Summary
In State on Inf. of Taylor v. Currency Services, Inc., 358 Mo. 983, 218 S.W.2d 600, 602, we considered the validity of Sec. 7890, RS 1939, which prohibited corporations other than those "formed under or subject to the banking laws of this state or the United States" from certain specified activities which were part of banking.
Summary of this case from Petitt v. FieldOpinion
No. 40563.
February 14, 1949. Rehearing Denied, March 14, 1949.
1. BANKS AND BANKING: Corporations: Selling Checks Not Banking Business. A corporation which sells checks drawn on its personal bank account to persons who have no bank account is not engaged in the banking business within the meaning of the first part of Sec. 7890 R.S. 1939.
2. CONSTITUTIONAL LAW: Banks and Banking: Statutes: Transmitting Money by Check: Defective Title: Portion of Act Unconstitutional. The last portion of Sec. 7890 R.S. 1939, which limits the power to transmit money by check, is unconstitutional because of a defective title.
3. CONSTITUTIONAL LAW: Banks and Banking: Transmitting Money by Check: Grant of Exclusive Privilege Unconstitutional. The latter portion of Sec. 7890 R.S. 1939, which grants the exclusive privilege of transmission of money by check "or otherwise" to a special group of corporations other than banks, is unconstitutional because the classification of such corporations is arbitrary and unreasonable.
4. QUO WARRANTO: Banks and Banking: Corporations: Selling Checks Not Violation of Banking Statutes: Writ Quashed. Since the business of respondent corporation of selling checks is not a prohibited banking business in violation of the first part of Sec. 7890 R.S. 1939, and the latter portion of said statute is unconstitutional, the writ heretofore issued against respondent corporation and its agents should be quashed.
WRIT QUASHED.
J.E. Taylor, Attorney General, Tyre W. Burton and George W. Crowley, Assistant Attorneys General, for relator.
(1) Parties joined as respondents in quo warranto. Two or more defendants, corporations or individuals or corporations and individuals, charged in one proceeding for violations of law based on the same act, may be joined as respondents in quo warranto proceedings. 51 C.J. 340, sec. 49; Sec. 16, General Code for Civil Procedure; Laws 1943, p. 353; 44 Am. Jur. 148, sec. 79, p. 148; State of Missouri v. Presbury, 13 Mo. 241; 2 C.J. 431; 13 C.J. 255; Atwater v. Brokerage Co., 147 Mo. App. 436, 126 S.W. 823; Banking Co. v. Lichtenstein, 37 P. 574; Jamieson v. Wallace, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389. (2) The respondents here are charged jointly with doing an unlawful banking business in this state. All parties participating in the violation of statutes, whether corporations or individuals, or both, are proper parties to be joined as principals, even though one is the agent of the others. 2 C.J. 431; 13 C.J. 255; Atwater v. Brokerage Co., 147 Mo. App. 436, 126 S.W. 823; Banking Co. v. Lichtenstein, 37 P. 574; Jamieson v. Wallace, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389. (3) The banking code of this state expresses the public policy of the state in Articles 1, 2 and other articles of Chapter 39. R.S. Mo. 1939, and amendments thereto, respecting banks, and constitutes a complete and exclusive plan for the organization of banks and the supervision by the state of banks and banking. Sec. 7879. Art. 1. Chap. 39, R.S. 1939; Secs. 7939, 7940, 7949, 7998, 7999, Art. 2. Chap. 39, R.S. 1939; 1 Michie, Banks and Banking, pp. 3, 4, 5. (4) The business of banking is so coupled with the public interest that it must be, and is, subject to strict regulation, supervision and control by the state, under the police regulations of the state. 