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Gordon v. McGovern

Supreme Court of New York, Appellate Division

April 28, 1954

EMANUEL GORDON, Suing on Behalf of Himself and All Other Similarly Situated Pawnbrokers in the City of Buffalo, Respondent,
v.
J. RAYMOND MCGOVERN, as Comptroller of the State of New York, Appellant.

APPEAL from a judgment of the Supreme Court at Special Term (OTTAWAY, J.), entered January 21, 1953, in Erie County, which (1) denied a motion by defendant for judgment on the pleadings under rule 112 of the Rules of Civil Practice and (2) granted a declaratory judgment in favor of plaintiff.

COUNSEL

Nathaniel L. Goldstein, Attorney-General (Ruth Kessler Toch and Wendell P. Brown of counsel), for appellant.

Herbert Shafer and Robert P. Freedman for respondent.

VAUGHAN, J.

The question before the Special Term was whether section 2 of chapter 610 of the Laws of 1952 (Abandoned Property Law, § 1301) was inapplicable in respect to pawnbrokers and pawnbrokerage business in the city of Buffalo. The

Page 26

Special Term, in denying defendant's motion for judgment on the pleadings in an action brought by plaintiff for a declaratory judgment, held that the statute was inapplicable to pawnbrokers and the pawnbrokerage business in the said city of Buffalo and permanently enjoined the defendant, J. Raymond McGovern, as Comptroller of the State of New York, from enforcing the statute against the plaintiff and other pawnbrokers similarly situated. The court was of the opinion that, in view of the Charter of the City of Buffalo, which empowers the common council to license and regulate the pawnbrokerage business there, the Abandoned Property Law (§ 1301) should not be construed to apply to pawnbrokers in that city.

We cannot agree with the determination reached by the Special Term. It is of interest to note that the right of a municipality to fix a rate of interest to be charged by pawnbrokers was first recognized in the Revised Statutes of 1829 (Part I, ch. 20, tit. XIX, § 9) in those instances where the charter of the municipality gave it the power to license such pawnbrokers. The various charters of the City of Buffalo from 1853 have all granted to the municipality power to enact ordinances to license and regulate pawnbrokers and the business of pawnbrokerage and since the charter of 1891 to fix the rate to be charged in said business (L. 1853, ch. 230, tit. 3, § 9, subd. 3; L. 1870, ch. 519, tit. III, § 8, subd. 5; L. 1891, ch. 105, tit. II, § 17, subd. [6]; L. 1914, ch. 217, tit. II, § 13, subd. [4]; Local Laws, 1927, No. 4 of Buffalo, § 33, subd. 3 [published in Local Laws, 1932, p. 37]).

The City of Buffalo, pursuant to its charter, has enacted an ordinance requiring the licensing of pawnbrokers, regulating their business and establishing the manner of the sale of unredeemed pledges. It requires the pledgee to keep a record of such sales and to afford to the pledgor of any unredeemed goods which have been sold, or to his executors or administrators, the right at all reasonable times to inspect the books showing such sale (Ordinances of the City of Buffalo, ch. 20, § 15). However, it is noteworthy to observe that no provision is made for the disposition of unclaimed surplus moneys from the sale of pledged articles. The Special Term was fully aware of the absence of any such provision. In referring to the ordinance the court said: 'It contains directions as to how surplus moneys shall be disbursed, but there is no provision relating to the final disposition of such surplus moneys, and the practice has been for these surplus moneys to be taken by the pawnbrokers.'

Page 27

We find no reference to the disposition of such unclaimed surplus moneys other than that found in the Abandoned Property Law (§ 1301), which became law in 1952 (L. 1952, ch. 610). It provides:

'§ 1301. Unclaimed surplus from sale of pledge.

'1. The word, 'pledgee', as used in this section shall mean any person, partnership or corporation (a) loaning money on the deposit or pledge of personal property * * *

'2. Any surplus moneys resulting from a sale by a pledgee, other than a banking organization, after the thirtieth day of June, nineteen hundred fifty of personal property after deducting the amount loaned or advanced, interest due thereon and any other lawful charges, which surplus moneys have remained unpaid to the person entitled ...


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