City of Joplin v. Joplin Water Works Co., 50507

• Citation: 386 S.W.2d 369
• Decision Date: 08 February 1965
• Docket Number: No. 1,No. 50507,50507,1
• Parties: CITY OF JOPLIN, Missouri, a Municipal Corporation, Respondent, v. The JOPLIN WATER WORKS COMPANY, a Missouri Corporation, Appellant
• Court: Missouri Supreme Court

Page 369

386 S.W.2d 369

CITY OF JOPLIN, Missouri, a Municipal Corporation, Respondent, v. The JOPLIN WATER WORKS COMPANY, a Missouri Corporation, Appellant.

No. 50507.

Supreme Court of Missouri, Division No. 1.

Feb. 8, 1965.

William H. Burden, Joplin, for respondent.

John W. Scott, Spencer, Scott & Dwyer, Joplin, for appellant.

HOUSER, Commissioner.

Action in two counts by City of Joplin against The Joplin Water Works Company. Tried to the court without a jury Count I for a declaratory judgment was dismissed. Judgment was rendered for City on County II for $48,336.84. City did not appeal from the judgment on either count. Company appealed from the order overruling its motion for new trial, a non-appealable order, but we will review the judgment on Count II on the theory that Company intended and in good faith attempted to appeal from a final judgment. State v. Kendrick, Mo.Sup., 383 S.W.2d 740[1, 2]. We have jurisdiction since the amount in dispute, exclusive of costs, exceeds the sum of $15,000. Constitution of Missouri, Art. V, Sec. 3, V.A.M.S.; Sec. 477.040, V.A.M.S.

Tried upon the facts by the court without a jury we review the case on both the law and the evidence as in an equity case. The judgment is not to be set aside unless clearly erroneous. Supreme Court Rule 73.01; Sec. 510.310(4), V.A.M.S.

On November 25, 1949 City Council passed Ordinance No. 20861, a licensing ordinance specially applicable to water suppliers, requiring payment to City of a quarter-annual license fee on or before the 30th days of January, April, July and October of each year, in the amount of 4% of gross receipts from the sale of water during the preceding 3-month period, and requiring a licensee to report under oath to the city commissioner of revenue, on forms prescribed by him, the information necessary to determine the amount of fee due for each quarter-annual period. From its effective date and in compliance with Ordinance No. 20861, hereinafter referred to as 'the 4% ordinance,' Company made and presented to the proper city officials affidavits and statements of gross receipts for each preceding quarter, computed the tax at 4%, and issued vouchers to City reciting payment of 4% of the gross receipts during the 3-month period 'to comply with the terms of Ordinance No. 20861 passed by the City Council of Joplin, Missouri, on November 25, 1949.' In response City issued quarter-annual licenses to Company for each subsequent three-months period to and through December 31, 1962, signed by the commissioner of revenue until the city adopted a city manager form of government in 1954, and signed thereafter by the director of finance, authorizing Company to carry on its business during a 3-month period. Each license issued stated the amount paid and that it was paid as 'required by Ordinances of said City.'

On March 13, 1951 City Council passed Ordinance No. 21204, a licensing ordinance generally applicable to approximately one hundred different occupations, trades, pursuits, businesses and vocations. Section 1 repealed 37 sections of Ordinance No. 17707 and all of Ordinance No. 21194 (the subject matter of these ordinances is not revealed) but did not repeal or mention the 4% ordinance. Section 2 provided as follows:

'Every person, firm, corporation, association, partnership, joint stock company or other entity whatsoever engaged in any occupation, trade, pursuit, business or vocation or in the keeping or maintaining of any institution, establishment, article or commodity specified in this ordinance shall procure and pay for a license for the privilege of engaging in same within the limits of this city, and the fee for such license shall be in the amount hereinafter set out, EXCEPT AS OTHERWISE PROVIDED IN OTHER ORDINANCES; provided, however, that any portion of any other ordinance prescribing any license fee in conflict with the license fees fixed herein is hereby repealed.'

We have italicized and capitalized the language of Section 2 which provoked this lawsuit. The capitalized language will be referred to as 'the exception'; the italicized language as 'the proviso.' Section 5 contained a schedule of fees and a classification of occupations, including:

'Water companies--5% of annual gross receipts for last preceding calendar year, per year, with a minimum of $10,000.00 per year in any case.'

We will refer to Ordinance No. 21204 as 'the 5% ordinance.'

