We are asked by appellees to strike down Chapter 14, Title 46, Code 1940, originally enacted in 1927, Gen.Acts 1927 p. 335, as in contravention of both the State and Federal Constitutions. The argument, which found favor in the Court below, is based in part upon the theory that the right to earn a livelihood by following the ordinary occupations of life is a fundamental, natural, inherent and inalienable right, sacred and valuable, and fully protected by our fundamental laws.
This principle is of course well supported by the authorities and not here denied. 11 Amer.Jur. Sec. 336. And it must be conceded also that "the common businesses and callings of life, the ordinary trades and pursuits which are innocent in themselves and which have been followed in all communities from time immemorial must, therefore, be free in the United States to all alike upon the same terms", 11 Amer.Jur. Sec. 336.
But this universal right is subject to the paramount right of the government as a part of the police power to impose such restrictions as the protection of the public may require. "The right of reasonable regulation is a modification of the sweeping generalization that every person has a right to pursue any lawful calling." 11 Amer.Jur. Sec. 337. Counsel for appellee concedes in effect the correctness of this principle, but insists that the real estate business is innocent and harmless and not subject to the police power of the State and that any regulatory enactment is founded upon no reasonable basis and is of consequence but an arbitrary exercise of legislative power subject to be condemned by the Courts. 11 Amer.Jur. Section 337.
The essential details of the Statute here under review appear in the opinion of Mr. Justice BROWN and need no repetition here. We would only add thereto some emphasis upon Section 306, Title 46, Code 1940, which has full provisions for a hearing before the commission with compulsory attendance of witnesses. Appellees do not question full protection in this respect, but base their argument upon the theory this real estate business is not subject to legislative regulation.
In support of their insistence we are cited to only one authority which is directly in point, that of the Court of Appeals of Kentucky in Rawles v. Jenkins, 212 Ky. 287,279 S.W. 350, decided in 1925, wherein the case of Hoblitzel v. Jenkins,204 Ky. 122, 263 S.W. 764, was overruled, which latter decision was rendered by a unanimous Court only the year previous.
Mr. Justice BROWN in his opinion appears to consider that the Courts of North Carolina and Delaware have ruled in accordance with the Kentucky Court of Appeals in Rawles v. Jenkins, supra. But this is an error. The Supreme Court of North Carolina by a sharply divided Court in State v. Dixon, 215 N.C. 161,1 S.E.2d 521, invalidated a similiar law upon the ground that it violated the State Constitution as a local law and left untouched the *Page 445 question here considered. The Delaware decision in Becker v. State, 7 W.W.Harr. 454, 185 A. 92, 93, as well as the North Carolina case of State v. Harris, 216 N.C. 746, 6 S.E.2d 854, 128 A.L.R. 658, dealt with regulatory statutes concerning an entirely different business with which we are not here concerned.
This observation is likewise applicable to other authorities cited by appellees, among them; Adams v. Tanner, 244 U.S. 590,37 S. Ct. 662, 61 L. Ed. 1336, L.R.A. 1917F, 1163, Ann.Cas. 1917D, 973; Kent Stores v. Wilentz, D.C., 14 F. Supp. 1; Ribnik v. McBride, 277 U.S. 350, 48 S. Ct. 545, 72 L. Ed. 913, 56 A.L.R. 1327; Wolff Packing Co. v. Court of Industrial Relations,262 U.S. 522, 43 S. Ct. 630, 67 L. Ed. 1103, 27 A.L.R. 1280; Duncan v. City of Des Moines, 222 Iowa 218, 268 N.W. 547; Buehman v. Bechtel, 57 Ariz. 363, 114. P.2d 227, 134 A.L.R. 1374; Bramley v. State, 187 Ga. 826, 2 S.E.2d 647; Richardson v. Coker,188 Ga. 170, 3 S.E.2d 636; People v. Warden of City Prison, 144 N.Y. 5229, 39 N.E. 686, 27 L.R.A. 718; State v. Smith, 42 Wash. 237,84 P. 851, 5 L.R.A., N.S., 674, 114 Am. St. Rep. 114, 7 Ann.Cas. 577; New State Ice Co. v. Liebmann, 285 U.S. 262,52 S. Ct. 371, 76 L. Ed. 747; Williams v. Standard Oil Co.,278 U.S. 235, 49 S. Ct. 115, 73 L. Ed. 287, 60 A.L.R. 596; Replogle v. City of Little Rock, 166 Ark. 617, 267 S.W. 353, 36 A.L.R. 1333.
