Corp. v. Snediker

• Decision Date: 01 January 1860
• Citation: 25 Tex. 460
• Parties: THE CORPORATION OF THE CITY OF MARSHALL v. WILLIAM SNEDIKER AND ANOTHER.
• Court: Texas Supreme Court

25 Tex. 460

THE CORPORATION OF THE CITY OF MARSHALL

v.WILLIAM SNEDIKER AND ANOTHER.

Supreme Court of Texas.

1860.

Where the ordinances of a municipal corporation required a party to obtain a license before retailing spirituous liquors, and imposed a heavy penalty for their violation, a compliance therewith, by the payment of the sum required to obtain the license, will not preclude the party paying the same from testing the legality of the exaction, by suit to recover back the money.

The party upon whom such an ordinance operates, not standing upon an equal footing with the corporation, which may inflict upon him penalties or cause him to hazard ruinous losses by the certainty of litigation, is not upon an equal footing with the corporation; and consequently the rule which has been often held, that if a party pay money voluntarily in ignorance of law, but with a knowledge of all the facts, he cannot recover it back, would not be applicable to such a state of facts.

If the city council exceeded its authority in making the assessment of tax (payable before procuring the license) and demanded and received from the plaintiff more than the charter permitted, and it was paid under the pressure of the summary remedies prescribed for its collection, and of the heavy penalty for retailing without its payment, it was against good conscience to retain it; and that is an additional reason why the action for it can be maintained.

A municipal charter granted by the legislature empowering the “city council to have and exercise the power of laying and levying taxes upon all subjects of taxation within the corporate limits upon which a tax may be levied by the state, as may be deemed necessary: provided, that the tax on property shall not in any one year exceed one half of one per cent. ad valorem on such property: provided, also, that such tax shall be apportioned in the same manner as the state tax,” confers a general power of taxation limited by the provisions; the second of which requires the city council to follow the apportionment of occupation tax, as indicated by the will of the legislature in the assessment of state tax.

Where the assessment of corporation taxes upon occupations, under such a charter, discriminates against an occupation in a degree beyond that made on such occupation by the legislature in the collection of taxes for state and county purposes, it is unwarranted by the charter, and, if enforced, the money thus illegally exacted may be recovered back from the corporation by a party so injured. 30 Tex. 86.

The defendants not having appealed or taken out a writ of error to this court, it is not necessary to decide whether or not it should have been determined that the ordinance of the city council imposing this excessive tax was utterly void for want of authority to assess it in the manner it was done.

ERROR from Harrison. Tried below before the Hon. C. A. Frazer.

This suit was brought by William Snediker and W. B. Cole, partners in trade under the name and style of Snediker & Cole, on the 24th day of August, 1858, against the corporation of the city of Marshall, to recover the sum of five hundred dollars, alleged and admitted by the defendant to have been paid by them, as a corporation tax imposed upon retailers of spirituous liquors; said tax being five hundred dollars per annum upon each retail establishment of spirituous liquors in quantities less than one quart, and said plaintiffs having paid, in compliance therewith, one hundred and twenty-five dollars every three months for the period of one year.

The petition alleges that said tax was imposed by the ordinance passed by the mayor and aldermen of the city on the 6th of May, 1857, imposing said tax for the privilege of retailing spirituous liquors within the corporate limits of said city for twelve months, and that petitioners paid said several sums as aforesaid under compulsion, from the 3d day of September, 1857, for one year ensuing.

The petition also alleges that the tax, so imposed and collected out of them, is out of proportion to the taxes imposed upon other occupations and citizens of said city; that the same is exacted and forced out of them in violation of the laws and constitution of the state. That a tavern, eating house and livery stable are taxed only fifteen dollars by said ordinance, and that most of those occupations and privileges are more valuable than that of retailing spirituous liquors. The mayor and aldermen are made defendants, and the petition prays for judgment against said corporation for said sum of five hundred dollars.

The defendant filed as an answer a general demurrer, and a general denial.

