State v. Warren, 580

• Decision Date: 10 June 1960
• Docket Number: No. 580,580
• Citation: 252 N.C. 690,114 S.E.2d 660
• Court: North Carolina Supreme Court
• Parties: STATE, v. E. D. WARREN.

Page 660

114 S.E.2d 660

252 N.C. 690

STATE, v. E. D. WARREN.

No. 580

Supreme Court of North Carolina.

June 10, 1960

Adam Younce, Greensboro, for defendant-appellant.

T. W. Bruton, Atty Gen. and Harry W. McGalliard, Asst. Atty. Gen., for the State.

MOORE, Justice.

Defendant assigns as error the refusal of the court to grant his motions for nonsuit and in arrest of judgment. These motions call into question the constitutionality of Chapter 93A of the General Statutes of North Carolina entitled 'Real Estate Brokers and Salesmen,' under which defendant was indicted.

The chapter in question makes it unlawful, and punishable by fine or imprisonment, for any person, partnership, association or corporation to engage in business as a real estate broker or salesman without a license. It defines the terms 'broker' and 'salesman' and the definition includes the negotiation of a sale or exchange of real estate for compensation. The Act (Chapter 744 of the Session Laws of 1957) created the North Carolina Real Estate Licensing Board, composed of five members, appointed by the Governor. Only two of the members may be licensed real estate brokers or salesmen. The compensation of members is a per diem and expenses. The Board has the power to make bylaws, rules and regulations 'as it shall deem best, that are not inconsistent with the provisions of this chapter and the laws of North Carolina * * *.' In order to obtain a license an applicant must take an oral or written examination 'to determine his qualifications with due regard to the paramount interests of the public as to the honesty, truthfulness, integrity and competency of the applicant.' Applicants for 'broker' license pay a fee of $25, for 'salesman' license, $15. Licenses are renewed annually upon payment of a fee of $10. Any surplus from fees shall go to the general fund of the State. Licenses may be revoked upon any of eleven grounds set out in the Act. Before a license is revoked licensee shall be granted a hearing before the Board after 10 days notice and may be represented by counsel. If the decision of the Board is adverse to licensee, he may appeal to the Superior Court, where there shall be a trial de novo.

Defendant was licensed by the Board on 1 July 1957 under the grandfather clause of the Act. His license was renewed 1 July 1958 and revoked by the Board 16 May 1959 after a hearing. Defendant did not appeal from the decision of the Board. The cause of revocation does not appear in the record. On 25 August 1959 defendant negotiated the real estate transaction referred to in the bill of indictment. He requested re-instatement of his license on 3 September 1959 and action on this request is still pending.

Defendant attacks no particular provision of the Real Estate Act. He insists that the Act as a whole is not a valid exercise of the police power and contravenes sections 1, 7, 17 and 31 of Article I and section 5 of Article V of the North Carolina Constitution and the Fourteenthe Amendment of the Constitution of the United States. We may consider the Act only in its general purport and effect since it does not appear that any specific provision is called into question. Cyphers v. Allyn, 1955, 142 Conn. 699, 118 A.2d 318, 323.

Section 1, Article I, of the Constitution of North Carolina guarantees to the citizens of the State 'the enjoyment of the fruits of their own labor' and declares this an inalienable right.

The basic constitutional principle of personal liberty and freedom embraces the right of the individual to be free to enjoy the faculties with which he has been endowed by his Creator, to live and work where he will, to earn his livelihook by and lawful calling, and to pursue any legitimate business, trade or vocation. This precept emphasizes the dignity, integrity and liberty of the individual, the primary concern of our democracy. It is the antithesis of the totalitarian concept of government. The right to work and earn a livelihood is a property right that may not be denied except under the police power of the State in the public interest for reasons of health, safety, morals or public welfare. Arbitrary interference with private business and unnecessary restrictions upon lawful occupations are not within the police powers of the State. Restrictions and regulatory standards may not be applied so as to prevent individuals from freely engaging in ordinary trades and occupations in which men have immemorially engaged as a matter of common right. Roller v. Allen, 245 N.C. 516, 518, 96 S.E.2d 851; State v. Ballance, 229 N.C. 764, 769, 51 S.E.2d 731, 7 A.L.R.2d 407; State v. Harris, 216 N.C. 746, 753, 6 S.E.2d 854, 128 A.L.R. 658; State v. Polakow's Realty Experts, 1942, 243 Ala. 441, 10 So.2d 461, 462; State ex rel. Davis v. Rose, 1929, 97 Fla. 710, 122 So. 225, 238.