On August 27, 1951 City Council passed Ordinance No. 21365, amending the 5% ordinance by repealing the proviso, and by adding to the reference to 'merchants' in Sec. 5 a provision excluding from total receipts amounts received from the sale of cigarettes, etc. Ordinance No. 21365 will be referred to as 'the proviso-repealer ordinance.'

After the effective dates of the 5% and proviso-repealer ordinances City and Company continued to operate on the 4% basis under the procedure provided for in the 4% ordinance, using the same forms of application, reports, computations, vouchers and license as they used before their enactment, the City accepting payments of license fees computed on the basis of 4% (not 5%) of gross receipts.

In 1952, 1957 and 1960 Company filed with the public service commission applications for increases in water rates, introducing in evidence at each hearing the fact that it paid City 4% of gross receipts as a license fee. In determining the rates Company could charge the commission in each instance considered the 4% tax as Company's operating expense for municipal licensing. Although City appeared at all three hearings and was represented by counsel, City did not object to this evidence, or suggest a correction from a 4% to a 5% license tax as the proper basis for the fixing of rates to be charged water users in the future, or claim that City was entitled to a license tax based on 5% of gross receipts.

On November 1, 1960 City demanded from Company the payment of $51,668.11, calculated as the additional 1% license fee upon gross receipts from the effective date of the 5% ordinance to September 30, 1960. Company refused to pay.

On December 21, 1962 City Council passed Ordinance No. 24708, effective that date as an emergency ordinance, specifically repealing the 4% ordinance in its entirety, by number; specifically repealing the portion of Sec. 5 of the 5% ordinance which read 'Water companies--5% of annual gross receipts for last preceding calendar year, per year, with a minimum of $10,000.00 per year in any case,' and repealing 'all or any part of all ordinances relating to the licensing of water companies enacted prior hereto and in conflicting (sic) herewith passed prior to the effective date hereof.' Then followed a re-enactment in haec verba of the language of the original 4% ordinance, except a license fee of 5% was imposed upon gross receipts instead of 4% and an annual minimum fee of $10,000 was prescribed, and except for a few inconsequential changes of language. The preamble of Ordinance No. 24708 recited the enactment in 1951 of the 5% ordinance; stated that Company contends that the provisorepealer ordinance repealed and nullified the taxing provision of the 5% ordinance and 'revived' the tax rate set out in the 4% ordinance; recited the refusal of Company to pay on the basis of more than 4% of its gross receipts; recited Company's contention that by accepting 4% since November 1949 to date and granting licenses during that period of time City is guilty of laches and is estopped from claiming any additional amount; related that a controversy existed between City and Company as to the amount of past due tax; and stated the desire of City Council 'to eliminate any controversy' as to the percentage to apply to future sales, and the legislative intent of City Council 'to establish a five percent rate of the gross sales with a minimum of $10,000.00 per year as a license fee for said [water] companies * * * without waiving any of its rights to collect the additional amount that the city claims is due it under the terms and conditions of certain provisions of Section 5' of the 5% ordinance. When Ordinance No. 24708 became effective, December 21, 1962, Company for the first time began to report, compute, and pay its license fees on the basis of 5% of gross receipts.

This suit was filed in one count for a declaratory judgment on November 22, 1961. On March 27, 1963 City filed an amended petition adding Count II on account, praying for $67,255, plus interest. Company's answer to Count II alleged that the 4% ordinance remained in force and effect from its effective date to December 21, 1962, unaffected by the 5% ordinance by reason of the ambiguous and contradictory nature of the exception and the proviso in its Section 2 and set up the defenses of laches, estoppel and limitations. City's reply denied the existence and applicability of the defenses of waiver, estoppel and limitations.

The court found for City, rejecting all defenses except that of limitations which it sustained in part, whereby recovery of an additional 1% an gross receipts prior to five years preceding November 1, 1960, the date of demand for payment, was precluded.

Company's first point is that the court erred in determining that the 4% ordinance was repealed by the enactment of the 5% ordinance; that under proper application of the rules of construction the 4% ordinance continued in force and effect until specifically repealed by Ordinance No. 24708 on December 21, 1962.

We do not understand it to be the position of City that no construction is necessary. (City would hardly be in a position to make this claim, since City affirmatively alleged in its count for a declaratory judgment [allegations adopted and realleged in Count II now under review] that there is uncertainty 'as to how each party is to proceed' and that it is necessary that the 4% and 5% ordinances and the proviso-repealer ordinance 'be construed by this court to clarify same.') Conceding that Sec. 2 of the...