Beasley v. Cahoon , 109 Fla. 106 ( 1933 )

By the common law concerning crimes as adopted in the United States, no rate of interest is illegal in the absence of a statutory enactment, and by the common law concerning civil matters as adopted in this country no rate of interest is illegal unless so great as to be unconscionable. Thecrime of usury is therefore, malum prohibitum, not mala in se. See 27 R. C. L. 203.

Since the prohibition of usury under criminal penalty rests wholly in statute, the Legislature in enacting usury laws may make them as broad or as narrow as it may deem wise, taking care only that due process of law is not denied and that unequal protection of the laws does not result.

The history of statutory enactments in this State is that usury of all kinds was first defined and prohibited by a statute which applied to all alike. See Chapter 5960, Acts of 1909. Now Sections 6839-6845 C. G. L, 4851-4858, R. G. S.

In passing the original usury law the Legislature had the power then to make certain exceptions delimiting its broadest scope, because the Legislature in enacting statutes does not have to cover the whole field of an evil permitted to be suppressed. Middleton v. Texas P. L. Co., 249 U.S. 152,39 Sup. Ct. Rep. 227, 63 L. Ed, 527; Rosenthal v. New York,226 U.S. 260, 33 Sup. Ct. Rep. 27, 57 L.Ed. 212, and under this principle of constitutional law just cited a Legislature can first pass a general law covering the whole field of an evil designed to be suppressed, and later contract the scope of its first enactment by subsequent amendments. This is a common legislative practice which has never been successfully challenged. Dominion Hotel v. Arizona, 249 U.S. 265,39 Sup. Ct. Rep. 273, 63 L.Ed. 597.

My view is that Chapter 10177, Acts of 1925, is in parimateria with all the other usury laws of Florida. Amos v. Mathews, 99 Fla. 1, 126 Sou. Rep. 308. And being no more than a permissible exception to the original operation of the general usury laws, an exception that could have been written into such general usury laws in the first instance, I am unable to see upon what basis the 1925 Act must now fall on the ground of an alleged denial of the equal protection of the laws.

The courts have repeatedly rejected the idea that equal protection of the laws means that the Legislature may not deal with a conspicuous class in a particular way, although logically that class may not be distinguished in any degree from others not embraced in the class covered by the law, but which might have been or should be as a matter of policy included. Central Lumber Co. v. State of South Dakota,226 U.S. 157, 33 Sup. Ct. Rep. 66, 57 L.Ed. 164; Reymann Brewing Co. v. Brister, 179 U.S. 445, 21 Sup. Ct. Rep. 201, 45 L.Ed. 269; Noble v. Carlton, 36 F.2d 967.

Suppose that at the time Chapter 10177 was enacted, there had been no other usury laws at all on the statute books. This fact would not have prevented the Legislature from singling out for special regulation that class of money-lenders who fall within the purview of Chapter 10177, supra, nor preclude the Legislature's right to regulate them to the extent provided for by that Act. Upon what principle therefore can this Court say that an Act passed in 1925 is rendered unconstitutional because it happens to delimit the scope of an earlier Act on the subject of usury in 1909? Since the 1925 Act is the latest expression of the Legislature would not it supersede the 1909 Act if both cannot constitutionally stand together on the same statute books?

I think the answer to all these questions is that both Acts must stand. This is so because the 1925 Act would be valid if we had no usury statute at all, and were governed solely by the common law. As has been pointed out, at common law charging excessive or unreasonable interests, or usury, was no criminal offense whatsoever. Hence the mere presence on the statute books of an earlier usury law conflicting (if we put it that way) with the 1925 Act, does not render the last Act of the Legislature invalid, if the 1925 Act would be valid in relation to the common law, on the subject dealt with.

The right to charge usury is not given by any of these statutes. On the contrary the act of charging usury could be exercised as a common law right if all the statutes were repealed. It was not punishable at all as a criminal offense to charge excessive interests, and an excessive interest charge was only redressible in the civil courts on certain equitable principles when deemed "unconscionable." So all the statute of 1925 says in effect is that if you, as one of the designated class of money lenders, can get a special license to do it, you can then exercise your common law privileges of exacting an amount of interest unlimited by law as to rate, except as provided by the statute which limits it only as not to exceed 3 1/2 per cent. per month on a principal that does not exceed $300.00.

Can it be said that the mere failure of the 1925 Act to dispense with the common law in a certain classified field described in that Act, renders the statute violative of the Constitution, which in the absence of any statutes at all on the subject, would leave the interest rates of this State wholly unlimited?

In providing for licenses, the Legislature can select a conspicuous class to be licensed and exclude all others. Under Chapter 10177, Act of 1925, only licensed persons of a conspicuous class defined by that statute are permitted to obtain licenses. Unless we are compelled to say that the Legislature is forbidden to classify for license purposes, money lenders engaged solely in lending money in amounts not exceeding $300.00 a loan, we cannot strike these statutes down.

It has been definitely held that a classification may be made based on size alone. Engel v. O'Malley, 219 U.S. 128,31 Sup. Ct. Rep. 190, 55 L.Ed. 128.