State v. Ware

154 P. 905, 79 Or. 367, 1916 Ore. LEXIS 178

• Court: Oregon Supreme Court
• Decided: February 8, 1916
• Status: Published

Opinions

Mr. Justice Benson

delivered the opinion of the court.

1. The assignments of error are numerous; the first, third, seventh and ninth being chiefly directed to the contention that the act under which the prosecution is maintained is unconstitutional and void. This contention is first raised in the demurrer to the indictment. The statute in controversy contains, inter alia, the following clause:

“No license shall be granted to any such person, firm or voluntary association unless said person and the members of any such firm or voluntary association shall be bona fide residents of the State of Oregon, and no license shall be issued to any joint stock company, incorporated society, or corporation unless and until such company, society or corporation shall, in writing and in due form, to be first approved by and filed with the state banking board, appoint an agent, resident in the State of Oregon, upon whom all judicial and other process of legal notice directed to such company, society or corporation may be served.”

The question arises: Does this provision violate the spirit of Article IV, Section 2, of the Constitution of the United States, wherein it is provided that “The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states” or of Section 1, Fourteenth Amendment, of the same document, wherein it declares that:

“No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States,”

Usury has been looked upon with disfavor for ages, and it has been uniformly held that the state may either regulate or absolutely prohibit the taking of usurious interest. It follows that no citizen has an inherent or common right to exact the same. This being true, the state has ample power to regulate the taking of excessive interest and confine the privilege to those whose residence within its borders renders them subject to its process: State v. Catholic, 75 Or. 367 (147 Pac. 372); White v. Holman, 44 Or. 180 (74 Pac. 933, 1 Ann. Cas. 843); Sandys v. Williams, 46 Or. 327 (80 Pac. 642). It is a fact of common knowledge that in the larger cities and towns there are men whose business it is to prey upon the necessities of the improvident and the unfortunate by lending money at exorbitant rates of interest, with the effect that in many instances the borrower becomes the bond slave of the lender, if, indeed, he possesses enough character to prevent his desperation from driving him into overt acts of crime. These lendings and borrowings are usually so small in amount that the banking institutions make no pretense of engaging in the business, and hence arises the duty of the state to protect the unfortunate victim of rapacity so far as it is practicable. It requires no argument to establish the truth that this is a proper exercise of the police power. The state owes a duty in this regard just as clearly as it does to protect the ignorant and the unwary from the machination of the confidence man or the extortion of the highwayman, and if the lender under such circumstances is a nonresident of the state, he may work through devious methods to • accomplish his purpose and laugh at the statutory efforts of law enforcement. We conclude that the statute under consideration is not subject to the objection suggested.

2. We next consider the question as to whether or not the act is unconstitutional as being discriminatory class legislation. Section 8 thereof reads as follows:

“That nothing contained in this act shall be held to apply to the legitimate business of state and national banks, licensed bankers, trust companies, savings banks, building and loan associations, or real estate brokers. ’ ’

Speaking of a somewhat.similar statute, the United States Supreme Court, speaking by Mr. Justice McKenna, says:

“This contention attacks Section 6 of the statute which exempts from its provisions certain banks, banking institutions and loan companies. It is urged that the provision is discriminatory and therefore denies to plaintiff the equal protection of the laws. "We have declared so often the wide range of discretion which the legislature possesses in classifying the objects of its legislation that we may be excused from a citation of the cases. We shall only repeat that the classification need not be scientific nor logically appropriate, and if not palpably arbitrary and is uniform within the class, it is within such discretion. The legislation under review was directed at certain evils which had arisen, and the legislature, considering them and from whence they arose, might have thought or discerned that they could not or would not arise from a greater freedom to the institutions mentioned than to individuals. This was the view that the Supreme Judicial Court took, and, we think, rightly took. The court said that the legislature might have decided that the dangers which the statute was intended to prevent would not exist in any considerable degree in loans made by institutions which were under the supervision of bank commissioners, and ‘believed rightly that the business done by them would not need regulation in the interest of employees or employers. ’ * * But even if some degree of evil which the statute was intended, to prevent could be ascribed to loans made by the exempted institutions, their exception would not make the law unconstitutional. Legislation may recognize degrees of evil without being arbitrary, unreasonable, or in conflict with the equal protection provision of the Fourteenth Amendment to the Constitution of the United States”: Mutual Loan Co. v. Martell, 222 U. S. 225, 235 (56 L. Ed. 175, Ann. Cas. 1913B, 529, 32 Sup. Ct. Rep. 74, 75).

We regard this quotation from the highest court of our country as a wise and correct declaration of the true doctrine of interpretation.

3. We come, then, to a consideration of defendant’s contention that the court erred in admitting in evidence certain papers and correspondence which he claims were seized by tbe officers in Ms rooms, in violation of tbe constitutional guaranties against unreasonable searches. Whatever may be the rule in the federal courts, it has been repeatedly held in state courts that evidence thus obtained is not thereby rendered inadmissible: State v. McDaniel, 39 Or. 161 (65 Pac. 520); State v. Wilkins, 72 Or. 77 (142 Pac. 589); 1 Bishop New Cr. Proc., § 211. In 1 Greenleaf, Ev., Section 254, the rule is stated thus:

‘ ‘It may be mentioned in this place, that though papers and other subjects of evidence may have been illegally taken from the possession of the party against whom they are offered, or otherwise unlawfully obtained, this is no valid objection to their admissibility if they are pertinent to the issue. The court will not take notice how they were obtained, whether lawfully or unlawfully, nor will it form an issue to determine that question.”

