City of Portland v. Portland Gas & Coke Co.

• Decision Date: 20 July 1915
• Parties: CITY OF PORTLAND v. PORTLAND GAS & COKE CO.
• Court: Oregon Supreme Court

150 P. 273

80 Or. 194

CITY OF PORTLAND v. PORTLAND GAS & COKE CO.

Supreme Court of Oregon

July 20, 1915

Department 1.

Appeal from Circuit Court, Multnomah County; W. N. Gatens, Judge.

Action by the City of Portland against the Portland Gas & Coke Company. Judgment for defendant, and plaintiff appeals. Reversed, and cause remanded.

By virtue of an ordinance hereinafter mentioned to provide additional revenue for the city of Portland, this action was instituted to recover a 3 per cent. license tax upon the gross receipts of the defendant as a corporation engaged in the business of selling gas in the city. Upon a demurrer to the complaint, the court rendered judgment for the defendant from which the plaintiff appeals.

Henry A. Davie, of Portland (W. P. La Roche, of Portland, on the brief), for appellant. W. W. Cotton, of Portland (H. W Strong, John A. Laing, and J. G. Wilson, all of Portland, on the brief), for respondent.

BURNETT J.

In respect to the matters involved in this action, the city of Portland operates under a charter formulated by an act of the legislative assembly of the state approved January 23, 1903. Section 3 thereof reads thus:

"The city of Portland shall be invested within its limits with authority to perform all public services and with all governmental powers except such as are expressly conferred by law upon other public corporations and subject to the limitations prescribed by the constitution and laws of the state, except as hereinafter provided."

Section 114 authorizes the council to assess, levy, and collect taxes upon all property both real and personal not exempt from taxation within the city not exceeding seven mills on each dollar of valuation. Subdivision 21 of section 73 empowers the council:

"To grant licenses with the object of raising revenue or of regulation, or both, for any and all lawful acts, things or purposes, and to fix by ordinance the amount to be paid therefor, and to provide for the revoking of the same. No license shall be granted to continue for a longer period than one year from the date thereof. All money received from licenses for vehicles of every description, whether for pleasure or for business, shall go to the credit of the street repair fund, but the council may in its discretion set aside the moneys arising from licenses upon bicycles for the construction or repair of bicycle paths."

The complaint alleges the public municipal character of the plaintiff under the act of January 23, 1903, and amendments thereto, and the corporate entity of the defendant. It states:

"That the defendant is now, and during all the times hereinafter mentioned or referred to has been, engaged in the business of selling and furnishing gas for lighting, heating fuel, and other commercial purposes within the corporate limits of the city of Portland." It is further averred that at a general city election on June 5, 1911, the legal voters duly enacted an ordinance entitled:

"An ordinance to provide additional revenue for the city of Portland; to levy a license on the gross receipts of persons and corporations selling gas, natural or manufactured, for lighting, heating, fuel or other commercial purposes within the city of Portland; defining the manner of ascertaining the nature and extent of such gross receipts defining a person and corporation within the meaning of this ordinance, and providing a penalty for the violation of the provisions of this ordinance."

This municipal enactment is set out at large in the complaint. After defining the word "person" to include an individual, or copartnership, and "corporation" to mean every corporation, company, association, or joint-stock company, other than an individual or copartnership, the ordinance, in section 2, reads thus:

"Every person, or corporation, engaged in the business of selling or furnishing gas, either natural or manufactured, for lighting, heating, fuel or other commercial purposes within the city of Portland, shall pay to the city of Portland, a license of three (3) per centum of the gross receipts of such person or corporation received upon its business within the city of Portland, which license shall be paid annually by said person, or corporation, to the treasurer of the city of Portland on the first day of March of each year for the preceding year ending December 31st. Provided that the payment to be made as required by this section and the statement to be made as required by section 3 hereof on March 1st, 1912, shall be upon and cover and embrace the gross receipts of any such person, or corporation, between the date this ordinance takes effect and December 31st, 1911."

In substance, section 3 requires persons in charge of the business named to make a sworn statement on or before March 1st of each year of its gross receipts, and declares the 3 per cent. demand to be a debt recoverable by an action at law in the name of the city of Portland in any court having competent jurisdiction. A penalty is imposed upon the persons charged with that duty for failure to make the report. It is averred that the resident officers of the defendant company made a statement showing that its gross receipts from June 6, 1911, to December 31st of the same year amounted to $587,639.47, but that the defendant has utterly failed to pay any part of the 3 per cent. thereof as required by the ordinance.

It is contended by the company, and conceded by the city, that the exaction contemplated by the ordinance is a tax, for the reason that no regulation under the police power is attempted by the city enactment. On the contrary, it is confessedly a revenue measure, and this being true, by whatever term it may be characterized, whether license, or public burden, or enforced contribution, it is none the less a tax. The precise question presented is whether the city has the right to levy such a tax.

The defendant argues that the exaction attempted was one levied upon the defendant's franchises; that, inasmuch as these privileges were taxed under the general laws, the assessment of which was adopted as a basis for the city taxes, the demand provided for by the ordinance in question amounted to double taxation in favor of the city. Under chapter 268 of the laws of Oregon for 1907, reproduced in section 3552, L O. L., as amended by the act of February 26, 1913 (Laws 1913, p. 325), there is included within the terms "land, real estate and real property," "all franchises and privileges granted by or pursuant to any law of this state, or municipal ordinance or resolution, owned or used by any person or corporation, other than the right to be a corporation." The general scheme of state taxation embodied in chapter 8 of title 28, L. O. L., especially in section 3670, requires that all taxes levied by any incorporated city or town shall be imposed upon the property therein respectively assessable according to its valuation as shown by the assessment roll last compiled by the county assessor, and that they shall be collected by the county tax collector at the rate declared by the city authorities, and the amounts collected returned to the proper municipality. From the legislation mentioned the defendant would deduce two conclusions: (1) That its franchises have been taxed as real property and collection worked out through the county tax collector for the benefit of the city, and that to enforce the ordinance in question would amount to double taxation upon the same property; and (2) that the procedure thus fashioned by the state for the collection of municipal taxes is exclusive of all other methods of raising revenue by a city, with the result that on both grounds the ordinance is void. The state law providing that the work of the county assessor in listing property should be adopted by a city as a basis upon which to collect its tax refers only to assessable things to be taxed...