Fairley v. City of Duluth

• Decision Date: 28 November 1921
• Docket Number: 22553.,Nos. 22552,s. 22552
• Citation: 185 N.W. 390,150 Minn. 374
• Parties: FAIRLEY v. CITY OF DULUTH et al.
• Court: Minnesota Supreme Court

150 Minn. 374

185 N.W. 390

FAIRLEY

v.CITY OF DULUTH et al.

Nos. 22552, 22553.

Supreme Court of Minnesota.

Nov. 28, 1921.

Appeal from District Court, St. Louis, County; Wm. A. Cant, Judge.

Action by George Fairley against the City of Duluth and others, and from an order overruling their demurrer to the complaint and from an order granting a temporary injunction, the defendants appeal. Orders affirmed.

Syllabus by the Court

Where an ordinance of a city imposes an unauthorized and illegal tax which affects in the same way a large number of its residents, who have a community of interest in the controlling principle of law involved, the decision of which will affect their separate property rights, the means of enforcement of the ordinance being drastic, the legal relief against the tax by an individual being attended with an expense out of proportion to the amount involved and practically not worth pursuing, but in combination with others similarly situated relief in equity being complete, a representative action may be maintained by one or more aggrieved persons in behalf of themselves and others similarly situated and appropriate relief be given by injunction.

The rule is that a party cannot have a tax enjoined as illegal without the payment of the portion confessedly valid. In this case the plaintiff's claim, made in good faith and on plausible and reasonable grounds, was that the whole tax was illegal. Relief as to the illegal tax will not be refused because the plaintiff did not pay before suit the tax found to be legal.

Laws 1921, c. 454, § 1, subd. 1, provides that no wheelage tax on motor vehicles imposed by a municipality ‘shall exceed a sum equal to 20 per cent. tax imposed by the state in lieu of all other taxes.’ This provision means that the wheelage tax shall not exceed 20 per cent. of the state tax, which on the same date was fixed on a basis of 2 per cent. of value; and the statute is not void for indefiniteness or uncertainty.

Conceding that subdivision 3 of section 1 of chapter 454, Laws 1921, exempting from the wheelage tax vehicles used for the purpose of selling or peddling the products of farm or garden, is unconstitutional, it is not so connected with the rest of the act as to render the whole unconstitutional; and there is left a workable and constitutional statute. John B. Richards, of Duluth, for appellants.

John Jenswold and John D. Jenswold, both of Duluth, for respondent.

DIBELL, J.

The defendants appeal from an order overruling their demurrer to the complaint and from an order granting a temporary injunction.

The complaint asked an injunction against the enforcement of an ordinance of Duluth imposing a wheelage tax on motor vehicles. The trial court held that the wheelage tax was valid to an amount not exceeding 20 per cent. of the 2 per cent. value tax imposed by the state on motor vehicles by the statute of 1921. An order was entered forbidding the enforcement of the wheelage tax in excess of the amount stated and overruling the demurrer.

Section 3 of article 16 of the Constitution, adopted at the November, 1920, election, is as follows:

‘The Legislature is hereby authorized to provide, by law, for the taxation of motor vehicles, using the public streets and highways of this state, on a more onerous basis than other personal property, provided, however, that any such tax on motor vehicles shall be in lieu of all other taxes thereon, except wheelage taxes, so-called, which may be imposed by any borough, city or village. Any such law may, in the discretion of the Legislature, provide for the exemption from taxation of any motor vehicle owned by a nonresident of the state, and transiently or temporarily using the streets and highways of the state. The proceeds of such tax shall be paid into said trunk highway sinking fund.’ See Laws 1919, p. 737.

Chapter 461, Laws 1921, approved April 23, 1921, provides a lieu tax on motor vehicles of 2 per cent. of the manufacturers' retail list price at the factory when new, with certain deductions as they become older, and with certain maximums and minimums. It is a value tax except that motorcycles bear a fixed tax.

Chapter 454, Laws 1921, approved April 23, 1921, is as follows:

‘Section 1. Any borough, city or village may impose a wheelage tax upon motor vehicles using the public street or highway, provided that:

‘Subd. 1. No wheelage tax imposed by any borough, city or village shall exceed a sum equal to twenty per cent. tax imposed by the state in lieu of all other taxes, except such wheelage tax, upon motor vehicles using the public streets or highways.

‘Subd. 2. No borough, city or village shall impose a wheelage tax upon the vehicle of any person not a resident of such borough, city or village, unless such vehicle shall be used principally upon the streets or highways of such borough, city or village.