1 Michie, Banks and Banking, pp. 5, 6, 12; Lucas v. Central Missouri Trust Co., 349 Mo. 537, 162 S.W.2d 569; State v. Stone, 118 Mo. 388, 24 S.W. 164. (5) The statutes of this state define what constitutes banks and banking. Respondents are engaged in banking under the facts and law of this case by receiving deposits, caring for money, issuing checks, money orders and bills of exchange. Totality of all incidents of banking are not necessary to be engaged in banking. Sec. 3209, Art. 4, R.S. 1939; Secs. 7949, 7998, 7990, Art. 2, Chap. 39, R.S. 1939; 7 C.J. 474, 475, Sec. 321, p. 639; People v. Bartow, 6 Cowen 290; 1 Michie, Banks and Banking, p. 10; Meserole Securities Co. v. Cosman, 253 N.Y. 130, 170 N.E. 519; White v. Greenlee, 49 S.W.2d 132. (6) Private banking has been abolished in this state. The acts charged against respondents and shown by the evidence, constitute private banking. Sec. 7999, Art. 2, Chap. 39, R.S. 1939; State ex rel. Barker v. Sage, 267 Mo. 493, 184 S.W. 984; Sec. 7990, Art. 2, Chap. 30, R.S. 1939; Sec. 3200, Art. 3, Chap. 14, R.S. 1939; Sec. 3141, Art. 2, Chap. 14, R.S. 1939; Fisher v. Bagnell, 194 Mo. App. 581; Bank v. Bank, 148 Mo. App. 1. (7) Respondents Riek and Hughes as Service Exchange Co. assert that they are mere agents of Currency Services, Inc., and are not subject to penalty for acts performed as such agents. Notwithstanding their contract with Currency Services, Inc., as an agency, they become principals and are liable as such along with Currency Services, Inc. for violation of the banking statutes and doing acts against public policy. (8) The finding of the special commissioner on the facts and his report on both the facts and the law under the first count are sound and proper and should be given great weight. State ex inf. Major v. Arkansas Lumber Co., 260 Mo. 212, 169 S.W. 145. (9) The issuance of money orders by respondents as a corporation and as individuals, is unlawful. "Bills of exchange," and "other evidences of debt for circulation as money" mentioned in Section 7890, R.S. Mo. 1939, "money orders" or "post card checks" issued by respondents have the same meaning and are one and the same character of items which constitute the business of banking. Secs. 7890 and 7990. R.S. 1939. (10) The record is abundant with testimony that respondents have received deposits and have wilfully issued, and are still issuing, money orders in violation of Section 7890, R.S. Mo. 1939, as an infringement on banking. Secs. 7990, 7890, R.S. 1939; State v. Stone, 118 Mo. 388, 24 S.W. 164; McDougall v. Lueder, 58 N.E.2d 899; Fisher v. Bagnell, 194 Mo. App. 581; Bank v. Bank, 148 Mo. App. 1. (11) Section 7890, R.S. Mo. 1939 is valid. It is not a local or special law granting special or exclusive privileges to one person or corporation, or association as such. It is the exercise of the state's sovereignty in enacting and enforcing its police powers, including the regulation by reasonable classification of those who may carry on any acts of banking. Said section does not violate subsection 28, of Article III of the Constitution of Missouri, 