Ravitz v. Steurele, Justice of the Peace
| Citation | 257 Ky. 108 |
| Parties | Ravitz v. Steurele, Justice of the Peace. Lissauer v. Dorman. |
| Decision Date | 21 December 1934 |
| Court | United States State Supreme Court (Kentucky) |
1. Constitutional Law. — Courts have power to declare void all acts of General Assembly in violation of State Constitution or Federal Constitution.
2. Constitutional Law. — In determining constitutionality of act, it will be presumed that Legislature intended not to violate Constitution and all doubt regarding constitutionality of act must be resolved in its favor.
3. Constitutional Law. — Where statute is susceptible of two constructions, one of which will render it unconstitutional and the other valid, latter will be adopted.
4. Statutes. — "Special law" within meaning of Constitution is such as relates to particular persons, places or things, or to persons, places, or things which, though not particularized, are separated by any method of selection from whole class to which law might, but for such legislation, be applied, while law is "general" when by its terms, intendment, and phraseology it is uniform in operation and operates alike and equally on all persons or things as class throughout state under same circumstances (Constitution, sec. 59).
5. Statutes. — "Local law" is one whose operation is confined within territorial limits other than those of whole state or any properly constituted class or locality therein, and "class legislation" is such as concerns and operates on portion of particular class of persons or things, partaking of nature of private act, and test in determining whether law is "special," "local," or "general" is whether it embraces all of class to which it relates, substance rather than form being determinative (Constitution, secs. 3, 59).
6. Statutes. — Mere fact that practical effect of statute is special or local does not necessarily bring it within constitutional inhibitions against special, local, or class legislation (Constitution, secs. 3, 59).
7. Evidence. — It is matter of general information that those engaged in business of purchasing from dealers notes arising from sale of motor vehicles, or of financing or refinancing individuals through loans on sole security of liens on motor vehicles, form a separate class, as respects constitutionality of statute exempting such class from regulations of small money lenders (Acts 1934, c. 17, sec. 12).
8. Constitutional Law. — It must be presumed that Legislature, in exempting from act regulating small money lenders those engaged in automobile financing and refinancing business, acted on knowledge of fact that they constituted special class, as respects constitutionality of statute (Acts 1934, c. 17, sec. 12).
9. Constitutional Law; Pawnbrokers and Money Lenders. — Statute providing for licensing and regulation of those engaging in business of making loans of $300 or less held not unconstitutional as denying equality or conferring exclusive privileges in violation of state Constitution, nor as denying to the affected class due process or equal protection of laws, though exempting those engaged in automobile financing and refinancing business (Acts 1934, c. 17; Constitution Ky., sec. 3; Constitution U.S. Amend. 14, sec. 1).
10. Constitutional Law; Statutes. — Statute providing system for licensing and regulation of those in business of making loans of $300 or less, but exempting those engaged in automobile financing or refinancing business held not unconstitutional as "local or special law to regulate rate of interest" or as class legislation in such respect, though including as an incident of such regulation provisions regulating the charging and collection of interest by those within the act (Acts 1934, c. 17; Constitution Ky., secs. 3, 59, subd. 21; Constitution U.S. Amend. 14, sec. 1).
11. Statutes. — Statute entitled "An act to define, license and regulate business of making loans * * * of $300 or less * * * at greater rate of interest * * * than six per cent., * * * prescribing rates of interest * * * and penalties, * * * regulating assignment of wages or salaries * * * as security, * * * providing for administration of this Act, authorizing making of examinations and investigations and publication of reports thereof, [and] providing for review of decisions and findings of Banking Commissioner
* * *" held to have sufficient title (Acts 1934, c. 17; Constitution, sec. 51).
12. Constitutional Law. — That Legislature, in directing statute against what it deems an evil as it actually exists, does not cover the whole field of possible abuses does not render act invalid as discriminatory (Constitution Ky., sec. 3; Constitution U.S. Amend. 14, sec. 1).
13. Evidence. — It is matter of general knowledge that there are grave abuses in the business of money lenders regulated by statute pertaining to lenders of money not exceeding $300 in amount (Acts 1934, c. 17).
