Wessell v. Timberlake

• Decision Date: 21 November 1916
• Docket Number: 15297
• Citation: 95 Ohio St. 21,116 N.E. 43
• Parties: Wessel v. Timberlake
• Court: Ohio Supreme Court

116 N.E. 43

95 Ohio St. 21

Wessel v. Timberlake

15297

Supreme Court of Ohio

November 21, 1916

Constitutional law - Police power - Regulation of chattel and salary loans - Section 6346-I et seq., General Code (106 O. L., 281) - License by superintendent of banks.

1. Chattel loans on mortgage security or otherwise, the rate of interest on such loans, and the ways and means of assigning wages, are proper subjects for the exercise of the police power by the general assembly of the state.

2. Section 6346-1 et seq., General Code (106 O. L., 281) is a constitutional exercise of police power by the general assembly of Ohio. The provision in Section 63469 of said act in so far as it relates to the revocation of a license issued pursuant to the act, is reserved for future consideration in cases in which such question may properly be raised.

On September 17,1915, plaintiff in error, Herman Wessell, was arrested by a constable, Charles L. Timberlake, charged with violation of Section 6346-1, General Code (106 O. L., 281) in that said Wessell "did on or about the 17th day of September, 1915, in the county of Hamilton and state of Ohio unlawfully" etc., engage and continue in the business of making loans on plain notes at a charge or rate of interest in excess of eight per cent. per annum without a license.

On the same date Wessell was brought before the common pleas court of Hamilton county on a writ of habeas corpus, and the sole ground upon which it was sought to have him released was the alleged unconstitutionality of the law under which he was arrested.

On April 28, 1916, the common pleas court, by its judgment entry, declared this law valid, and on May 3, 1916, the judgment of the common pleas court was duly affirmed by the court of appeals. Proper exceptions were taken by plaintiff in error to the judgments rendered.

The only questions to be discussed are those which pertain to the validity of the provisions of the act known as the "Loan Law," which act is as follows:

"Sec 6346-1. It shall be unlawful for any person, firm partnership, association or corporation, to engage, or continue, in the business of making loans, on plain, endorsed, or guaranteed notes, or due bills, or otherwise, or upon the mortgage or pledge of chattels or personal property of any kind, or of purchasing or making loans on salaries or wage earnings, or of furnishing guarantee or security in connection with any loan or purchase, as aforesaid, at a charge or rate of interest in excess of eight per centum per annum, including all charges, without first having obtained a license so to do from the superintendent of banks and otherwise complying with the provisions of this act.

"Sec. 6346-2. Any person, firm, partnership, corporation or association desiring to obtain a license, shall apply therefor, under oath, on forms prescribed by the superintendent of banks; and by paying annually to the superintendent of banks, a license fee in the sum of one hundred dollars, shall be entitled to obtain a license, which license fee shall include the entire cost of inspection, or inspections, for a period of one year. The said license shall be issued by the superintendent of banks, and shall expire the first day of March, next following the date of its issuance, except that the fee of one hundred dollars herein provided shall be apportioned for that part of the year 1915 remaining after the date when this act shall become law, but thereafter no abatement of said charge shall be made if licenses are issued for less than one year, and no other or further license fee shall be required from any such licensee, by the state or any municipality nor shall any fees or charges be collected under section 736 of the General Code. Every such license and bond hereinafter provided for shall be renewed annually on the first day of March in each year. No license shall be granted to any person, firm, partnership, corporation or association unless, and until, such applicant shall, in writing, and in due form, to be first approved by and filed with the superintendent of banks, appoint an agent, a resident of the state of Ohio, and county where his office is to be located, upon whom all judicial and other process, or legal notice, directed to such applicant may be served; and in case of the death, removal from the state, or any legal disability or disqualification of any such agent, service of such process or notice may be made upon the superintendent of banks. The said superintendent of banks may revoke any license, if the licensee, his officers, agents, or employees shall violate any of the provisions of this act. Whenever, for any cause, such license is revoked, said superintendent of banks shall not issue another to said licensee until the expiration of at least one year from the date of revocation of such license. Every such applicant shall execute and file a bond to the state of Ohio in the penal sum of two thousand dollars with the superintendent of banks, to be approved by him, for the faithful observance of all provisions of this act. Any person claiming to be injured by a violation of this act by a licensee may maintain an action on said bond.

