Ex Parte Asotsky

• Decision Date: 09 April 1928
• Docket Number: No. 28350.,28350.
• Citation: 5 S.W.2d 22
• Parties: Ex parte ASOTSKY. ASOTSKY v. BEACH et al.
• Court: Missouri Supreme Court

5 S.W.2d 22

Ex parte ASOTSKY ASOTSKY v. BEACH et al.

No. 28350.

Supreme Court of Missouri, in Banc.

April 9, 1928.

Application by Max Asotsky for writ of habeas corpus to secure petitioner's release from custody on a charge of violating a city ordinance, opposed by Albert I. Beach and others. Petitioner remanded.

Walsh & Aylward, Albert A. Ridge, and James P. Aylward, all of Kansas City, for petitioner.

John T. Barker, City Counselor, and E. F. Halstead, Asst. City Counselor, both of Kansas City, for respondents.

BLAIR, J.

This is an original proceeding under the Habeas Corpus Act (Rev. St. 1919, § 1876 et seq.). Petitioner, a retail cigarette merchant of Kansas City, was arrested by and in the custody of the chief of police of said city, charged with violating an ordinance of said city requiring the payment of an occupation tax of 20 per cent. of the retail sales price of each package of cigarettes "sold, offered or displayed for sale within the city." Contending that said ordinance is invalid and that his arrest and imprisonment for the alleged violation thereof is unauthorized and illegal, petitioner filed in this court his petition for our writ of habeas corpus.

Our writ was ordered issued. Thereupon its formal issuance and service were waived. Production before this court of the body of petitioner has likewise been waived, and petitioner was released from custody pending the final determination of the case. Thereafter return of respondents and answer of petitioner, admitting the facts but challenging the validity of the ordinance, were filed. The case was argued and submitted at the October term of this court.

Petitioner is a druggist in Kansas City, and, among other things, sells cigarettes in packages at retail. On August 2, 1927, an information was filed in the municipal court of Kansas City charging that petitioner displayed, offered for sale, and sold at retail for 15 cents to a person named one package of cigarettes, "without first paying to Kansas City any occupation tax therefor, and without first affixing to said package of cigarettes a stamp or stamps purchased from or furnished by the commissioner of licenses of Kansas City, Mo., evidencing the payment to Kansas City of said occupation tax thereon, all in violation of ordinance of Kansas City, Mo., No. 38141, approved July 1, 1920, as amended by Ordinance No. 54356, passed April 11, 1927."

No contention is made that petitioner did not violate the terms of said ordinance. He was lawfully arrested and taken into custody therefor and was being properly prosecuted thereunder, if said ordinance is a valid ordinance. Sections 3-H, 3-I, 3-J, and 3-K of said ordinance are as follows:

"Section 3-H. Every person, firm or corporation engaged in the retail business of selling cigarettes or offering or displaying the same for sale within the city, shall procure a license therefor, and at the time such license is issued, shall pay to the commissioner of licenses, the sum of one dollar ($1.00) as a registration fee, and in addition thereto, every such person, firm or corporation, engaged in said business, shall pay an occupation tax in an amount equal to twenty per cent. (20%) of the retail sales price (exclusive of tax) of each package of cigarettes so sold, offered or displayed for sale within the city, said tax shall be paid and the stamps hereinafter provided for affixed by the person, firm or corporation selling such cigarettes or displaying or offering the same for sale after the same shall have come to rest in this city and before being displayed or offered for sale by such retailer in this city; provided nothing in this ordinance shall be construed to require a distributor or dealer to fix the retail price, or construed to require any retailer to sell at any particular price, but the amount of stamps affixed at time of sale shall in no event be less then twenty per cent. (20%) of the price at which the retail sale is made.

"Section 3-I. The tax provided by section 3-H of this ordinance shall be paid by purchase from the commissioner of licenses of stamps of such design and denomination as may be prescribed by the director of finance. In the sale of said stamps the commissioner of licenses shall allow a discount of ten per cent. (10%) of the denomination or face value thereof. It shall be the duty of every person, firm or corporation selling, offering or displaying for sale, at retail, any package of cigarettes, to affix to each package of cigarettes, so sold, offered or displayed for sale, a stamp or stamps so purchased from and furnished by the commissioner of licenses, and which stamps so affixed shall evidence the payment of the tax imposed by this ordinance; and such stamps shall be canceled so soon as they shall be affixed to the package containing such cigarettes and no stamps of less fractional denominations than one-half of one cent shall be so affixed. For the purpose of this ordinance every sale and delivery of cigarettes within the city, other than sales to retail dealers in cigarettes within the city licensed under this ordinance as such, shall be deemed a retail sale.

