Riley v. Sweat

• Citation: 149 So. 48,110 Fla. 362
• Parties: RILEY v. SWEAT, Sheriff.
• Decision Date: 31 May 1933
• Court: Florida Supreme Court

149 So. 48

110 Fla. 362

RILEY v. SWEAT, Sheriff.

Florida Supreme Court

May 31, 1933

En Banc.

Original habeas corpus proceeding by L. K. Riley against Rex Sweat, as Sheriff of Duval County.

Petitioner discharged.

COUNSEL Hall & Rush, of Jacksonville, for petitioner.

Cary D Landis, Atty. Gen., and H. E. Carter, Asst. Atty. Gen., for respondent.

OPINION

DAVIS Chief Justice.

This is an original habeas corpus proceeding brought by the petitioner, Riley, to secure his release from custody under a criminal charge brought against him under chapter 14899, Acts of 1931, Laws of Florida, commonly known as the '1931 Securities Act.'

The record before us shows that petitioner was arrested on a warrant charging him with having engaged in and conducted the business of a dealer in securities in Duval county, Fla without having been registered as a dealer in the office of the Florida Securities Commission as required by the aforesaid act. Upon a preliminary hearing before a justice of the peace, it appeared that petitioner's occupation had for sixteen years been that of a security dealer in the city of Jacksonville, that he was in no wise suspected or accused of having attempted any fraud or misrepresentation in connection with his business, and that, in an effort to comply with the terms of section 11 of chapter 14899, supra, requiring a $5,000 bond as a condition precedent for registration as a security dealer, petitioner had unsuccessfully made repeated attempts to induce surety companies to write such a bond for him as the statute requires, but that such surety companies had refused so to do because of the vagueness and uncertainty of the liability contemplated by the bond the statute provides shall be furnished.

From the order remanding petitioner to custody under the charge laid in the affidavit, relief from imprisonment has been sought on the ground that, as applied to the petitioner and his particular business, the requirements of section 11 of the act for his registration are unconstitutional and void.

Section 11 of said chapter 14899, Acts of 1931, is to the effect that no dealer or salesman shall engage in business in this state as such dealer or salesman of securities, or sell any securities, including securities exempted in section 4 of the act, except in transactions exempt under section 5 of the act, unless he has been first registered by the Florida Securities Commission pursuant to the provisions of said section. For any violation of the law in the foregoing particulars the violator is, under section 17 of the act subject to a criminal penalty of not more than $1,000 fine, or two years' imprisonment, or both such fine and imprisonment.

It is conceded on the record that petitioner has engaged in the business of a security dealer without having been registered with the Florida Securities Commission as required by section 11. It is likewise conceded that petitioner's failure to procure such registration has been due entirely to the refusal of the Florida Securities Commission to register him. This, the record shows, has been based on the ground that petitioner has not furnished the penal bond of $5,000 required by section 11.

Such requirement as to bond, as stated in section 11 of the act, is as follows:

'If the Commission shall find that the applicant is of good repute and has complied with the provisions of this Section including the payment of the fee hereinafter provided, he shall register such applicant as a dealer upon his filing a bond in the sum of Five Thousand Dollars running to the Governor of the State of Florida conditioned upon the faithful compliance with the provisions of this Act by said dealer and by all salesmen registered by him while acting for him. Such bond shall be executed as surety by a surety company authorized to do business in this State.'

'Liberty,' as that word is used in the Fourteenth Amendment to the Constitution of the United States means more than mere freedom from servitude. 'Liberty,' as protected by the Fourteenth Amendment to the United States Constitution, means not alone the right of the citizen to be free from unauthorized physical restraint of his person. It means that he must be free in the enjoyment of all of his faculties; to be unhindered in the use of them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to freely pursue any livelihood or avocation, and for that purpose to enter into all contracts which may be proper, necessary, and essential to his carrying out to a successful conclusion the purposes above mentioned, subject only to those valid restraints on individual action which may be exacted under the police power of the state. Smith v. State of Texas, 233 U.S. 630, 34 S.Ct. 681, 58 L.Ed. 1129, L. R. A. 1915D, 677; Williams v. Fears, 179 U.S. 270, 21 S.Ct. 128, 45 L.Ed. 186; Allgeyer v. State of Louisiana, 165 U.S. 578, 17 S.Ct. 427, 41 L.Ed. 832.

But the power of the state in providing for the general welfare of its inhabitants authorizes its legislative power to be exercised in making and enforcing regulations which in its judgment are necessary and appropriate to secure the people against the consequences alike of ignorance and incapacity, as well as deception and fraud, in the pursuit of an otherwise admittedly proper and lawful calling, business, or profession. Dent v. State of West Virginia, 129 U.S. 114, 9 S.Ct. 231, 32 L.Ed. 623. Yet it is well settled that, under the Fourteenth Amendment to the Constitution of the United States, the guaranty of 'liberty' therein set forth precludes the direct, or indirect, forbidding by the state of the citizen's inherent right to engage in a useful and legitimate business, even though such business itself be subject to reasonable statutory regulations of an appropriate nature enacted under the police power. Adams v. Tanner, 244 U.S. 590, 37 S.Ct. 662, 61 L.Ed. 1336, L. R. A. 1917F, 1163, Ann. Cas. 1917D, 973.

That the business or calling of security dealers of the kind undertaken to be regulated by chapter 14899, Acts of 1931, is a legitimate and useful business, which cannot under either the state of Federal Constitution be entirely forbidden by statutory law to be carried on by a citizen in the enjoyment of his 'liberty' under the Fourteenth Amendment to the Federal Constitution, can scarcely be denied.

So we pass the a consideration of the constitutionality of the bond requirement of section 11 of the act as applied to the particular dealer now before the court, in order to determine whether such requirement, as it actually operates, is an unconstitutional restriction on petitioner's right to continue in his business as a security dealer.

Not only does section 11 of the act require dealers and salesmen of securities to apply for registration with the Florida Securities Commission as a condition precedent to the continued pursuit of their ordinary avocations as such dealers and salesmen, but it attaches to the granting of registrations certain precedent terms and conditions, without which registration under the act is required by law to be refused by the state agency vested with administration of chapter 14899.

Registration was refused in the case now before us on the ground that the applicant had not furnished a bond in the sum of $5,000, conditioned upon his faithful compliance with the provisions of the act, not only by the dealer himself, but by all salesmen registered by him while acting for him. The bond required cannot be accepted by the Securities Commission unless it is executed, as surety, by a surety company authorized to do business in this state.

That dealers in corporate and other forms of securities may under the police power of the state be required to apply for and procure special licenses to do business before engaging in such occupations, and that the state may, in the exercise of its police power, require that applicants for licenses first demonstrate to a state agency that they are of good repute and qualified to engage in such business, and intend to engage in such a legitimate way, before licenses or registrations are granted to dealers, is not to be denied. Hall v. Geiger-Jones Co., 242 U.S. 539, 37 S.Ct. 217, 61 L.Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643; Merrick v. N.W. Halsey & Co., 242 U.S. 568, 37 S.Ct. 227, 61 L.Ed. 498; Caldwell v. Sioux Falls Stock Yards Co., 242 U.S. 559, 37 S.Ct. 224, 61 L.Ed. 493.

Therefore, in so far as chapter 14899, supra provides that applications for registration shall be in such form as the commission shall prescribe, and shall be duly verified under oath, etc., and shall embrace such additional information as to applicant's previous history, record, and association as may be deemed necessary to establish the good repute in business of the applicant, the present act is well within the scope of permissible exercise...