City of Richmond v. Beltway Properties, Inc.

• Decision Date: 08 October 1976
• Docket Number: No. 750505,750505
• Citation: 228 S.E.2d 569,217 Va. 376
• Parties: CITY OF RICHMOND v. BELTWAY PROPERTIES, INC., et al. Record
• Court: Virginia Supreme Court

Page 569

228 S.E.2d 569

217 Va. 376

CITY OF RICHMOND v. BELTWAY PROPERTIES, INC., et al.

Record No. 750505.

Supreme Court of Virginia.

Oct. 8, 1976.

William L. Wimbish, Asst. City Atty. (Conard B. Mattox, Jr., City Atty., James R. Saul, Asst. City Atty., on brief), for plaintiff in error.

Alan G. Fleischer, Waller H. Horsley, Richmond (Lee F. Davis, Jr., Robert R. Kaplan, William L. S. Rowe, Christian, Barton, Epps, Brent & Chappell, Hirschler, Fleischer, Weinberg, Cox & Allen, Hunton & Williams, Richmond, on brief), for defendants in error.

Before I'ANSON, C.J., and CARRICO, HARRISON, COCHRAN, HARMAN, POFF and COMPTON, JJ.

HARMAN, Justice.

This writ of error challenges the trial court's holding of invalidity of Ordinance 71--170--146 (the Ordinance), as amended, ¹ orginally adopted by the City of Richmond (City), acting by and through its City Council, on May 27, 1971. The text of the original ordinance, which added § 37--211.10 to the Richmond City Code, is as follows:

'Section 37--211.10. Renting residential living units and renting business, commercial, industrial and like property.

'(a) Every person engaged in the business of or operating a business of renting four or more living units, apartments, houses or dwelling units, whether acting for himself or through an agent, shall pay an annual license tax equal to thirty dollars and one percent of the gross receipts of the business; provided, that no tax shall be assessible against the gross receipts under this section if the person is operating a motel, hotel, or rooming house subject to the lodging tax imposed in Article 5.1 of this Chapter.

'(b) Every person engaged in the business of or operating a business of renting property used for professional purposes or commercial, manufacturing, industrial, or other business purposes, whether he acts for himself or through an agent, shall pay an annual license tax equal to thirty dollars and one percent of the gross receipts of the business.

'For the purposes of this subsection, a person who rents one or more parcels of land or one or more buildings or one or more portions of or spaces in a building or one or more combinations of the foregoing, used and to be used for professional purposes or commercial, manufacturing, industrial or other business purposes shall be deemed to be engaged in the business of renting property used for professional purposes or commercial, manufacturing, industrial or other business purposes.'

Two weeks after our decision in Krauss v. City of Norfolk, 214 Va. 93, 197 S.E.2d 205 (1973), striking down a similar ordinance of the City of Norfolk, the Richmond City Council, on June 25, 1973, repealed the ordinance with the repealer to become effective on December 31, 1973. Thereafter, more than 300 property owners in the City filed applications under Code § 58--1145 challenging the validity of the Ordinance and praying for a refund of the license taxes assessed and paid thereunder. These petitions were consolidated by the trial court so that the common question which they presented, the validity of the Ordinance, could be adjudicated.

The trial court, after a full hearing on this question, held that the Ordinance, as amended, was 'drafted and adopted, as well as administered and enforced, with the intent of levying a tax to be determined solely by the application of a numerical test . . . without inquiry as to whether any (property owner) was 'engaged in the business' of renting within the meaning of Virginia's common law.' While the Richmond City Code contained a severability provision, the trial court held the invalid portion of the Ordinance was non-severable because the evidence of legislative intent showed that the numerical test was crucial to both the purpose and spirit of the Ordinance.

Here, as in the trial court, the City concedes that the second paragraph of subsection (b) of the Ordinance is invalid under our holding in Krauss. The City argues, however, that if this definitional paragraph is severed, as was the definitional paragraph of the ordinance at issue in Portsmouth v. Citizens Trust Co., 216 Va. 695, 222 S.E.2d 532 (1976), a legally valid Ordinance would remain imposing a license tax on those persons engaged in the business of renting property under the common law definition and that such a tax could be levied by the City under Code § 58--266.1. Under its view, the City says that the words 'four or more' as used in subparagraph (a) of the Ordinance could and should be construed, not as a definition of 'engaged in the business of renting' residential property, but to provide an exemption from the license tax for persons engaged in the business of renting if that business consisted of renting fewer than four residential dwelling units. We do not agree. We are of the opinion that subparagraph (a) is substantially equivalent to the definitional paragraph condemned in Krauss.

The only issue remaining, therefore, is the correctness of the trial court's ruling that the evidence established a legislative intent which precluded severance of the invalid portion of the Ordinance.

Recently, in Bd. Sup. James City County v. Rowe, 216 Va. 128, 216 S.E.2d 199 (1975), we had occasion to review the legal principles involved in ascertaining the severability...