A regulatory act justified only by reason of a desire to protect the public against fraud and dishonesty may not be sustained. There is no business or occupation which is not likely to have its quota of dishonest men. The limits of police power are exceeded when government undertakes by regulation to rid ordinary occupations and callings of the dishonest and morally decadent. Resort in this area must be had to the criminal laws. Furthermore, laws may not be procured by men already engaged in an occupation in order to keep others out. The exclusion of others from a common right is a prominent feature of monopolistic action forbidden by our fundamental law. North Carolina Constitution, Article I, section 31; State v. Harris, supra, 216 N.C. at page 761, 6 S.E.2d at page 864; State v. Ballance, supra, 229 N.C. at page 771, 51 S.E.2d at page 735.

Our Court has in several instances declared unconstitutional acts seeking to regulate vocations. Roller v. Allen, supra (tile contractors); State v. Ballance, supra, overruling State v. Lawrence, 213 N.C. 674, 197 S.E. 586, 116 A.L.R. 1366 (photography); Palmer v. Smith, 229 N.C. 612, 51 S.E.2d 8 (a phase of optometry); State v. Harris, supra (dry cleaning).

But liberty and freedom in an orderly democratic society are of necessity relative terms. Government is necessary to the preservation of liberty. And government must be vested with sufficient power and authority to maintain its own existence and provide for the general welfare. The police power of the State is exercised for the protection of the health, safety, morals, comfort and quiet of all persons and the protection of all property within the commonwealth. According to the maxim, Sic utere tuo ut alienum non laedas, which is universally applied, it must be within the range of legislative action to define the mode and manner in which everyone may so use his own as not to injure others. State ex rel. Davis v. Rose, supra.

The State possesses the police power in its capacity as a sovereign, and in the exercise thereof the Legislature may enact laws, within constitutional limits, to protect or promote the health, morals, order, safety and general welfare of society. Before an Act regulating an occupation can be sustained it must affirmatively appear that the Act has a rational, real or substantial relation to one or more of the purposes for which police power is exercised and that the occupation to be regulated is clothed with a substantial public interest. The Act must be reasonably necessary to promote the accomplishment of a public good, or to prevent the infliction of public harm. State v. Ballance, supra. 'In attempting to maintain the delicate balance between individual rights and the public need, the courts * * * have evolved the following rules as guides in the judicial determination of such conflicts: (1) the purpose of the statute must be within the scope of the police power, (2) the act must be reasonably designed to accomplish this purpose, and (3) the act must not be arbitrary, discriminatory, oppressive or otherwise unreasonable.' In re Russo, 1958, 107 Ohio App. 238, 150 N.E.2d 327, 331.

There are professions and occupations so affected with the public interest as to warrant their regulation for the public good. Roller v. Allen, supra. More than fifty professions and occupations are regulated by statute in North Carolina. 17 N.C.Law Review 1. Cases dealing with some of these are: Roach v. City of Durham, 204 N.C. 587, 169 S.E. 149 (plumbing and heating); State v. Scott, 182 N.C. 865, 109 S.E. 789 (accountants); State v. Siler, 169 N.C. 314, 84 S.E. 1015 (chiropractic and suggesto-therapy); State v. Hicks, 143 N.C. 689, 57 S.E. 441 (dentistry); State v. Call, 121 N.C. 643, 28 S.E. 517, and State v. Van Doran, 109 N.C. 864, 14 S.E. 32 (physicians); Ex parte Schenck, 65 N.C. 353 (Lawyers).

Two former enactments of our General Assembly designed to regulate real estate business were declared unconstitutional. State v. Dixon, 215 N.C. 161, 1 S.E.2d 521; State v. Warren, 211 N.C. 75, 189 S.E. 108, 111. These Acts were held to be unconstitutional for the reason that they applied only to real estate brokers and salesmen in designated counties and not to those in the other counties of the State and were therefore discriminatory. In the Warren case it is said: 'The state can no doubt, in a state-wide act, make reasonable regulations in regard to the real estate business.' The Act under consideration in the instant case is a State-wide Act.

It is our opinion that the real estate business affects a substantial public interest and may be regulated for the purpose of protecting and promoting the general welfare of the people. 'Real estate is one of the two great divisions of property rights, and bears as close a relation to public peace and welfare in our civilization as any species of private rights. The business of acting as intermediary between seller and purchaser in real estate transactions, the business of a real estate broker or salesman, is a lawful business, or calling, and any one has a right under constitutional guaranties of liberty and pursuit of happiness to...