Bellington v. East Windsor Tp.

• Decision Date: 14 March 1955
• Docket Number: No. A--93,A--93
• Citation: 112 A.2d 268,17 N.J. 558
• Parties: William BELLINGTON, John J. Clark and Elizabeth Clark, partners trading as East Windsor Trailer Park, and John Brown, Plaintiffs-Appellants, v. TOWNSHIP OF EAST WINDSOR, a municipal corporation, Defendant-Respondent.
• Court: New Jersey Supreme Court

Page 558

17 N.J. 558

112 A.2d 268

William BELLINGTON, John J. Clark and Elizabeth Clark partners trading as East Windsor Trailer Park, and John Brown, Plaintiffs-Appellants, v. TOWNSHIP OF EAST WINDSOR, a municipal corporation Defendant-Respondent.

No. A--93.

Supreme Court of New Jersey.

Argued Jan. 31, 1955.

Decided March 14, 1955.

Milford Salny, Netcong, for appellants.

Henry F. Satterthwaite, Trenton, for respondent (Satterthwaite & Satterthwaite, Trenton, attorneys).

The opinion of the court was delivered by

HEHER, J.

We are concerned here with the legal sufficiency of a local ordinance to 'license and regulate' trailer camps and camp sites within the municipality, adopted May 6, 1953.

The ordinance is essentially regulatory directed to the problems peculiar to trailer camps and camp sites. It embodies measures related to the provision of potable water and adequate sanitary facilities, overcrowding, the disposal of garbage, ashes and waste matter, the maintenance and use of cesspools, septic tanks and plumbing fixtures, the lighting of the camp grounds and toilet facilities, drainage, grading, the observance of health practices and the requirements of law and good order. It prescribes a 'license fee' of $200 per annum for a 'trailer camp or camp site' and $2 'per calendar week per trailer,' reduced to $1 for 'any trailer parked in a camp three days or less,' which 'said fee is hereby expressly declared to be imposed for revenue'; and this 'license fee' is denounced 'as enacted for purposes of taxation, not regulation,' and 'prohibitory and confiscatory,' yet severable from the 'regulatory and administrative' provisions of the ordinance which stand unchallenged.

The contention of Pro tanto invalidity was overruled by the Law Division of the Superior Court, and the Appellate Division affirmed the judgment. 32 N.J.Super. 243, 108 A.2d 179 (1954). The case is here under Article VI, section V, paragraph 1(a) of the 1947 Constitution, providing for an appeal of right in cases involving a substantial and not merely colorable constitutional question. See State v. Pometti, 12 N.J. 446, 97 A.2d 399 (1953).

The argument is that the 'municipal purpose, in adopting the license fee provisions, was to impose a tax,' and a license fee 'imposed as a tax is equally bad, standing alone or accompanied by separable regulatory provisions.' And this 'notwithstanding the language' of R.S. 40:52--2, N.J.S.A., on the authority of Salomon v. Jersey City, 12 N.J. 379, 97 A.2d 405 (1953). But the Salomon case does not go so far.

It cannot be gainsaid that a business, occupation or activity having a potential for harm to the public weal in matters of health, safety, morals, or property is the subject of reasonable regulation to obviate or eradicate the inimical influence; and tourist or trailer camps are by their very nature in this category. This is but the exercise of the police power to a legitimate public end.

In New Jersey such regulation is a municipal function by legislative grant. Under R.S. 40:52--1(d), as amended by L.1948, c. 425, N.J.S.A., the local governing body 'may make, amend, repeal and enforce ordinances to license and regulate: (d) * * * trailer camps and camp sites, * * *.' And the next succeeding section, R.S. 40:52--2, N.J.S.A., empowers these local agencies of government to 'fix the fees for all such licenses, which may be imposed for revenue, * * *.'

In Edwards v. Mayor & Council of the Borough of Moonachie, 3 N.J. 17, 68 A.2d 744 (1949), we sustained, as within this statutory power, a local ordinance which combined both police and tax measures. And in Independent Warehouses, Inc., v. Scheele, 134 N.J.L. 133, 45 A.2d 703 (E. & A.1946), affirmed 331 U.S. 70, 67 S.Ct. 1062, 91 L.Ed. 1346 (1947), the sale of coal storage service was the business regulated and taxed by local ordinance under the same grant of power. The statute, R.S. 40:52--1(g)--2, was there held to concern 'a license or privilege tax or excise levied for both revenue and regulation under the police power * * *.' The statutorily-provided 'license' was defined as 'a means of regulating and taxing privileges and occupations and the use and disposal of property,' a power contained within reasonable bounds and subject in its exercise to the basic principle interdicting 'confiscation and oppression under the guise of taxation.'