Reduced, therefore, to the last analysis, so far as authorities are concerned, appellees' insistence is supported only by the Kentucky case of Rawles v. Jenkins, supra. Such is the result of our own investigation as well as the ingenuity and resourcefulness of able and energetic counsel. Of course the mere fact that the Kentucky case stands alone, and as opposed to several other Courts of wide repute, does not suffice as a reason to cast that decision aside. But when we consider the guiding rule as here often stated that the Courts must first be convinced beyond all reasonable doubt that a legislative Act is violative of the Constitution, the decided weight of authority as thus outlined must suffice to give us pause.
We have often adverted to the duty resting upon the Court in questions of this character, more recently in State v. Murphy,237 Ala. 332, 186 So. 487, 489, 121 A.L.R. 283, wherein it was observed:
"The courts, in the exercise of their power to annul a statute which contravenes the organic law, have uniformly recognized that the power is a delicate one, and to be used with great caution. And it must be borne in mind also that legislative power is not derived from either the State or Federal Constitution. These are only limitations upon power. Apart from the limitations imposed by these fundamental charters of government, the power of the legislature has no bounds, and is as plenary as that of the British Parliament.
"Or to state it differently, all that the legislature is not forbidden to do by the organic law, state or federal, it has full competency to do. And in passing upon the constitutionality of a legislative act, the courts uniformly approach the question with every presumption and intendment in favor of its validity, and seek to sustain rather than strike down the enactment of a co-ordinate branch of the government. All of which is embraced in the simple statement that it is the recognized duty of the court to sustain the act unless it is clear beyond a reasonable doubt that it is violative of the fundamental law."
Counsel for appellees insist "this legislation is typical pressure group legislation", and inform us in brief that in response to such continuous pressure, beginning in 1919 with the National Association of Real Estate Boards, some thirty-three States have enacted regulatory legislation similar to that embraced in our Act of 1927. Of course there is nothing appearing upon the face of this Act suggesting that it was the result of any "pressure group" or that it was not passed by the lawmakers in entire good faith and in the public interest as they so viewed it.
In a number of instances litigation has arisen assailing the constitutionality of such legislation upon the grounds here urged upon us. And with the single exception of the Kentucky case above noted, these Courts have rejected the argument that the lawmakers have no authority to pass such regulatory statutes.
One of the earlier decisions (1919) was by the Supreme Court of California in Riley v. Chambers, 181 Cal. 589, 185 P. 855,856, 8 A.L.R. 418, which contains a clear statement of the question presented and the conclusion reached as will appear from the following:
"Such being the general scope and outline of the act, a number of objections are made to it. The most important of these *Page 446 is that the act is an unreasonable interference with the right of every citizen to engage in a legitimate and useful occupation. This objection is fundamental, and, if sound, the whole act falls, since its sole primary purpose is to hedge about the pursuit of the vocation of a real estate broker or salesman with certain restrictions. That such vocation is a legitimate and useful one cannot be controverted. Nor can it be controverted that the right to engage in a lawful and useful occupation cannot, in effect, be taken away under the guise of regulation. On the other hand, it is equally true that a lawful and useful occupation may be subjected to regulation in the public interest, and that all regulation involves in some degree a limitation upon the exercise of the right regulated. The test is whether or not the limitation imposed is really by way of regulation only; is one whose purpose and effect go no further than throwing reasonable safeguards in the public interest around the exercise of the right. If the limitation is of this character, its imposition is a proper exercise of the police power resident in the Legislature, and whose exercise is one of the latter's most important functions.
