City of Independence v. Hindenach

• Decision Date: 10 October 1936
• Docket Number: 33008.
• Citation: 144 Kan. 414,61 P.2d 124
• Parties: CITY OF INDEPENDENCE v. HINDENACH.
• Court: Kansas Supreme Court

61 P.2d 124

144 Kan. 414

CITY OF INDEPENDENCE v. HINDENACH.

No. 33008.

Supreme Court of Kansas

October 10, 1936

Syllabus by the Court.

Under statute authorizing cities to license for purpose of regulation or revenue occupations which are not exclusively reserved to state or county as objects of taxation or regulation, city of second class held authorized to impose occupation tax on dentists practicing within city limits notwithstanding that dentists were licensed and regulated by state board, since regulation by state did not necessarily include revenue or taxation purposes (Rev.St.Supp.1933 12--1650, 65--1404, 65-- 1406a).

Under statute, city held entitled to maintain civil action for collection of license fee imposed on dentist within city (Rev.St.Supp. 1933, 12--1650).

Action to determine validity of ordinance imposing occupation tax under statute held "case involving tax or revenue law" within statutory exception to limitation on right of appeal to Supreme Court that amount in controversy must exceed $100 (Rev.St.Supp.1933, 12--1650; Rev.St.1923 60--3303).

Practice of profession by dentist within corporate limits of city in open violation of ordinance imposing occupation tax, would be enjoinable on showing that dentist's continued refusal to comply with ordinance encouraged others to violate ordinance thereby depriving city of necessary income, and constituting nuisance (Rev.St.Supp.1933, 12--1650).

In action for declaratory judgment to determine controversy between city and dentist charged with occupation tax involving interpretation of statute authorizing imposition of tax and ordinance imposing tax, other persons belonging to same profession and similarly charged with tax held not necessary parties (Rev.St.Supp.1933, 12--1650; Rev.St. 1923 60--3127).

1. An ordinance of a city of the second class, which imposes an occupation tax on dentists practicing that profession within the limits of such city, is not invalid because by statute the members of that profession are licensed and regulated by a state board, for the reason that the statute authorizing cities of the second class to impose such occupation tax, R.S.1933 Supp. 12--1650, provides for both regulation and revenue, but in the alternative, so that regulation by the state does not necessarily include revenue or taxation purposes nor exempt members of that profession from the city occupation tax.

2. Where the statute which authorizes a city of the second class to impose an occupation tax further provides that the city "shall fix the amount of all license fees and provide for their collection," a civil action for the collection of such fees may be maintained by the city.

3. Where the validity or invalidity of a city ordinance imposing an occupation tax must be determined by the construction given to the requirements, limitations, and the extent of the provisions of a certain statute authorizing the enactment of such ordinance, the matter becomes a case involving a tax or revenue law, which is an exception to the $100 limitation in R.S. 60--3303 limiting the right of appeal to this court.

4. Under the declaratory judgment proceeding in this state where a real controversy exists between a city and one charged with an occupation tax, which controversy involves the interpretation of a statute and a municipal ordinance, others belonging to the same profession and similarly charged with such tax are not necessary parties to the action.

Appeal from District Court, Montgomery County; Joseph W. Holdren, Judge.

Action by the City of Independence, Kansas, against L. A. Hindenach. Judgment for defendant, and plaintiff appeals.

Reversed, with directions.

Chester Stevens and W. D. Kimble, both of Independence, for appellant.

Harold Medill, of Independence, for appellee.

HUTCHISON Justice.

This action involves the question of the validity of an ordinance of a city of the second class which attempts to impose an occupation tax upon a dentist practicing his profession within the limits of the city. Other questions involved are the right of the city to maintain a civil action to collect such occupation tax, its right to appeal to this court when the total amount involved is less than $100, its right to maintain an action for injunction against the defendant dentist to restrain him from pursuing the practice of his profession until his occupation tax is paid, and its right to maintain an action for a declaratory judgment upholding the validity of the ordinance.