14. Constitutional Law. — Statute regulating those in business of making loans of $300 or less and conferring power of control and supervision on banking commissioner held not unconstitutional as delegating to him legislative, judicial, or arbitrary power (Acts 1934, c. 17).
15. Constitutional Law. — That statute regulating those in business of making loans of $300 or less requires persons, when commencing business thereunder, to have net worth of $20,000 and to maintain such net worth after obtaining license held not to render act invalid as discriminatory (Acts 1934, c. 17; Constitution Ky., sec. 3; Constitution U.S. Amend. 14, sec. 1). stitution U.S. Amend. 14, sec. 1).
16. Statutes. — That act regulating those in business of making loans of $300 or less requires licensee thereunder to pay license tax held not to render such act, which originated in Senate, unconstitutional as "revenue measure" which should have originated in House of Representatives, since license tax requirement was merely an incident to purpose of act (Acts 1934, c. 17).
Appeal from Jefferson Circuit Court.
WILLIAM F. CLARKE, Jr., and EMMET R. FIELD for appellants.
BAILEY P. WOOTTON, Attorney General, ARTHUR B. BENSINGER and JOHN S. MILLIKEN for appellee J.R. Dorman, Banking Commissioner.
STITES & STITES and NORRIS McPHERSON for appellee Kentucky Discount Co.
STOLL, MUIR, TOWNSEND & PARK, EUGENE R. ATTKISSON, EDWARD C. O'REAR, JOHN R. ALLEN and FRED R. WRIGHT amici curiae.
Affirming.
These appeals present identical questions, and will therefore be disposed of as one.
In the first entitled action a motion to dismiss, because the questions involved in it are moot, is overruled. The paramount question to be determined is the constitutional validity of an Act of 1934, c. 17, p. 32, entitled:
"An Act to define, license, and regulate the business of making loans or advancements in the amount or of the value of three hundred dollars [$300] or less, secured or unsecured, at a greater rate of interest, consideration, or charge than six per centum [6%] per annum, prescribing the rates of interest and charges therefor and penalties for the violation thereof, regulating the assignment of wages or salaries, earned or to be earned, when given as security for any such loan or as consideration for a payment of three hundred dollars [$300] or less, providing for the administration of this Act, authorizing the making of examinations and investigations and the publication of reports thereof, providing for a review of decisions and findings of the Banking Commissioner under this Act, and repealing so much of section 4224a-1, Carroll's Kentucky Statutes [1930] as applies to persons licensed under this Act, and limiting the application of Sections 2218 and 2219, Carroll's Kentucky Statutes [1930], and repealing all Acts and parts of Acts whether general, special, or local, which relate to the same subject matter as this Act."
Section 1 thereof defines terms used therein. Section 2 provides no person, except as authorized by the act and without first obtaining a license from the banking commissioner as provided in the act, shall engage in this state in making loans in the amount of value of $300 or less at a greater rate of interest or consideration therefor than 6 per cent. per annum. Section 3 defines the manner of making application for license thereunder and what it shall contain; also, stating the net worth of the applicant to be at least $20,000, etc., and requires the applicant to pay the banking commissioner a license fee of $50 to cover his expense of investigating the applicant and an additional annual license fee of $250 proportioned to the year the application is made. This section imperatively requires, as therein set forth, the licensee to file a bond to be approved by the banking commissioner in the sum of not more than $1,000. Section 4 confers authority on the banking commissioner to approve the bond and the "financial responsibility," experience, character, and fitness of the licensee and a standard for the measurement of his fitness. It confers on the commissioner power to approve or deny an applciation for a license including the other powers therein defined. Section 5 limits the right of the licensee to advertise. Section 6 (a) contains this provision:
"Every licensee hereunder may lend any sum of money not exceeding three hundred dollars [$300] in amount and may charge, contract for, and receive thereon interest at a rate not exceeding three and one-half per centum [3 1/2%] per month on any part of the unpaid principal balance of the loan not in excess of one hundred and fifty dollars [$150] and two and one-half per centum [2 1/2%] per month on any remainder of the unpaid principal balance of the loan."
Following the above section, is set forth in detail how interest shall be computed by the licensee on his loan and prohibits splitting or dividing loans. The section sets forth in detail the duties of the licensee to the borrower and requires him to have at all times a net worth of at least $20,000 and...
To continue reading
Request your trial