"Now, the single primary purpose of the act is to require of real estate brokers and salesmen that they be 'honest, truthful and of good reputation.' All of its provisions, including the requirements of a license, are but incidental to this single purpose and designed to accomplish it. * * *
"Where the occupation is one wherein those following it act as the agents and representatives of others and in a more or less confidential and fiduciary capacity, it certainly can be fairly, said that those pursuing it should have in a particular degree the qualifications of 'honesty, truthfulness and good reputation.' The occupation of a real estate agent is of just this sort. He acts for others and in a more or less confidential and fiduciary capacity. As a result there is particularly required of him for the proper discharge of his duties honesty and truthfulness, and the Legislature has the right to require some assurance of their possession by every one following the occupation. One strong assurance of their possession is a good reputation."
Likewise the State of Tennessee at an early date (1921) passed a similar Act which was attacked upon constitutional grounds in the federal court. This litigation reached the Supreme Court of the United States. Bratton v. Chandler,260 U.S. 110, 43 S. Ct. 43, 67 L. Ed. 157.
Though the particular argument here presented does not appear to have been pressed upon the Court in that case, yet we think when the entire opinion is read the conclusion must be reached that the members of the Court had in mind all questions presented by a consideration of the Fourteenth amendment and the decision upholding what is known as the Blue Sky Laws in Hall v. Geiger-Jones Co., 242 U.S. 539, 37 S. Ct. 217,61 L. Ed. 480, L.R.A. 1917F, 514, Ann.Cas. 1917C, 643, Note 87 A.L.R. 42, 43 et seq., wherein the court concludes by saying [260 U.S. 110, 43 S. Ct. 44, 67 L. Ed. 157]: "And the act construed as we construe it, will take no power from the commission necessary to the performance of its duties, and will leave no power with it that it can exercise to the detriment of any right assured to an applicant for a license by the Constitution of the United States."
And in 1925 the Supreme Court of Louisiana in Zerlin v. Louisiana Real Estate Board, 158 La. 111, 103 So. 528, 531, in a well considered opinion upheld a similar law and cited approvingly the California Riley case, supra, as well as the Bratton case from the United States Supreme Court. Says the Louisiana Court after full discussion: "That the statute comes within the legitimate exercise of the police power of the state we entertain no doubt".
Without intending any invidious comparison, we think perhaps the outstanding opinion from the standpoint of logic is to be found in that of Mr. Justice Cardozo writing for the Court of Appeals of New York in Roman v. Lobe, reported in 243 N.Y. 51,152 N.E. 461, 462, 50 A.L.R. 1329. The view we entertain is therein well expressed in the following excerpts from that opinion:
"The Legislature has a wide discretion in determining whether a business or occupation shall be barred to the dishonest or incompetent. * * * Callings, it is said, there are so inveterate and basic, so elementary and innocent, that they must be left open to all alike, whether virtuous or vicious. If this be assumed, that of broker is not one of them. The intrinsic nature of the business combines with practice and tradition to attest the need of regulation. The real estate broker is brought *Page 447 by his calling into a relation of trust and confidence. Constant are the opportunities by concealment and collusion to extract illicit gains. We know from our judicial records that the opportunities have not been lost. With temptation so aggressive, the dishonest or untrustworthy may not reasonably complain if they are told to stand aside. Less obtrusive, but not negligible, are the perils of incompetence. The safeguards against incompetence need not long detain us, for they were added to the statute after the services were rendered. We recall them at this time for the light that they cast upon the Legislature's conception of the mischief to be remedied. The broker should know his duty. To that end, he should have 'a general and fair understanding of the obligations between principal and agent.' Section 441, as amended by Laws 1924, c. 579. Disloyalty may have its origin in ignorance as well as fraud. He should know, so the Legislature has said (Laws 1924, c. 579), what is meant by a deed or a lease or a mortgage. At any moment he may have to make report as to such matters to expectant buyers or lessees. Often he goes farther, perhaps too far, and prepares a memorandum of the contract. He is accredited by his calling in the minds of the inexperienced or the ignorant with a knowledge greater than their own.