1945, or section 53 of subsection 26 of Article IV of the Constitution of Missouri, 1875. It is a reasonable and proper classification of persons and corporations who may and who may not engage in banking. Banks and banking are coupled with and are subservient to the public interest. The regulation and supervision of banks and banking by the state affects the people of the state as a whole. Sec. 7890. R.S. 1939; 59 C.J. 724, sec. 311; State ex rel. Garvey v. Buckner, 308 Mo. 390, 272 S.W. 940; 12 C.J. 1129, 1130; State ex rel. Rolston v. Railroad, 246 Mo. 512; Hawkins v. Smith, 242 Mo. 688; Bachtel v. Wilson, 204 U.S. 36. (12) The states alone may establish by their statutes and enforce police powers as an attribute of sovereignty. Under the exercise of its police powers, a state may provide reasonable classification of those who may engage in the business or perform any acts of banking. 12 C.J. 904; Transbarger v. Railroad, 250 Mo. 46, 156 S.W. 694; State ex rel. v. Mercantile Co., 184 Mo. 160, 82 S.W. 1075; Nobel State Bank v. Haskell, 219 U.S. 104; Shallenberger v. Bank, 219 U.S. 114; Bank v. Dolley, 219 U.S. 121; Engel v. O'Malley, 219 U.S. 128. (13) Section 7890, R.S. Mo. 1939, does not violate Section 1 of the Fourteenth Amendment of the Constitution of the United States, or Section 10 of Article I of the Constitution of Missouri, 1945, or Section 30 of Article II of the Constitution of Missouri, 1875. Said section does not deprive respondents of any property or property rights without due process of law. It is a valid statute expressing the police powers of the state, and is constitutional. 12 C.J. 1188; Wilcox v. Phillips, 260 Mo. 664, 169 S.W. 55; State ex rel. v. Chemical Works, 249 Mo. 702, 156 S.W. 967; Emert v. Missouri, 156 U.S. 296; Quong Wing v. Kirkendall, 223 U.S. 59; Nobel State Bank v. Haskell, 219 U.S. Rep. 104; State v. Stone, 118 Mo. Rep. 388, 24 S.W. 164. (14) Section 7890. R.S. Mo. 1939, does not violate Section 23 of Article III of the Constitution of Missouri, 1945, or Section 28 of Article IV of the Constitution of Missouri, 1875, by containing more than one subject in the title of the bill passed by the legislature including said Section 7890, Laws of Missouri, 1915, page 102 (Sec. 13). Said bill contains only one subject which is clearly expressed in its title. Sec. 7890, R.S. 1939; Laws 1915, p. 102; 59 C.J., pp. 809-814; Ward v. Board of Equalization, 135 Mo. 309, 36 S.W. 648; Lynch v. Murphy, 119 Mo. 163; Graves v. Purcell, 337 Mo. 574, 85 S.W.2d 513. (15) The master and servant, or principal and agent, are both liable here. Where the agreement is one which violates the fixed public policy of the state or its performance in violation of a statute all persons or corporations, or corporations and persons, participating in such violation are principals. State of Missouri v. Presbury, 13 Mo. 241; 2 C.J. 431; 13 C.J. 255; Banking Co. v. Lichtenstein, 37 P. 574; Jamieson v. Wallace, 47 N.E. 762; Ferguson v. Morris, 67 Ala. 389; Atwater v. Brokerage Co., 147 Mo. App. 436, 126 S.W. 823. (16) The finding of the special commissioner on the facts and his report on both the facts and the law are sound and proper and should be given great weight. State ex inf. Major v. Arkansas Lumber Co., 260 Mo. 212, 169 S.W. 145. John W. Mueller and Harold F. Hecker for respondent Currency Services, Inc.; Walther, Hecker, Walther Barnard of counsel.
