City of Seattle v. Dencker

• Decision Date: 28 May 1910
• Citation: 108 P. 1086,58 Wash. 501
• Parties: CITY OF SEATTLE v. DENCKER.
• Court: Washington Supreme Court

108 P. 1086

58 Wash. 501

CITY OF SEATTLE v. DENCKER.

Supreme Court of Washington

May 28, 1910

Department 2. Appeal from Superior Court, King County; J. T. Ronald Judge.

John P Dencker was convicted of the violation of a city ordinance relating to the sale of goods by automatic vending machine and he appeals. Reversed and dismissed.

Lyter & Folsom and I. L. Blair, for appellant.

Scott Calhoun and Ralph S. Pierce, for respondent.

DUNBAR J.

This is an appeal from a judgment of the superior court for King county after trial upon conviction of the violation of an ordinance of the city of Seattle relating to the sale of goods by automatic vending machine, which ordinance reads as follows:

'An Ordinance Licensing Certain Automatic Devices, and Providing a Penalty for Violation.

'Be it ordained by the city of Seattle as follows:

'Section 1. That it shall be unlawful for any person to maintain, keep, conduct, manage, have in his possession or control for use, any automatic device, for the sale of goods of any kind or character, where money or any representative of value is used to operate the same, or where gain or trade is the object, without being licensed so to do by the city of Seattle.

'Sec. 2. The license required by this ordinance shall be secured by paying the required amount to the city treasurer, receiving a receipt therefor and presenting such receipt to the city comptroller, who shall issue such license as the receipt calls for.

'Sec. 3. The schedule of amounts to be paid for licenses, is as follows: Where a deposit of one (1) cent or slug representing the same in trade, is required to operate the same, one (1) dollars per year for each device; where a deposit of five (5) cents or slug representing the same in trade, is required to operate the same, five (5) dollars per year for each device; where a deposit of ten (10) cents or slug representing the same in trade, is required to operate the same, ten (10) dollars per year for each device; where a deposit of twenty-five (25) cents or slug representing the same in trade, is required to operate the same, fifteen (15) dollars per year for each device.

'Sec. 4. The provisions of this ordinance shall not be held to include or apply to the sale of gas, or other commodities, through prepayment meters, or the installation and use of telephones with slot machine devices, by public service corporations, operating under franchises granted by the city of Seattle, or to the sale of candies or similar confections, by automatic devices in theaters or other such places of public assembly where a fee is charged for admission.'

Defendant is the manager of the Northwestern Automatic Vending Machine Company, a Washington corporation, which is engaged in the business of selling cigars at retail by means of vending machines, owns and operates a great many of these machines in the city of Seattle, and has invested a large sum of money in said machines. The machines are placed in hotels where cigars are required by the patrons, are under the general supervision of the clerks of the hotels, and as a rule a certain percentage is given to the hotel men for operating the machines. Under the ordinance in question the license fee required for the operation of the machines varies from $30 to $95, according to the number of devices; the fee being based on the denomination of the coin required for operation and the number of devices, and not on the amount of business done. Each machine has a device for five, ten, and twenty-five cent pieces. The cigars are at all times exposed to view under their proper labels and prices, so that the purchaser can at all times see what he is getting for his money, and he gets just what he pays for. If he drops in a five-cent coin in the device calling for a coin of that denomination, and presses the plunger, he gets a five-cent cigar; if a ten-cent coin, a ten-cent cigar, and, if a twenty-five-cent coin, either a two-for-a-quarter or a three-for-a-quarter cigar, according to his selection. There is no more opportunity for the customer being cheated or defrauded in dealing with this device than by any other one.

The question for determination here is the validity of the ordinance. It is conceded that this ordinance is a revenue measure; that the only ground of difference between licensed and unlicensed sales in this ordinance is in the mode of sales, whether by device or hand. It is conceded that none of the other retail merchants of that occupation is taxed by licenses for the sale of cigars; that if the sale is by this device the license is imposed; and that, if it is by hand in the ordinary way, no license is required. In the discussion of this question there are certain fundamental principles which may be conceded, viz., that it is a well-known attribute of sovereignty to tax occupations for the purpose of raising revenue, and that such tax may be imposed in the form of a license fee; that the state may tax all or any occupations or business carried on within its boundaries, imposing the burden upon some and passing by others; that only considerations of general policy determine such selections; and that there is no restriction unless it be imposed by the Constitution. This determination, however, must not be exercised arbitrarily or fraudulently, and, while the policy of the enactment may not be questioned by the courts, the discretion exercised by the law making power must be natural and reasonable, and consistent with the general principles of law and the fundamental principles upon which our government is founded. When these principles are violated to the extent of depriving the citizen of natural or constitutional rights, it is the duty of the court to intervene in his behalf. A wilderness of authority might be cited on this interesting and fruitful subject of litigation, for from the beginning of not only our government, but of all government, the contest has been waged between legislative powers and individual rights. But from the best considered cases the general principles above announced can be deduced.

Tested by these principles, can this ordinance be sustained? We think not. It is plain that there is no police power or regulation involved, a power which is the sustaining principle in 99 out of 100 of the cases cited; for there is no claim that the business discriminated against here affects in any way the public morals or the business interests of the community, except as it affects the interest of others engaged in the same business, but purely in the way of competition. The article that is sold does not in any way involve the police power. Hence it is a matter of no public concern whether it be sold by device or by some other method. And here it is well to note a vital distinction, founded on sound and just principles of law, between the power to tax occupations under the form of a license which by reason of the character of the occupation is subject to police regulation, and the power to tax what are termed useful trades and employments under the guise of a license. It is well settled that the license required of employments of the latter character can carry with it only such fee as is necessary to make compensation for the regulation services, and cannot be perverted into a tax. Especially is this true when the attempt is made to discriminate between occupations alike in principle, but differing only in mode of operation in some trifling particular.

The respondent relies largely upon the case of St. John v. New York, 201 U.S. 633, 26 S.Ct. 554, 50 L.Ed. 896, where the Supreme Court of the United States sustained an act prohibiting the sale of adulterated milk where in certain respects it provided different prohibitions and penalties as to producing and nonproducing vendors of milk; the enactment making it a penal offense for a person to vend milk that contained more than a certain amount of water and less than a certain amount of milk solids. The objection urged to the law was that it was a discrimination between the vendor and the producers of the milk, and that such discrimination had no basis in right or public policy. In discussing the case the court said: 'It has been decided many times that a state may classify persons and objects for the purpose of legislation. We will assume the cases are known and proceed immediately to consider whether the...