Beatty v. City of Santa Fe

Citation57 N.M. 759,263 P.2d 697,1953 NMSC 110
Decision Date19 November 1953
Docket NumberNo. 5615,5615
PartiesBEATTY et al. v. CITY OF SANTA FE at al.
CourtNew Mexico Supreme Court

Louis C. Lujan, Albuquerque, Walter R. Kegel, Santa Fe, for appellants.

F. A. Catron and Thomas B. Catron III, Santa Fe, for appellees.

McGHEE, Justice.

The plaintiffs, wholesalers of cigarettes in the City of Santa Fe, appeal from the refusal of the lower court to grant injunction against the enforcement of an ordinance of said city (Ordinance No. 1046, enacted June 27, 1951) levying a stamp tax upon the sale of cigarettes within the corporate limits of the city providing stamps are to be purchased and affixed by wholesalers and direct buying retailers, and further providing the revenues to be derived therefrom shall be placed in a special fund to be used exclusively for playgrounds and other similar recreational facilities for juveniles in said city. This ordinance was enacted under authority of Ch. 92, Laws of 1951, which act plaintiffs contend is void or unconstitutional in several respects, and therefore, that the said ordinance is void.

The act under which the ordinance was passed, after reciting the need of the municipalities of this state for added revenues with which to provide adequate recreational facilities to combat juvenile delinquency, provides, in substance, the following:

Section 1 provides municipalities shall have the power to fix and have collected a tax upon the sale of cigarettes sold within their limits; that they shall have power to fix the amount of such tax, but that the tax shall not exceed the limitation therein provided.

Section 2 defines the words, 'municipality,' 'cigarette' and 'tobacco.'

Section 3 declares the passage of an ordinance in lawful manner providing for a tax upon the sale of cigarettes shall be sufficient to put the tax into effect.

Section 4 empowers the municipalities to provide by ordinance for the manner of payment and collection of the tax and to require filing of terminal reports by sellers of cigarettes showing quantity of cigarettes sold.

Section 5 provides the revenues derived from such tax shall be paid into the municipal treasury and placed in a special fund to be used exclusively for playgrounds and similar recreational facilities for juveniles in the municipality.

Section 6 grants to municipalities power to provide by ordinance for penalties for failure to make reports or the sale of cigarettes without first paying the tax thereon as provided by ordinance.

Before undertaking consideration of the particular matters urged here, we take note of considerable argument in the briefs of counsel in this case with respect to the proper rule of construction to be employed with respect to statutes delegating power to levy taxes, the appellants contending all taxation and revenue statutes should be construed strictly in favor of the taxpayer and that the grant of taxing power to municipalities should likewise be so construed, while appellee maintains if under any construction the act is valid, it should be upheld; that as enabling legislation, the act should be loosely construed. Suffice it to say we are in agreement with the sensible statement made by the Minnesota court in Governmental Research Bureau v. Borgen, 1947, 224 Minn. 313, 28 N.W.2d 760, 764:

'* * * statutes imposing taxes and providing means for the collection of the same should be construed strictly in so far as they may operate to deprive the citizen of his property by summary proceedings or to impose penalties or forfeitures upon him; but otherwise tax laws ought to be given a reasonable construction, without bias or prejudice against either the taxpayer or the state, in order to carry out the intention of the legislature and further the important public interests which such statutes subserve.'

Appellants' first point is the act, Ch. 92, Laws of 1951, is void for uncertainty, etc., and that the ordinance based thereon is likewise void. The burden of argument is directed primarily at section 1 of the act, which provides:

'Any municipality shall have the power to fix and have collected a tax upon the sale of cigarettes sold within the limits of such municipality, and shall have the power to fix the amount of tax to be paid thereon; provided, that no such tax shall exceed the sum of five mills on each package of ten cigarettes or less; one cent on each package containing more than ten and not more than twenty cigarettes; an additional five mills for each ten cigarettes or less over twenty cigarettes contained in any one package.'