"The Legislatures of many states, awaking to these evils, have adopted statutes like to ours. Licenses to be issued after suitable inquiry as to character and competence are required in California (Laws 1919, p. 1252), Tennessee (Laws 1921, c. 98), Kentucky (Laws 1924, c. 138), Virginia (Laws 1924, c. 461; Virginia Code § 4359 [77]), New Jersey (Laws 1921, c. 141), Louisiana (Act No. 236 of 1920), Idaho (Laws 1921, c. 184), Illinois (Laws 1921, p. 153), Michigan (Laws 1921, c. 387), Montana (Rev. Code 1921, § 4065), Oregon (Laws 1921, c. 223), Wisconsin (Stat. 1923, § 136.01), and Wyoming (Laws 1921, c. 31). Legislation so general marks a rising tide of opinion which is suggestive and informing. Klein v. Maravelas, 219 N.Y. 383,385, 114 N.E. 809, L.R.A. 1917E, 549, Ann.Cas. 1917B, 273. The Supreme Court of California in a careful judgment upheld the act adopted in that state. Riley v. Chambers, 181 Cal. 589,185 P. 855, 8 A.L.R. 418. The ruling there made was approved and followed by the Supreme Court of Louisiana. Zerlin v. Louisiana Real Estate Board, 158 La. 111, 103 So. 528. In accord also is the Supreme Court of Wisconsin. Payne v. Volkman, 183 Wis. 412, 198 N.W. 438. The Court of Appeals of Kentucky at first upheld the Kentucky act (Hoblitzel v. Jenkins, 204 Ky. 122, 263 S.W. 764), but afterwards condemned it (Rawles v. Jenkins, 212 Ky. 287, 279 S.W. 350). A like statute of Tennessee was before the Supreme Court of the United States in Bratton v. Chandler, 260 U.S. 110, 43 S. Ct. 43,67 L. Ed. 157. By dictum and manifest implication, if not by necessary decision, the statute was sustained. Valid by the judgment of the same court are statutes for the licensing of dealers in securities (Hall v. Geiger-Jones Co., 242 U.S. 539,37 S. Ct. 217, 61 L. Ed. 480 [L.R.A. 1917F, 514], Ann.Cas. 1917C, 643. * * *
"One searches vainly for any adequate distinction in respect of legislative control between one broker and another.
"Significant, also, is the argument from history. For the better part of a century, real estate brokers in many states, even though not subjected to a test of character and competence, have been prohibited from doing business without a preliminary license. The validity of these requirements has been uniformly upheld. Decisions enforcing them will be found in the federal courts (Bradley v. City of Richmond,227 U.S. 477, 480, 33 S. Ct. 318, 57 L. Ed. 603 [604], in Illinois (Braun v. Chicago, 110 Ill. 186), in Pennsylvania (Luce v. Cook,227 Pa. 224, 75 A. 1098), in Minnesota (Buckley v. Humason,50 Minn. 195, 52 N.W. 385, 16 L.R.A. 423, 36 Am. St. Rep. 637), and in Arkansas (City of Little Rock v. Barton, 33 Ark. 436). Such forms of regulation are less drastic, indeed, than the system now in question. They have significance, none the less, in marking off the business of the broker as distinct from occupations which by general acquiescence are pursued of common right without regulation or restriction. 'We do not readily overturn the settled practice of the years.' * * *
"The case circumscribes the judgment. We hold that the Legislature acts within its lawful powers when it establishes a system of licenses for real estate brokers with annual renewals."
And the statute now being considered has been twice before our own Court. True its constitutionality was not questioned, and its validity merely assumed. Knight *Page 448 v. Watson, 221 Ala. 69, 127 So. 841; Marx v. Lining, 231 Ala. 445,165 So. 207, 210.
In the latter case it was said: "In the case of Knight v. Watson, 221 Ala. 69, 127 So. 841, the above-mentioned act came under review in this court. In that case we held that this act was not designed to impose a license tax as a revenue measure merely, but was designed to regulate the business of brokers and real estate salesmen, to protect the public against fraud and imposition, requiring a license as evidence of qualification and fitness; and that the act came under the police power of the state. We further held that an unlicensed real estate broker or salesman could not sue and recover commissions for the sale of land under a contract with the owner. We reached this conclusion upon the ground that, in acting as such unlicensed broker or salesman, the plaintiff broker had violated section 1 of the Act, which made it a misdemeanor to engage in such business without first having obtained the required license."
