City of Bolivar v. Ozark Utilities Co.

• Decision Date: 05 December 1945
• Citation: 191 S.W.2d 368,238 Mo.App. 860
• Parties: City of Bolivar, Missouri, Appellant, v. Ozark Utilities Company, a Corporation, Respondent
• Court: Missouri Court of Appeals

191 S.W.2d 368

238 Mo.App. 860

City of Bolivar, Missouri, Appellant, v. Ozark Utilities Company, a Corporation, Respondent

Court of Appeals of Missouri, Springfield District

December 5, 1945

Appeal from Circuit Court of St. Clair County; Hon. Dewey P. Thatch Judge.

Affirmed.

L Cunningham and Herman Pufahl for appellant.

Under the evidence and the admissions in this case there is but one issue, viz.: Did the city of Bolivar, Missouri, have power to enact the ordinance levying a tax on the defendant of five per cent of its gross revenue? The ordinance is not challenged in any other respect. The plaintiff had the right to enact the ordinance. The defendant was a merchant within the meaning of the law. Secs. 7196, 11303, R. S. Mo., 1939. The plaintiff had the right to control the use of its streets and to impose conditions under which the defendant could use its streets. Sec. 7197, R. S. Mo., 1939; State ex inf. v Telephone Co., 337 Mo. 642, 85 S.W.2d 613. The courts have recognized the right of municipalities to impose a reasonable charge as compensation for the space in its streets which is occupied by the operator of a public utility, or for the use of streets. The charge for the occupation of the street has been considered to be in the nature of rental, and not a tax. 44 C. J., sec. 3802, p. 997. A city of the fourth class has the right to enact an ordinance requiring a utility company to pay a per cent of its gross receipts to the city for the use of its streets. Lancaster v. Bugg & Melvin, 118 Mo.App. 570, 76 S.W. 314; City of Plattsburg v. People's Telephone Co., 88 Mo.App. 306, l. c. 313. In the case at bar, defendant's franchise expired. The city enacted an ordinance making a charge for the use of the streets after the expiration of the franchise. The defendant, after the enactment of the ordinance, continued to use the streets, thus creating an implied contract that it accepted the ordinance and would pay the charge. State ex rel. Sikeston v. Missouri Utilities Co., 321 Mo. 337, 53 S.W.2d 394.

Spencer & McPherson, R. K. McPherson and N. E. Jones for respondent.

The City of Bolivar is not empowered by charter provision or by statute to impose an occupation tax or license tax upon the defendant light company. Viquesney v. Kansas City, 305 Mo. 488, 266 S.W. 700; City of Ozark v. Hammond, 329 Mo. 1118, 49 S.W.2d 129; City of Lebanon v. Joslyn (Mo. Sup., 1933), 58 S.W.2d 289; Bloebaum v. Broeker, (Mo. App., 1928), 11 S.W.2d 81; Kansas City v. J. I. Case Threshing Machine Co., 337 Mo. 913, 87 S.W.2d 195; 37 Corpus Juris 168, sec. 3, et seq; Cooley's Constitutional Limitation (7 Ed.), p. 283; Mo. R. S. Ann., sec. 7440; Seimens v. Shreeve (Mo. Sup., 1927), 296 S.W. 415; City of St. Charles v. St. Charles Gas Co. (Mo. Sup., 1945), 185 S.W.2d 797. The defendant is not a merchant within the meaning of the law relating to occupation or license taxes. City of Ozark v. Hammond, 329 Mo. 1118, 49 S.W.2d 129; City of Lebanon v. Joslyn (Mo. Sup., 1933), 58 S.W. 289; Mo. R. S. Ann., sec. 7196; City of Kansas City v. Grush, 151 Mo. 128, 52 S.W. 286; City of St. Louis v. Spiegel, 75 Mo. 145; Id., 90 Mo. 587, 2 S.W. 839. The power of the City of Bolivar to regulate the use of its streets does not include the power to raise revenues thereby. Viquesney v. Kansas City, 305 Mo. 488, 266 S.W. 700; City of Lebanon v. Joslyn (Mo. Sup., 1933), 58 S.W. 289; City of Ozark v. Hammond, 329 Mo. 1118, 49 S.W.2d 129; Bloebaum v. Broeker (Mo. App., 1928), 11 S.W.2d 81; Kansas City v. J. I. Case Threshing Machine Co., 337 Mo. 913, 87 S.W.2d 195; 37 Corpus Juris on Licenses, pp. 169-170, secs. 6 and 7. There is no evidence of a contractual obligation on the part of the defendant to pay the City of Bolivar for the use of its streets, either by course of dealing, by estoppel or otherwise, and the City of Bolivar, not having pleaded or proved an estoppel, is precluded from attempting to avail itself thereof. St. Louis v. Laclede Power & Light Co., 152 S.W.2d 23 (S.Ct. of Mo., Div. 2); City of St. Louis v. Laclede Gas Light Co., 155 Mo. 1, 55 S.W. 1003; St. Louis v. Western Union Telegraph Co., 148 U.S. 92; City of Plattsburg v. People's Telephone Co., 88 Mo.App. 306; City of Lancaster v. Briggs, 118 Mo.App. 570, 96 S.W. 314; Bowers v. Kansas City Public Service Co., 328 Mo. 770, 41 S.W.2d 910; Laighton v. Carthage, 175 F. 145; City of Mexico v. Missouri Power & Light Co. (1932, Mo.), P. U. R. 1933 A, 1; United Fuel Gas Co. v. Railroad Commission (1929), 278 U.S. 300; Cleveland v. East Ohio Gas Co. (1929), 34 Ohio App. 97, 170 N.E. 586; 61 C. J. 68, sec. 3; Kinloch Telephone Company v. City of St. Louis, 268 Mo. 485, 188 S.E. 182.

