City of St. Charles v. St. Charles Gas Co.

• Court: Missouri Supreme Court
• Writing for the Court: BARRETT
• Citation: City of St. Charles v. St. Charles Gas Co., 185 S.W.2d 797, 353 Mo. 996 (Mo. 1945)
• Decision Date: 05 March 1945
• Docket Number: 38873
• Parties: City of St. Charles, Missouri, a Municipal Corporation, Appellant, v. St. Charles Gas Company, a Corporation

185 S.W.2d 797

353 Mo. 996

City of St. Charles, Missouri, a Municipal Corporation, Appellant, v. St. Charles Gas Company, a Corporation

No. 38873

Supreme Court of Missouri

March 5, 1945

Appeal from St. Charles Circuit Court; Hon. Theodore Bruere, Judge.

Affirmed.

Robert V. Niedner for appellant.

(1) All the evidence on the subject in this case is to the effect that the defendant is a light company within the meaning of the statutory term "light, power and water companies" found in Section 6986, Revised Statutes of Missouri for 1939, and the ordinance therefore does not violate the "due process" clause of the State or Federal Constitution. Sec. 6986, R.S. 1939; Laclede Gas Light Co. v. Murphy, 130 Mo. 10, 31 S.W. 594; Memphis Gas Light Co. v. Taxing Districts, 109 U.S 398; St. Louis v. St. Louis Gas Light Co., 70 Mo 69; Weise v. Sedalia Gas Light Co., 34 Mo.App. 501; State ex rel. v. Public Serv. Comm., 110 S.W.2d l.c 760; Sec. 5646.3, R.S. 1939; Chap. 35, Art. 4, R.S. 1939; State ex rel. v. Busby, 274 S.W. l.c. 1072; Union Electric Co. v. City of St. Charles, 181 S.W.2d 526. (2) Light, power and water companies may be required by ordinances of third class cities to pay occupation licenses based on a percentage of their gross receipts, and the Missouri Sales Tax Act is not thereby violated. Sec. 6986, R.S. 1939; Ploch v. City of St. Louis, 136 S.W. 2d 1020; Union Electric Co. v. City of St. Charles, 181 S.W.2d 526; Springfield City Water Co. v. City of Springfield, 182 S.W.2d 613. (3) The classification of "companies supplying gas for any purpose" in Ordinance 1787 of the City of St. Charles is reasonable and therefore does not violate the State Constitution's prohibition against unreasonable and arbitrary discrimination and denial of equal protection of the law. Union Electric Co. v. City of St. Charles, 181 S.W.2d 526; Cape Girardeau v. Groves Motor Co., 346 Mo. 762; City of Washington v. Washington Oil Co., 346 Mo. 1183; Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339; St. Louis Union Trust Co. v. State, 348 Mo. 725; Keane v. Strodtman, 18 S.W.2d 896; City of St Charles v. Schulte, 264 S.W. 654; Edmonds v. St. Louis, 156 S.W.2d 619; Springfield City Water Co. v. City of Springfield, 182 S.W.2d 613; St. Joseph v. Dye, 72 Mo.App. 214; City of Eldorado Springs v. Highfill, 188 S.W. 68; Viquesney v. Kansas City, 266 S.W. 700; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435; Kansas City v. Grush, 151 Mo. 128; Ex parte Asotsky, 5 S.W.2d 22; Village of Beverly Hills v. Schulter, 344 Mo. 1098. (4) The fact that the amount of license tax levied by ordinance 1787 differs from and may exceed that levied upon other classes of business in St. Charles is not in itself violative of the equal protection laws of the State Constitution, and therefore the testimony of the city collector offered to prove such variation was immaterial and inadmissible, and it was prejudicial error to admit such testimony. Automobile Gasoline Co. v. St. Louis, 326 Mo. 435; Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339; Hines v. Hook, 89 S.W.2d 52; St. Louis Union Trust Co. v. State, 348 Mo. 725; City of Washington v. Washington Oil Co., 346 Mo. 1183; Cape Girardeau v. Groves Motor Co., 346 Mo. 762; American Express Co. v. St. Joseph, 66 Mo. 675; St. Louis v. United Rys. Co., 174 S.W. 78; Springfield City Water Co. v. City of Springfield, 182 S.W.2d 613; Keane v. Strodtman, 18 S.W.2d 896. (5) Ordinance 1787 of the City of St. Charles, in providing for a five percent (5%) gross receipts occupation tax is not shown by the record to be confiscatory and therefore does not violate the due process clause of the State or Federal Constitution. City of St. Charles v. Schulte, 264 S.W.2d 654; St. Louis v. United Rys. Co., 174 S.W. 78; Ploch v. St. Louis, 138 S.W.2d 1020; Ex parte Asotsky, 5 S.W.2d 22; People's Motor Bus Co. v. Blaine, 58 S.W.2d 5; Union Electric Co. v. St. Charles, 181 S.W.2d 526; Lincoln Traction Co. v. Lincoln, 84 Neb. 327; Bellerive Inv. Co. v. Kansas City, 13 S.W.2d 628; State v. Weitzel, 130 Mo. 600. (6) Evidence that at the time the legislature first enacted the authorization to third class cities to tax "light, power and water companies," companies supplying gas supplied it for illumination, was admissible to show that the legislature intended "light, power and water companies" to include companies supplying gas. It was prejudicial error to exclude such evidence. Sec. 6986, R.S. 1939; 2 McQuillin, Municipal Corporations, sec. 856.2; United States v. Southeastern Underwriters Assn., 64 S.Ct. l.c. 1166; State v. Busby, 274 S.W. 1067; Ex parte Holman, 191 S.W. 1109; Power Co. v. Independence, 188 Mo.App. l.c. 162. (7) The construction given to tax legislation by the municipal officials upon whom the duty of enforcement rests, concurred in by the taxpayer, is entitled to consideration in determining the meaning of such legislation, and the fact that appellant has for years been collecting an occupation license from respondent, which respondent has always voluntarily paid, indicates that both appellant and respondent have been considering the St. Charles Gas Company a "light and power company." 2 McQuillin on Municipal Corporations, sec. 858; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435; City of Tulsa v. Southwestern Bell Tel. Co., 75 F.2d 343. (8) Evidence in the form of Senate Bill No. 53 introduced by defendant was inadmissible for any purpose and could not show legislative intent as to the meaning of Sec. 6986, R.S. 1939, because it was neither passed by the legislature nor did it ever become law. It was prejudicial error to admit Senate Bill No. 53 in evidence. (9) Evidence of the ability of a taxpayer to pay a tax is immaterial to the issue of the validity of the tax, and while the evidence in this case does not show the defendant's inability to pay, the admission of the testimony as to defendant's costs of production was prejudicial error. City of St. Charles v. Schulte, 264 S.W. 654; St. Louis v. United Rys. Co., 174 S.W. 78; State v. Weitzel, 130 Mo. 600; Ex parte Holman, 191 S.W. 1109; Marty v. Kansas City L. & P. Co., 259 S.W. 793; State v. Public Serv. Comm., 47 S.W.2d l.c. 115; State v. Busby, 274 S.W. 1067; Sec. 32, Art. 4, R.S. 1939; Secs. 5644, 5646.3, R.S. 1939; 1 Mo. P.S.C. 564; 2 Mo. P.S.C. 122; Ploch v. St. Louis, 138 S.W.2d 1020; Ex parte Asotsky, 5 S.W.2d 22; Union Electric Co. v. St. Charles, 181 S.W.2d 526; Springfield City Water Co. v. City of Springfield, 182 S.W.2d 613.