Salomon v. Jersey City is differentiable. There, the question decided was whether 'the selfsame statute delegated to municipalities legislative jurisdiction to 'impose solely for revenue purposes, license taxes upon all businesses operating within their borders, including manufacturers, wholesalers and retailers,' a power distinct in attribute and incidence. The local action reviewed was an ordinance 'establishing licensing requirements for businesses having a situs in the City.' It was devoid of regulatory features; indeed, it did not purport to be regulative, but was concededly a taxing measure designed to raise annual revenues of $3,000,000. Wholesalers and retailers were made subject to license fees measured by gross receipts; manufacturers, by their payrolls; truckers, by the square footage of space occupied by their truck terminal. There were other classifications. But we need not go on. It suffices to say that this was a general revenue measure, in no sense involving regulation for police purposes or otherwise; there was no pretense of regulation. Justice Jacobs said, and this is the rationale and interpretive principle of the decision: 'It is purely a taxing measure without any regulatory aspects whatever and is made applicable to all businesses, including those clearly having inter-municipal and interstate aspects such as manufacturers, and with varying tax bases including gross receipts, payrolls and square footage,' and so not within the enabling act cited supra. In the light of the history and long-continued usage the nature of the subject matter, and the acts In pari materia, it was deemed that the 'primary and overriding' legislative purpose was 'to authorize municipalities to license and regulate as police measures for the public health, safety, morals or welfare, the local businesses described therein, and only incidentally to impose on the businesses thus licensed and regulated license fees for revenue which may, at least within reasonable limits, exceed the regulatory costs.'

In a word, the enabling statute is not a general municipal tax measure, as an end in itself, but is in essence a regulative police mechanism directed to the service of the public need in the particular area of governmental action by control theough license and a license fee which may also, within reasonable bounds, be imposed for revenue as an incident of the police regulation, and by the same token a fee reasonably related to the regulated subjects and the public ends to be served.

There is a basic distinction between a local legislative act primarily regulative of a business, trade, profession, or calling in the exercise of the police power to serve the common need and the use of the delegated power to tax the pursuit for revenue. In the first case the license fee is ordinarily the means of defraying the expense fairly attributable to the regulative process, while the broader sovereign power to tax for revenue to serve a public purpose of a general nature is confined by constitutional limitations, the terms of the grant itself, and the rule of reason and good discretion. Independent Warehouses, Inc., v. Scheele, supra; Jersey City v. Martin, 126 N.J.L. 353, 19 A.2d 40 (E. & A.1941); Eastern Pennsylvania Power Co. v. State Board of Taxes, 103 N.J.L. 281, 135 A. 677 (Sup.Ct.1927); Muhlenbrinck v. Long Branch Commissioners, 42 N.J.L. 364 (Sup.Ct.1880). See also Pennsylvania Liquor Control Board v. Publicker Commercial Alcohol Co., 347 Pa. 555, 32 A.2d 914 (Sup.Ct.1943).

The assessment of the cost of a license and the ensuing governmental supervision and control is sustained by the correlative benefits to the public. Alabama Power Co. v. Federal Power Commission, 75 U.S.App.D.C 315, 128 F.2d 280 (1942), certiorari denied 317 U.S. 652, 63 S.Ct. 48, 87 L.Ed. 525 (1942). A license tax for revenue represents an exercise of the general taxing power. Thus, one is differentiated from the other, although the license fee for regulation alone also has the connotation of a tax as a charge on the business or pursuit for the cost of supervision in the public interest. See Spencer v. Maryland Jockey Club of Baltimore City, 176 Md. 82, 4 A.2d 124, 479 (Ct.App.1939); Lamere v. City of Chicago, 391 Ill. 552, 63 N.E.2d 863 (Sup.Ct.1945); In re Opinion of Justices, 250 Mass. 591, 148 N.E. 889 (Sup.Jud.Ct.1925); Maryland Theatrical Corp. v. Brennan, 180 Md. 377, 24 A.2d 911 (Ct.App.1942); City of Buffalo v. Lenn, 192 N.Y. 193, 84 N.E. 809 (Ct.App.1908); Conard v. State, 2 Terry 107, 41 Del. 107, 16 A.2d 121 (Sup.Ct.1940). The powers are essentially different: one is to license and regulate under the police power; the other, to raise revenue under the general power to tax. But the two may be 'unitedly exercised.' Becker v. Pickersgill, 105 N.J.L. 51, 143 A. 859 (Sup.Ct.1928). See City of Chicago v. R. & X. Restaurant, 369 Ill. 65, 15 N.E.2d 725, 117 A.L.R. 1313 (Sup.Ct.1938). And the assessment may still constitute a license fee proper rather than a tax for revenue even though the fee charged be in excess of the regulatory expenses and burdens. Where the primary object is police regulation, it does not necessarily matter that the incidental result is revenue above the actual cost of supervision and control of the business; that is not enough to render the return a tax for revenue rather than a license tax; E contra, where revenue is the principal objective of the tax, it is not sustainable under...