Palmore v. Baltimore & O.R. Co.

• Decision Date: 21 June 1928
• Docket Number: 39.
• Citation: 142 A. 495,156 Md. 4
• Parties: PALMORE v. BALTIMORE & O. R. CO. ET AL.
• Court: Maryland Court of Appeals

142 A. 495

156 Md. 4

PALMORE v. BALTIMORE & O. R. CO. ET AL.

No. 39.

Court of Appeals of Maryland

June 21, 1928

Appeal from Circuit Court, Baltimore County, in Equity; C. Gus Grason and Frank I. Duncan, Judges.

Action by Roy B. Palmore against the Baltimore & Ohio Railroad Company, a body corporate, and another. Decree for defendants, and plaintiff appeals. Affirmed.

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT DIGGES, PARKE, and SLOAN, JJ.

James J. Lindsay, of Baltimore, for appellant.

David G. McIntosh, Jr., and James F. Thrift, both of Baltimore, and Frank R. Hubachek and F. B. Hubachek, both of Minneapolis Minn., for appellee Bayer.

Allen S. Bowie and Duncan K. Brent, both of Baltimore, for appellee Baltimore & O. R. Co.

PATTISON J.

In this case the appellant, Roy B. Palmore, engaged in the business of purchasing from employees of corporations all, or a portion, of their earned salaries, on February 1, 1928 bought of the appellee Paul L. Bayer, an employee of the Baltimore & Ohio Railroad Company, the other appellee, a portion of his wages earned in January, 1928, amounting to $25, and paid him therefor the sum of $23. On February 25th thereafter, he entered into a similar transaction with the appellee Bayer for the same amount of money. The railroad company was notified of the second alleged sale or assignment, but refused to recognize it. In consequence of such refusal, the appellant filed his bill against the appellees Paul L. Bayer, and the Baltimore & Ohio Railroad Company, alleging the facts stated, together with other facts immaterial to the question before us, to which further reference need not be made, and asked:

"(a) Discovery as to the said defendant and each of them, and that they be required to discover the entire earnings of the said defendant Paul L. Bayer, in his capacity as Carman for the month of January, 1928. (b) That the said court may assume jurisdiction over said fund and determine the rights of the parties hereto. (c) That your orator may have a decree in personam against each of the said defendants for said sum of $25."

A demurrer filed to the bill was sustained on the ground that the transaction was in fact a loan and in conflict with and in violation of section 16, art. 58A, of the Code of 1924, known as the "Petty Loan Act."

The previous sections of this article require persons, firms, or corporations engaged in the business of making loans of money, etc., of the value of $300 or less at a greater rate of interest than 6 per cent. per annum, to first obtain a license therefor from the bank commissioner, after having given approved bond for the amount and of the character therein named, and in them are also found other regulatory provisions, to which we need not more particularly refer.

Section 16, as first enacted by the Acts of 1918, c. 88, was as follows:

"No licensee shall take any confession of judgment or any power of attorney, nor shall he take any note, promise to pay, or security that does not state the actual amount of the loan, the time for which it is made and the rate of interest charged, nor any instrument in which blanks are left to be filled after execution."

This section was subsequently amended by the Act of 1924, c. 115, by adding thereto an additional paragraph, which is as follows:

"The payment of three hundred dollars ($300.00) or less in money, credit, goods or things in action, as a consideration for any sale, assignment or order for the payment of wages, salary, commissions or other compensation for services, whether earned or to be earned, shall be deemed a loan within the provisions of this article secured by such assignment and the amount by which such assigned compensation exceeds such payment shall be deemed interest upon such loan from the date of such payment to the date such compensation is payable. Such loan and such assignment shall be governed by and subject to the provisions of this article."

The sole question presented by this appeal is the validity vel non of section 16 of article 58A of the Code, as above stated.

The appellee, in support of his contention that the act is valid, and not subject to objection under either the state or Federal Constitution, relies upon the decision of this court in Wight v. Baltimore & Ohio Railroad Co., 146 Md. 66, 125 A. 881, 37 A. L. R. 864, in which we held valid the Act of 1906, c. 399, codified as section 11 to 17, inclusive, of article 8 of the Code , titled "Assignment of Choses in Action."

By the last-named article, all assignments of wages or salary in any amounts are declared to be invalid, unless certain requirements are followed, and by section 14 of that article, Sales, under the term "Assignments," are included therein.

It was contended by the appellant in Wight v. B. & O. Railroad Co., supra, that the assignment in that case was valid because of the unconstitutionality of said Act of 1906, c. 399. In support of that contention the appellant said:

"So far as it deals with the claims for wages or salaries actually earned, it is clearly an unwarranted interference with the owner's liberty of contract and right of property; and is void under the 'due process' guaranty of our fundamental law."

In that case we said, speaking through Judge Offutt:

"This act is remedial in character and its apparent purpose is to throw around transactions such as that involved in this case such safeguards as will protect the wage earner who may be a party to them from the greed and the rapacity of unscrupulous persons who

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