It is further complained that the court, erred in permitting a cross-examination of the defendant upon matters upon which he was not questioned in his direct examination. We have examined the record very carefully, and while it is long and it is not necessary to set it out herein, we may say that we find the cross-examination of the defendant confined to matters germane to his direct testimony, and therefore proper.

4. This brings us to a consideration of a question which was raised for the first time in the argument of the case in this court. The indictment, as has already been noted, was based npon Chapter 278 of the Session Laws of 1913, and the trial, conviction and sentence were all accomplished while that act was in force. Thereafter, and while the appeal herein was pending, the legislative assembly of 1915 passed a new statute, Chapter 219 of the Session Laws of 1915, which expressly repeals Chapter 278 of the Laws of 1913. The later act, like the former, begins with the following words:

“That hereafter it shall he unlawful to engage in the business of making loans of money or of personal credit upon which there is, directly or indirectly, charged or received, interest, discount, or consideration greater than 10 per cent per annum, without first procuring a license as hereinafter provided.”

The requirements as provided are identical in both laws, with the exception that in the earlier act, the annual license fee is $50, while in the later one it is increased to $100. The only other changes in the later act are directed to additional details as to the conduct of such business after a license has been procured. Both laws require the application for a license to be made to the state banking board and give such board power to reject such application upon proper notice and a public hearing “before issuing such license,” so we are not left in doubt as to the authority .which is to issue the same. In brief, as has already been observed, there is, up to the point of securing the license, absolutely no change in the later act, other than an increase in the amount of the annual fee to be paid by the applicant, and, therefore, since the defendant never paid any fee nor secured any license, there is practically no change in the law so far as it affects this case. We are then to consider whether or not the repeal of the earlier act and simultaneous re-enactment of substantially the same provisions necessitates the dismissal of the indictment and discharge of the defendant. We are unable to find any good, practical reason for such a contention, since every element of the law with which the defendant is charged of violating, is still the law and has never at any moment since its first enactment in 1913 ceased to be the law. The only justification, then, for so holding must be found in precedent. In the case of Steamship Co. v. Joliffe, 69 U. S. (2 Wall.) 450 (17 L. Ed. 805), we find the following language:

“The new act re-enacts substantially all the provisions of the original act, relating to pilots and pilot regulations for the harbor of San Francisco. It subjects the pilots to similar examinations; it requires like qualifications; it prescribes nearly the same fees for similar services; and it allows half pilotage fees under the same circumstances as provided in the original act. It appears to have been passed for the purpose of embracing within its provisions the ports of Mare Island and Benicia, as well as the port of San Francisco; of creating a board of pilot examiners for the three ports, in place of the board of pilot commissioners for the port of San Francisco alone, and of prohibiting the issue of licenses to any persons who were disloyal to the government of the United States. The new act took effect simultaneously with the repeal of the first act; its provisions may, therefore, more properly be said to he substituted in the place of, and to continue in force with modifications, the provisions of the original act, rather than to have abrogated and annulled them. The observation of Mr. Chief Justice Shaw, in Wright v. Oakley, 5 Met. (Mass.), 406, upon the construction of the Revised Statutes of Massachusetts, which in terms repealed the previous legislation of the state, may with propriety he applied to the case at bar. • ‘In construing the Revised Statutes and the connected acts of amendment and repeal, it is necessary to observe great caution to avoid giving an effect to these acts which was never contemplated by the legislature. In terms, the whole body of the statute law was repealed; but these repeals went into operation simultaneously with the Revised Statutes, which were substituted for them, and were intended to replace them, with such modifications as were intended to be made by that revision. There was no moment in which the repealing act stood in force without being replaced by the corresponding provisions of the Revised Statutes. In practical operation and effect, therefore, they are rather to be considered as a continuance and modification of old laws than as an abrogation of those old and the re-enactment of new ones.’ ”

The good practical sense of the above quotations seems to render further citation of authorities unnecessary, for both of the cited cases seem to be precisely in point, and to furnish ample authority for the conclusion that the simultaneous repeal and re-enactment of the provisions under consideration do not constitute such a repeal as would be of any avail to the defendant herein, and it may be added that this doctrine has been distinctly enunciated by this court in the cases of Renshaw v. Lane County, 49 Or. 526 (89 Pac. 147), and Bayless v. Douglas County, 57 Or. 301 (111 Pac. 384).

5. Finally, it has been urged that the title of Chapter 278 of the Laws of 1913, is so defective as to render the act void, and the case of State v. Levy, 76 Or. 63 (147 Pac. 919), is cited in support of this contention. A careful examination of the enactments discloses, however, that the citation does not support this theory. The title of the act in question reads as follows:

‘ ‘ To regulate the business of loaning money or credit by persons, firms, and corporations other than national banks, licensed bankers, trust companies, savings banks, building and loan associations, real estate brokers and pawnbrokers.”

The regulation of the business as indicated would naturally and logically connect the state banking board and the state examiner with the management and conduct of administering such regulation, and the provisions are therefore germane to the title. In the case of State v. Levy, 76 Or. 63 (147 Pac. 919), there is no logical connection between the powers of a railroad commissioner and the duty of supervising the business of a commission merchant.

The conclusion is that there is no substantial error in the record, and the judgment of the lower court should be affirmed.

Affirmed. Rehearing Denied.

Mr. Justice Burnett and Mr. Justice McBride dissent. Mr. Justice Eakin did not sit.