Opinion
13144
May 15, 1931.
Before SEASE, J., Spartanburg, July, 1930. Order reversed and writ revoked.
Habeas corpus proceeding by C. Rhett Riddle, who was charged with violating an Act making it a misdemeanor willfully to violate the usury laws. From an order granting the writ and discharging the defendant, the State appeals.
Messrs. I.C. Blackwood, Solicitor, and Lanham Lanham, for appellant, cite: Constitutionality of statute may be tested in habeas corpus proceeding: 79 S.C. 9. Failure to mention corporation does not make Act unconstitutional: 143 S.C. 283; 141 S.E., 454; 149 S.C. 52; 146 S.E., 696; 107 S.C. 349; 92 S.E., 1054. "Person": 48 C.J.
Messrs. R.A. Hannon and C.E. Daniel, for respondent, cite: Original usury statute: 3 Civ. Code, 1922, Sec. 3639. Discrimination in favor of corporations: 149 S.C. 52; 135 S.C. 190; 79 S.C. 25.
The order of Circuit Judge Sease was as follows:
Defendant is in custody charged with violating the provisions of Act No. 830 (36 Stat., p. 1386), which undertakes to make "any person" who violates the statutes against usury guilty of a misdemeanor. He seeks his release by habeas corpus, assailing the Act as unconstitutional because it applies to persons only and not to corporations. For that reason it is contended that the Act of 1930 is in fatal conflict with the equal protection clauses of the State and Federal Constitutions. The principal authority urged in support of this contention is the case of Xepapas v. Richardson, 149 S.C. 52, 146 S.E., 686, 691, which invalidated the Sunday selling law (Cr. Code 1922, §§ 714 and 717), upon exactly the same grounds.
There can be no doubt that the Xepapas case is convincingly reasoned to the conclusion announced and amply supported by authority. The Court illustrated the discriminatory operation of the Sunday selling law by instancing two drug stores on the same street, side by side, one owned by an individual and the other by a corporation, each having a substantially similar stock, with the usual cigar stand and soda fountain; on Sunday, both open and sell cigars, soda, and candies; the goods of the individually owned store are subject to confiscation, while those of the corporation are exempt. The Court said: "We do not think it necessary to extend the length of this opinion by citing numerous other decisions of the Supreme Court of the United States and the Courts of last resort of many States of the Union, including our own, to show that Sections 714 and 717 must be declared unconstitutional because of the failure of these two sections to include in their provisions corporations."
The prosecution contends, however, that the Xepapas case is not conclusive, because the Sunday labor law (Section 713), which applies to persons only and does not include corporations, was nevertheless upheld by the Supreme Court in Charleston Oil Co. v. Poulnot, 143 S.C. 283, 141 S.E., 454, 60 A.L.R., 750, and, impliedly, in the Xepapas case.
While there was no assault upon Section 713 in those cases, and the Court's remarks may be obiter, there is ample ground for the distinction between the Sunday selling law and the Sunday labor law suggested in the Court's discussion, which cited cases directly upholding Section 713. Labor is a personal act. Persons only can labor. And it makes no difference that the person may be laboring for himself, for an individual, or for a corporation. The doing of labor is the thing forbidden, and the doer can be reached and punished. The punishment provided in Section 713 operated solely and directly upon the person offending. Under the Sunday selling law, confiscation of goods is the principal punishment provided. Legislation which provides for the confiscation of the goods of an individual and does not provide for the confiscation of the goods of a corporation, under the same circumstances, is clearly discriminatory, unequal, and void.
Here the prosecution contends that a violation of the usury law is personal, just as the violation of the Sunday labor law, and that the failure to include corporations is no objection to the Act of 1930. The defense contends that the discriminatory operation of the statute assailed is as certain and conclusive as that of the invalidated Sunday selling law.
The argument is: Usury is an unlawful profit upon the hire of money; all, whether natural persons or corporation, who can and do receive such unlawful profit, are equally guilty in law and in morals; that a corporation certainly can exact and receive usury, and any statute which undertakes the punishment of an individual for doing that and leaves corporations immune is unequal and discriminatory. In imitation of the Xepapas case, his counsel illustrate by supposing two money loan concerns operating on the same street, one a corporation and the other an individual, each making a loan of the same amount to the same person, and each charging 20 per cent., under the 1930 Act, the individual may be fined and imprisoned, while the corporation cannot be touched. The receipt and enjoyment of usurious interest is not necessarily limited to individuals; a corporation may charge and receive usury; while it acts only through human agents, the agent does not lend his own money, nor receive beneficially, the usurious profit. The corporation loaned its money, and receives the benefit of the usurious interest collected. The agent cannot be guilty of usury, for he neither lends money nor receives usury. The conclusion urged is that, under the Act of 1930, an individual may be punished for that which a corporation may not be.
In Citizens' Bank v. Heyward, 135 S.C. 190, 133 S.E., 709, the president of the bank made a loan for it at 8 per cent. interest, and charged the borrower an additional 2 per cent., which he pocketed. The bank was nevertheless held guilty of usury, and the borrower obtained a substantial judgment. Certainly, in a case where a corporation not only charges but actually receives the usury exacted, there can be no valid reason why it should be favored above an individual conducting the same kind of business, and collecting the same amount of usury. "Equal protection of the laws embraces the right to equal exemptions." Ex parte Hollman, 79 S.C. 25, 60 S.E., 19, 25, 21 L.R.A. (N.S.), 242, 14 Ann. Cas., 1105.