"Sec. 6346-3. Application for a license shall state fully the name or names, and address, of the person or corporation, and of every member of the firm, partnership, or association authorized to do business thereunder, and the location of the office or place of business in which the business is conducted; and in the case of a corporation, shall also state the date and place of its incorporation, the name and address of its manager for the period for which the license is issued, and the names and addresses of its directors for the period for which the license is issued, and the name and address of the agent as provided in section 6346-2 of this act. Such license shall be kept posted in a conspicuous place in the office where the business is transacted. No person, firm, partnership, corporation or association so licensed, shall transact or solicit business under any other name. Not more than one office or place of business shall be maintained under the same license. But in case of removal, the superintendent of banks, may, on application, endorse thereon a transfer to the new place of business, with the date of transfer, and from the time of such endorsement, the new place so designated shall be deemed the place designated in the license.

"Sec. 6346-4. The superintendent of banks shall, either personally, or by such person or persons as he may appoint for the purpose, at least once a year, and oftener, if he deems it advisable, investigate the business and affairs of every such licensee, and for that purpose shall have free access to the vaults, books and papers thereof, and other sources of information with regard to the business of such licensee and whether it has been transacted in accordance with this act. Said superintendent of banks, and every examiner appointed by him, shall have authority to examine, under, oath or affirmation, any person whose testimony may relate to the business of any such licensee or alleged violator herein.

"Sec. 6346-5. No such licensee or licensees shall make a loan or purchase or furnish guaranty, or security, as hereinbefore provided at a greater total charge, including interest, than three per cent. per month; except that on loans that do not exceed fifty dollars in amount, in whatever manner made payable, an inspection fee of not to exceed one dollar may be collected at the time the loan is made, when such loan is made for a period of not less than four months; and such inspection fee shall not be imposed upon the same borrower for any new or additional loan made within four months after such charge has been imposed. Said three per cent. per month shall not be paid in advance and shall be computed on unpaid monthly balances, without compounding interest or charges. No bonus, fees, expenses, or demands of any nature whatsoever, other than said inspection fee and said total charge of three per cent. per month (which shall include interest) as hereinbefore provided, shall be made, paid, or received, directly or indirectly, for such loans, purchases or furnishing guaranty or security, wage assignments or advancements except court costs upon the actual foreclosure of the security or upon the entry of judgment. Nothing in this act shall apply to pawn brokers who obtain a municipal license as provided in sections 6337 to 6346, inclusive, of the General Code or to national banks or to state banks or any person, partnership, association or corporation whose business now comes under the supervision of the superintendent of banks. No charge or fee shall be made unless the loan is actually made. A copy of this section shall be furnished each borrower at the time the loan is made.

"Sec. 6346-6. Every person, firm, partnership, corporation or association. licensed as herein provided, shall give to the assignor, borrower, or pledger, a statement upon which shall be written in ink, typewritten or printed, the name of the licensee making such loan or purchase, name of the assignor, borrower or pledger, the amount of the loan, the rate or amount of interest charged, the date when the loan is made, and the date when payable; and shall also give the assignor, borrower, or pledger, a receipt for each payment of principal or interest.

"Sec 6346-7. No assignment of any salary, wages or earnings, or any part thereof given to secure a loan shall be valid unless the same shall be in writing, signed in person by the person making the same; and if such person is married and living with husband or wife, signed also by the husband or wife of such person, as the case may be. Nor shall any such assignment be valid unless...