THILLENS, INC., Appellee, vs. LLOYD MOREY, Auditor of Public Accounts, et al., Appellants.
No. 34315
Supreme Court of Illinois
May 23, 1957
Rehearing denied September 19, 1957
579-600
The decree of the circuit court was correct and it is affirmed.
Decree affirmed.
DAVIS and HERSHEY, JJ., dissenting.
KIRKLAND, FLEMING, GREEN, MARTIN & ELLIS, and TENNEY, SHERMAN, BENTLEY & GUTHRIE, both of Chicago, (DAVID JACKER, HENRY F. TENNEY, GEORGES DAPPLES, and THOMAS J. KERWIN, of counsel,) for appellee.
Mr. JUSTICE BRISTOW delivered the opinion of the court:
The Auditor and Attorney General of the State of Illinois together with the State‘s Attorney of Cook County, and certain currency exchanges as intervening defendants, have appealed directly to this court from a declaratory judgment of the circuit court of Cook County adjudging that the 1951 amendment to the Community Currency Exchange Act of 1943 (
The constitutionality and validity of a State statute being the principal issue, the appeal properly comes direct to this court.
Plaintiff‘s complaint prayed a declaratory judgment declaring the 1951 amendment to the Community Currency Exchange Act void and unconstitutional and that the defendant public officials and the individual defendant currency exchanges, as representative of all other currency exchanges, be enjoined from exercising any of the rights, powers or duties conferred upon them respecting the enforcement of the amended act.
Section .01 of the amendatory act contains a finding and declaration by the General Assembly in reference to ambulatory currency exchanges as follows: “* * * that there has arisen also the ambulatory currency exchange business, as hereinafter defined in Section 1, which has engaged heretofore in unlicensed competition with the licensed community currency exchange business; that it is in the public interest to promote and foster the community currency exchange business and to assure the financial stability thereof; that the operations of the ambulatory currency exchange business have enabled it to appropriate the most profitable function of the community currency exchange business without incurring the expenses of, or subjecting itself to the regulations imposed upon the community currency exchange business, and to secure thereby an unfair advantage; that there has resulted therefrom an unfair and ruinous competition to the licensed community currency exchange business; that the nature of the ambulatory currency exchange business is such as to render it hazardous and dangerous to the public safety and security; that the public welfare demands that no ambulatory currency exchange business should be operated without a license, or otherwise than in accordance with the regulations provided in, or to be provided pursuant to this Act.”
Section 1 of the amendatory act defines a community currency exchange as being “any person * * * engaged at a fixed and permanent place of business, in the business
Section 2 of the amendatory act provides that no community currency exchanges or ambulatory currency exchange can engage in business without a license from the Auditor of Public Accounts; that no license shall issue for the conduct of an ambulatory currency exchange on any public street or highway; that an ambulatory currency exchange shall secure a license for the conduct of its business at each and every location served by it as provided in section 4; and that violators of said section shall suffer prescribed penalties.
Section 3 of the act provides what operations a community or ambulatory currency exchange may or may not engage in.
Section 4 provides for written applications for licenses and certain information relative to the applicant‘s history; that applications for both types of exchanges for a license
Section 10 specifies certain qualifying conditions precedent to the issuance of a license and provides that no application shall be denied by the Auditor without notice and hearing and the right of review in accordance with section 22.01 of the act.
Section 14 provides for the payment of annual license fees and the filing of annual license bonds, reports and insurance policies as and if required by the act on or before November 15 annually.
Section 15 provides that no licenses shall be revoked by the Auditor without notice and hearing and right of review in accordance with section 22.01.
Section 16 provides for annual reports to the Auditor and requires that the Auditor shall, at least once a year, inspect the locations served by an ambulatory currency exchange for the purpose of determining whether such exchange is complying with the provisions of the act in such location served, and provides for subpoena powers of the Auditor and examination fees with a maximum fee of $20 per day.
Section 19.1 requires an ambulatory currency exchange actively engaged in any place or station on a location licensed under the act and cashing checks other than from an
Section 28 provides that if an ambulatory currency exchange does not engage in selling or issuing money orders in its own name, then sections 5, 6, and 7 of the act are not applicable to it.
Section 29 declares the operation of any unlicensed exchange or the unlawful conduct of any licensed exchange constitutes unfair competition with licensed and legally operated currency exchanges doing business in the same community and authorizes such licensed and legally operating currency exchanges doing business in the same community to apply for and obtain an injunction restraining such unfair competition.
Section 30 of the act provides that if any provision of the act is declared unconstitutional the unconstitutionality of such provision shall not invalidate the constitutional provisions of the act.
