Brown v. Cheney

• Decision Date: 02 October 1961
• Docket Number: No. 5-2446,5-2446
• Citation: 233 Ark. 920,350 S.W.2d 184
• Parties: W. Jake BROWN d/b/a Tia Wanna and Lynn Farr d/b/a Central Music Company, Appellants, v. J. Orville CHENEY, Commissioner of Revenues, Appellee.
• Court: Arkansas Supreme Court

Page 184

350 S.W.2d 184

233 Ark. 920

W. Jake BROWN d/b/a Tia Wanna and Lynn Farr d/b/a Central

Music Company, Appellants, v. J. Orville CHENEY, Commissioner of Revenues, Appellee.

No. 5-2446.

Supreme Court of Arkansas.

Oct. 2, 1961.

Rehearing Denied Nov. 6, 1961.

D. D. Panich, Little Rock, for appellants.

Lyle Williams and Glenn F. Walther, Little Rock, for appellee.

WARD, Justice.

Appellants Brown, a citizen and resident of this state, owns and operates a supper club in Little Rock. Appellant Farr, a citizen and resident of Texas, owns and operates the Central Music Company in Texarkana, Arkansas. Brown owns, and operates in connection with his business, one 'juke box' or record playing machine into which the customers insert a coin. Farr owns several 'juke boxes' and pinball machines which he leases to different persons for use in this state. In this litigation we are concerned only with 'juke boxes' or music vending machines. Ark.Stats. § 84-2604 imposes a 'privilege tax' of $5 on 'each music vending phonograph' to be paid annually by the owner to the Commissioner of Revenues. This tax is not here challenged by appellants.

In 1959 the legislature passed Act 120 (Ark.Stats. §§ 84-2622 to 84-2632). Section 84-2622 declares the owning, operating or leasing of 'coin operated amusement devices' to be a privilege, and that such owners, operators or lessors shall pay a fee for such privilege in addition to the $5 on each machine mentioned above. Section 84-2623 provides that no one can secure such a privilege license unless, among other things, he has been a resident of this state for at least one year. The section following fixes an annual license fee of $250. Section 84-2628 requires the licensee to keep certain records (available to the Commissioner) relative to a determination of sales taxes. Section 84-2632 requires a $3,000 bond by each applicant 'to insure the faithful and prompt payment of all sales tax * * *' etc.

When Appellee, Commissioner of Revenues, let it be known that the tax would be imposed on appellants, they filed suit in Chancery Court for a declaratory judgment to invalidate said Act 120 on the grounds that it is unconstitutional and 'in violation of constitutional rights of plaintiffs and other taxpayers similarly situated * * *.'

Appealing from an adverse decree, appellants urge a reversal on the grounds that: (a) The Act is arbitrary, discriminatory, confiscatory, and against the police powers of the state; and, (b) The Act is in violation of certain provisions of the State and Federal Constitutions.

(a) In trying to determine whether Act 120 is arbitrary and confiscatory, etc. the first interesting question presented is whether owning and operating a coin-operated music machine is a privilege--i. e. whether the legislature can so declare it. In their brief appellants make this statement: 'It is admitted the operation of music vending machines falls within the class commonly referred to as a privilege, that reasonable taxes can be imposed, but not such taxes and regulations as will be oppressive, arbitrary, discriminatory or confiscatory, such as are included in Act 120.' (Emphasis added.)

Despite the above admission, we think the question should be examined further. On first impression it might appear that a 'juke box' is harmless, and that its owner should be allowed to play it as a common right, but there are other things to be considered. It is common knowledge that coin operated 'juke boxes' are not usually placed in the home, but are frequently used in dance halls, drinking places, and amusement spots. Pinball machines, the operation of which is conceded to be a privilege and so declared by statute and this Court, can also be used and operated in a perfectly harmless way, but by association and abuse they often lead to unwholesome results. The legislature, in regulating 'juke boxes' had a right to take all these things into consideration. In the case of White, County Treasurer v. Adams, 1961, 233 Ark. ----, 343 S.W.2d 793, 794, which upheld Act 48 of 1945 placing a tax of $100 a week on fortune tellers, we said:

'The lawmakers are entitled to believe that no human being has the power of foretelling future events and that therefore fortune telling may be a fraudulent means of preying upon the ignorant, the superstitious, and the gullible. Consequently it has been uniformly held that the state, in the exercise of its police power, may constitutionally prohibit fortune telling altogether.'