Wm. Waye, Jr., for respondent.

(1) Ordinance No. 1787 of the City of St. Charles was passed pursuant to the authority given the City by Section 6986 Revised Statutes of Missouri, 1939, and since the respondent gas company does not supply gas for light and power it is not specially named in said statute as one of the businesses subject to the tax sought to be imposed by said ordinance, and said ordinance in attempting to impose a tax on respondent's gross income is, so far as respondent gas company is concerned, absolutely void. Secs. 6986, 7440, R.S. 1939; Keane v. Strodtman, 18 S.W.2d 896, 323 Mo. 161; Siemens v. Shreeve, 296 S.W. 415, 317 Mo. 736; City of St. Louis v. Laughlin, 49 Mo. 559; City of Fulton v. Craighead, 164 Mo.App. 90; Pierce City v. Hentchel, 210 S.W. 31; Ex parte Lockhart, 171 S.W.2d 660, 350 Mo. 1220; Union Electric Co. v. City of St. Charles, 181 S.W.2d 526. (2) Section 6986, R.S. 1939, gives the City of St. Charles the power and authority to levy and collect a license tax and regulate light, power and water companies. Ordinance 1787 of said city passed pursuant to the power given it by said statute undertakes to impose a license tax on respondent for supplying gas in the City of St. Charles for any purpose. Said ordinance is void for the reason that the city can impose a tax on respondent gas company for light and power only and for no other purpose. Cases cited under Point (1); Leavell v. Blades, 237 Mo. 695; State ex rel. v. Gehner, 325 Mo. 24, 27 S.W.2d 1; Siemens v. Shreeve, 296 S.W. 415, 317 Mo. 736; Union Electric v. Coale, 146 S.W.2d 631. (3) The City of St. Charles has no inherent right to tax but possesses only such powers of taxation as are conferred upon it by express or implied provision of law. The charter of the city is a grant and not a limitation of power and the rules of strict construction apply and if any doubt as to the right of the city to impose the tax exists, that doubt must be resolved against the city and in favor of the taxpayer. State ex rel. v. McWilliams, 74 S.W.2d 363; Bull v. McQuie, 119 S.W.2d 204; Taylor v. Dimmitt, 78 S.W.2d 841; State ex rel. Spencer v. Anderson, 101 S.W.2d 530; Peters v. St. Louis, 226 Mo. 62. (4) The Legislature never intended to classify a gas company as a light or power company and Ordinance No. 1787 of the City of St. Charles in attempting to do so is contrary to authority given the city as shown by the legislative construction of the words light and power company. Laws 1943, p. 701; Subsec. 16 of Sec. 6293, R.S. 1939; Subsec. 17 of Sec. 6609, R.S. 1939; Morgan v. Jewell Construction Co., 91 S.W.2d 639; State v. Long-Bell Lumber Co., 12 S.W.2d 64; Hall v. Sedalia, 232 Mo. 344. (5) Respondent gas company's primary business, if not its sole business at the time of the passage of Ordinance 1787 was that of supplying gas to the people of St. Charles for cooking and heating. It was not a light or power company and therefore it cannot be taxed as is sought to be done under the provisions of Ordinance 1787. State v. Barnes, 35 S.E. 605; Bradley v. Blekely, 154 So. 415; Hagelstadt v. Usiak, 252 N.W. 430; Chicago, Milwaukee, St. Paul & Pacific R. Co. v. Custer County, 32 P.2d 8; Story v. Richardson, 186 Cal. 162, 198 P. 1057; State ex rel. Danciger v. Public Serv. Comm., 275 Mo. 483; 18 Am....