Request By:
Mr. Astor Gibson
Chief of Police
City of Fleming-Neon
Box 66
Neon, Kentucky 41840
Opinion
Opinion By: David L. Armstrong, Attorney General; Walter C. Herdman, Asst. Deputy Attorney General
This is in response to your letter of April 19 in which you raise the question as to the legality of pawnbrokers or hock shops operating within the city limits of Fleming-Neon.
Referring first to the case of
Peel v. Dummit, 308 Ky. 399, 214 S.W.2d 605 (1948), we find the court declaring that the business of pawnbroker is not one injurious to the public and, although subject to reasonable regulation under police power, cannot be prohibited or subjected to prohibitive restrictions. More specifically the court said:
"There can be no doubt that the pawnbroking business, due to its peculiar nature, is subject to abuse, and if unregulated great evils would grow up in connection with it. It is universally recognized that the business is subject to regulation under the police power, but, being a useful business when properly conducted, it cannot be prohibited, and regulations so onerous as to amount to a prohibition are not permissible."
See also
Commonwealth v. Loeb, 245 Ky. 843, 54 S.W.2d 373 (1932).
Pawnbrokers are regulated to a degree by state law under Ch. 226 KRS and must comply with the requirements therein. One of the requirements is that they must give bond when granted a city or county license to do business conditioned on their observing not only the provisions of Ch. 226 KRS but also the licensing ordinance in force in the city or county that is not inconsistent with the state statutes.
Under the circumstances the business of pawnbroker or hock shop is a legitimate and even useful business subject, however, to reasonable licensing regulations including a fee for conducting business in the city. This type of business is peculiar in that it is regulated by state law and at the same time would as we have indicated be subject to local regulations provided such local regulations do not in any way conflict with the state law, in this case Ch. 226 KRS. In other words, the business of pawnbroker cannot be prohibited within the confines of any city.