(1) Respondent Currency Services, Inc., is not engaged in the "banking business," nor is it a bank within the meaning of the banking laws of Missouri. State ex rel. Buder v. Compton, 271 S.W. 770; State v. Reid, 125 Mo. 43, 228 S.W. 172; Wedesweiler v. Brundage, 130 N.E. 520, 297 Ill. 228; Butcher v. Butler, 134 Mo. App. 61; Smith v. Kansas City, Kansas City Title Trust Co., 255 U.S. 180; Warren v. Shook, 91 U.S. 704; Wells Fargo Co. v. Northern Pacific Ry. Co., 23 F. 469; Marvin v. Kentucky Title Trust Co., 291 S.W. 17, 218 Ky. (1927); Eastern Acceptance Corp. v. Godfrey, 14 N.J. Misc. 187; Martin v. St. Aloysius Church, 38 R.I. 339. (2) The banking business does not consist of a single act of banking, but contemplates a totality of banking functions; the banking "business" or "a bank" must be used in the ordinary common-sense meaning of the term. Meserole Securities Co. v. Cosmon, 253 N.Y. 130, 170 N.E. 519; Merrick v. Holmes Stove Foundry Co., 255 Ill. 362; Chase Baker v. National Trust Credit Co., 215 F. 633. (3) The sale of Bondified Checks is not the buying and selling of bills of exchange within the meaning of the banking laws of Missouri. Hayes v. Bank, 75 Mo. App. 213; Bank v. Bank, 12 Wall. 647. (4) The acceptance of money by respondents in payment for the Bondified Checks sold is not receiving deposits within the banking laws of Missouri. White v. Greenlee, 49 S.W.2d 134; City of St. Louis v. Johnson, Fed. cases 12235, 5th Dil. 241, 9 Central Law Journal 91; Gimble Bros., Inc., v. White, 10 N.Y.S. 666; In re Cooper County Bank, 67 S.W.2d 109. (5) Sec. 7890, R.S. Mo. 1939, is unconstitutional and void. It violates Art. III, Sec. 23, of the Constitution of Missouri 1945, and Art. IV, Sec. 28, of the Constitution of Missouri 1872, in that the subject thereof is not clearly indicated in the title. Ex parte Hunn, 207 S.W.2d 468; Fidelity Adjustment Co. v. Cook, 339 Mo. 45, 95 S.W.2d 1162; Wedesweiler v. Brundage, 297 Ill. 228, 130 N.E. 520; Hunt v. Armour Co., 345 Mo. 677, 136 S.W.2d 312; Sherell v. Brantley, 334 Mo. 497, 66 S.W.2d 529; State v. Smith, 353 Mo. 808, 184 S.W.2d 593; 50 Am. Jur. 157. (6) Sec. 7890, R.S. Missouri 1939, is unconstitutional and void and violates Art. III, Sec. 40, sub-section 28, Constitution of Missouri 1945, and Art. IV, Sec. 53, sub-section 26 of the Constitution of Missouri 1872, in that it is legislation granting special privileges and rights to certain named express companies, transatlantic steamship companies and telegraph and telephone companies. Ex parte French, 285 S.W. 513; State v. Bascovitz, 156 S.W. 945; Wedesweiler v. Brundage, 297 Ill. 228, 130 N.E. 520; State v. Kummel, 165 S.W. 1067. (7) Sec. 7890, R.S. Mo. 1939, is unconstitutional and void and violates Art. II, Secs. 1 and 10 of the Constitution of Missouri 1945, Art. I, Secs. 2 and 10 of the Constitution of Missouri 1872, and the Fourteenth Amendment to the Constitution of the United States, in that it deprives respondents of the equal protection of the law. Wedesweiler v. Brundidge, 297 Ill. 236, 130 N.E. 520.
Dubail Judge for respondents Elmer G. Rick and Orville G. Hughes, doing business as Service Exchange Company.
(1) To constitute private banking within the prohibition of Section 7999, R.S. 1939, individuals must receive money on deposit. Respondents Rick and Hughes have not received money on deposit for the reason that no debtor-creditor relationship exists between them, as agents of Currency Services, Inc., and the purchasers of "Bondified" money orders and checks. State v. Lincoln Trust Co., 144 Mo. 562, 46 S.W. 593; 9 C.J.S., p. 557; Ray County Bank v. Hutton, 224 Mo. 42, 123 S.W. 47; Hunt v. Sanders, 313 Mo. 169, 281 S.W. 422; 3 C.J.S., p. 119. (2) Since Respondents Riek and Hughes are not engaged in the business of banking by receiving money on deposit, the sale of Bondified money orders and checks by them as agent, does not violate Section 7999 or any other section of the banking laws. Laws 1915, p. 157, sec. 109; Peoples Bank of Butler v. Allen, 344 Mo. 207, 125 S.W.2d 829. (3) Even if Currency Services, Inc., be held to have violated Section 7890, R.S. 1939, Respondents Riek and Hughes are not subject to penalty for acts performed as its agent. City of Carterville v. Gibson, 259 Mo. 499, 168 S.W. 673; Neck City v. Griffith, 184 Mo. App. 328, 168 S.W. 1137; Bank of Augusta v. Earle, 13 Pet. 519, 10 L.Ed. 274; 9 C.J.S., 32.
