Spicer v. King Bros. & Co.

• Decision Date: 02 December 1916
• Citation: 189 S.W. 865,136 Tenn. 408
• Parties: SPICER v. KING BROS. & CO.
• Court: Tennessee Supreme Court

189 S.W. 865

136 Tenn. 408

SPICER v. KING BROS. & CO.

Supreme Court of Tennessee.

December 2, 1916

Appeal from Chancery Court, Knox County; Will D. Wright, Chancellor.

Suit by J. L. Spicer against King Bros. & Co. From a judgment dismissing the bill after sustaining demurrer thereto complainant appeals. Affirmed.

Malcolm McDermott and Harry S. Hall, both of Knoxville, for appellant.

S. E Hodges, of Knoxville, for appellee.

LANSDEN J.

The complainant filed his original bill in the chancery court of Knox county for the purpose of having certain transactions had between him and the defendants declared null and void under chapter 109, Acts 1905. The defendants demurred to the bill and the Chancellor sustained the demurrer and dismissed it, from which an appeal has been taken to this court and errors assigned.

The questions for decision involve the validity of the act referred to. Its caption is as follows:

"An act to regulate the business of lending money on personal property, wages or salaries, and the buying of salaries or wages; and to prescribe the penalties for its violation in counties of not less than fifty thousand population according to the federal census of 1900, or any subsequent federal census."

The first section of the act prohibits any person, firm, or corporation from engaging in the business of making loans on personal property or wages or salaries, or in the business of buying wages or salaries, without filing bond as provided in the act. The subsequent sections of the act, down to section 15, provide a system of regulation and bookkeeping for inspection, as well as bond and license for those who engage in the business referred to in the act. It is not necessary to set out the detail provisions of the act.

Section 15 excepts from the operation of the act banks, or merchants, who furnish goods or supplies and take mortgages or other liens on personal property to secure such debts. Section 16 excepts from the operation of the act persons, firms, or corporations who loan money or furnish goods and take a mortgage or lien on buggies, wagons, live stock, agricultural products, or farming implements. Section 17 limits the application of the act to counties having a population of 50,000 or over by the federal census of 1900, or any subsequent federal census.

The objections made to the act, which will be considered in this opinion, are that it violates the two subjects clause of the state Constitution (article 2, § 17), and that it is class legislation by virtue of the exceptions above pointed out.

It will be observed that the title of the act relates to the regulation of the business of lending money on personal property, wages, or salaries, and the buying of salaries or wages. Undoubtedly two subjects are embraced within the title, but the question for determination is, Are they such as are forbidden by the Constitution? We think a fair construction of the act is that it contemplates the regulation of the business of lending money on personal property, wages, or salaries only where the lender intends to secure a lien upon the personal property, wages, or salary, and the business of buying salaries. It could only be in this aspect that the Legislature or the public could have any interest in the contract of lending. Such a lien is generally secured by what is known to the law as an assignment. An account for wages earned or unearned is assignable under our Code (Shannon, § 3516). Prior to the Code, such a transaction was recognized by the decisions of this court as being valid. Clodfelter v. Cox, 1 Sneed, 328, 60 Am. Dec. 157; Johnson v. Donohue, 113 Tenn. 446, 83 S.W. 360; Peters v. Goetz, 188 S.W. 1144, this term.

The lien may be secured upon salaries, earned or unearned, in such manner as the parties may agree upon. So, when reduced to its simplest form, the question is whether an act, which regulates lending money and procuring liens upon personal property, salary, or wages, can be combined with an act which regulates the sale of salaries or wages without violating the two subjects clause of the Constitution.

It is undoubtedly true, as a general proposition, that mortgagees or other lienors are purchasers to the extent of their mortgages or liens. Knowles v. Masterson et al., 3 Humph. 621; Moore v. Walker, 3 Lea, 657. And so is a trustee under a trust deed to secure a debt. Myers v. Ross, 3 Head, 63; Turbeville v. Gibson, 5 Heisk. 682. And so is the conditional vendee of personal property. Coal Co. v. Alley, 127 Tenn. 173, 154 S.W. 536. And so is a holder of a pledge. Arendale v. Morgan, 5 Sneed, 704.

But all of the foregoing transactions involve deliveries to the lienor for the purpose only of securing the loan, and they all contemplate that the thing so delivered is to be returned to its owner upon the payment of the sum agreed upon with proper charges. The parting with the thing by the owner in such cases always contemplates that the delivery is for a fixed or indefinite time, and at all events, the time is to have an ending, so that the thing delivered may be returned to its owner. 25 Cyc. 183.

But in the case of a sale, there is a material difference. Its essence is the transfer of an article from the buyer to the seller for a price without any agreement or understanding between them that the thing is to be returned. The property in the thing acquired by the buyer is general or absolute. 35 Cyc. 27.

The statute under consideration uses the word "sale" as applied to salaries or wages, but the proper nomenclature to be applied to such a transfer is "assignment." Personal property in possession is the subject of sale, but salaries or wages accounts, earned or unearned, are subjects of assignments. At common law property not in possession was incapable of sale or assignment, but under our Code, supra, they are now assignable. It is sufficient that they have actual or potential existence at the time of the assignment. 4 Cyc. 11, 12; 2 R. C. L. 593; 5 C.J. 836.

The difference between the terms employed by the Legislature in the act in controversy and the proper nomenclature is technical, although it is substantial, and the Legislature is presumed to have known this difference, as well as the distinction between assignments and liens.

The transaction of which complainant complains was a sale of his salary as an employé of the Southern Railway Company, earned by him from the 1st of December, 1915, to the 17th of January, 1916, amounting to $64.50, at the price of $60. This was an absolute and unconditional sale of the wages account, and was not a loan or advance of money or a discount. The complainant was not a debtor to the defendant, and the transaction was an original one.

Can it be...