Sims v. Reeves

• Decision Date: 30 October 1953
• Citation: 261 S.W.2d 812
• Parties: SIMS et al. v. REEVES.
• Court: Supreme Court of Kentucky

Page 812

261 S.W.2d 812

SIMS et al. v.REEVES.

Court of Appeals of Kentucky.

Oct. 30, 1953.

Troy D. Savage, Taylor G. Smith, Lexington, for appellants.

Hazelrigg & Cox, Frankfort, Bemis Lawrence, Louisville, J. D. Buckman, Atty. Gen., Wm. F. Simpson, Asst. Atty. Gen., for appellee.

CULLEN, Commissioner.

In a declaratory judgment proceeding, several persons engaged in the real estate business in the City of Lexington attacked the constitutionality of Chapter 324 of the Kentucky Revised Statutes, including an amendment added by Chapter 4 of the Acts of 1952, which provides for the licensing and regulation of real estate brokers and salesmen.The circuit court upheld the statute, and the plaintiffs have appealed, maintaining that the statute is unconstitutional in several respects.

It is conceded that the statute is not a revenue measure, but a police measure.The appellants' first contention is that the nature of the occupation of real estate broker or agent is not such as to justify invoking the police power.However, a similar contention was rejected in Shelton v. McCarroll, 308 Ky. 288, 214 S.W.2d 396, which upheld KRS Chapter 324 as a valid exercise of the public power.And in Miller v. Kentucky State Real Estate Commission, Ky.1952, 251 S.W.2d 845, the Court indicated its belief in the soundness of the reasoning relied upon in the Shelton case.We continue to adhere to the view expressed in the Shelton and Miller cases.It may be stated that the overwhelming weight of authority upholds the licensing and regulation of real estate brokers under the police power.SeeState v. Polakow's Realty Experts, 243 Ala. 441, 10 So.2d 461, and cases cited therein.

The statute in question requires the licensing of real estate brokers and salesmen only in cities of the first three classes and within five miles of their boundaries.It is contended that there is no reasonable basis for such a classification, and therefore the statute is special legislation in violation of Section 59 of the Kentucky Constitution.

It is well settled that a classification according to population and its density, or according to the division of cities into classes, will be sustained if the classification has a reasonable relation to the purpose of the Act.Mannini v. McFarland, 294 Ky. 837, 172 S.W.2d 631.As stated by Chief Justice Sims in Shelton v. McCarroll, 308 Ky. 288, 214 S.W.2d 396, 398, the major purpose of this Act is 'to keep within the bounds of good business ethics those engaged in the real estate business, and to protect the public from unscrupulous real estate brokers and agents.'Another purpose made clear by the 1952amendment, Chapter 4, Acts of 1952, is to guard the public against incompetence, which was recognized as one of the purposes of the New York statute by Mr. Justice Cardozo's opinion in Roman v. Lobe, 243 N.Y. 51, 152 N.E. 461, 50 A.L.R. 1329.

It will easily be recognized that in a community having a large concentration of population, with the resulting lack of acquaintanceship among its citizens, the opportunities for an unscrupulous real estate broker to prey upon the public are much greater than in the smaller communities where each man knows his neighbors.Also, the volume of real estate business in the larger cities and their suburban areas is such that the danger of damage and loss resulting from incompetency is far greater than in the smaller cities and in rural areas.

Our decisions have recognized that the degree of seriousness of the problem sought to be remedied by the law under attack may be taken into consideration in determining whether a classification is reasonable.SeeSomsen v. Sanitation District No. 1, 303 Ky. 284, 197 S.W.2d 410.It is our opinion that the classification in the Act now before us has a reasonable relation to the purpose sought to be accomplished.

It is next argued...