City of Central v. Axton

• Decision Date: 09 July 1962
• Docket Number: No. 19977,19977
• Parties: The CITY OF CENTRAL, a municipal corporation, Plaintiff in Error, v. William L. AXTON, individually, and doing business as the Glory Hole Tavern, Defendant in Error.
• Court: Colorado Supreme Court

Page 300

373 P.2d 300

150 Colo. 414

The CITY OF CENTRAL, a municipal corporation, Plaintiff in Error, v. William L. AXTON, individually, and doing business as the

Glory Hole Tavern, Defendant in Error.

No. 19977.

Supreme Court of Colorado, En Banc.

July 9, 1962.

Albert B. Dawkins, City Atty., Denver, for City of Central.

Fugate, Mitchem, McGinley & Hoffman, Richard L. Whitworth, Denver, for defendant in error.

SUTTON, Justice.

This writ of error involves the question of whether the City of Central was authorized under its charter to enact an ordinance imposing an occuaptional tax on the business of William L. Axton. The parties are here in the same order as in the trial court where the City was plaintiff and Axton defendant. We will so refer to the parties

The City was incorporated by virtue of a charter granted by the Territorial Legislature in 1864. Under C.R.S. '53, 139-1-1, a city or town incorporated previous to July 3, 1877, can choose to retain its charter organization and operate in accordance therewith; or under C.R.S. '53, 139-8-1, can choose to reorganize under the general statutes pertaining to cities and towns. The City has chosen to retain its charter and such charter is the sole source of authority under which it operates.

Article V of the City's charter provides in pertinent part that the city council shall have authority:

'Sec. 17. To license, tax and regulate auctioneers, merchants, peddlers retailers, grocers, taverns, ordinaries, hawkers, brokers, pawnbrokers, and money changers.'

Pursuant to the above charter provision the city council on March 1, 1957, enacted Ordinance No. 133 entitled 'An Ordinance Establishing An Occupation Tax In and For The City of Central.' The ordinance provides in pertinent part as follows:

'Section 1. License Required. It shall be unlawful for any person, firm or corporation to carry on or engage in any business, profession or occupation within the city limits of the City of Central which business, profession or occupation shall involve any of the following activities, without having first paid unto the Clerk of the City of Central the amount specified herein, and having obtained from said Clerk a receipt or license setting forth the occupation, business or profession for which, said fee has been paid, the year for which said fee has been paid, and the amount so paid. Such receipt or license shall be kept at the place of business at all times.

'A. The sale of alcoholic beverages for consumption on the premises, provided for one bar or service bar in one room the fee shall be $100.00, and for each additional bar or service bar or room in which such beverages are served and sold in the same premises an additional $50.00 shall be paid.

* * *

* * *

'C. Restaurants not licensed by the State of Colorado to sell alcoholic beverages, $100.00 for the first room and $50.00 for each additional room.

'D. All other restaurants, $50.00.

'Section 2. More than one business. Any store, shop, office or place of business in which more than one of the above businesses, occupations or professions is carried on shall have paid and have receipts or licenses for each such business.

'Section 3. When Payable. The above license fee or tax shall be payable January 1 each year * * *.

'Section 4. Violation--Penalties. The violation of the above provisions shall subject the offender to a civil action for recovery of up to three times the amount of the fee, and the City of Central shall be entitled to recover its costs and reasonable attorney's fees as a part of the judgment.

'Section 5. Should any portion or portions of this ordinance be found unconstitutional, the remaining portions shall remain in full force and effect.

'Section 6. All ordinances and parts of ordinances in conflict herewith are hereby repealed.

'Section 7. The City Council finds that this act is necessary for immediate protection and preservation of the public health and safety, convenience and general welfare, and it shall be in full force and effect immediately after its passage and final publication.'

The defendant Axton operates a business in the City known as the Glory Hole Tavern. The premises on which this business is operated consists of a room containing a bar and tables, and an adjoining room containing a service bar and additional tables. In both rooms alcoholic beverages and food are sold by Axton to patrons. On April 15, 1960, Axton received notice from the City of an occupational tax levy of $200.00 for the year 1960. Upon Axton's subsequent refusal to pay the tax the City brought this action. Its complaint alleged, inter alia, that although failure to pay the occupational tax entitled the City to recover three times the amount of the tax plus reasonable attorney's fees and costs, the City was only claiming the sum of $300.00. After various proceedings not pertinent to this writ of error the county court on June 20, 1961, entered findings of fact and conclusions of law in which the court found that Axton 'conducts a restaurant and incidentally sells liquor by the drink or conducts a tavern, which incidentally sells food' and that 'the Charter does not give express authority to tax either.' The complaint was accordingly dismissed and a motion for a new trial denied.

The sole issue for determination here is whether the City is authorized by its charter to impose an occupational tax on Axton's business. In their briefs both parties raise additional issues pertaining to the constitutionality of the ordinance under which the tax in question was imposed. The arguments addressed to these constitutional issues proceed from the assumption that the charter did confer authority upon the City to tax the type of business conducted by Axton. Although these issues were also raised at the trial, the court refrained from passing...