Cary v. City of Bellingham, 32091
| Decision Date | 13 November 1952 |
| Docket Number | No. 32091,32091 |
| Parties | CARY, v. CITY OF BELLINGHAM. |
| Court | Washington Supreme Court |
Joseph T. Pemberton, Bellingham, for appellant.
Walthew, Gershon, Oseran & Warner, Seattle, for respondent.
October 4, 1951, the city of Bellingham adopted ordinance number 6784.
The ordinance, among other things, required that all employees within the city of Bellingham secure a yearly license. It levied a tax, based upon one-tenth of one per cent of gross income, revenues, receipts, and commissions, on all persons receiving compensation for services performed within the city.
November 2, 1951, the plaintiff commenced this action against the city, alleging that he was 'a resident and wage earner in the city of Bellingham,' and that ordinance number 6784 was unconstitutional for various reasons set forth. The prayer of the complaint recited:
'(2) That the defendants * * * be required to show cause * * * why a temporary injunction should not issue against defendants * * * from enforcing, as against this plaintiff and all others similarly situated, the said ordinance No. 6784. * * *
'(3) That upon the trial of the merits of this cause, a permanent injunction issue against said defendants * * * restraining them from enforcing, as against plaintiff and others similarly situated, said ordinance, or any portion thereof.'
The same day an order was entered directing the defendant city to show cause on November 16, 1951, why a temporary injunction should not issue enjoining defendant from enforcing the ordinance during the pendency of the action.
On November 30, 1951, the city filed a general demurrer. Although the record does not disclose it, the return day upon the show cause order for a temporary injunction was apparently continued until November 30, 1951, when the show cause order, and the demurrer, were argued and submitted to the court.
Upon that day, the following took place:
'Mr. Oseran: [for plaintiff] If Your Honor please, in this action the hearing was originally scheduled on an order to show cause issued at the instance of the plaintiff, an order to show cause directed to the City and other defendant why a temporary injunction should not issue restraining the enforcement as against the plaintiff of an ordinance of the City of Bellingham. Subsequent to the order to show cause a demurrer was interposed by the defendants to the complaint and to the order to show cause. Counsel for the City and I for the plaintiff both agree that the demurrer is the matter that should be heard and that will probably resolve the entire issue. That being the case, I assume you should argue first.
'Mr. Pemberton [for the city]
That's right. * * *'
Having taken the matter under advisement, the trial court filed its memorandum opinion December 5, 1951.
On December 17, 1951, the trial court entered a 'Judgment Overruling Demurrer and Granting Permanent Injunction.' Thus, the court entered judgment against defendants, permanently enjoining the enforcement of the ordinance against any persons receiving compensation in 'salary, wages, commissions, bonuses, incentive payments and/or other forms of compensation' within defendant city. Although service of the judgment was accepted by counsel for the city, it was not approved as to form.
By its first assignment of error, appellant urges that the trial court erred in overruling the demurrer to respondent's complaint. Although respondent has pleaded five separate reasons why the ordinance is claimed to be unconstitutional, it is not necessary, at this stage of the proceeding, that we discuss and analyze all of them. Our province is to test the sufficiency of the complaint. If it states a cause of action upon any theory, the demurrer must be overruled.
The complaint alleges:
'The City of Bellingham has no power to license or refuse to license plaintiff for working for a living and earning wages within the said city, and having no power to license at all, has no power to license for revenue.'
Section 10 of the ordinance provides:
'* * * no person whether subject to the payment of a tax or not, shall engage in any business or activity in the City of Bellingham for which a license fee or tax is imposed by this ordinance without having first obtained and being the holder of a valid subsisting license so to do, * * * and without paying the license fee or tax imposed by this ordinance, and in addition the sum of One Dollar ($1.00), as a license fee which shall accompany the application for the license.'
The persons subject to the license fee and tax are defined in section 3 of the ordinance. Insofar as respondent is concerned as a 'wage earner,' it provides:
'On and after the effective date of this ordinance, there is hereby levied * * * [a tax] * * * (f) Upon every person engaging within the City in any activity, receiving compensation in salary, wages, commissions, bonuses, incentive payments and/or other forms of compensation * * * the amount of the tax on account of such activities shall be equal to the gross income of such person so received, multiplied by the rate of one-tenth of one per cent; * * *.'
The sole purpose of the ordinance is found in section 1.
'The provisions of this ordinance shall be deemed an exercise of the power of the City of Bellingham to license for revenue.'
The appellant in its brief states that:
'* * * the only question involved is whether the activity of working for salaries or wages may be reached by the city's excise tax.'
In determining that the classification was not arbitrary when a business and occupation tax covered those engaged in a business activity and excluded those performing the same activity as employees, we have recognized an inherent, fundamental difference between one engaged in business for himself and one who is simply employed by others.
In State ex rel. Stiner v. Yelle, 174 Wash. 402, 25 P.2d 91, we said:
'It needs no argument to demonstrate that the wage-earner is properly excluded and that upon no theory can he be classed with those engaged in business.' 174 Wash. at page 411, 25 P.2d at page 94.
In Supply Laundry Co. v. Jenner, 178 Wash. 72, 34 P.2d 363, we approved the distinction...
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