Plaintiff‘s complaint in substance alleges that it is an Illinois corporation organized in 1949 for the purpose, among others, of engaging in the business of transporting
After a temporary injunctional order was affirmed by the Appellate Court in Thillens, Inc. v. Cooper, 345 Ill. App. 145, the defendants filed answers which, in addition to denying the unconstitutionality of the amendatory act and plaintiff‘s right to an injunction, specifically denied the following facts alleged in the complaint: that plaintiff‘s sole business consisted of the transporting of currency belonging to the plaintiff to premises of business establishments pursuant to contract and the cashing of payroll checks of employees on the premises of the employers; that any loss which occurs is borne by the plaintiff and can accrue to no others; that a very substantial part of plaintiff‘s business is conducted in industrial and outskirt areas where there is no practical or convenient means by which payroll checks can be cashed except by plaintiff‘s services; that the principal competitors of plaintiff‘s business are tav-
Thereafter the trial court granted plaintiff‘s motion for judgment on the pleadings and entered a declaratory judgment granting the relief prayed, basing its decision primarily upon the opinion of this court entered in the case of People ex rel. Barrett v. Thillens, 400 Ill. 224. Such declaratory judgment entered on the pleadings by the trial court was reversed by this court in Thillens, Inc. v. Hodge, 2 Ill. 2d 45, and the cause was remanded with directions to overrule the motion for judgment on the pleadings and to require the introduction of evidence in order to resolve the factual issues raised by the pleadings before deciding the legal questions presented.
On remandment the trial court heard extensive and voluminous testimony and evidence and entered its judgment declaring the amended act unconstitutional as applied to plaintiff, from which this appeal is taken. Such judgment made the following specific findings among others: “The plaintiff engaged in the business of cashing payroll checks on the premises of various employers, there being instances, however, of the cashing of payroll checks outside such premises and on the public streets while plaintiff was engaged in promotional services;” “payroll checks are cashed from tables in plants in some instances, in cages in plants in other instances, and from the windows of armored trucks on the premises of plants in other instances;” “in most instances where the check cashing is not done from the armored truck it is done by an armed employee of
The contentions by appellants on this appeal that the amendatory act is constitutional may be summarized in substance as follows: That the legislative judgment is conclusive unless clearly shown to be arbitrary, capricious and unrelated to the public good; that the trial court‘s finding that the plaintiff‘s unlicensed competition was not unfair or ruinous was contrary to the uncontradicted evidence, and the legislation is a constitutional inhibition of “unfair and ruinous competition” which the legislature has found and declared to exist; that the trial court‘s finding that the amendment exceeded the legislature‘s police power was contrary to the uncontradicted evidence, which established the dangerous and hazardous nature of plaintiff‘s business.
The substance of plaintiff‘s contentions in support of the declaratory judgment may be summarized as follows: The reasonableness and propriety of regulation and its application is a judicial and not a legislative function; plaintiff‘s competition is neither unfair nor ruinous; plaintiff‘s business is neither dangerous nor hazardous; the designation of a business by the legislature as being affected with the public interest does not in fact make it so; and the statute is void as an unlawful classification, a denial of equal protection of the laws, an unwarranted discrimination, and an invalid exercise of police power.
The opinion of this court in Thillens, Inc. v. Hodge, 2 Ill. 2d 45, points out the nature of the decision of this
As stated in the case of Thillens, Inc. v. Hodge, all presumptions are in favor of the constitutionality of legislation once it becomes the law of the State, and all reasonable doubts must be resolved in its favor. The party attacking the validity of a statute has the burden of proving that it is clearly arbitrary and has no foundation in the police power for its existence. Where the reasonableness of the legislation is fairly debatable the courts will not interfere with the legislative judgment and will not substitute their judgment for that of the legislative department. Such principle does not foreclose the courts from exercising their judicial function, and it is true that the reasonableness and propriety of regulation and its application must be decided by the court from the facts and circumstances in evidence. (Midland Electric Coal Corp. v. County of Knox, 1 Ill. 2d 200.) However, the trial court has no power to judge in accordance with its judgment on conflicting evidence but its duty is only to decide whether the question is fairly debatable. If fairly debatable it should not investigate further. (Gadlin v. Auditor of Public Accounts, 414 Ill. 89.) It makes no difference that substantial evidence on both sides may be in conflict or that the facts may be disputed or their effect opposed by argument and opinion of serious strength. It is not for the courts to arbitrate in such contradictions of evidence. (Stewart v. Brady, 300 Ill. 425; Rams-Head Co. v. City of Des Plaines, 9 Ill. 2d 326; City of West Frankfort v. Fullop, 6 Ill. 2d 609.) From the findings of fact specifically made by the trial court that the plaintiff cashed checks on the public streets while engaged in promotional services, that there have been holdups in which individuals have been injured, that there is no armed
As to the question of whether legislative protection of one business from competition by another is valid in and of itself, we are not called upon to consider. As announced in People ex rel. Barrett v. Thillens, 400 Ill. 224, it is a firmly settled constitutional principle that every citizen is guaranteed the right to engage in any lawful, useful and harmless business or trade, and it is not within the constitutional authority of the State legislature, in the exercise of police power, to interfere with the rights of the individual to carry on a legitimate business when no interest in the public safety, welfare or morals is damaged or threatened. Although the decision in People ex rel. Barrett v. Thillens, 400 Ill. 224, was unquestionably correct, yet, in the instant case we have a situation of a business which damages or threatens to damage the public safety. In Gadlin v. Auditor of Public Accounts, 414 Ill. 89, this court upheld the constitutionality of section 4.1 of the Currency Exchange Act, also adopted in 1951, limiting the issuance of community exchange licenses to those which would promote the advantage of the community, and said that the unrestricted issuance of licenses in a community to the point of saturation would tend to decrease net earnings to the point of insolvency of one or more exchanges with the inevitable result of losses to the public. By the same token and same reasoning the legislature would have the same right to regulate the unrestricted cashing of payroll checks where the unlicensed competition emanates from an admittedly dangerous and hazardous business.
