Morris Engel v. Edward Malley

• Decision Date: 03 January 1911
• Docket Number: No. 703,703
• Citation: 219 U.S. 128,55 L.Ed. 128,31 S.Ct. 190
• Parties: MORRIS ENGEL, Appt., v. EDWARD R. O'MALLEY, Frank Moss, Clark Williams, and William F. Baker
• Court: U.S. Supreme Court

219 U.S. 128

31 S.Ct. 190

55 L.Ed. 128

MORRIS ENGEL, Appt.,

v EDWARD R. O'MALLEY, Frank Moss, Clark Williams, and William F. Baker.

No. 703.

Argued December 15, 16, 1910.

Decided January 3, 1911.

Mr. Charles Dushkind for appellant.

[Argument of Counsel from pages 129-131 intentionally omitted] Messrs. Louis Marshall, Edward H. Letchworth, Robert C. Taylor, Archibald R. Watson, and Theodore Connoly for appellees.

[Argument of Counsel from pages 131-134 intentionally omitted] Mr. Justice Holmes delivered the opinion of the court:

This is a bill in equity to prevent the carrying out of chapter 348 of the Laws of New York for 1910, which forbids individuals or partnerships to engage in the business of receiving deposits of money for safe-keeping, or for the purpose of transmission to another, or for any other purpose, without a license from the comptroller. The requirements for obtaining the license, so far as they affect the plaintiff, are that the applicant shall deposit $10,000 with the comptroller, and present a bond with a penalty of not more than $50,000 or less than $10,000, to be fixed by the comptroller, conditioned upon the faithful performance of the duties undertaken. After notice shall have been posted for two weeks, the comptroller may approve or disapprove the application, in his discretion, and licensees are to pay a fee of $50. § 25. The license is revocable at all times by the comptroller for cause shown. § 26. Carrying on the business specified, or using the word 'banking' or 'banker' on signs, letter heads, or advertisements in connection with any business, without a license, is made a misdemeanor. § 27. The foregoing provisions do not apply to any corporation or 'individual banker' authorized to do business under the banking law, or to national banks; to any hotel keeper who shall receive money for safe-keeping from a guest; to any express or telegraph company receiving money for transmission; to individuals or partnerships where the average amount of each sum received on deposit or for transmission in the ordinary course of business shall have been not less than $500 during the fiscal year preceding an affidavit to that effect; or, finally, to any individual or partnership filing a bond approved by the comptroller for $100,000 when the business is in a city having a million inhabitants, or, if elsewhere, for $50,000; or money or securities that the comptroller approves. § 29d.

The plaintiff alleges that he is a citizen of the United States, and has been engaged in the business specified in the statute for twenty years; that by good reputation and considerable expenditure he has made his business of great value, and that it chiefly consists in receiving deposits in very small sums from time to time until they reach an amount sufficient to be sent to other states and mainly to foreign countries. The plaintiff further alleges that he has not the means that would enable him to make the deposit and give the bond required, and that the enforcement of the law against him will compel him to close. He avers that the statute is unconstitutional as against him under the 14th Amendment and under the commerce clause of the Constitution of the United States. Article 1, § 8. The bill was demurred to and the demurrer was sustained by the circuit court.

The first objection urged by the plaintiff in argument is to a requirement that we have not mentioned,—that the applicant must have been continuously for five years immediately preceding his application a resident of the United States. As the plaintiff alleges that he satisfies this requirement, he has nothing to complain of. And therefore, without intimating any doubt as to the validity of the clause, we pass at once to the matters in which he is concerned. Southern R. Co. v. King, 217 U. S. 524 534, 54 L. ed. 868, 871, 30 Sup. Ct. Rep. 594. As a preliminary to his argument, the plaintiff denies that he is in any sense a banker, and even goes so far as to treat the receipt of money for safe-keeping or transmission within the meaning of the act as a case of bailment, in which the very coins received must be returned or sent on. Of course, this is not a true construction of the statute, as is sufficiently indicated by the title 'Private Banking.' The receipt of money by a bank, although it only creates a debt, is in a popular sense the receipt of money for safe-keeping, since the depositor can draw it out again at such time and in such sums as he chooses. It is safe to assume that the transmission of money contemplated very generally is accomplished by a draft, and practically never by sending on the identical currency received. One form, at least, of the business aimed at, and, on the face of the bill, that carried on by the plaintiff, is a branch of the banking business. Furthermore, it is a business largely done with poor and ignorant immigrants, especially on their first arrival here.

We presume that the money deposited with the plaintiff is not drawn upon by checks, so that a part of the argument in Noble State Bank v. Haskell, just decided [219 U. S. 104, 55 L. ed. ——, 31 Sup. Ct. Rep. 186], may not apply. On the other hand, experience has shown that the protection of such depositors against fraud, which is the purpose running through the statute, is especially needed by at least that class of them with whom the persons hit by the statute largely deal. The case cited establishes that the state may regulate that business, and may take strong measures to render it secure. It also establishes that the plaintiff has no such constitutional right to carry it on at will as to raise him above state laws not manifestly unfit to accomplish the supposed end, greatly in excess of the need,...