‘Subd. 3. No such wheelage tax shall be imposed upon any vehicle used upon the public streets or highways solely for the purpose of selling or peddling the products of the farm or garden occupied and cultivated by the owners of such vehicles.

‘Sec. 2. This act shall take effect and be inforce from and after its passage.’

The Duluth wheelage tax is imposed by ordinance under authority of the home rule charter. It was sustained in Park v. City of Duluth, 134 Minn. 296, 159 N. W. 627. It provides for a specific tax on motorcycles, a tax based on horse power on ordinary autos, and a tonnage tax on auto trucks. Unlike the state tax it is not an ad valorem tax. It is a privilege tax based on the character of the vehicle. It is not a police measure.

By Laws 1921, c. 465, approved April 23, 1921, provision is made for a refundment by the municipality ‘in all cases where persons have paid a wheelage tax * * * in excess of the amount which a municipality may at the time of the passage of this act lawfully impose and collect.’

By G. S. 1913, § 7674, it is provided that--

‘When the question is one of common or general interest to many persons, or when those who might be made parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all.’

These are all the statutory provisions which we find it necessary to note.

The plaintiff is a resident taxpayer of Duluth and the owner of an automobile. The Duluth wheelage tax imposed upon his auto exceeds 20 per cent. of the state lieu tax. There are in Duluth 4,200 residents owning and using upon the streets 5,500 motor vehicles. More than 90 per cent. of these owners are subject to a wheelage tax in excess of 20 per cent. of the state tax.

The complaint alleges in substance that the auto owners have a common interest in the principle involved in the litigation, that it is impossible to bring all before the court, and that the action is brought in behalf of the plaintiff and all others alike interested.

The defendants make four contentions in support of their appeal:

(1) That the plaintiff has a remedy at law, and so injunction will not lie.

(2) That the plaintiff cannot have an injunction, since he did not pay before suit the portion of the tax found to be legal.

(3) That chapter 454, Laws 1921, authorizing the imposition of a wheelage tax, is so indefinite and uncertain that it cannot be enforced.

(4) That chapter 454 is unconstitutional because of the exemption from the wheelage tax of vehicles used solely for the purpose of selling or peddling the products of a farm or garden occupied and cultivated by the owner of the vehicle; and that, being unconstitutional, the Duluth ordinance is unaffected by it and is therefore in force.

[1] 1. The defendants urge that the complaint is without equity because the owner has adequate remedies at law. He may submit to an arrest and a criminal prosecution and assert the invalidity of the tax, or after arrest may test the ordinance on habeas corpus. Every day's use of his auto, during the pendency of the proceeding, is a separate offense. This is an unsatisfactory remedy. The defendants do not urge it much, but mostly insist that the owner may pay under protest and maintain an action to recover and that this affords an adequate remedy. This is their real contention. It was the point of preatest difficulty to the trial court. We have found it so. The question is not of much practical importance to the parties, but its determination makes a precedent.

The authorities substantially agree that an injunction will not issue to restrain a tax for mere irregularities or informalities in its imposition. Courts hesitate to interfere with taxing officers in the collection of public revenue. The cases are at hopeless variance and much confused on the question whether an injunction will issue at the suit of an individual taxpayer to restrain a tax which is illegal or without authority of law, solely on that ground, and without other basis for the interposition of equity. Some hold that it will. Security Sav. Bank v. Carroll, 131 Iowa, 605, 109 N. W. 212;Overall v. Ruenzi, 67 Mo. 203;St. Louis, etc., R. Co. v. Apperson, 97 Mo. 300, 10 S. W. 478;Appeal of Conners, 103 Pa. 356;Hoy v. Kuhn, 295 Ill. 33, 128 N. E. 829;Turkey Knob Coal Co. v. Hallanan, 84 W. Va. 402, 99 S. E. 849. Our court, following the apparent weight of authority, is opposed to such holding. An early case is Clarke v. Ganz, 21 Minn. 387, involving a personal property tax. It was followed in Bradish v. Lucken, 38 Minn. 186, 36 N. W. 454, and Laird v. County of Pine, 72 Minn. 409, 75 N. W. 723. In none of these was there present a recognized ground for equitable interference unless the illegality of the tax is such. An injunction was denied in Albrecht v. City of St. Paul, 47 Minn. 531, 50 N. W. 608, and Fajder v. Village of Aitkin, 87 Minn. 445, 92 N. W. 332, 934. These cases involved assessments for local improvements. The lot owner was afforded a convenient opportunity for defense in the proceeding, and this was sufficient.

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