State v. O'Neil
| Decision Date | 26 May 1939 |
| Docket Number | No. 31994.,No. 31981.,31981.,31994. |
| Citation | 205 Minn. 366,286 N.W. 316 |
| Parties | STATE ex rel. GOFF, Co. Atty., v. O'NEIL. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Hennepin County; Levi M. Hall, Judge.
Action by the State, on the relation of Edward J. Goff, County Attorney of Hennepin County, Minn., against R. J. O'Neil, doing business as the Metro Loan Company, to enjoin the defendant from conducting a loan business, on ground that usury was exacted. From adverse orders, the defendant appeals.
Affirmed.
Gainsley, Goldstein & Levitt, of Minneapolis, for appellant.
J. A. A. Burnquist, Atty. Gen., M. Tedd Evans, Asst. Atty. Gen., and Edward J. Goff, Co. Atty., and Per M. Larson, Asst. Co. Atty., both of Minneapolis, for respondent.
Joseph A. Padway, of Washington, D. C., Counsel, American Federation of Labor, amicus curiae.
Nichols, Mullin & Farnand, of Minneapolis, Counsel, State Federation of Labor, amicus curiae.
Action by the state on relation of the county attorney of Hennepin County to enjoin defendant from conducting a small loan business in the city of Minneapolis in which usury is invariably exacted. Upon the verified complaint and accompanying affidavits the court, September 23, 1938, made an ex parte order appointing a receiver to take over defendant's said business and issued a temporary restraining order. On the same date the summons, with complaint and affidavits attached, was served upon defendant personally together with notice of motion for a temporary injunction, and the court also issued an order for defendant to show cause October 10, 1938, the time named in plaintiff's motion, why such temporary injunction should not issue pendente lite and why such receiver should not continue to act. Defendant answered and filed counter affidavits, and a hearing was had. October 28, 1938, the court filed an order granting a temporary injunction, and continuing the receivership. September 29, 1938, defendant procured from the court an order on plaintiff to show cause why the order appointing the receiver should not be revoked, and the receiver directed to restore the property seized to defendant. A hearing was had and by order filed October 17, 1938, the order to show cause was discharged. Defendant appeals from both the order filed October 28 and the one filed October 17.
That the complaint and supporting affidavits herein did not present an emergency authorizing the court on an ex parte application to appoint a receiver of defendant's business must be considered settled by State ex rel. Claude v. District Court, 204 Minn. 415, 283 N.W. 738. The complaint upon which a receiver ex parte was there appointed was substantially of the same import as the one herein. However, while the court here erred in appointing a receiver ex parte, the record shows the following whereby defendant both had notice and gave notice and had two hearings on the merits as to whether or not in this action there should be a temporary restraining order or injunction issued, and as to whether or not there should be a receiver of defendant's business pendente lite. The court, on September 23, 1938, without notice to defendant, appointed a receiver of his said business; but, on the same day, the summons, with complaint and affidavits attached, was served upon defendant, together with notice of motion to be heard October 10, 1938, for a restraining order or temporary injunction and for the retention of the receivership pending suit, and, in addition, the court issued an order for defendant to show cause at the hearing of the motion why it should not be granted. So, for the hearing, there was adequate notice and defendant appeared generally and submitted numerous counter affidavits. Having heard the parties, the court filed its order October 28, 1938, granting plaintiff's motion. Not only that, but on September 29, 1938, defendant procured an order from the court directing plaintiff to show cause why the order of September 23, 1938, appointing a receiver herein of defendant's business, should not be revoked, and the business seized by the receiver restored to defendant. Both parties were heard and the order to show cause was discharged by order filed October 17, 1938. So there have been two hearings on notice as to whether on the merits a receiver was properly appointed pendente lite. Therefore, on this appeal, the want of notice to defendant of the application for a receiver in the action is out of the case. High, Receivers (4 Ed.) p. 131, § 112, states: "But where the propriety of the action of the court in appointing a receiver without notice has been considered by the court upon a motion to discharge the receiver and the court has sustained the original order by refusing to discharge him, the want of notice of the appointment is thereby cured". Schmid v. Ballard, 175 Minn. 138, 220 N.W. 423; Boyd v. Brown, 79 Colo. 568, 247 P. 181; Bristow v. Home Bldg. Co., 91 Va. 18, 20 S.E. 946, 947.
It is to be noted that the appeal is from two interlocutory orders. The action is for an injunction enjoining defendant from conducting a business wherein the usury law is invariably violated. If the action is maintainable, there is judicial discretion in granting or refusing the ancillary remedies of a receiver, and a temporary injunction or restraining order.
Defendant by his answer avers that the county attorney is not a proper party plaintiff. Whether the county attorney in his official capacity is empowered to institute a suit of this nature need not now be decided, for it is conceded that the attorney general has authority to institute such a suit on behalf of the state. Section 109, Mason Minn.St.1927, reads: "The attorney general shall appear for the state in all causes in the supreme and federal courts wherein the state is directly interested also in all civil causes of like nature in the district courts whenever, in his opinion, the interests of the state require it." Section 926, Mason Minn.St.1927, relating to the duties of a county attorney, provides that he, "whenever requested by the attorney general, shall appear for the state in any case instituted by such attorney general in his county." In this court on this appeal the attorney general has come in and filed a supplemental brief with the county attorney. There can be no doubt of the attorney general's power to step into a cause where the state is a party and take over or carry on the same regardless of the fact that it had been instituted by the county attorney on behalf of the state. A supplemental record also shows that in the court below the attorney general entered an appearance on behalf of the state in this case and joins as a relator herein and adopts this action as his own. Defendant's objection to the attorney general's appearance in the appeals must be overruled. And we are of the opinion that by the attorney general so coming in for the state, the action must here be considered in the same manner as if originally instituted by him instead of by the county attorney.
The next proposition is, Does the complaint state a cause of action for injunctive relief? It is conceded that our statutes forbidding the taking of usury do not subject the transgressor to a penalty by way of imprisonment or fine. So there is no remedy for usury under the criminal law. The plaintiff contends that the business of usury as carried on by defendant is in the nature of a public nuisance and as such may properly be enjoined. In Town of Linden v. Fischer, 154 Minn. 354, 191 N.W. 901, 902, in an action to enjoin an unlicensed dance hall, the court said: As stated, usury, by our statute, is not made a crime, so the state may not put a stop to the practice by criminal prosecution. However our usury legislation clearly establishes the policy of the state outlawing the taking of usury. It is forbidden. Why? In the interest of public welfare, to protect the helpless and the poor, always present in every community, from the rapacity of the money lenders who exact usury. On principle, where there is no adequate remedy either by criminal law or by the ordinary civil suit, equity may properly come to the rescue by appropriate injunctive relief. The complaint herein charges that defendant "maintains a common or public nuisance in Hennepin County, Minnesota, and is engaged in habitually, continuously and repeatedly, openly, publicly, persistently and intentionally doing the acts hereinafter in detail set forth, all to the injury of the public and contrary to the public policy of the state of Minnesota." The complaint sets forth that in October, 1935, defendant opened an office in the city of Minneapolis and that from its opening up to the present time he has therein been engaged in the "loan shark business", the principal object of which is "to collect and extort illegal and usurious rates of interest, sometimes as high as five hundred thirty per cent (530%) per annum, from wage earners who are forced by necessitous circumstances, such as sickness, birth of children, accidents, etc. to borrow small sums of money." It is averred that the amounts of the loans made by defendant are small, varying from five to fifty dollars, that they are...
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