Section 3639 of Vol. 3, Code of 1922, and Section 1 of the Act of 1930 must be read and construed together.
Section 3639 reads: "Any person or corporation who shall receive, or contract to receive, as interest any greater amount than is provided for in the preceding Section shall forfeit all interest, and the costs of the action and such portion of the original debt as shall be due shall be recovered without interest or costs, and where any amount so charged or contracted for has been actually received by such person or corporation, he or she, or they shall also forfeit double the total amount received in respect of interest, to be collected by a separate action or allowed as a counterclaim in any action brought to recover the principal sum."
Section 1 of the Act of 1930 reads: "Any person who shall knowingly, intentionally and willfully violate the laws of the State of South Carolina enacted for the purpose of prohibiting the charging, collecting, or receiving of usurious interest upon conviction thereof in a Court of competent jurisdiction shall be deemed guilty of a misdemeanor and punishable by fine or imprisonment, or both, in the discretion of the trial Judge within the limits prescribed by law."
These sections must be construed just as if they had been enacted by the same Legislature at the same time. The Act of 1930 simply means that any person violating Section 3639 shall be criminally penalized. The Legislature meant to criminally punish a person, and not a corporation, for an offense equally within the capacity of both. This it cannot do.
It is therefore ordered that the writ prayed be granted and the defendant discharged.
May 15, 1931. The opinion of the Court was delivered by
This matter comes before this Court on appeal by the State from an order issued by his Honor, Judge T.S. Sease, granting a writ of habeas corpus for and discharging the defendant, C. Rhett Riddle, who was arrested on a charge of the violation of the Act of 1930 (36 Statutes, p. 1386), making it a misdemeanor for any person to "knowingly, intentionally and willfully violate the laws of the State of South Carolina enacted for the purpose of prohibiting the charging, collecting, or receiving of usurious interest." So much of the Act in question as is pertinent to the inquiry herein reads as follows:
"An Act to Make Violation of the Usury Law a Misdemeanor and to Prescribe the Punishment Therefor.
"Section 1, Be it enacted by the General Assembly of the State of South Carolina: Any person who shall knowingly, intentionally and willfully violate the laws of the State of South Carolina enacted for the purpose of prohibiting the charging, collecting, or receiving of usurious interest upon conviction thereof in a Court of competent jurisdiction shall be deemed guilty of a misdemeanor and punishable by fine or imprisonment, or both, in the discretion of the trial judge within the limits prescribed by law."
By reference to the order of his Honor, Judge Sease, which order will be reported with the case, it will be seen that his Honor held the Act under consideration to be in conflict with the equal protection clauses of the State and Federal Constitutions (Const. U.S. Amend. 14, § 1; Const. S.C. Art. 1, § 5), in that the Act applied to persons only and not to corporations, and therefore, holding this view, his Honor granted the writ prayed for and discharged the defendant. We are unable to agree with this view. In our opinion the Act under consideration, when considered in connection with Section 43, Vol. 3, Code of 1922, which must be done, should be construed to include corporations as well as persons. This section of the Code reads as follows:
"(43) § 3. Construction of Words. — The words `person' and `party' and other word or words importing the singular number, used in any Act or Joint Resolution, shall be held to include firms, companies, associations and corporations, and all words in the plural number shall apply to single individuals in all cases in which the spirit and intent of the Act or Joint Resolution may require it. All words in an Act or Joint Resolution importing the masculine gender shall apply to females also, and all words importing the present tense shall apply to the future also."
In the absence of there being some provision in the Act under consideration to show that it was the intention of the Legislature for the Act not to apply to corporations, it seems clear to us that the Act should not be construed to exclude corporations. In this case we also call attention to the opinion of Mr. Justice Blease, now Chief Justice, in the case of United States Tire Co. v. Keystone Tire Sales Co., 153 S.C. 56, 150 S.E., 347, 66 A.L.R., 1264, where the principle is declared, that, when the word "person" or "party" is used in a statute, it is broad enough to include corporations, unless the intention to exclude is obvious. As supporting the same view, we also call attention to the following authorities: 7 R.C.L., 33, and 20 R.C.L., 662. The opinion in the case of In re: Roton, 95 S.C. 120, 78 S.E., 711, is also pertinent to the question involved.
Our attention has been called to the opinions in the cases of Charleston Oil Co. v. Poulnot, 143 S.C. 283, 141 S.E., 454, 60 A.L.R., 750, and Xepapas v. Richardson, 149 S.C. 52, 146 S.E., 686. We deem it sufficient to state that in the statutes under consideration in those cases it appeared to be the legislative intent not to include corporations, whereas, such was not the legislative intent regarding the statute involved in the case at bar. It is our opinion that the statute involved in the case at bar, viewed in connection with Section 43, Vol. 3, of the Code of 1922, must be construed, not to exclude corporations, but to include corporations.
It is the judgment of this Court that the order of the Circuit Court appealed from be reversed, and the writ revoked.
MR. CHIEF JUSTICE BLEASE and MESSRS. JUSTICES COTHRAN, STABLER and MR. ACTING ASSOCIATE JUSTICE COSGROVE concur.