These authorities are not cited in support of the constitutionality of the act, as the question was not presented. But considering the fact the court must here be convinced beyond a reasonable doubt, the reference in the opinions to the exercise of the police power and the assumption of the validity of the act are matters not to be entirely ignored. See also Blan v. Hollywood Realty Co., 22 Ala. App. 537,118 So. 253; and Id., 22 Ala. App. 537, 118 So. 258.
Other authorities could be cited to like effect as those herein specifically noted. But they are cited in these cases and may be found also in note to Roman v. Lobe, supra, 243 N.Y. 51,152 N.E. 461, 50 A.L.R. 1329 and Riley v. Chambers, supra,181 Cal. 589, 185 P. 855, 8 A.L.R. 418.
Indeed, the author of the text under the heading "Brokers" in 12 C.J.S. p. 16, § 8, treats the subject upon the assumption the validity of such legislation is well settled. See also 12 C.J.S. § 8, p. 14.
It is clear enough, we think, that a real estate broker does occupy a fiduciary position, one of trust and confidence and our statute merely makes provision that those who engage in the business be those "who are trustworthy and competent to transact the business * * * in such manner as to safeguard the interests of the public". It must be borne in mind that the courts are not concerned with the wisdom or policy of the statute, and have the power to declare it invalid only when it clearly appears that it bears no real or substantial relation to the police power or the means adopted for affecting the object are manifestly arbitrary and unreasonable. 16 C.J.S. Constitutional Law, p. 572, § 198; Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 575, 62 S. Ct. 736,86 L. Ed. 1037.
We have observed that the statute (Sec. 306) provides full opportunity for notice and hearing, with compulsory attendance of witnesses, before any application for a license is denied or any license once issued is suspended. Careful provision is made that the Commission furnish the applicant or licensee a definite statement of its findings of fact and its reason therefor. This section then provides: "* * * The findings of the commission may be appealed to the circuit court of the county in which the licensee resides, provided an appeal is taken within thirty days after such final determination of the commission. Any licensee desiring to appeal under this section shall file with the board of commissioners, or some member thereof, a notice in writing that he appeals to the circuit court, with at least one solvent surety, payable to the State of Alabama, conditioned to prosecute such appeal to effect, and upon failure so to do, to pay all costs and damages which may be adjudged against him by the circuit court on such appeal; bond to be approved by the circuit court clerk of the county. Any cause when so appealed shall be tried de novo in the circuit court."
It is suggested in the opinion of Mr. Justice BROWN, a suggestion not found in brief of counsel, that the legislature has granted an appeal only to one whose license has been suspended and denied it to the applicant. True the above noted excerpts from the statute appear to be rather loosely drawn, and we are strongly inclined to the view no such distinction was intended and the use of the word "licensee" only might be properly construed as applicable also to one seeking a license. But we pretermit that question and leave it to one side and undetermined.
In any event, and without regard to the wording of the statute in this respect, due notice and hearing is provided before the commission and any arbitrary action on the part of the commission is subject to review in the courts. An omission of a specific right of appeal would of *Page 449 consequence not render the Act invalid. 16 C.J.S. 1277 and 1288, Constitutional Law, §§ 626 and 629; 12 Amer.Jur. 281 and 307; 11 Amer.Jur. 1060.
We feel that further discussion is unnecessary. The excerpts herein noted from the opinion of courts for which we have the highest regard fully state our views and should suffice as a complete answer to the argument advanced against the validity of this statute, and serve all purposes of this appeal.
We, therefore, conclude the statute is a valid exercise of the police power of the State and that the trial court erred in the ruling to the contrary. The judgments will accordingly be here reversed and the causes remanded.
Reversed and remanded.
BOULDIN, FOSTER, and LIVINGSTON, JJ., concur.
THOMAS and BROWN, JJ., dissent.
LAWSON, J., not sitting.