Appeals

Appeal from Collin County Court; R. L. Moulden, Judge.

C. O. Juhan was convicted of violating Acts of 34 Leg. 1915, c. 28, defining loan brokers, and providing regulations therefor, and punishment for violation thereof, and he appeals. Reversed, and proceedings ordered dismissed.

Charles F. Greenwood and John W. Pope, both of Dallas, for appellant.

Sam Neathery, Co. Atty., of McKinney, and E. B. Hendricks, Asst. Atty. Gen., for the State.

MORROW, J.

The prosecution is for violation of the act of the 34th Legislature, chapter 28 (Vernon's Ann. Civ. St. Supp. 1918, arts. 6171a-6171l), defining "Loan Brokers," and providing regulations therefor and punishment for violations thereof.

A loan broker is defined in the act as follows:

"A `loan broker' is a person, firm or corporation who pursues the business of lending money upon interest and taking as security for the payment of such loan and interest an assignment of wages, or an assignment of wages with power of attorney to collect the same or other order for unpaid chattel mortgage or bill of sale upon household or kitchen furniture." Section 1 (article 6171a).

Other provisions, making conditions precedent to the engagement in the business, require a bond of $5,000, prescribing its terms; that a book registering the transactions shall be kept open to inspection; the filing of power of attorney, making the county judge the agent upon whom service of process may be had; penalizing the continuance of the pursuit of the business when in default of the payment of the judgment rendered on the bond; requiring that in securities pledged by a married man the wife shall join; fixing an annual tax; declaring compromises for usury void; and prescribing a penalty.

The appeal is maintained on the proposition that appellant, in lending money at the legal rate on chattel mortgage security, was exercising an inalienable right, and that the act abridging it is void for want of power in the legislative department of the government, and its terms unreasonable.

He urges various reasons for his contentions. These cannot, within the limits of an opinion, be followed in detail. All of them are referable to the scope and limits of the police power of the state. This power has been the subject of much comment by text-writers and judges, so much that it would be futile to attempt its review. No more satisfactory statement of it has been found than that made by Justice Williams of the Supreme Court of this state in the opinion in H. & T. C. Ry. Co. v. Dallas, 98 Tex. 415, 84 S. W. 653, 70 L. R. A. 850, from which we quote as follows:

"The power is not an arbitrary one, but has its limitations. It is commensurate with, but does not exceed, the duty to provide for the real needs of the people in their health, safety, comfort, and convenience, as consistently as may be with private property rights. As those needs are extensive, various, and indefinite, the power to deal with them is likewise broad, indefinite, and impracticable of precise definition or limitation."

Courts have not undertaken to catalogue the subjects upon which the police power may operate, nor to define in precise terms the measures that may be lawfully taken, but are guided by previous decisions, and pass upon particular cases as they arise, and determine whether they fall within or without the proper limits. See Hudson v. McCarter, 209 U. S. 349, 28 Sup. Ct. 529, 52 L. Ed. 828, 14 Ann. Cas. 560; Chicago R. R. v. State, 47 Neb. 549, 66 N. W. 624, 41 L. R. A. 481, 53 Am. St. Rep. 557; State v. Harrington, 68 Vt. 622, 35 Atl. 515, 34 L. R. A. 100; Ives v. South Buffalo Ry. Co., 201 N. Y. 271, 94 N. E. 431, 34 L. R. A. (N. S.) 162, Ann. Cas. 1912B, 156; Stone v. Mississippi, 101 U. S. 814, 25 L. Ed. 1079; Dunn v. Commonwealth, 105 Ky. 834, 49 S. W. 813, 43 L. R. A. 701, 88 Am. St. Rep. 344; Aubrey's Case, 36 Wash. 308, 78 Pac. 900, 104 Am. St. Rep. 952, 1 Ann. Cas. 927; People v. Budd, 117 N. Y. 1, 22 N. E. 670, 682, 5 L. R. A. 559, 15 Am. St. Rep. 460. It follows that the decisions of courts passing upon laws similar to those before it in a given case become important subjects of investigation.

It cannot be questioned that the state, under its police power, has the right to regulate the conduct of business to protect the public health, morals, and welfare, observing constitutional limitations, reasonable classification, and terms of control. This is recognized in constructions of both the federal and state Constitutions. Tiedeman on Lim. Police Power, § 102; Mugler v. Kansas, 123 U. S. 623, 8 Sup. Ct. 273, 31 L. Ed. 205; Murphy v. People of Cal., 225 U. S. 623, 32 Sup. Ct. 697, 56 L. Ed. 1229, 41 L. R. A. (N. S.) 153; St. Louis v. Fischer, 167 Mo. 654, 67 S. W. 872, 64 L. R. A. 679, 99 Am. St. Rep. 614; Id., 194 U. S. 361, 24 Sup. Ct. 673, 48 L. Ed. 1018; and other cases listed in Ruling Case Law, vol. 6, p. 198.