The petition contains six counts. The first four are each for the recovery of the occupation tax for a period of six months in the sum of $5.50 covering the period of two years immediately prior to the commencement of the action, making a total sum of $22. The fifth count sets forth plaintiff's reasons for maintaining an equitable action and asking for an injunction, and the sixth count alleges the existence of an actual controversy between the city and the defendant dentist and asks for a declaratory judgment as to the validity of the ordinance. The defendant filed demurrers to each of the six separate causes of action, which demurrers were sustained by the trial court, and the city appeals from that ruling.

The appellant does not contend that the city of Independence, being a city of the second class, has an inherent right to pass an ordinance imposing an occupation tax on dentists or those engaged in other professions or occupations, but that such right is given it by statute. Neither does the defendant dentist contend that the dental profession is not included in Ordinance No. 1919 passed by the city council of Independence, nor that it was not the intention of the council to so include it, but maintains that there is no legislation authorizing the passing of such an ordinance. Section 11 of Ordinance No. 1919 of the plaintiff city, which became effective January 1, 1926, is as follows:

"Section 11. Each person engaged in the following named professions or occupations, shall pay a license tax,

"Six months ...$5.50

1. Architect.

2. Accountant.

3. Abstractor.

4. Dentist.

5. Doctor.

6. Geologist.

7. Lawyer.

8. Optometrist.

9. Veterinarian."

The statute about which the contention arises in this action, as to its giving or not giving authority to the city to pass such an ordinance and to impose such a tax is R.S. 1933 Supp. 12--1650, and is as follows: "That the governing body of any city of the second or third class shall have the power by ordinance to classify and license for purpose of regulation or revenue any and all occupations, businesses or professions pursued, conducted or carried on within its corporate limits which are not prohibited by law or which are not or shall not be specifically or exclusively reserved to the state or county as objects of taxation or regulation, subject to the constitution and laws of this state, and shall fix the amount of all license fees and provide for their collection and prescribe penalties for the nonpayment thereof."

The position the defendant takes is that his profession is regulated by the state, and the state has reserved to itself the exclusive right to regulate the practice of dentistry in Kansas, and therefore the members of that profession are exempt from and are not subject to the imposition of an occupation tax by a city ordinance. R.S.1933 Supp. 65--1404 requires all persons desiring to engage in the practice of dentistry before beginning such practice to apply to the state board of dental examiners and obtain a license for such purpose, and R.S. 1933 Supp. 65--1406a requires that such licensed dentist shall thereafter annually before the first day of December pay to the state board the sum of $1 and if that is not paid his license will be revoked. There can be no question but that the profession of dentistry is regulated by the state, but does that exempt the members of that profession from the payment of occupation tax to the city?

The defendant insists, and the trial court concluded, that the exclusive regulation of the profession by the state exempts it under the statute from the payment of occupation tax to a city. Defendant cites cases showing that this regulation of the practice of dentistry extends to and includes professional and personal conduct for years after one is licensed, and argues that such regulation necessarily includes all revenue matters and excludes any right of a city to impose or collect an occupation tax. It will be observed that the language of the statute here considered, R.S.1933 Supp. 12--1650, is in the alternative as to regulation and revenue. The city has authority under this statute to classify and license for the purpose of regulation or revenue all occupations which are not prohibited or which are not specifically or exclusively reserved as objects of taxation or regulation. The argument that regulation includes taxation makes the use of the word taxation in the statute unnecessary and superfluous.

Chief Justice Johnston in the case of Duff v. Garden City, 122 Kan. 390, at page 392, 251 P. 1091, 1092, distinguished between the terms "occupation tax" and "license fee" as follows:

"The question of whether or not the city ordinance is in conflict with the state law depends largely upon whether the charge is occupation tax or a license fee--whether it is a revenue measure wholly or in substantial part regulatory. If it is an occupation tax, it is not within the prohibition of the statute cited, but, if it is wholly or in part a license fee, regulatory in character, it conflicts with the statute and is invalid. ***

"A regulation charge is one exacted for a privilege or as a condition precedent to the carrying on of the business, and is an exercise of the police power, while

...