State, on Inf. of Taylor, v. Currency Services

• Decision Date: 14 February 1949
• Docket Number: 40563
• Citation: 218 S.W.2d 600,358 Mo. 983
• Parties: State of Missouri, on the Information of J. E. Taylor, Attorney General, Relator, v. Currency Services, Inc., of Missouri, a Corporation, Elmer G. Riek, an Individual, and Orville G. Hughes, an Individual, doing business as partners at 1721 Washington Street, in the City of St. Louis, State of Missouri, under the style and firm name and fictitious name of Service Exchange Co., Respondents
• Court: Missouri Supreme Court

218 S.W.2d 600

358 Mo. 983

State of Missouri, on the Information of J. E. Taylor, Attorney General, Relator, v. Currency Services, Inc., of Missouri, a Corporation, Elmer G. Riek, an Individual, and Orville G. Hughes, an Individual, doing business as partners at 1721 Washington Street, in the City of St. Louis, State of Missouri, under the style and firm name and fictitious name of Service Exchange Co., Respondents

No. 40563

Supreme Court of Missouri

February 14, 1949

Rehearing Denied March 14, 1949.

Quo Warranto.

Writ Quashed.

J. E Taylor, Attorney General, Tyre W. Burton and George W Crowley, Assistant Attorneys General, for relator.

(1) Parties joined as respondents in quo warranto. Two or more defendants, corporations or individuals or corporations and individuals, charged in one proceeding for violations of law based on the same act, may be joined as respondents in quo warranto proceedings. 51 C.J. 340, sec. 49; Sec. 16, General Code for Civil Procedure; Laws 1943, p. 353; 44 Am. Jur. 148 sec. 79, p. 148; State of Missouri v. Presbury, 13 Mo. 241; 2 C.J. 431; 13 C.J. 255; Atwater v. Brokerage Co., 147 Mo.App. 436, 126 S.W. 823; Banking Co. v Lichtenstein, 37 P. 574; Jamieson v. Wallace, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389. (2) The respondents here are charged jointly with doing an unlawful banking business in this state. All parties participating in the violation of statutes, whether corporations or individuals, or both, are proper parties to be joined as principals, even though one is the agent of the others. 2 C.J. 431; 13 C.J. 255; Atwater v. Brokerage Co., 147 Mo.App. 436, 126 S.W. 823; Banking Co. v Lichtenstein, 37 P. 574; Jamieson v. Wallace, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389. (3) The banking code of this state expresses the public policy of the state in Articles 1, 2 and other articles of Chapter 39, R.S. Mo. 1939, and amendments thereto, respecting banks, and constitutes a complete and exclusive plan for the organization of banks and the supervision by the state of banks and banking. Sec. 7879, Art. 1, Chap. 39, R.S. 1939; Secs. 7939, 7940, 7949, 7998, 7999, Art. 2, Chap. 39, R.S. 1939; 1 Michie, Banks and Banking, pp. 3, 4, 5. (4) The business of banking is so coupled with the public interest that it must be, and is, subject to strict regulation, supervision and control by the state, under the police regulations of the state. 1 Michie, Banks and Banking, pp. 5, 6, 12; Lucas v. Central Missouri Trust Co., 349 Mo. 537, 162 S.W.2d 569; State v. Stone, 118 Mo. 388, 24 S.W. 164. (5) The statutes of this state define what constitutes banks and banking. Respondents are engaged in banking under the facts and law of this case by receiving deposits, caring for money, issuing checks, money orders and bills of exchange. Totality of all incidents of banking are not necessary to be engaged in banking. Sec. 3209, Art. 4, R.S. 1939; Secs. 7949, 7998, 7990, Art. 2, Chap. 39, R.S. 1939; 7 C.J. 474, 475, Sec. 321, p. 639; People v. Bartow, 6 Cowen 290; 1 Michie, Banks and Banking, p. 10; Meserole Securities Co. v. Cosman, 253 N.Y. 130, 170 N.E. 519; White v. Greenlee, 49 S.W.2d 132. (6) Private banking has been abolished in this state. The acts charged against respondents and shown by the evidence, constitute private banking. Sec. 7999, Art. 2, Chap. 39, R.S. 1939; State ex rel. Barker v. Sage, 267 Mo. 493, 184 S.W. 984; Sec. 7990, Art. 2, Chap. 30, R.S. 1939; Sec. 3200, Art. 3, Chap. 14, R.S. 1939; Sec. 3141, Art. 2, Chap. 14, R.S. 1939; Fisher v. Bagnell, 194 Mo.App. 581; Bank v. Bank, 148 Mo.App. 1. (7) Respondents Riek and Hughes as Service Exchange Co. assert that they are mere agents of Currency Service, Inc., and are not subject to penalty for acts performed as such agents. Notwithstanding their contract with Currency Services, Inc., as an agency, they become principals and are liable as such along with Currency Services, Inc. for violation of the banking statutes and doing acts against public policy. (8) The finding of the special commissioner on the facts and his report on both the facts and the law under the first count are sound and proper and should be given great weight. State ex inf. Major v. Arkansas Lumber Co., 260 Mo. 212, 169 S.W. 145. (9) The issuance of money orders by respondents as a corporation and as individuals, is unlawful. "Bills of exchange," and "other evidences of debt for circulation as money" mentioned in Section 7890, R.S. Mo. 1939, "money orders" or "post card checks" issued by respondents have the same meaning and are one and the same character of items which constitute the