214 S.W.2d 605 | Ky. Ct. App. | 1948
Reversing. C.W. Peel and twenty-two other licensed pawnbrokers brought an action in the Franklin Circuit Court against the Attorney General and the Commonwealth's Attorney for the Fourteenth Judicial District, representing all Commonwealth Attorneys, to restrain them from enforcing the provisions of Chapter 216 of the Acts of 1946, now KRS 226.050(2),
Chapter 216 of the Acts of 1946, entitled "An Act relating to pawnbrokers," makes it unlawful for pawnbrokers, as defined in KRS
"Twenty-first: To regulate the rate of interest."
It is also charged that the Act is class legislation because it applies to one group of persons and not to the members of the general public who are engaged under like conditions and similar circumstances in the same activities and business transactions. Similar claims were made in Ravitz v. Steurele,
On this appeal the appellants in their brief, though not waiving the foregoing grounds, limit their arguments to two grounds for reversal of the judgment: (1) The court erred in sustaining the demurrer to the petition since facts were alleged which, if proved, would show that the low interest rate allowed by the Act would have the effect of destroying appellants' business; and (2) the Act prohibits pawnbrokers from complying with the Federal law which imposes a 20% tax on jewelry and other items. 26 U.S.C.A. secs. 1650, 2400.
There is no merit in ground (2). The Federal law referred to imposes the tax only on articles sold by the manufacturer, producer or importer, but we find *402 nothing in the Act prohibiting the collection of such a tax from the buyer if legally imposed. The Act merely provides that no pawnbroker shall directly or indirectly charge, receive or contract for any interest or consideration greater than that allowed by section 1 of the Act.
The soundness of ground (1) depends upon the nature of the business sought to be regulated. Is the business of pawnbrokers of such a nature that the Legislature, in the exercise of the police power, may prohibit it altogether? If so, the regulation of which complaint is made is valid although it may result in the destruction of the business. In Commonwealth v. McCray,
This rule applies to any regulation under the police power. Appellees cite Equitable Loan Society v. Bell,
And further: "Having determined that the occupation of lending money on salaries or chattels is a legitimate one, we must apply the same rule to it that we apply to any other useful or legitimate occupation."
To the same effect is Salisbury v. Equitable Purchasing Company,
There can be no doubt that the pawnbroking business, due to its peculiar nature, is subject to abuse, and if unregulated great evils would grow up in connection with it. It is universally recognized that the business is subject to regulation under the police power, but, being a useful business when properly conducted, it cannot be prohibited, and regulations so onerous as to amount to a prohibition are not permissible. The petition in the instant case stated facts not conclusions, and it follows from what has been said that the appellants should have been afforded opportunity to introduce evidence in support of their allegations as was done in Martin v. Nocero Ice Cream Company,
The judgment is reversed with directions to overrule the demurrer to the petition.