Food Center of St. Louis v. Village of Warson Woods

• Decision Date: 14 March 1955
• Docket Number: No. 2,No. 44413,44413,2
• Citation: 277 S.W.2d 573
• Parties: FOOD CENTER OF ST. LOUIS, Inc., a Corporation, Appellant, v. VILLAGE OF WARSON WOODS, a Municipal Corporation, and City of Rock Hill, a Municipal Corporation, Respondents
• Court: Missouri Supreme Court

Page 573

277 S.W.2d 573

FOOD CENTER OF ST. LOUIS, Inc., a Corporation, Appellant, v. VILLAGE OF WARSON WOODS, a Municipal Corporation, and City of Rock Hill, a Municipal Corporation, Respondents.

No. 44413.

Supreme Court of Missouri, Division No. 2.

March 14, 1955.

Motion for Rehearing or to Transfer to Court en Banc Denied

April 11, 1955.

Schwartz, Schwartz & Landsman, St. Louis, for appellant.

Lackland H. Bloom, Samuel B. Murphy, St. Louis, for respondent, Village of Warson Woods.

Richard K. Nalley, St. Louis, for respondent, City of Rock Hill.

DEW, Special Judge.

This action seeks a declaratory judgment to determine the rights of the plaintiff as to its liability for merchant's tax as between both defendants, and for a judgment to recover any such taxes already paid by plaintiff to defendant City of Rock Hill, hereinafter referred to as 'Rock Hill,' to which the latter may not have been entitled.

Plaintiff's store and appurtenant premises were partially within the limits of each of the defendants. Defendant Village of Warson Woods, hereinafter referred to as 'Warson Woods,' filed a crossbill seeking a judgment for merchant's tax against the plaintiff for the years 1949 to 1952, inclusive. The trial court ruled that the plaintiff was liable to both defendants for merchant's tax and gave judgment in favor of Warson Woods on its crossbill for $9,515.38. The plaintiff has appealed.

The parties stipulated as to the facts. They are in substance and in part as follows: Plaintiff is a duly organized corporation, operating a retail supermarket for the sale of foods and similar products, at a certain store building in St. Louis County, containing 19,000 square feet and known as 9909 Manchester Road; the store is of the self-service type; merchandise offered for sale is displayed on open shelves and in cases with prices of various items posted; customers are provided with four-wheel carts into which they place the items which they select from the merchandise and desire to purchase, after which the customer wheels the cart to one of the check-out counters stationed at a cash register, where the merchandise is removed from the cart, is viewed by the checker, the prices totaled and paid.

Defendant Rock Hill is a duly incorporated city of the fourth class under Section 79.010 RSMo 1949, V.A.M.S. Since 1948, pursuant to an ordinance of that city, it has required merchants to obtain a merchant's license as a prerequisite to doing business as such in said city, and pursuant thereto has demanded and collected of the plaintiff payment for such license, measured by plaintiff's gross sales within that city. The gross sales of the plaintiff at the store in question for the years 1948 to 1952, inclusive, were in the total sum of $9,597,590, on which plaintiff has paid Rock Hill a total merchant's tax for those years in the sum of $9,597.59. Under Ordinance No. 133 of Rock Hill, a merchant is defined as follows: 'Whoever shall deal in the selling of any goods, wares or merchandise at any store, stand or place occupied for that purpose within Rock Hill Village, is hereby declared to be a merchant, except as is or may be otherwise provided by ordinance.' The ordinance provides that a person so defined must make and file an annual statement of the aggregate sales made by him preceding June 1, and requires the city to levy a tax of one dollar for each $1,000 or fractional part thereof of sales at each store, stand or place occupied for that purpose within the corporate limits of Rock Hill. The form of merchant's license is incorporated in the ordinance referring to the tax as 'the tax and license upon $05R as a merchant for the year $03R,' and authorizes the taxpayer 'to sell any goods, merchandise * * *, at any store, stand or place of business within the Village * * *.'

Warson Woods is a duly incorporated village under Section 80.020 RSMo 1949, V.A.M.S., and adjoins the corporate area of Rock Hill. Since February 9, 1949, under its Ordinance No. 54, Warson Woods has required merchants doing business in that village to obtain a merchant's license, and pursuant thereto has demanded of plaintiff payment of such license, measured by plaintiff's gross sales, which tax the plaintiff has refused to pay. Its ordinance requires levy and payment of one dollar on each $1,000 of the gross sales, or fraction thereof, as a prerequisite to the issue of such license. A penalty is provided for noncompliance with the ordinance.