The Attorney General, as relator, filed an information in this court alleging that the respondents have been and are illegally engaged in certain business practices, permissible by law only to incorporated banks; praying that the charter of the corporate respondent be forfeited, that all the respondents be ousted and restrained from exercising the franchises and privileges of banks and that a fine be assessed against each of the respondents.
After we had caused our writ to issue and respondents had made return thereto, we appointed Honorable J. Marvin Krause, of the St. Louis Bar, as Special Commissioner to hold hearings and report as to the facts and law of the case. His report was duly filed in which he found for relator upon all issues except as to a conspiracy.
There is no dispute as to the facts found by the Special Commissioner which, so far as relevant, are as follows:
Respondent Currency Services is incorporated under the general business and manufacturing statutes of this state, [Laws of Mo. 1943, p. 410.] a portion of its articles purporting to authorize it "to buy and sell 'bondified' post-card checks and 'bondified' money-orders and other business and financial forms; to give aid and assistance in the transfer of monies, deposits; . . . to distribute money-orders, checks, . . ." It purchases copyrighted forms for checks, money orders and other supplies from a [602] Minnesota corporation. The check forms are printed on the reverse side of a postal card. The so-called money orders are in legal effect nothing more than checks. These forms are furnished to agents of Currency Services and sold for the amount of the check plus a small fee, depending on the amount of the check. They are usually issued for sums ranging from $1.00 to $100.00 and sold to persons having no bank accounts. When sold the agent fills in the amount and signs his name as agent under the printed signature of Currency Services. Inc. At stated times the agents remit to Currency Services the face amount of all checks sold plus 60% of the amount of fees collected. The checks are drawn on an account maintained by Currency Services in the Industrial Bank Trust Company, a duly licensed bank incorporated under the laws of Missouri. No checks except those sold as aforesaid are drawn on this account. Currency Services is under contract with the bank to maintain a balance in this account of not less than $10,000.00 and furnishes a bond to the bank to provide against overdrafts.
Currency Services has about 170 agents for the sale of checks, mostly in St. Louis and suburban territory. The other respondents, Riek and Hughes, doing business as partners under the name of Service Exchange Co., are such agents.
Our Special Commissioner did not find respondents guilty of any fraud, indicated that they are operating their business in good faith with rigid restrictions upon themselves and agencies, but held that they are engaged in the business of banking. However, the report says: "Eliminating bookkeeping and other normal business methods, the sale and issuance of the checks and money orders, and on occasion the return of the purchaser's money, are the only acts that might be considered banking practice."
By its return to our writ and its exceptions to the report of the Special Commissioner, Currency Services contends that its operations do not constitute banking business as contemplated by our statutes; and that Section 7890, upon which relator's information is founded, violates certain specified provisions of the State and Federal Constitutions. [All references to statutes, unless otherwise stated, are to Revised Statutes of Missouri 1939, and Mo. R.S.A.]
The other respondents raise the same points and also contend that, as agents, they are not liable even though it be held that the business of Currency Services constitutes banking.
