Court Opinion

ID: 3999310
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:56:37.06618+00
Date Added: 2024-06-11T07:44:31.522426
License: Public Domain

Since the supreme court of the United States and courts of last resort in eighteen states have held declaratory judgment statutes valid, it must be admitted that the constitutionality of our own act is not debatable. It does not follow, however, that the act can be construed as conferring upon the courts the power of judicial veto. To put such construction upon it would render the act unconstitutional under the well recognized and often applied doctrine of unlawful delegation of legislative power. For, if the legislature cannot delegate its legislative power to the executive, surely it cannot abdicate such power to the judiciary.
The purpose of the declaratory judgment act is to construe
contracts and statutes — not to abrogate, annul, *Page 117 
supplement, or detract from them. In this case, the majority have abrogated and annulled a statute which would be invulnerable to judicial construction, but for the theory that the declaratory judgment act has endowed the court with the power of judicial veto. I cannot accede to that view.
Under all the rules of statutory construction hitherto recognized and applied, chapter 213, Laws of 1937, p. 1034, withstands the challenge to its constitutionality. For the act is plain in purpose and salutary in effect — or would be but for the exercise of judicial veto. That the business of loaning money for interest is a privilege and not a right has been long recognized in commercial states (27 R.C.L. 203, 204) — witness: the abolition of private banking, the regulation of national banks by Congress, and state banks and savings and loan associations by the state.
The purpose of chapter 213, Laws of 1937, p. 1034, is to regulate the business of the loan shark, whose rapacity has hitherto been unchecked in this state. Leaving out the vetoed (executive) sections, the act (§ 2, p. 1034) provides that all who engage in the business of making loans under three hundred dollars shall register with the tax commission and apply to the director of licenses for a permit. It also requires that the application contain the name, residence, and location of the applicant, and be accompanied by the petition of ten freeholders. It also requires that the applicant shall deposit with the director of licenses the sum of one hundred dollars "to cover investigation." Plainly, these provisions constitute a legitimate exercise of the police power, and, standing alone, are sufficient to withstand the challenge to the constitutionality of the whole act. For the act contains a saving clause: *Page 118 
"If any action or provision of this act is declared unconstitutional such decision shall not invalidate the remaining portion of the act." Laws 1937, chapter 213, § 17, p. 1039.
But it is not necessary to rest here, for the act as a whole is soundly grounded in constitutional authority.
Section 5, p. 1036, is designed to prevent the licensee from charging more than twelve per cent interest through the well known devices of "carrying charges" and "examination fees."
Section 7, p. 1037, provides that the licensee
". . . must give the borrower a receipt for all payments,which shall not only show the amount of the payment but totalpayments to date and the balance due." (Italics mine.)
Obviously, the purpose of this provision is to discourage a well known method of bilking the borrower indulged in by the less scrupulous members of the fraternity. Standing alone, the provision is a wholesome and reasonable exercise by the state of its police power.
Section 8, p. 1037, requires the licensee to keep his license posted in a conspicuous place in his office. This is so common a regulation with respect to businesses subject to the police power that it requires no comment.
Section 9, p. 1037, empowers the director of licenses to revoke licenses "for cause, after hearing." The director is empowered to prescribe methods of procedure governing such hearings. Provision is made for service of orders by mail and appeal by the licensee to the superior court. Surely, in view of the provisions of statutes (heretofore held constitutional) relating to hearings before the department of labor and industries, the department of public works, and the liquor control *Page 119 
board, this section cannot be the subject of assault.
Section 10, p. 1037, requires the director of licenses to examine the affairs of licensees. It empowers him to require such information and reports as may be "of aid in determining the true conditions of affairs of such licensees." Again we need only advert to the powers of the director of labor and industries, the director of public works, and the liquor control board. More aptly, perhaps, might be cited the regulations requiring the examination of and reports from banks and savings and loan institutions.
Section 11, p. 1038, is designed to prevent another well known practice indulged in by votaries of the business: that of securing a greater amount of interest by making the loan through a dummy, who is ostensibly the offender in exacting usurious interest.
Section 13, p. 1038, is designed to obviate another trick of the trade: that of taking title to the borrower's personal property and then selling it back to him on conditional bill of sale — thus disguising the loan character of the transaction.
Section 14, p. 1038, exempts from the operation of the act (1) banks, (2) trust companies, (3) building and loan associations, (4) credit unions, (5) industrial loan companies, (6) licensed pawn brokers, (7) individuals making casual loans, and (8) retail merchants selling on installment and conditional sales contract. In considering this section, it must be kept in mind that, in the exercise of the police power, the legislature is vested with the broadest discretion in classifying businesses and individuals. The court will not indulge in nice distinctions in judging whether the classifications are reasonable. If any reasonable hypothesis can be discerned for the legislative inclusions or exclusions, the act will not be held invalid on the ground of discrimination, even though the court may disagree *Page 120 
with the policy. Quong Wing v. Kirkendall, 223 U.S. 59,32 S. Ct. 192.
But, aside from the rule, I think that the reasons for exempting from the operation of the act the classes named are too obvious to warrant judicial examination, much less criticism. The first six classes are already subject to regulation under other statutes. The seventh and eighth are not in the loan business.
When one may cease to be a "casual" loaner of money and enter upon the loan business is a matter to be determined in specific instances. If one considers himself a "casual," he need not comply with the act — thereby running the risk of the director of licenses and the courts disagreeing with him. Certainly, the distinction made between the "casual" and the "professional" — if he may be called such — does not warrant the court in holding the whole act unconstitutional at the behest of the latter.
Finally, the act cannot be held discriminatory on the ground that its operation is limited to loans of less than three hundred dollars. Obviously, in fixing that limitation, the legislature had in mind the protection of that unfortunate class of borrowers who can offer as security only property exempt from execution except when pledged to secure specific obligations.
Believing the act to be not only a reasonable but a salutary exercise of the police power of the state, I dissent.
HOLCOMB, J., concurs with BLAKE, J. *Page 121