On appeal from Commissioner of Banking and Insurance to Superior Court, Appellate Division, certified to Supreme Court of its own motion.
For affirmance -- Chief Justice Vanderbilt, and Justices Heher, Oliphant, Wachenfeld, Burling and Brennan. For reversal -- None. The opinion of the court was delivered by William J. Brennan, Jr., J.
[11 NJ Page 567] No person may conduct a small loan business at any location without first obtaining
a license from the Commissioner of Banking and Insurance, R.S. 17:10-2. The Commissioner "shall issue" the license if he finds that the financial responsibility, experience, character and general fitness of the applicant, and of the officers and directors thereof, if a corporation, are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly and efficiently, that the applicant's net worth is at least $25,000 and that the applicant has liquid assets of at least that amount available for the purpose of making small loans at the specified location, and "that allowing the applicant to engage in business will promote the convenience and advantage of the community in which the business of the applicant is to be conducted." R.S. 17:10-5(b).
Family Finance Corporation filed an application on December 16, 1949 for a license for a location at 66 Hudson Street, Hoboken. At that time there were two small loan licensees doing business in that city. The applicant was found to be qualified as to financial responsibility and character, but the license was denied on the ground that the issuance of another license in Hoboken would not promote the convenience and advantage of the community.
The decision was reversed in the absence of findings of basic facts supporting this determination. Family Finance Corp. v. Gough, 10 N.J. Super. 13 (App. Div. 1950). It was held, however, that the convenience and advantage clause provided a legally sufficient standard for the guidance of the Commissioner and empowered him to limit the number of licenses in a community "by declining to issue an additional license therein [to an applicant otherwise qualified] in the absence of a showing that the granting of the additional license will promote the convenience and advantage of the community within the contemplation of R.S. 17:10-5," 10 N.J. Super., at p. 21.
The application has been reheard and has again been denied on the ground that the issuance of an additional license in Hoboken will not promote the convenience and
advantage of the community. We certified of our own motion this appeal of the company to the Appellate Division from this second determination of denial.
The respondent Commissioner based his decision on ten findings of fact from the testimony and exhibits in evidence, which we summarize as follows: (1) that the population of Hoboken increased hardly at all from 1940 to 1950 compared with a substantial increase in the State; (2) that retail sales in Hoboken show a smaller percentage of increase from 1939 to 1948 than the percentages for Hudson County and the State; (3) that Hoboken's retail sales have only a slightly higher average per personal loan office now licensed in Hoboken than the State average; (4) that Hoboken's per capita retail sales figure is lower than the State per capita although a little higher than the county per capita; (5) that Hoboken is not a trade center (although it is an active business center), and its merchants must depend primarily upon the patronage of Hoboken residents; (6) that there is already a licensed small loan lender next door to 66 Hudson Street; (7) that there are two banks, two state credit unions and seven federal credit unions all engaged in making personal loans in Hoboken; (8) that the business of the small loan licensee most recently licensed (in 1947) has had no substantial growth since 1948; (9) that there is competition now between the two present Hoboken licensees, 13 others in Jersey City, and three in Union City; (10) that the present licensees have sufficient working capital and credit to meet the demands for service in Hoboken. He therefore concluded that "allowing the applicant to engage in business would not promote the convenience and advantage of the community in which the business is proposed to be conducted."
Appellant contends on this appeal that the convenience and advantage clause cannot constitutionally be construed and applied to authorize denial of a license to an applicant, as here, found by the Commissioner to be financially and otherwise qualified, save as it appears that the applicant plans to operate the small loan business at the specified location merely "as an adjunct to another business"
or when "the foreseeable borrowing needs of the community are negligible," that is, when the applicant will not be able to do a loan business of at least $25,000. Particularly, it is argued, is there an unlawful invasion of constitutionally protected rights of private property in a denial based upon the capacity of the present licensees to handle foreseeable additional loan demands. This, appellant says, constitutes an unlawful suppression of competition, H. P. Hood & Sons v. DuMond, 336 U.S. 525, 538, 69 S. Ct. 657, 93 L. Ed. 865, 874 (1949); Federal Communications Commission v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S. Ct. 693, 84 L. Ed. 869 (1940), and an arbitrary and capricious action going beyond the demands of the public interest which alone will justify the exercise of the regulatory power, Sheffield Farms Co., Inc., v. Seaman, 114 N.J.L. 455 (Sup. Ct. 1935); Regal Oil Co. v. State, 123 N.J.L. 456 (Sup. Ct. 1939); N.J. Good Humor, Inc., v. Bradley Beach, 124 N.J.L. 162 (E. & A. 1940); cf. Reingold v. Harper, 6 N.J. 182 (1951); Lane Distributors v. Tilton, 7 N.J. 349 (1951); that a denial on such ...