Allen v. Pavach

335 N.E.2d 219, 263 Ind. 574, 1975 Ind. LEXIS 333
CourtIndiana Supreme Court
DecidedOctober 7, 1975
Docket574S107
StatusPublished
Cited by11 cases

This text of 335 N.E.2d 219 (Allen v. Pavach) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allen v. Pavach, 335 N.E.2d 219, 263 Ind. 574, 1975 Ind. LEXIS 333 (Ind. 1975).

Opinions

Givan, C.J.

This appeal arises from Appellees’ action for injunctive and declaratory relief in Marion Superior Court. This Court entertains jurisdiction pursuant to Ind. R. Ap. P. 4(A) (8), as the trial court found Acts 1973, P.L. 326, §§ 4 and 5, to be unconstitutional.

The facts were stipulated as follows:

1. The plaintiff is a resident of Marion County, State of Indiana, and is a Professional Bail Bondsman.

2. The defendant is the duly appointed Commissioner of the Department of Insurance of the State of Indiana.

3. The plaintiff is registered and has qualified as a Professional Bondsman, pursuant to Burns 9-3701 et seq., with the Department of Insurance, State of Indiana.

[576]*5764. The First Regular Session of the 98th General Assembly of the State of Indiana passed Public Law 326, which statute amends Burns 9-3701.

5. The plaintiff’s license to operate as a professional bondsman expired on September 30, 1973, but all such licenses were extended by the Insurance Commissioner to date of October 8,1973, which date falls on a holiday.

The issues presented by the complaint are:

Whether Public Law 326, Acts of 1973, has deprived the plaintiff of his right to due course of law under the Indiana Constitution, Article 1, Sec. 12, his right to equal protection under the Indiana Constitution Art. 1, Sec. 23, and his right to due process of law under the Constitution of the United States, 14th Amendment, Sec. 1, by:

a) Arbitrarily establishing two classes (individual-insurance company) to sell bail bonds;
b) Arbitrarily establishing different standards for the two classes established which must be met before they may sell bail bonds;
c) Arbitrarily establishing maximum amount of bail bonds that may be written by an individual professional bail bondsman, and placing no limit upon individuals selling bail bonds for an insurance corporation;
d) Arbitrarily requiring a $100,000.00 cash bond for an individual professional bail bondsman and providing no cash bond for individual salesmen employed by an insurance company.

Following argument and submission of briefs to the trial court, the judge made the following conclusions of law:

“1. The law is with the plaintiffs.
“2. Sections 4 and 5 of Public Law 326 are discriminatory in their effect on professional bondsmen.
“3. The discrimination established by Sections 4 and 5 of Public Law 326 is arbitrary, unreasonable, and of an unusual nature; it therefore is discriminatory in fact and in law, and a [sic] as applied to plaintiffs is therefore unconstitutional. It is not based on a substantial difference of situation or circumstances indicating any necessity for such determination.
[577]*577“4. Because of the constitutional violations, Sections 4 and 5 of Public Law 326 are expressly found to be unconstitutional and therefore void.”

Appellant raises one issue for review: Whether the trial court erred in finding §§ 4 and 5 of P.L. 326, Acts of 1973, to be arbitrary and unreasonable and therefore unconstitutional.

Appellees admit that the bail bond business, because of its close relation to the criminal justice system, is a proper subject for legislative regulation. In fact, other jurisdictions have uniformally so held. See, e.g., Jackson v. Beavers, (1923) 156 Ga. 71, 118 S.E. 751; McDonough v. Goodcell, (1939) 13 Cal.2d 741, 91 P.2d 1035. See also Annot., 13 A.L.R.3d 618 (1967).

At the outset, it should be noted that a corporation is a “person” within the meaning of the equal protection and due process provisions of the United States Constitution. 18 Am.Jur.2d Corporations, § 21.

The equal protection clauses of the United States and Indiana Constitutions do not prevent the legislature from indulging in classifications which treat one group differently from another. The test is whether the difference in treatment is an invidious discrimination. Lehnhausen v. Lake Shore Auto Parts Co., (1973) 410 U.S. 356, 35 L.Ed.2d 351, 93 S.Ct. 1001. Similarly, the due process clause protects only against invidious discrimination. Ferguson v. Skrupa, (1963) 372 U.S. 726, 83 S.Ct. 1028, 10 L.Ed.2d 93. Generally, if a classification has a rational or reasonable basis, it will be sustained. Graham v. Richardson, (1971) 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534; State ex rel. Miller v. McDonald, (1972) 260 Ind. 565, 297 N.E.2d 826, 37 Ind. Dec. 332. Corporations may be classified and treated differently when the classifications are based upon distinctions having a fair and reasonable relation to the purpose of the legislation. Atchison, T. & S.F. Ry. Co. v. Vosburg, (1915) 238 U.S. 56, 35 S.Ct. 675, 59 L.Ed. 1199. Further, [578]*578the enactment is presumed to be valid, the burden resting upon the party challenging its validity to overcome the presumption. Graham, supra; State ex rel. Miller, supra.

Acts 1973, P.L. 326', § 4, amending the deposit requirements of professional bondsmen, reads in part, as follows:

“SECTION 4. IC 1971, 35-4-5-34 is amended to read as follows: Sec. 34. Professional bondsmen and property bondsmen shall, before writing cash, property or security bail bonds deposit with the commissioner cash, bearer bonds or other negotiable securities in the same manner as required of domestic insurance companies, an amount determined by the commissioner not less than having a value of at least one hundred thousand dollars ($100,000) in order to obtain a license to engage in the bail bond business, out of which the commissioner shall satisfy judgment on all forfeitures which have not been paid. The deposit shall be subject to all laws, rules and regulations as deposits by domestic insurance companies.”

IC 35-4-5-35 (Burns 1975 Repl.) pertaining to the insurer’s deposit, reads as follows:

“Deposit by insurers with commissioner — Amount.—All insurers must deposit with the commissioner cash, bearer bonds or other negotiable securities having a value of at least seventy-five thousand dollars [$75,000], in order to obtain a license to engage in the bail bond business, out of which the commissioner shall satisfy judgment on all forfeitures which have not been paid. Such deposit shall be subject to all laws, rules and regulations as are deposits by domestic insurance companies. [Acts 1961, ch. 263, § 32a, as added by Acts 1969, ch. 241, § 17, p. 927.] ”

The State is attempting to protect itself from bail bond forfeitures and to insure that defendants will be present for trial.

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Allen v. Pavach
335 N.E.2d 219 (Indiana Supreme Court, 1975)

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335 N.E.2d 219, 263 Ind. 574, 1975 Ind. LEXIS 333, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allen-v-pavach-ind-1975.