Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-06-13
LOAN SHARK" LAW
HELD TO Be VOID
Chief Justice CIabaugh De-
cIares Act Unconstitutional
in Opinion Today.
MANDAMUS is DIRECTED
AGAINST DISTRICT HEADS
defective" Section Discriminates
Against Non-Residents,
Court Holds.

The new loan shark law is uncOn-
stitutional and void. Chief Justice Cla-
baugh of the District Supreme Court so
declared today when he directed man
damus to issue against the District Com
missioners to compel the granting of a
license to William n. Prender of Cherry
dale. Va. under the old pawnbroke er' s
act, which the new law was supposed to
supersede.
Assistant Corporation Counsel Stephens
on behalf of the District authorities noted
in open court an appeal to the District
Court of Appeals.
The chief justice frankly admitted that
when he heard arguments on the case a
few weeks ago he was inclined to hold
the law good if he could find a way TO
do so. Mature consideration, however. he
said, convinced him that the opening sec
ton of the law was so grossly discrim-
inatory that he felt obliged to render a
decision against the constitutionality of
the entire act.
The defective section provides that
no license shall be issued to any person,
firm or voluntary association unless he
be a bona fide resident of the District Of
Columbia. Then Immediately provides
that any corporation or joint stock COM
pany licensed to do business here shall
appoint an agent who shall reside in this
jurisdiction. and such concerns may have
licenses. The nonresident individual is
denied license which may be granted to
nonresident corporation.
The court intimated that there were
other holes i'm the act but did not
specify them, as he thought the first sec
ton contained the principal embodiment
Of the law.
May Affect Prosecutions.
The decision of Chief Justice Clabaugn
may have the effect of disseminating
prosecutions in the Police Court against
money lenders" although one of the
Judges Of that tribunal recently held the
law valid and imposed fine under it.
The case arose on the application Of
William n. Prender for license as
pawnbroker. Through Attorneys Tucker,
Kenyon & Macfarland and E. S. Bailey,
the applicant proceeded under the provi-
sions of the old law which governed
pawnbrokng before the enactment of the
loan shark law Of last February. The
District Commissioners refused the ap-
plication for license, holding the old
law was repealed by the new enactment.
Counsel for the applicant sought man
damus from the District Supreme Court.
They urged the new law is void because
u
individual. while allowing nonresident
corporations to do business here. if a res
ident representative be designated. Coun-
sci also contended there was no expressed
repeal of the old pawnbrokers' law in the
new enactment and urged that the new
law could not repeal by implication.
Contention of the District.
In their answer, the District Commis-
oin
should find the first section of the new
law invalid it was susceptible Of di-
vision from the remaining provisions of
the act and the whole law ought not to
be declared invalid merely because the
first section was bad in law.
To this contention, counsel for the ap-
plicant argued that the court would have
to usurp the functions of the legislature.
as such construction would enlarge the
scope Of the enactment BY SO holding,
they urged. the court would grant licenses
To non-residents. when Congress had in
tended expressly to exclude them from
doing business here under the loan
shark law.
Prosecutions to Continue.
noon said that the decision of Justice
Clabaugh would not deter his Office in
proceeding with prosecutions under the
loan shark law. Not only has the de-
cision been appealed. he declared. but it
is his intention to prosecute actively
every violation of the law that comes to
his attention Mr.. Thomas stated that
there is a distinction in the case decided
by Justice Clabaugh in that the defend
ant was a nonresident.