All of the check-out counters and cash registers in plaintiff's store at which the merchandise selected for purchase was checked and the sale prices computed and paid, are located in that portion of the store building which is within the boundary lines of the defendant Rock Hill, as are also 86.6 percent of the floor area and 65.7 percent of the frontage. The remaining 13.4 percent of the floor area and 34.3 percent of the frontage lie within the boundaries of Warson Woods. Adjacent to the building is a lighted, paved parking area, consisting of 59,500 square feet, of which 96.6 percent is located in Warson Woods, and 3.4 percent within Rock Hill. The lease under which plaintiff occupies the store building provides that plaintiff may have the use of and access to said parking area for its customers, along with tenants of adjoining premises. Also, during the month of December, the plaintiff, in addition to using the parking area for such parking purposes, has used a portion thereof for the display and sale of Christmas trees and Christmas decorations, and a stand therefor was erected, all entirely within that portion of the parking area which is situated within Warson Woods. The receipts from such Christmas sales so located for the years 1947 to 1952, inclusive, totaled $40,256.26.

Ordinance No. 54 of Warson Woods defines the term 'merchant' as follows: 'The term 'merchant' as used in this ordinance shall include every person who shall deal in the selling of any goods, wares, merchandise or personal property of any description or the rendering of any service in connection therewith at any store, stand, or place within the Village of Warson Woods, except as is or may be otherwise provided in this ordinance.' (Italics supplied.) This ordinance requires a merchant's license as a prerequisite to doing business as a merchant, as so defined, and application therefor is based on an annual statement of the aggregate sales made. The license tax levied is referred to as imposed 'upon the privilege of engaging, within the limits of the Village of Warson Woods, Missouri, in the business of a merchant as defined in Section 1 hereof.' A blank form of the license is contained in the ordinance in the same words as appear in the blank form of Ordinance 133 of Rock Hill, except as to the amount paid, name of taxpayer, tax period and name of village.

The court entered its findings and decree to the effect that both the defendants have attempted to collect a merchant's tax from the plaintiff under their merchant's tax ordinances, respectively; that the ordinance of Rock Hill contemplates that a merchant is one dealing in the selling of goods, wares and merchandise within the limits of the city, and that the tax is measured by the volume of sales; that the Warson Woods merchant's tax ordinance contemplates not only one dealing in such goods, wares and merchandise, but includes the doing of work or rendering of any services in connection therewith, which, the court said, may refer to the idea of 'dealing,' or 'selling' or, possibly, 'goods, wares and merchandise.' The court further found that in any event, the ordinance of defendant Rock Hill was valid, enforceable, and that the tax collected thereunder was authorized by law. The court further found that even though the actual sales of the articles were not made within the limits of Warson Woods, the tax imposed by that village would be valid on the theory that work or service had been rendered in connection therewith. The court held that Warson Woods had a right by its ordinance to define the term 'merchant' in broader terms than that contemplated by the Rock Hill ordinance, and points out that the plaintiff raises no question about the right of Warson Woods to define 'merchant' as it appears in the Warson Woods tax ordinance. The court ordered that the plaintiff make its returns to defendant Warson Woods in accordance with the ordinance of that city. Subsequently, upon motion, the court amended its findings and decree by sustaining the motion of the defendant Warson Woods for judgment on its crossbill against the plaintiff for merchant's taxes for the years 1949 to 1952, inclusive, in the total sum of $9,515.38, which included interest accrued.

Plaintiff complains that the court erred in construing Ordinance 54 of Warson Woods as imposing a merchant's tax based on gross sales made outside of the geographical limits of that village. It further argues that the ordinance should have been construed as a revenue measure, not as a regulatory measure, and, therefore, to be construed strictly in favor of the taxpayer; that strictly construed, the wording of the ordinance (Section 1) limits the term 'merchant' to one engaged 'within the limits of the Village of Warson Woods,' and that the court erred in not construing the word 'service' in the Warson Woods ordinance defining a merchant also as one 'rendering any service in connection therewith,' as meaning work or labor, and that the 'rendering' of any service, to be applicable, must have been for a consideration; and, lastly, 'that the court erred in failing to construe the objects of taxation as set out by the ordinance according to their popular signification.'

As to the judgment on the counterclaim of defendant Warson Woods,...