Airway Drive-In Theatre Co. v. City of St. Ann

• Decision Date: 12 March 1962
• Docket Number: No. 48002,DRIVE-IN,48002
• Citation: 354 S.W.2d 858
• Parties: AIRWAYTHEATRE CO., Inc., a corporation, St. Louis Amusement Co., a corporation, and Herbert P. Hartstein, doing business as Skyline Drive-In Theatre, Appellants, v. CITY OF ST. ANN, a municipal corporation, Clarence G. Tiemeyer, Mayor of the City of St. Ann, and Maurice H. McCue, Chief of Police and Collector of the City of St. Ann, Respondents.
• Court: Missouri Supreme Court

Page 858

354 S.W.2d 858

AIRWAY DRIVE-IN THEATRE CO., Inc., a corporation, St. Louis

Amusement Co., a corporation, and Herbert P.

Hartstein, doing business as Skyline

Drive-In Theatre, Appellants, v. CITY OF ST. ANN, a municipal corporation, Clarence G.

Tiemeyer, Mayor of the City of St. Ann, and

Maurice H. McCue, Chief of Police and

Collector of the City of St.

Ann, Respondents.

No. 48002.

Supreme Court of Missouri, En Banc.

March 12, 1962.

Flynn, Parker & Badaracco, Norman C. Parker, St. Louis, for appellants.

William R. Dorsey, Clayton, for respondents.

STOCKARD, Commissioner.

Appellants seek a declaratory judgment declaring unconstitutional and void that portion of Ordinance No. 288 of the City of St. Ann which purports to levy an annual license tax on drive-in theaters of $1.50 per speaker. The trial court dismissed their petition and they have appealed contending, as they did in the trial court, that the challenged portion of the ordinance violates Section 3, Article X of the Constitution of Missouri, V.A.M.S., and also the due process and equal protection clauses of both the Missouri and Federal Constitutions.

Ordinance No. 288, which became effective January 1, 1959, levies an annual license tax in varying amounts upon 95 specifically designated classifications of business, and provides that all other businesses should be taxed on an annual basis at the rate of seventy-five cents for each one thousand dollars of the first million dollars of gross sales, and one dollar for each one thousand dollars of gross sales thereafter with a minimum tax of $25.00. The tax on the specifically designated classifications varies from $5.00 to $250.00 for those businesses taxed on a flat rate of so much per year. The challenged tax is listed as follows: 'Theaters, drive-in, per speaker per year $1.50.' There is no separate classification for 'theaters,' but there is a separate classification for 'Opera houses or picture shows, indoor, per year $50.'

Drive-in theaters are arranged so that patrons drive in the theater area and watch the moving picture show while seated in their automobiles. A separate speaker is provided for each automobile. The drivein theater of one of the appellants also has a substantial number of seats arranged so that persons may leave their automobile or come to the area without an automobile and watch the picture show. Airway Drive-In Theatre has 925 in-car speakers on which the annual tax under Ordinance No. 288 is $1,387.50; Skyline Drive-In Theatre has 591 in-car speakers on which the annual tax is $886.50; and St. Ann Drive-In Theatre, operated by Appellant St. Louis Amusement Co., has 1,040 in-car speakers for which the annual tax is $1,560.00. We note that subsequent to the filing of this action Skyline Drive-In Theatre has terminated its operations in the City of St. Ann.

During 1959 there were twenty-four businesses which paid a license tax based on gross sales. The largest was $1,006.98 paid by a super-market, and to warrant this tax its annual gross sales necessarily exceeded $1,250,000. The gross receipts of appellants in 1958 from admissions and from concessions was as follows: Airway Drive-In Theatre--$352,505; Skyline Drive-In Theatre--$96,071; and St. Ann Drive-In Theatre--$257,335. In addition to the license tax under Ordinance No. 288 and the regular real and personal property taxes, appellants paid to the City of St. Ann in 1958 'under agreement for police direction of traffic and other police services' the following amounts: Airway Drive-In Theatre--$4,850; Skyline Drive-In In Theatre--$1,410; and St. Ann Drive-In Theatre--$3,570. These payments would be approximately the same each year for each theater except the one which has terminated its business in the city.

There appears to be no question, at least by the parties, but that Ordinance No. 288 is a revenue measure as distinguished from a regulatory measure, and that as such it is subject to the provisions of Section 3, Article X, Constitution of Missouri which provides that 'Taxes * * * shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.' See City of Cape Girardeau v. Fred A. Groves Motor Co., 346 Mo. 762, 142 S.W.2d 1040; City of St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124, 264 S.W. 654. Appellants contend that the ordinance violates the above constitutional provision because the 'separation of indoor and outdoor theaters is an arbitrary and unreasonable classification thereby destroying the required uniformity of application of the tax.' They also contend that the tax on drive-in theaters is 'excessive and discriminatory in comparison with the tax imposed upon other businesses.' The City of St. Ann, on the other hand, contends that it is entitled to make reasonable classifications of businesses for the purpose of levying a license tax; that it has done so by creating the classification of 'picture shows, indoor' and 'theaters, drivein;' and that since the tax is uniform on all members of the classification of 'theaters drive-in' the ordinance does not violate any provision of the Constitution. It asserts that 'discrimination as such [will] not void the ordinance but only unreasonable and arbitrary discrimination [is] prohibited by Section 3, Article X of the Missouri Constitution of 1945.'

A municipal corporation as no authority to impose a license tax upon any business or pursuit unless such power is conferred by charter or by statute. Automobile Club of Missouri v. City of St. Louis, Mo.Sup., 334 S.W.2d 355, 362. The City of St. Ann is not a charter city so its authority must be found in the statutes. Section 71.610 RSMo 1959, V.A.M.S., requires quires that the business or avocation to be taxed shall be 'specially named as taxable' in the charter or applicable statute. Section 94.270 RSMo 1959, V.A.M.S., applicable to cities of the fourth class, specifically lists 'moving picture shows' among the businesses upon which license taxes may be levied.

This court has held that a municipality 'has power to divide a taxable class, that is, a class taxable under its charter [or applicable statutes], into subclasses and tax these subclasses differently.' Village of Beverly Hills v. Schulter, 344 Mo. 1098, 130 S.W.2d 532; Ploch v. City of St. Louis, 345 Mo. 1069, 138 S.W.2d 1020. But, of course, the subclassifications must be reasonable and not arbitrary. Campbell Baking Co. v. City of Harrisonville, 8 Cir., 50 F.2d 670. There must be a substantial distinction between the subclasses, 33 Am.Jur. Licenses Sec. 34, or the effect is that businesses which are in fact in the same class are not taxed uniformly. See, for example, City of Kansas City v. Grush, 151 Mo. 128, 52 S.W. 286. However, 'the latitude allowed a legislative body in making classifications in a pure revenue measure is more restricted, since the element of regulating particular businesses because of their nature is missing.' Edmonds v. City of St. Louis, 348 Mo. 1063, 156 S.W.2d 619.

When we consider the fact that the tax imposed is not for purposes of regulation but is imposed for revenue purposes only, we find it difficult to justify a distinction between moving picture shows held indoors and moving picture shows held outdoors in what is called a drive-in theater. The product sold by these highly competitive businesses is precisely the same and is dispensed for the same purpose. Neither, as distinguished from the other, is detrimental to the public good or adversely influential on public morals or habits so as to justify a different treatment. See Edmonds v. City of St. Louis, supra. However, it may be said that...