A large discretion is necessarily vested in the legislature to determine not only what the interests of public safety and welfare require but what measures are necessary to secure such interests. (Zelney v. Murphy, 387 Ill. 492.) Whether the enactment is wise or unwise; whether it is based on sound economic theory; whether it is the best means to achieve the desired results, and whether the legislative discretion within its prescribed limits should be exercised in a particular manner are matters for the judgment of the legislature, and the honest conflict of serious opinion does not suffice to bring them within the range of judicial cognizance. People v. Saltis, 328 Ill. 494; Stewart v. Brady, 300 Ill. 425.
Plaintiff further argues that the amendatory act in question is unconstitutional and void because the exemptions in section 1 of the act hereinbefore set forth are unlawful classifications and deny the equal protection of the law to plaintiff. The exemptions referred to are those exempting from the act (a) those engaged primarily in the transporta-
The general legal principles to be applied to this particular question are rather well settled. The equal-protection clause goes no further than the invidious discrimination. (Williamson v. Lee Optical of Okla., Inc., 348 U.S. 483, 99 L. ed. 563, 75 S. Ct. 461.) The court in Lindsley v. Natural Carbonic Gas Co. 220 U.S. 61, 55 L. ed. 369, 31 S. Ct. 337, succinctly stated the rules for testing a discrimination as follows:
“1. The equal protection clause of the Fourteenth Amendment does not take from the State the power to classify in the adoption of police laws, but admits of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.”
The foregoing principles are of equal application in the State of Illinois. (Stewart v. Brady, 300 Ill. 425; Krebs v. Board of Trustees, 410 Ill. 435; Union Cemetery Ass‘n v. Cooper, 414 Ill. 23.) This court has uniformly recognized that a class cannot be created by arbitrary declaration of the law-making powers and that only those classifications are valid which are based upon reasonable grounds of distinction with reference to the object of
It is apparent from the act in question that the purpose of the legislature in adopting the act was to protect the public when dealing with institutions, both ambulatory and otherwise, primarily engaged in the business of furnishing check cashing and currency exchange services. From what has heretofore been noted, the legislature was not unreasonable or arbitrary in determining that such business required regulation by the State under its police power to protect the public from certain evils. The exemptions complained of refer to businesses not primarily engaged in currency exchange or check cashing, but refer to businesses whose primary business is something different, viz., transportation of another‘s valuables for hire, or retail sales. In each type of exempted business it is recognized that incidentally checks may be cashed. Under the applicable rules, however, we must conclude that the legislature exempted from the application of the act certain businesses with different characteristics predicated upon a reasonable belief that the evils at which the statute was directed did not exist in sufficient degree in the exempted classes to warrant regulation. From the facts introduced in evidence, we cannot say the legislature acted arbitrarily or unreasonably in providing the exemptions attacked.
A similar contention was made in McDougall v. Lueder, 389 Ill. 141, with reference to the exclusion of check cashing by retail stores. Such contention was overruled by this court in that opinion, subsilentio, the opinion being devoted to other issues presented. Among such other issues was
In our opinion the legislature was acting within the scope of its constitutional limitations in adopting the legislation here challenged, and this court cannot judicially state that it was acting in an arbitrary, capricious or unreasonable manner. Consequently, the judgment of the trial court will be reversed.
Judgment reversed.
Mr. JUSTICE SCHAEFER took no part in the consideration or decision of this case.
