Court Opinion

ID: 5236665
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:10:51.315251+00
Date Added: 2024-06-11T08:27:44.436446
License: Public Domain

Hotchkiss, J. (dissenting):
I shall state the grounds of my dissent without attempting to fully argue them. Chapter 326 of the Laws of 1895 belonged to a class of legislation which at or about that period was enacted in a number of States and was generally known as Small Loans Acts. These acts grew out of the discovery that the business of making small loans to poor people had grown to large proportions and presented questions of serious public interest, inasmuch as the industry had fallen into the hands of unscrupulous persons known as “loan sharks,” who, working upon the improvidence of a necessitous class, extorted unconscionable rates of interest for loans insignificant in amount save when compared with the resources of the borrowers. It has been said, and I believe is generally conceded, that Bentham’s celebrated “Defense of Usury” and the great objection urged against usury laws by him and his followers, is that to make high rates of interest illegal is simply to drive the unfortunately placed borrower into the arms of a class of men willing to balance the profits of extortion against the odium and risks of an unlawful trade. To avoid this and to furnish lawful and regulated media for the class of loans in question was the undoubted purpose of all such legislation which in effect places this class of loans in a category separate and apart from larger loans, the very amount of which indicate that they are made to a type of persons it was not the intention of the Legislature to protect. The evil conditions sought to be mitigated by the Small Loans Acts notoriously existed to a larger extent in cities than in less populous localities. The original act in this State (Laws of 1895, chap. 326), the essential form of which, so far as purpose and penalty is concerned, has never been changed, applied to cities (other than those in two excepted counties) having not less than 600,000 inhabitants, and provided for the incorporation of “associations” for lending money on personal property, the purpose of which associations was in the first section declared to be for “aiding such persons as shall be deemed in need of pecuniary assistance, by loans of money at interest, not exceeding,” etc. By the third section the rate of interest was prescribed, and by the fourth section dividends were limited to ten *383per cent per annum, and by the fifth section, in counties where such associations existed, all persons except pawnbrokers, and every other kind of corporation than those provided for by the act, were prohibited from taking a greater rate of interest than six per cent per annum on loans of less than $200 in amount, and the violation of the act was made a misdemeanor. The act of 1895 was subsequently amended to apply to any county having a population of more than 300,000 (Laws of 1895, chap. 706); any county containing a city of more than 25,000 inhabitants, except in the counties of Monroe and Westchester (Laws of 1896, chap. 206); any county containing or which is contained in. a city of more than 25,000 population (Laws of 1902, chap. 78), and again (Laws of 1905, chap. 333) to any county containing or which is contained in “an incorporated city’’(the exception of the two counties, in the last two amendments, being continued), in which form it was carried into the Banking Law in the Consolidated Laws, where it remained at the time of the loan in question. (See Consol. Laws, chap. 2 [Laws of 1909, chap. 10], §§ 310-314, as amd. by Laws of 1910, chap. 127.) The counties of Monroe and Westchester were included in 1910. The legislative intent, as disclosed by the “history of legislation and the evil which the statute was designed to prohibit or remedy,” may be followed through all the mutations of an act, and the fact that it later appears in a codification or consolidation of the laws, unless materially changed in form, should not change its interpretation. .(Caesar v. Bernard, 156 App. Div. 724, 732; affd., 209 N. Y. 570.)
I draw no conclusion adverse to the present purpose of the law because of its history or present location in the statutes. To me the situation seems plain. Section 74 of the Banking Law, as well as the statutes from which it was taken, was intended to cover the great body of commercial business consisting of loans in excess of $200, and to put the banks and private bankers of this State on a parity with National banks with respect thereto. Sections 310 et seq., including section 314, were intended to continue the segregation of small loans from the general act and to prescribe the class of “associations ” (now called corporations) which might make such loans under the limitations, conditions and penalties therein provided.
*384This case affords abundant proof that the evils which the Small Loans Acts were intended to prevent are as much to be apprehended from private bankers as now regulated by law as from the predatory class against which the original act was directed. The effect of section 314 is in no event to wholly repeal section 74, for it applies to only an infinitesimally small part of the transactions affected by section 74. Repeals by implication are not presumed unless there is irreconcilable inconsistency. If to section 74 we add — save as hereinafter provided —the meaning of sections 310 et seq. is clear and their purpose and intent are preserved. In view of the sweeping provisions of section 314—“in any such county no person or corporation, other than corporations organized pursuant to this article, shall,” etc.; “any person, and the several officers of any corporation, who shall violate,” etc., and the fact that pawnbrokers are alone exempted from the operations of the act, it seems to me that it is error to hold that banks and private bankers are also excepted.
I do not see that People v. Young (207 N. Y. 522) is necessarily decisive of this case, although portions of the opinion may lend to the conclusion reached by a majority of my brethren herein.
Determination affirmed, with costs.