Callings that cannot be regulated except by license tax are those which cannot in their operation be dangerous to the public. Tiedeman on Lim. Police Power, p. 273; Ex parte Dickey, 144 Cal. 234, 77 Pac. 924, 66 L. R. A. 928, 103 Am. St. Rep. 82, 1 Ann. Cas: 428. All others may be restricted. Tiedeman on Lim. Police Power, § 102; Ex parte Drexel, 147 Cal. 763, 82 Pac. 429, 2 L. R. A. (N. S.) 588, 3 Ann. Cas. 878; Stone v. Mississippi, 101 U. S. 814, 25 L. Ed. 1079, notes 15 and 16, and other cases listed in 6 Ruling Case Law, p. 218, note 16. And those essentially harmful may be prohibited. Commonwealth v. Vrooman, 164 Pa. 306, 30 Atl. 217, 25 L. R. A. 250, 44 Am. St. Rep. 603; Ruling Case Law, vol. 6, p. 194, note 6 and cases cited.

The calling of lending money at interest is subject to regulation. From 22 Cyc. 1471, we quote the following:

"The taking of interest, or, as it was then called, `usury,' was looked upon in early times with great disfavor, and actually prohibited, not only by the Mosaic law among the Jews, but also under severe penalties by the old English laws. The church uttered its anathema, and the state leveled its forfeitures, against the taking of any interest, great or small. But, notwithstanding the denunciations and punishments to which it was subjected, it could not be suppressed, and it was finally, in 1545, sanctioned in England by 37 Henry VIII, c. 9."

The right to lend money at interest is a creature of statute, not an inherent right, and in our Constitution there is a limitation of the right prohibiting contracts for interest exceeding 10 per cent. per annum. Many restrictions and regulations with reference to lending money and touching the security that may be taken therefor will be found in the banking laws of the United States and the several states. Laws identical in purpose and similar in detail to that involved in this appeal have been passed by more than 30 of the states of the Union and in the District of Columbia. So far as we have examined the authorities they have except in the case of Massie v. Cessna, 239 Ill. 352, 88 N. E. 152, 28 L. R. A. (N. S.) 1108, 130 Am. St. Rep. 234, been sustained. People v. Stokes, 281 Ill. 159, 118 N. E. 87; Mutual Loan Co. v. Martell, 200 Mass. 482, 86 N. E. 916, 43 L. R. A. (N. S.) 746, 128 Am. St. Rep. 446; Knoxville v. Harbison, 183 U. S. 13, 22 Sup. Ct. 1, 46 L. Ed. 55; Hancock v. Yaden, 121 Ind. 366, 23 N. E. 253, 6 L. R. A. 576, 16 Am. St. Rep. 396; State v. Peel, 36 W. Va. 802, 15 S. E. 1000, 17 L. R. A. 385; State v. Wear, 79 Or. 367, 154 Pac. 905, 155 Pac. 364; Commonwealth v. Grossman, 248 Pa. 11, 93 Atl. 781; In re Stephan, 170 Cal. 48, 148 Pac. 196, Ann. Cas. 1916E, 617; Heath & Milligan Mfg. Co. v. Worst, 207 U. S. 338, 28 Sup. Ct. 114, 52 L. Ed. 236; Telephone Co. v. Los Angeles, 211 U. S. 265, 29 Sup. Ct. 50, 53 L. Ed. 176; Edwards v. State, 62 Fla. 40, 56 South. 401; King v. State, 136 Ga. 709, 71 S. E. 1093; State v. Sherman, 18 Wyo. 169 105 Pac. 299, 27 L. R. A. (N. S.) 898, Ann. Cas. 1912C, 819; Wessell v. Timberlake, 95 Ohio, 21, 116 N. E. 43, Ann. Cas. 1918B, 402; Commonwealth v. Puder, 261 Pa. 129, 104 Atl. 505, Supreme Court of Pennsylvania, decided April, 1918.

In the case of People v. Stokes, 281 Ill. 159, 118 N. E. 87, that of Massie v. Cessna, 239 Ill. 352, 88 N. E. 152, 28 L. R. A. (N. S.) 1108, 130 Am. St. Rep. 234, is distinguished; and in Mutual Loan Co. v. Martell, supra, the Supreme Court of Massachusetts and the Supreme Court of the United States (222 U. S. 231, 32 Sup. Ct. 74, 56 L. Ed. 178, Ann. Cas. 1913B, 529) refused to follow it.

The states having similar laws are as follows: California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming. The major portion of them require a bond as a condition precedent for the pursuit of the business, and other regulations varying in terms, but not different in substance, from those in our statute. The law on the subject enacted by Congress for the District of Columbia varies from ours in no essential particular, and contains the criticised requirement that an agent upon whom service of process may be made shall be appointed, requires a bond in the sum of $5,000, and is more restrictive than the Texas statute, in that it requires the bond shall be made by a surety company. U. S. Statutes at Large, vol. 37, part 1, p. 657, c. 26. In amount of bond and other provisions this statute is not unlike that in many of the other states. The classification of occupations for the purpose of police regulation, based upon the character of security taken for loans, is declared legal in Griffith v. Conn., 218 U. S. 563, 31 Sup. Ct. 132, 54 L. Ed....

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