The charter of Currency Services purports to authorize it to do the precise business which it is doing; but, although the charter has been approved by the proper state authorities, it may be forfeited if it conflicts with a valid statute. That brings us to the problem of whether the corporate charter conflicts with Section 7890, mainly relied upon by the Attorney General; and, if so, whether that section is a valid enactment. That section reads as follows:
"No corporation, domestic or foreign, other than a corporation formed under or subject to the banking laws of this state or of the United States, except as permitted by such laws, shall by any implication or construction be deemed to possess the power of carrying on the business of discounting bills, notes or other evidences of debt, of receiving deposits, of buying and selling bills of exchange, or of issuing bills, notes or other evidences of debt for circulation as money, or of engaging in any other form of banking; nor shall any such corporation, except an express company having contracts with railroad companies for the operation of an express service upon the lines of such railroad companies, or a transatlantic steamship company, or a telegraph or telephone company, possess the power of receiving money for transmission or of transmitting the same, by draft, traveler's check, money order or otherwise."
We have been furnished with a number of citations relative to what constitutes a "bank" and "banking business." 7 Corpus Juris, pages 474-5, says: "the principal attibutes of a bank are the right to issue negotiable notes, to discount notes, and to receive deposits." An old New York case, People v. Bartow, 6 Cowen 290, held that "to keep an office of deposit, for the purpose of discounting notes, is a specific [603] violation of the statute." Michie on Banks and Banking, Vol. I, page 10. "The business of banking, as defined by law and custom, consists in . . . receiving deposits payable on demand; . . . buying and selling bills of exchange." Our statute, Section 7998, while not purporting to give an all inclusive definition of the term "bank," says it "shall include any person, firm, association or corporation soliciting, receiving or accepting money, or its equivalent, on deposit as a business, whether such deposit is made subject to check, or is evidenced by a certificate of deposit, a pass book, a note, a receipt or other writing." Respondents do not receive or accept on deposit. [See White v. Greenlee, 330 Mo. 135, 49 S.W.2d 132, l.c. 134; Gimbel Bros. v. White, 10 N.Y. Supp.2d 666; Mescrole Securities Co. v. Cosman, 253 N.Y. 130, 170 N.E. 519; Chase Baker Co. v. Nat'l Trust Credit Co., 215 F. 633.] None of the citations listed in this paragraph mention practices indulged in by Currency Services unless it be "the buying and selling of bills of exchange."
In Wells Fargo Co. v. Northern Pac. Ry. Co., 23 F. 469, [1884] the United States Circuit Court held that the plaintiff was not engaged in the banking business although its statutory charter, among other things, authorized it to "draw, accept, endorse, buy, sell and negotiate drafts and bills of exchange." It should be noted that the sale of checks by Currency Services is similar to and comes into direct competition with a part of the business of express companies. Our Special Commissioner so found.
The Attorney General's brief vigorously argues that respondents violate that part of Section 7890 relating to "buying and selling bills of exchange." Our Special Commissioner based his finding entirely upon that clause of the statute by stating in his report that "the sale and issuance of the checks and money orders, and on occasions the return of the purchaser's money, are the only acts that might be considered banking practices."
For some purposes a check is a bill of exchange and so defined by our statute, Section 3200, relating to negotiable instruments, but in banking parlance there are important differences between a check and a bill of exchange. [Hays v. The Bank, 75 Mo. App. 211, l.c. 213.] That case was decided before the enactment of the negotiable instruments act, but practically the same distinctions between checks and bills of exchange are recognized in Article III of that Act, Section 3200 to Section 3208, inclusive. We do not believe that Section 7890, where it speaks of buying and selling bills of exchange, has any reference to ordinary checks. The purpose of the statute is to vest in duly incorporated banks the exclusive power to carry on a banking business. While banks cash checks and sell drafts we do not speak of them as buyers or sellers of checks. The first part of Section 7890 speaks of the business of buying and selling "bills of exchange;" the last part speaks of the transmission of money "by draft, traveler's check, money order;" clearly recognizing a distinction between bills of exchange and drafts, checks and money orders. But even if the reference to bills of exchange in the first part of the section could be construed to mean checks, it still would not clearly cover the business carried on by respondents. The statute speaks of buying and selling bills of exchange. Respondents do not buy checks; they sell the personal checks of Currency Services drawn on a duly licensed bank.