Appellants' argument seems upon analysis to fall into four propositions: (1) That while the language of the statute seems to contemplate but a single tax upon only one level of sale between the manufacturer and the consumer, that since the act does not specify who shall pay the tax that as many as three separate taxes could be imposed--upon the wholesaler, the distributor and the retailer. (2) That since the act is silent on the manner of taxing, great confusion will result due to divergence in methods applied by the municipalities taking advantage of the power granted. (3) That the act does not provide whether the burden of tax may be passed down the line of buyers until the ultimate consumer is reached. (4) That the act does not specify that only sales for resale to the ultimate consumer within the corporate limits of the municipality may be taxed and that, therefore, the municipality may tax sales at one level when the sale to the consumer is made outside its jurisdiction.

At the outset it appears the appellants have confused the type of uncertainty which is objectionable in legislation with that uncertainty which must naturally result from eventual possible variations in the exercise by different municipalities of a delegated power. In the objectionable sense, uncertainty is inherent in the enactment itself, resulting from inconsistencies or ambiguities or indefiniteness in the language used, so as to make it impossible to determine and effectuate the legislative intent. See State ex rel. Salazar v. Humble Oil & Refining Co., 1951, 55 N.M. 395, 234 P.2d 339; In re Mares, 1938, 42 N.M. 556, 82 P.2d 786; Continental Oil Co. v. City of Santa Fe, 1918, 25 N.M. 94, 177 P. 742, 3 A.L.R. 398.

Of the propositions urged, only the first fairly raises any question of uncertainty in the objectionable sense, and we are unable to give to section 1 of the act the conflict in meaning contended for. This section and the entire body of the act contemplate and empower the municipalities to impose but a single tax, as is evidenced by the repeated use of the word 'tax' in singular form and meaning. If there were any doubt as to the intention of the legislature on this question, we have an express limit upon the maximum amount of tax to be imposed on a given package of cigarettes set forth in section 1. That the municipalities are given power thereunder to levy the tax where and in the manner they see fit does not empower them to place it at once upon all levels of sale, and only by strained construction of the act do appellants maintain this argument.

The fallacy of the argument under the second proposition, that the act is uncertain because there may be as many as forty different tax levies and methods of collection in as many municipalities, is best demonstrated by carrying the argument only one step further--to say that the act is uncertain because it is unknown whether all of the municipalities will take advantage of the power to levy the tax. What we are here concerned with is a delegation of power to tax and whether that grant is certain, not whether the particular or ultimate effects of the act are specified in or predictable from the act. In State ex rel. Clancy v. Hall, 1917, 23 N.M. 422, 168 P. 715, 719, we recognized that enabling legislation is 'necessarily couched in general terms'. If each legislative enactment had to be so complete as to be virtually selfexecuting, and if municipalities were to be allowed no discretion or flexibility in the exercise of their delegated powers to meet the variances of communal existence, an important part of our governmental machinery would be effectively hobbled. We know of no rule of law that an act such as is before us may be struck down solely because the taxpayer may be inconvenienced in meeting the requirements of the various municipalities.

Nor do we view it necessary that the act specify whether the burden of the tax may or may not be passed to the consumer. The concern of the legislature is to grant to the municipalities power to levy and prescribe the manner for collection of a tax upon the sale of cigarettes. If this power is effectively granted, the municipality may act within the limits of the law, insofar as the legislature itself could act. This principle applies to the fourth proposition urged by appellants, that the act does not provide that only sales for resale to the ultimate consumer within the corporate limits of the municipality may be taxed. This again is a matter properly left to the determination of the body to whom power is delegated. It is given power 'to fix and have collected a tax upon the sale of cigarettes sold within the limits of such municipality'. The term 'sale' is not defined in the act, and must be held to have been employed by the legislature in its ordinary sense. As defined in Webster's New International Dictionary (2d Ed.), its meaning in law is: 'Act of selling; a contract whereby the absolute, or general, ownership of property is transferred from one person to another for a price, or sum of money * * *' That a sale is not limited by considerations of 'consumption' would seem to need no argument. If the municipality chooses to exercise its power to 'fix and have collected a tax upon the sale of cigarettes' at some level above the ultimate consumer, who might purchase his cigarettes outside the limits of the municipality, there is no restriction...

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