A jury was waived and the cause submitted to the decision of the court, upon the agreement that the facts stated in the petition are true, and the following facts: That when said payments of the corporation license tax were made by the plaintiffs, they had a license from the county court of Harrison county for which they paid two hundred and fifty dollars for the privilege of retailing spirituous liquors for the space of twelve months. That the investments of plaintiffs in their business were about two thousand dollars annually; the profits on which have not exceeded one thousand dollars. That they pay the same ad valorem tax on their purchases for retail in their grocery store, and property, real and personal, which is exacted from other citizens. That the investments of capital in livery stables, hotels and public boarding houses, and in merchandise retailed in particular stores, is much greater,-- from three to ten times greater than the capital invested in the business of the plaintiffs. That the ordinances affixed a penalty by fine of twenty-five dollars for each day that any person or firm who pursued an occupation upon which a corporation tax was levied, without having first paid the tax and obtained license according to the provisions of said ordinance, against all persons violating the same; and that the ad valorem tax on merchandise and on real and personal property, levied by the corporation, for the years 1857 and 1858, did not exceed that collected by the state.

The 8th section of the charter granted by the legislature of the state of Texas, passed January 30th, 1856, regulating the laying and levying of taxes by the city council of the city of Marshall, is copied in the opinion delivered by the court, omitting, however, the concluding paragraph, which is as follows: “And the city assessor and collector of taxes shall have the same power to enforce the collection of such taxes as may be imposed in said city, as the assessor and collector of each county has for the collection of state and county tax.”

The court adjudged that the plaintiffs recover of the corporation of Marshall the sum of three hundred and fifty dollars and costs of suit.

The defendant removed the judgment to this court for review, and assigned as error:

1. That the court erred in its construction of the law as applicable to the facts.

2. That the judgment of the court was contrary to law and the evidence.W. P. Hill, for plaintiffs in error. The right or power of the corporation to assess and collect a license tax for retailing spirituous liquors within the limits of said city, is not questioned by the pleadings.

The charter of the city is dated January 30th, 1856, and the 8th sec. provides “that the city council of the city of Marshall shall have and exercise the power of laying and levying taxes upon all subjects of taxation within the corporate limits, upon which a tax may be levied by the state, as may be deemed necessary.”

But the question made by the petition is, as to the mode in which the corporation has exercised this power; and the mode of its exercise is complained of in this, that the tax of $500 for retailing spirituous liquors “is out of proportion to the taxes imposed upon other occupations and citizens; that a tavern, livery stable, etc., are more valuable as occupations than the business of retailing spirituous liquors, but are taxed only $15.”

If this principle of taxation is correct, then the whole system of license taxation is illegal, and the ad valorem rule must be applied to each occupation, and to each person's capital and profits in his occupation.

For the same reasons which make the ordinance of the city of Marshall illegal and void, will also make the act of the legislature of February 2d, 1856, imposing upon retailers the payment of $250 for license, void. The rule of proportion is violated, not only as between the occupation of retailing spirituous liquors and other occupations, but also as between the retailers themselves. Every retailer must pay $250 for his license, and yet one may have a capital invested of $1,000, another of $2,000, and a third one of $3,000. Upon the principle invoked in the petition, the retailer whose capital is only $1,000, may well complain that his license costs him as much as that of the retailer whose capital is $3,000. Establish this rule, and ex necessitate, all the laws which impose license taxes, in gross, upon occupations, must be expunged from the statute book.

The question of the validity of the act of February 2d, 1856, is fully recognized in the case of Cain v. The State, 20 Tex. 355.

In The State v. Swisher, 17 Tex. 441, this court in deciding the act of 1854, in regard to selling liquors without license, to be unconstitutional, never seem to have imagined that said act was vulnerable because it offended against the ad valorem principle.

But, if the legislature may assess a license tax in gross in behalf of the state, and may delegate this power to the corporation of any city or town; then, unless the legislature fixes a limitation to the exercise of the power by the corporation, how should it be limited? Certainly the most favorable view to the retailer, will be that the license tax must not amount to an absolute prohibition. This view of it I need not...