LOCATION: Pittsburgh Party Headquarters
DOCKET NO.: 129
DECIDED BY: Warren Court (1955-1956)
CITATION: 350 US 485 (1956)
ARGUED: Feb 29, 1956
DECIDED: Mar 26, 1956
Facts of the case
Media for Doud v. Hodge
Audio Transcription for Oral Argument - February 29, 1956 in Doud v. Hodge
Number 129, George W. Doud et al., versus Orville Hodge, Auditor of Public Accounts of the State of Illinois.
John J. Yowell:
John J. Yowell:
May it please the Court.
This appeal is for an order of the three-judge District Court in the Northern District of Illinois, dismissing for one of federal jurisdiction, a suit to enjoin the enforcement of the Illinois Community Currency Exchanges Act on the ground that it is repugnant to the equal rights such Equal Protection Clause of the Fourteenth Amendment.
The material allegations of the amended complaint, which were supported by findings of fact of the District Court or – or admitted in the answer to include to following.
That the action of course arises under the Fourteenth Amendment, Section 1, that the amount in controversy, which this Court said in the Gibbs case in 307 U.S. which is cited in the appellant's brief, is the value of the right to conduct the business prohibited by the challenged statute, exceed the sum of $3000 exclusive of interest and cost.
And the plaintiffs, Doud, McDonald and Carlson, constitute a partnership doing business under the foreign name of Bondified Systems, that the defendant -- that they're all citizens of Illinois, that the defendant Hodge is a duly qualified and acting Auditor of Public Accounts of the State of Illinois.
The defendant, Latham Castle is a duly qualified and acting Attorney General of the State of Illinois, and the defendant, Gutknecht as a duly qualified an acting State's Attorney of Cook County, resided in that County in the Northern District.
That's submitted on the action.
That the partnership is organized for the purpose of, intends to engage and has been engaged not in the ordinary business of a currency exchange, but exclusively in the business of selling and issuing money orders under the firm name, “Bondified Systems” in Cook and other counties in the State of Illinois.
That is supported by finding three, page 509 of the record.
Then, follows a great deal detail as to how the plaintiffs came to get a license to sell this -- this particular kind of money orders and how they happen to operate as a partnership and not as a corporation.
And then, at page 13 of the record is the allegation as to the provisions of the statute involved, which the statute of course is submitted in the answer, page 27 of the record.
The Act is an act in relation to the definition, the regulation and licensing of community currency exchanges.
It's also ambulatory, so-called ambulatory currency exchanges which are not here involved.
The statute purports to regulate the business -- I'm reading from the amended complaint, purports to regulate the business of a community currency exchange which is defined to be, one, a person, firm or a corporation engaged in the business of providing facilities or cashing checks, drafts and money orders for a fee or service charge or other consideration or, two, engaged in the business of selling or issuing money orders in his, there or its name or any other money orders or, the third classification, engaged in both such businesses subject to certain exceptions.
At page 14 of the record, the complaint -- the amended complaint further alleges, “The statute likewise specifically exempts from a definition” -- I should say at first it exempts state and national banks.
The statute likewise specifically exempt from the definition of a community currency exchanged, all persons, firms and corporations engaged in the business of selling or issuing United States Post Office money orders, American Express Company money orders, Postal Telegraph Company money orders, understand those two are now merged or Western Union Telegraph Company money orders.
In other words, the exemption is not only the Post Office, United States Post Office which is, of course, a federal instrumentality, the Western Union Telegraph Company which is regulated by federal law, and also the American Express Company money orders, which is not subject to any regulations whatsoever.
The said statute contains the following provisions, regulating the business of the community currency exchange, no person, firm or corporation which is not exempted from the definition of a community currency exchange shall engage in the business of selling or issuing money orders without first securing a license to do so from the Auditor Public Accounts of the State of Illinois.
The said statute further provides that a community currency exchange shall not be conducted as a department of another business that it must be an entity, financed, and conducted as a separate business unit.
It is then alleged that this classification is unconstitutionally broad in that, one, the American Express Company operates its money order business in substantially the same manner in which said plaintiffs operate.
That is supported by the Court's finding of fact.
Two, there's a conclusion that the exemption of the American Express money orders is unwanted, not germane to the purpose of the statute and highly discriminatory.
Then the allegation that the American Express Company is an aggregation of individuals operating under a joint stock company plan.
It is not a corporation but an association of individuals.
That's submitted in the action.
The answer also admits that the American Express Company sells and issues money orders in the City of Chicago, Illinois through operators of drug and grocery stores, such operators retaining a portion of a fee fixed by the American Express Company for the issuance of its money orders.