"Section 3-J. No person, firm or corporation shall sell or offer for sale, or display for sale, at retail, any cigarettes without first having affixed to the package thereof the stamp or stamps required to be affixed thereto under the provisions of this ordinance, nor sell or offer for sale or display for sale cigarettes at a greater price than that upon which the affixed and canceled stamps denote the retail price to be; nor shall any person, firm or corporation falsely and fraudulently make, forge, alter or counterfeit any stamp or stamps prescribed by the director of finance under the provisions of this ordinance, or cause or procure to be falsely or fraudulently made, forged, altered or counterfeited, any such stamp or stamps, or knowingly and willfully utter, publish, pass or tender as true, any false, altered, forged or counterfeited stamp or stamps.

"Section 3-K. Any person, firm or corporation who, at the time this section takes effect, shall be engaged in the business of selling cigarettes or offering or displaying the same for sale, at retail, under an unexpired cigarette dealer's license, shall be entitled to receive credit upon purchase of stamps required by this ordinance, in an amount to be determined as follows:

"The total amount of the prepaid cost of said unexpired retail cigarette dealer's license shall be prorated between the expired and unexpired prepaid term of said license as at the effective date of this section; and the amount so prorated to the unexpired prepaid term shall be credited upon purchases of stamps."

By section 13 of said ordinance, violation of the ordinance is declared to be a misdemeanor, and it is provided that a fine not less than $100 nor more than $500 may be imposed for each and every offense.

Several paragraphs of petitioner's points and authorities challenge the validity of the cigarette tax here involved because of the provision that a 10 per cent. discount shall be allowed by the commissioner of licenses in the sale of stamps. It is said that:

"An ordinance levying a 20 per cent. stamp tax on cigarettes sold in packages, and allowing retail dealers in Kansas City a 10 per cent. discount on each stamp purchased by them from the city, and to exact and receive from the consumer thereof the entire 20 per cent. and make a 10 per cent. profit for themselves on such stamps out of the public funds, authorized to be collected from and paid by the consumer of such cigarettes, is unconstitutional, null and void, because the tax thereby attempted to be levied is not wholly and exclusively laid for public purposes."

The ordinance is not reasonably subject to this objection. The provision for the purchase by the dealer of stamps representing 20 per cent. of the retail price at a discount of 10 per cent. is in effect a tax of 18 per cent. instead of 20 per cent. No stamps are sold at 100 per cent. of their face value to any one. There is nothing requiring the dealer to sell cigarettes at any stated price. All of the 18 per cent. tax is paid to the city and finds its way into its treasury where it is used for public purposes, as distinguished from private purposes. The requirement that stamps, representing 20 per cent. of the retail price less 10 per cent. be purchased, is nothing more or less than an unnecessarily roundabout way of imposing an 18 per cent. tax on sales of cigarettes.

Section 3, art. 10, of the Constitution, providing that "taxes may be levied and collected for public purposes only," is not violated by the ordinance. The cases cited by petitioner well illustrate the meaning of this provision, but have no bearing upon the question before us. They all deal with the use of public money after it has been collected by the taxing authority.

If the ordinance required the dealer to collect 20 per cent. of the retail price from the purchaser of the cigarettes in packages and then gave the dealer 10 per cent. of the money so collected or required the purchaser of a package of cigarettes to buy from the dealer, attach to the package and cancel a stamp and to pay therefor the full face of the stamp, a different situation would arise. But since the dealer is not required to collect the tax from the purchaser and the rate he pays for the stamps is 18 per cent. of the retail price, whether the purchaser ultimately pays it or the dealer absorbs it no public money is paid to or retained by the dealer.

Petitioner urges a number of objections to the ordinance, all based upon the proposition that the dealer is allowed to profit to the extent of 10 per cent. of the face value of each stamp purchased and attached to a cigarette package. It is said that this constitutes an unjust and arbitrary discrimination between cigarette dealers and other merchants; that sections 1 and 10 of article 10 are violated because taxes can...