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Chicago-crawford Currency Exchange v. Thillens

APRIL 6, 1964.




Appeal from the Superior Court of Cook County; the Hon. WALKER BUTLER, Judge, presiding. Affirmed.


Rehearing denied May 25, 1964.

Plaintiffs, a group of currency exchange operators, in a declaratory judgment action in chancery, charged defendants with "unfair competition" and a conspiracy to evade the licensing provisions of the Community Currency Exchanges Act (Ill Rev Stats 1961, c 16 1/2, §§ 30-56.3). They sought injunctive and affirmative relief. Defendants, Thillens, Inc., and Melvin Thillens, doing business as Thillens Merchandising Company, appeal from a partial summary decree, which enjoins both defendants from engaging in an ambulatory currency exchange business "under the guise of a merchandising business, or under any other form, nature, means, subterfuge or guise" at locations specified in the decree. The decree was entered upon pleadings, affidavits, depositions and exhibits, and the chancellor expressly found that there was no just reason for delaying enforcement or appeal.

The title of the Community Currency Exchanges Act states that it is "an Act in relation to the definition, licensing and regulation of community currency exchanges and ambulatory currency exchanges, and the operators and employees thereof, and to make an appropriation therefor, and to provide penalties and remedies for the violation thereof." The Act was found to be constitutional in Thillens, Inc. v. Morey, 11 Ill.2d 579, 144 N.E.2d 735 (1957).

Defendant Melvin Thillens contends the merchandising business which he conducted is not regulated by the Currency Exchanges Act since it is not a business for "cashing" checks, and that the Act in question should not be extended by implication beyond its literal terms. Defendant Thillens, Inc., contends the court erred in entering the summary judgment because a triable issue of material fact existed as to whether the corporation engaged in the enjoined business.

In substance, the record shows that in 1959, defendant Thillens, Inc., an ambulatory currency exchange business, applied for licenses to operate at 41 additional locations. The Director of Financial Institutions determined that the issuance of these licenses would not "promote the convenience and advantage of the community" and denied the applications. The orders of denial were sustained in Thillens, Inc. v. Department of Financial Institutions, 24 Ill.2d 110, 180 N.E.2d 494 (1962).

In July, 1961, and while the appeal of Thillens, Inc., was pending before the Supreme Court, Thillens Merchandising Company, a sole proprietorship owned by defendant Melvin Thillens, was formed for the purpose of "selling tangible personal property at retail." Thillens obtained a peddler's license from the City of Chicago and began to sell numerous items of small value, such as tie clasps, cuff links, sun glasses, money clips, greeting cards, perfume containers and the like. The items were sold for 24¢ plus 1¢ sales tax. During the same period, Thillens, Inc., was cashing checks in excess of $50 for a fee of 25¢. From 75% to 90% of the sales were paid for by check. The sales were made at about seventy-five locations, on the premises of various industrial firms, and "an attempt was made to coordinate the date of these stops with the payday of the plant in question."

The record establishes the following relationship between the two defendants. Thillens, Inc., sold trucks, guns, money changers, money boxes and adding machines to the merchandising company. The trucks, equipped with tear gas, shotguns and armed guards, were similar in color and in all other respects to the Thillens, Inc., trucks, except that the Thillens, Inc., emblem, "Thillens Checashers," was removed. Garage service, maintenance and storage were furnished at 40¢ per mile, in the same garage as the trucks of Thillens, Inc., and protected by the same watch service. Thillens, Inc., loaned to the merchandising company all of the money used by it in its operations, at the rate of 20¢ per $1,000 per day. During the week of May 14-19, 1962, Thillens sold 2,953 items of merchandise for a total of $738.25, and received checks totaling $228,341.63 in payment of merchandise. During that week, Thillens borrowed approximately $255,000 from Thillens, Inc. The merchandising business maintained a separate bank account. The books of account were kept by the Thillens, Inc., bookkeeper, in offices also occupied by Thillens, Inc., and a third proprietorship known as North Town Currency Exchange. About 3% of the bookkeeper's time was spent on the books of the merchandising company and Thillens, Inc., was reimbursed for this service as well as for the use of office space.

The employees of the merchandising company wore similar uniforms to the employees of Thillens, Inc., except there was no lettering on the uniforms. They carried the same kinds of weapons and used the same kinds of money boxes and money changers. The head driver of each truck of both companies went to the same garage each morning and obtained a large amount of cash, and used the same procedure in handling currency. At the end of each day, the employees of both returned their trucks to the same garage and prepared reports on the same kind of forms, showing cash on hand at the start of the day, total amounts of checks received, and cash on hand at the end of the day, and other information.

Initially, defendant Melvin Thillens argues that he, as a merchandising company, is not within the ambit of the Currency Exchanges Act. The statutory definition of currency exchange, as provided in chapter 16 1/2, § 31, is a company "engaged in the business or service of, and providing facilities for, cashing checks, drafts, money orders or any other evidences of money acceptable to such community currency exchange, for a fee or service charge or other consideration." Defendant specifically relies upon the following provision of section 31:

"Nothing in this Act shall be held to apply to any person . . . engaged in the business of selling tangible personal property at retail who, in the course of such business and only as an incident thereto, cashes checks, drafts, money orders or other evidences of money."

Defendant Thillens maintains he is not in the business of "cashing" checks and that, technically, a check can be cashed only when it is converted entirely into cash and not when used as payment for merchandise. He further argues that "the statutory definition of `currency exchange' is objective . . . and the reason for or the method of operation of the business, or the intent to solicit and accept employees' pay checks in payment for merchandise sold, is completely immaterial to the determination of whether or not the business is or is not a currency exchange as defined."

We find no merit in the foregoing contention. We believe the legislature, by section 31, intended to protect the bona fide retail business "selling tangible personal property" and cashing checks incidentally, and not the subterfuge of operating "ambulatory currency exchanges under the form and guise of a retail merchandising business." This finding of the chancellor is amply supported by the record, as is the conclusion that the conduct complained of "is a conspiracy between defendants to evade and is in fact an evasion by subterfuge of the licensing provisions of the Illinois Currency Exchange Act."

Defendants, citing legislative history and the executive reaction to the Act, contend that the Currency Exchanges Act is "more motivated by a purpose to restrain competition than by a need for regulation in the public interest, and this court should not lend itself further to that purpose by indulging in a broad construction of the act, adding by implication or intendment what the legislature did not by the words of the statute include." While the court is aware of the conflicting interests involved in legislation of this kind, the issue has been ...

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