business of banking. Secs. 7890 and 7990, R.S. 1939. (10) The record is abundant with testimony that respondents have received deposits and have wilfully issued, and are still issuing, money orders in violation of Section 7890, R.S. Mo. 1939, as an infringement on banking. Secs. 7990, 7890, R.S. 1939; State v. Stone, 118 Mo. 388, 24 S.W. 164; McDougall v. Lueder, 58 N.E.2d 899; Fisher v. Bagnell, 194 Mo.App. 581; Bank v. Bank, 148 Mo.App. 1. (11) Section 7890, R.S. Mo. 1939 is valid. It is not a local or special law granting special or exclusive privileges to one person or corporation, or association as such. It is the exercise of the state's sovereignty in enacting and enforcing its police powers, including the regulation by reasonable classification of those who may carry on any acts of banking. Said section does not violate subsection 28, of Article III of the Constitution of Missouri, 1945, or section 53 of subsection 26 of Article IV of the Constitution of Missouri, 1875. It is a reasonable and proper classification of persons and corporations who may and who may not engage in banking. Banks and banking are coupled with and are subservient to the public interest. The regulation and supervision of banks and banking by the state affects the people of the state as a whole. Sec. 7890, R.S. 1939; 59 C.J. 724, sec. 311; State ex rel. Garvey v. Buckner, 308 Mo. 390, 272 S.W. 940; 12 C.J. 1129, 1130; State ex rel. Rolston v. Railroad, 246 Mo. 512; Hawkins v. Smith, 242 Mo. 688; Bachtel v. Wilson, 204 U.S. 36. (12) The states alone may establish by their statutes and enforce police powers as an attribute of sovereignty. Under the exercise of its police powers, a state may provide reasonable classification of those who may engage in the business or perform any acts of banking. 12 C.J. 904; Transbarger v. Railroad, 250 Mo. 46, 156 S.W. 694; State ex rel. v. Mercantile Co., 184 Mo. 160, 82 S.W. 1075; Nobel State Bank v. Haskell, 219 U.S. 104; Shallenberger v. Bank, 219 U.S. 114; Bank v. Dolley, 219 U.S. 121; Engel v. O'Malley, 219 U.S. 128. (13) Section 7890, R.S. Mo. 1939, does not violate Section 1 of the Fourteenth Amendment of the Constitution of the United States, or Section 10 of Article I of the Constitution of Missouri, 1945, or Section 30 of Article II of the Constitution of Missouri, 1875. Said section does not deprive respondents of any property or property rights without due process of law. It is a valid statute expressing the police powers of the state, and is constitutional. 12 C.J. 1188; Wilcox v. Phillips, 260 Mo. 664, 169 S.W. 55; State ex rel. v. Chemical Works, 249 Mo. 702, 156 S.W. 967; Emert v. Missouri, 156 U.S. 296; Quong Wing v. Kirkendall, 223 U.S. 59; Nobel State Bank v. Haskell, 219 U.S. Rep. 104; State v. Stone, 118 Mo. Rep. 388, 24 S.W. 164. (14) Section 7890, R.S. Mo. 1939, does not violate Section 23 of Article III of the Constitution of Missouri, 1945, or Section 28 of Article IV of the Constitution of Missouri, 1875, by containing more than one subject in the title of the bill passed by the legislature including said Section 7890, Laws of Missouri, 1915, page 102 (Sec. 13). Said bill contains only one subject which is clearly expressed in its title. Sec. 7890, R.S. 1939; Laws 1915, p. 102; 59 C.J., pp. 809-814; Ward v. Board of Equalization, 135 Mo. 309, 36 S.W. 648; Lynch v. Murphy, 119 Mo. 163; Graves v. Purcell, 337 Mo. 574, 85 S.W.2d 513. (15) The master and servant, or principaland agent, are both liable here. Where the agreement is one which violates the fixed public policy of the state or its performance in violation of a statute all persons or corporations, or corporations and persons, participating in such violation are principals. State of Missouri v. Presbury, 13 Mo. 241; 2 C.J. 431; 13 C.J. 255; Banking Co. v. Lichtenstein, 37 P. 574; Jamieson v. Wallacle, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389; Atwater v. Brokerage Co., 147 Mo.App. 436, 126 S.W. 823. (16) The finding of the special commissioner on the facts and his report on both the facts and the law are sound and proper and should be given great weight. State ex inf. Major v. Arkansas Lumber Co., 260 Mo. 212, 169 S.W. 145.

John W. Mueller and Harold F. Hecker for respondent Currency Services, Inc.; Walther, Hecker, Walther & Barnard of counsel.

(1) Respondent Currency Services, Inc., is not engaged in the "banking business," nor is it a bank within the meaning of the banking laws of Missouri. State ex rel Buder v. Compton, 271 S.W. 770; State v. Reid, 125 Mo. 43, 228 S.W. 172; Wedesweiler v. Brundage, 130 N.E. 520, 297 Ill. 228; Butcher v. Butler, 134 Mo.App. 61; Smith v. Kansas City, Kansas City Title & Trust Co., 255 U.S. 180; Warren v. Shook, 91 U.S. 704; Wells Fargo Co. v. Northern Pacific Ry. Co., 23 F. 469; Marvin v. Kentucky Title Trust Co., 291 S.W. 17, 218 Ky. (1927); Eastern Acceptance Corp. v. Godfrey, 14 N.J. Misc. 187; Martin v. St. Aloysius Church, 38 R.I. 339. (2) The banking business does not consist of a single act of banking, but contemplates a totality of banking functions; the banking "business" or "a bank" must be used in the ordinary common-sense meaning of the term. Meserole Securities Co. v....