The last part of Section 7890, which purports to confine to banks and certain favored corporations the business of transporting money by check, etc., does, if valid, prohibit respondents from carrying on their business. This part of the section is attacked by respondents as being in violation of certain sections of the State Constitution, to wit. Article III, Section 23, [no bill shall contain more than one subject which shall be clearly expressed in its title] Article III, Section 40, subsection 28. [The General Assembly shall not pass any local or special law;. . . . Granting to any corporation, association or individual any special or exclusive right, privilege or immunity. . . .]
Section 7890 was enacted in 1915, [Laws of 1915, p. 102] the title being "An Act to [604] repeal [certain acts of 1909, 1911 and 1913] relating . . . to 'state banking department.' 'banks of deposit and discount' and 'trust companies,' . . . and to enact in lieu . . . thereof new articles entitled, respectively, 'state banking department,' 'banks' and 'trust companies.'"
The purpose of the constitutional provision is to require the true nature of proposed legislation to be stated in the title so that members of the general assembly will not be misled. [50 Am. Jur. 145] The title to the 1915 Act relates solely to banks and trust companies and gives no intimation that a limited group of corporations, other than banks, would be granted special privileges from which all other similar corporations would be excluded. Nor was that subject mentioned in any of the laws repealed by the 1915 Act. We hold that the title is insufficient to cover the extraneous matter injected into the latter part of Section 7890 relating to the transmission of money by check etc. [Ex parte Hunn. 357 Mo. 257, 207 S.W.2d 468; State v. Smith, 353 Mo. 808, 184 S.W.2d 593; Hunt v. Armour, 345 Mo. 677, 136 S.W.2d 312; Fidelity Adj. Co. v. Cook, 339 Mo. 45, 95 S.W.2d 1162.]
The latter part of Section 7890 is subject to another constitutional defect in that it attempts to grant special rights and privileges to the special group of corporations therein named.
We concede that the general assembly may pass laws applicable to a particular class, but such a law must bear equally upon all persons coming naturally within the class. [Ex parte French, 315 Mo. 75, 285 S.W. 513; State v. Baskowitz, 250 Mo. 82, 156 S.W. 945; State v. Kimmel, 256 Mo. 611, 165 S.W. 1067.] Section 7890 purports to grant exclusive privilege for the transmission of money by check "or otherwise" to corporations, other than banks, as follows: express companies having contracts with railroad companies; transatlantic steamship companies, or telegraph or telephone companies. It excludes all other companies falling naturally within the class, such as steamship or airplane companies operating in interstate or intrastate trade or across oceans other than the Atlantic; also bus and truck companies and companies operating armed and armoured cars for the transmission of payrolls, etc. The classification is not based upon the licensing, inspection, regulation, financial responsibility or business methods of the companies favored and is arbitrary and unreasonable.