Vandeventer, J. Fulbright, P. J., and Blair, J., concur.

OPINION

VANDEVENTER

The City of Bolivar, a city of the fourth class, on the 2nd day of November, 1943, by its Board of Aldermen, enacted an ordinance, providing that:

". . . any public utility company whose franchise for the use of the streets, avenues, alleys or other public places in the City of Bolivar, for the purpose of maintaining and operating its distribution system expires, shall, after such expiration and until this Ordinance is repealed or otherwise modified, pay to the City of Bolivar, as rental for such use thereof, five per centum (5%) of its gross monthly revenues derived from the sale of its product or services within the City of Bolivar, so long as it continues, after the expiration of such franchise, to use such streets, avenues, alleys or public places for such purpose."

The respondent, Ozark Utilities Company, was a corporation supplying the City of Bolivar with electrical energy. It had operated under a franchise prior to the 21st day of November, 1943, and after said date, continued to furnish light and power without any material change in conditions and was so doing at the trial of this case.

During the month beginning November 21, 1943 and ending December 21, 1943, the gross income of the respondent within the City of Bolivar was $ 4359.15; $ 4227.49 being for the sale of electrical energy and $ 131.66 for "Sales of Lamps, Appliances, Service Repairs, Material and Labor." If the ordinance above referred to was legal, and enforceable against respondent, the amount due the City by virtue of the ordinance would have been $ 217.96. These amounts were agreed upon by both parties at the trial.

Annually for ten years prior to November 21, 1943, the respondent had received and paid for a merchant's license from the City of Bolivar. Shortly after December 21, 1943, the City of Bolivar demanded that respondent pay the sum of $ 217.96, which, at all times, it refused to pay. This suit was brought by the City to recover that amount.

The trial court found for respondent and the City appealed. In its statement of facts in this court, appellant says:

"The decisive question in this case is the validity, or invalidity, of the ordinance levying the tax.

"If the City had authority to enact the ordinance and levy the tax, the judgment should be reversed and the cause remanded, or a proper judgment be made by this Court.

"If the City did not have authority to enact the ordinance and levy the tax, the judgment should be affirmed."

In paragraph one of its "Points and Authorities," Appellant says:

"Under the evidence and the admissions in this case there is but one issue, viz.: Did the City of Bolivar, Missouri, have power to enact the ordinance levying a tax on the defendant of five percent of its gross revenue? The ordinance is not challenged in any other respect."

At the close of the trial, the Abstract of the Record shows the following:

"By the Court: Now inasmuch as we haven't gone into the details of the proceedings of the City Council in the enactment of this ordinance, I presume the only question involved is the -- that is, with reference to the ordinance -- is the right of the city to pass and enforce such an ordinance.

"By Mr. McPherson: (for Respondent) That is correct, sir, that is the only issue in this case.

"By Mr. Cunningham: (for Appellant) We did offer in evidence, however, the vote of the city council on the passage of the ordinance and the signature of the ordinance and publication -- That was all gone into, but I don't think that is in issue.

"By the Court: That part is not being questioned by the defense, as I understand it.

"By Mr. McPherson: No, sir.

"By the Court: If the City Council had the power to pass such an ordinance, then the ordinance is admitted to be valid, otherwise, not."

So it would seem to have been agreed by all parties concerned, including the court, that the only question was, "Is the ordinance valid and enforceable against Respondent?"

The law is well settled in this State that a municipality has no inherent power to tax. This power rests in the State, primarily, and may be conferred upon a municipality by constitutional or statutory provisions. The grant must be specific and, in case of doubt, the power must be denied. This rule applies to all municipal corporations whether under special charter or general statute. [Siemens v. Shreeve, 296 S.W. 415, 317 Mo. 736; City of St. Charles v. St. Charles Gas Co., 185 S.W.2d 797; City of Lebanon v. Joslyn, 58 S.W.2d 289; City of Ozark v. Hammond, 49 S.W.2d 129, 329 Mo. 1118; Sec. 7440, R. S. Mo. Ann. 1939.]

In the case of City of St. Charles v. St. Charles Gas Co., supra, the Supreme Court said:

"But as to the latter point and in construing the city's charter, it must be kept in mind that a municipality possesses no inherent power to tax. If there is a doubt as to the delegation and existence of the power, the doubt must be resolved against the city, as the State's delegation of the authority to tax must be clear. [Siemens v. Shreeve, ...