Mr. JUSTICE DAVIS, dissenting:
If an examination of the provisions of this amendatory act raised only questions of the wisdom of its expressed social or economic policy, or of its choice of methods to implement such policy, I would concur with the court and defer to such legislative determination. However, the facts of record concerning the plaintiff‘s business, and the impact of this enactment thereon, require that this court exercise its time-honored judicial function of reviewing legislative enactments to determine whether they are arbitrary, capricious and unreasonable. (Midland Electric Coal Corp. v. County of Knox, 1 Ill. 2d 200; Giebelhausen v. Daley, 407 Ill. 25; McDougall v. Lueder, 389 Ill. 141; Marbury v. Madison, 1 Cranch 137.) Under our form of government, the legislative, executive, and judicial branches all serve as guardians of our liberties, and each branch has the duty to check and balance the unauthorized act of the other. Our constitution did not harness a three-horse team to work in unison, but rather, gave each branch a separate task with the expectation that where one branch errs, the other will, within constitutional limitations, repair such error.
A complete reading of the act before us reveals a singular purpose to deprive plaintiff of its present competitive position. The legislative finding and declaration of policy, in the amendment, boldly announces a plan to protect community currency exchanges from competition by ambulatory currency exchanges. But the legislature did not attempt to achieve this purpose by the regulation of fees or charges for the services rendered. Rather, it sought to burden the plaintiff by the imposition of multitudinous license fees, investigation fees, examination fees, surety bonds, armed guard, supervisory and report and record requirements. It is inescapable that these requirements are not designed to protect the public, but to increase plaintiff‘s cost and facility of doing business. The legislature is without authority to act as a handicapper in the race for commercial success, as it has here done.
The court grounded its opinion solely on the legislative determination that the operations of the plaintiff are dangerous to public safety. The record, in my opinion, reveals something quite different; it conclusively discloses that in seventeen years of operation, the general public has suffered neither physical injury, nor economic harm. But even assuming that the activity of plaintiff in using its own money to cash payroll checks is hazardous per se, a conclusion I believe unreasonable, the supervision of the Auditor of Public Accounts, the plethora of fees and charges, and the burdensome requirements of supervision, bonds, records
It is naive to regard this amendment as anything more than an ill-considered legislative attempt to place a millstone of regulation around the neck of a legitimate business, under the guise of the exercise of the police power. This court still gives lip service to its decision in People ex rel. Barrett v. Thillens, 400 Ill. 224, as “obviously correct,” but the present decision reduces the statements of constitutional law there announced to pious and hollow generalities, which will fall before the art of any skillful legislative draftsman. I would here reaffirm the more salutory doctrine that “If it is claimed that the statute or ordinance is referable to the police power, the court must be able to see that it tends, in some degree, toward the prevention of offenses or the preservation of the public health, morals, safety or welfare. It must be apparent that some such end is the one actually intended and that there is some connection between the provisions of the law and such purpose. If it is manifest that the statute or ordinance has no such object, but, under the guise of a police regulation, is an invasion of the property rights of the individual, it is the duty of the court to declare it void.” (People ex rel. Barrett v. Thillens, 400 Ill. 224, 235; also see: Midland Electric Coal Corp. v. County of Knox, 1 Ill. 2d 200; People v. Carolene Products Co. 345 Ill. 166; People v. Wilson, 249 Ill. 195.) The validity of the Community Currency Exchange Act as applied to community exchanges was based on various fiduciary activities in which the plaintiff does not engage, such as handling other people‘s money, issuing drafts, selling money orders, acting as bailee in payment of bills, taking other people‘s money and purchasing paper. (McDougall v. Lueder, 389 Ill. 141.) While extensive regulations of
The amendatory act has the further vice of lack of uniformity in exempting express companies from like regulation. While such classification was justified in McDougall v. Lueder, 389 Ill. 141, it can have no rational basis in the amendatory act under consideration, the validity of which is sustained solely on the ground that the business is hazardous to public safety. If the plaintiff‘s activities are hazardous to public safety, then similar activities of the express companies would have an equal element of hazard, and their exemption from the onerous provisions of the act would render it unconstitutional. (Berry v. City of Chicago, 320 Ill. 536, 542; Wedesweiler v. Brundage, 297 Ill. 228, 236; Millett v. People, 117 Ill. 294, 301 and 302.) The act discriminates against the plaintiff and excepts express companies performing similar services from its operation without the justification of genuinely different characteristics in the business involved, and in so doing violates the equal-protection clause of both the State and Federal constitutions. Morey v. Doud, 354 U.S. 457, 1 L. ed. 2d 1485.
I therefore voice my dissent to an opinion which tends to vest in the legislature the unfettered power, by finding and declaration, to destroy harmless competition under the guise of police regulation.
Mr. JUSTICE HERSHEY concurs in the foregoing dissenting opinion.