The case of Wedesweiler v. Brundage, 297 Ill. 228, 130 N.E. 520, is squarely in point and sustains our conclusion that the first part of Section 7890 does not cover the business transacted by respondents and that the last part of the section is unconstitutional because not embraced within the title and for unreasonable and arbitrary classification. The Illinois legislature passed an Act entitled "An Act to revise the law with relation to banks and banking." The first section provided for the incorporation of banks. Another section provided that no other persons, firms, etc., shall engage in the business of banking "or shall transact the business of transmitting money to foreign countries or buying or selling foreign money or receiving money on deposit to be transmitted to foreign countries provided that express, steamship and telegraph companies may continue their business of transmitting money and receiving money to be transmitted;" A bill was filed by more than fifty complainants, engaged in the business of transmitting money to foreign countries and of buying and selling foreign money, to enjoin the enforcement of the law. The opinion says: "The inquiry here is, not whether the business of the appellees in question may be regulated by statute, but is whether it can be regulated by a statute which by its title purports to regulate banking only. . . ." "We think the language employed should be used in its common, ordinary sense, and when this is done, the banking powers referred to mean such as are ordinarily conferred upon and used by the various banks doing business in the country. The ordinary and usual powers exercised by banks are to discount notes and receive deposits. They may, and often do, possess other powers, but these are the ordinary and usual powers [605] conferred upon and exercised by banks and bankers." The opinion says that banks do many other things "not because they are banking functions or are strictly incidental to the banking business, but because they can do them advantageously in connection with the banking business." "The appellees receive no deposits, pay no checks, make no loans, discount no notes or bills of exchange, buy or sell no bonds, do none of the things which are distinctively characteristic of a bank. No one would suspect that a bill which purported to revise the law in relation to banks and banking would abolish their business any more than it would abolish bond brokerage or private mortgage loans." Then the opinion goes on: "The proviso which exempts express, steamship, and telegraph companies from the prohibition against natural persons, firms, or partnerships, transmitting money to foreign countries also offends against section 22 of article 4 of the Constitution by granting to such companies a special privilege from which all other natural persons are excluded. The privilege of engaging in any lawful business is the right of every individual, of which no one can be deprived except by a general law acting equally on all individuals in the same situation. It is subject to the police power, and must be exercised in accordance with the requirements of statutes passed in the exercise of that power for the protection of the public. No person or class of persons can be excluded from that privilege while others are permitted to enjoy it, unless some reason exists for the distinction having a just relation to the object to be accomplished. No reasonable distinction exists for this proviso. It declares, in effect, that incorporated banks, and express, steamship, and telegraph companies, whether incorporated or not, may engage in the business of transmitting money to foreign countries, but no other natural person, firm or partnership may. So far as incorporated banks are concerned, the reason for the distinction is apparent. As between natural persons and partnerships on the one hand, and express, steamship, and telegraph companies on the other, the distinction is not based upon any just reason. It has no reference to character, solvency, financial responsibility, security, business, or monetary facilities, incorporation, method of doing business, public inspection, supervision, or report, or any other thing having any relation to the protection of the public from loss by reason of the dishonesty, incompetence, ignorance, or irresponsibility of persons engaging in that business. Under the legislation, if two or more men desire to engage as partners in the business of transmitting money to foreign countries they cannot do so, but if they want to associate themselves as partners in an express, steamship, or telegraph company they may do so, and may then engage in the business of transmitting money to foreign countries. What protection this would be to the public is not apparent. Classification based upon a reasonable difference does not violate the constitutional provision, but a merely arbitrary distinction cannot be sustained."
The Attorney General cites a later opinion by the Supreme Court of Illinois. [McDougall v. Lueder, 389 Ill. 141, 58 N.E.2d 899.] That case involved a different statute and, whether or not it is correctly ruled, we do not regard it as in any way modifying the court's previous opinion in the Wedesweiler case; in fact, the court expressly approves and reaffirms its former opinion. We have studied the many other cases cited by the Attorney General, but deem it unnecessary to review them in detail. We agree that private banking has been abolished in this state; also that the business conducted by the respondents, as shown by the evidence in the instant case, is coupled with a public interest and a proper subject for future statutory regulation. We do not agree that their business has been validly prohibited by Section 7890.
We hold that, properly interpreted, the first part of Section 7890, while valid, does not embrace the business of the respondents; that the evidence does not show that respondents are doing any of the things prohibited by that part of the section. We further hold that the latter part of the section which reads "nor shall any such corporation, except an express company having contracts with railroad companies for the operation of an express service upon the lines of such railroad companies, [606] or a trans-atlantic steamship company, or a telegraph or telephone company, possess the power of receiving money for transmission or of transmitting the same, by draft, traveler's check, money order or otherwise," is unconstitutional and void because not embraced in the title of the 1915 Act, and for unreasonable and arbitrary classification.
Accordingly our writ, heretofore issued herein, is hereby quashed. All concur, except Leedy, C.J., not sitting.