One of the best definitions of police power of which we are aware is found in Hinebaugh v. James, Tax Com'r, 119 W.Va. 162, 192 S.E. 177, 178, 112 A.L.R. 59. It reads:

'The police power of a state is an attribute of sovereignty, co-extensive therewith, difficult of definition because it cannot be circumscribed by mere words, latent in its nature, yet, nevertheless, perennially existing as a vast reservoir of authority to be drawn on by the law-making branch of the government for the public good. Within constitutional limits, the police power may be exercised to promote the safety, health, morals, and general welfare of society.'

We are inclined to the view that in the case before us the legislature did not exceed constitutional limitations in its effort to protect the morals and general welfare of society. This view is strengthened by the presumption that said Act 120 is constitutional. See State v. Hurlock, 185 Ark. 807, 49 S.W.2d 611, and Miller Levee District No. 2 v. Evers, Collector, 200 Ark. 53, 137 S.W.2d 915.

Having concluded that we are here dealing with a privilege, it must be concluded that the legislature has great latitude in regulating it. Article 16, § 5 of the State Constitution first deals with uniformity of taxation and then says: '* * * the General Assembly shall have power from time to time to tax * * * privileges, in such manner as may be deemed proper.'

Conceding, as contended by appellants, that the legislature under the above quoted section cannot impose a tax that is arbitrary or confiscatory, we still think Act 120 must be sustained. The Act is not arbitrary because there are good reasons, mentioned in the Act, why the legislature needed the required information for the purpose of collecting sales taxes and use taxes. Nor do we find the Act to be confiscatory. Although Brown owns only one 'juke box' on which he must pay $250 each year, he is free to own as many as he likes without further charge. Also, the record reflects that Brown's income from the one box is in excess of $2,000 annually.

(b) As heretofore noted, Act 120 provides that no person can secure a license unless he has resided in Arkansas for at least one year. Farr is not a resident of Arkansas. It is appellants' contention that the residence requirement violates that part of Amendment 14 of the Constitution of the United States which states: 'No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States * * *.' We think this contention is without merit. In the first place the Amendment deals with citizenship while Act 120 deals only with residency, and the two words have entirely different meanings. Under the Act a citizen of this state would not be eligible for a license unless he had a residency of one year. The great weight of authority supports the validity of similar residence requirements where only a privilege is involved.

In the Hinebaugh case supra, the Court said: 'The purpose of the quoted language of the fourteenth amendment [same as heretofore] is to protect citizenship of the United States as distinguished from citizenship of the several states.' Further, in the same case, the Court said the language in the Amendment furnished an 'additional guaranty against encroachment by the states on those fundamental rights which belong to citizenship.' (Emphasis added.) In the cited case the Court upheld a residency requirement to distribute nonintoxicating beer in West Virginia. Also, in the cited case, the Court noted that: 'A West Virginia citizen residing beyond the state is not eligible * * *. Under this regulation citizens of other states are entitled to exactly the same privileges and immunities as are citizens of West Virginia.' (Emphasis added.) Numerous decisions point out the difference between 'resident' and 'citizen'. See Ullman v. State, 1 Tex.App. 220, 28 Am.Rep. 405; Wyman v. Wyman, D.C. Nev., 49 F.Supp. 952; Jeffcott v. Donovan, D.C. Ariz., 135 F.2d 213; La Tourette v. McMaster, 248 U.S. 465, 39 S.Ct. 160, 63 L.Ed. 362, and Hankins v. Spaulding, Com'r, 78 Idaho, 533, 307 P.2d 222.

It is significant we think that our legislature, without successful challenge, has many times favored residents over nonresidents in regulating certain privileges, such as: The manufacture and sale of wine (Ark.Stats. § 48-110); Retail beer dealers (§ 48-515); Fur dealers (§ 47-202); The taking of mussels (§ 47-601, subd. C.), and; The practice of optometry (§ 72-806).

Appellants' contention that Act 120 violates Article 2, §§ 2, 3, 18, 19 and 29 of the state Constitution has been examined and found without merit. Section 2 deals with inalienable rights--not with privileges; Section 3 refers to discrimination based on race or color; Section 18 refers to discriminations between citizens or class of citizens; Section 19 refers to monopolies, and; Section 29 deals with rights retained by the people. We are unable to see how any of the above sections are related to or are violated by Act 120.

It is our conclusion, therefore, that the decree of the trial court must be, and it is hereby affirmed.

ROBINSON and JOHNSON, JJ., dissent.

ROBINSON, Justice (dissenting).

As authority for the holding that the ownership of a coin operated music machine, which in fact is a very fine musical instrument costing over $1,500, is a privilege and taxable as such, the majority cite the case of White v. Adams, Ark., 343 S.W.2d 793, which is a...