Kansas City v. J. I. Case Threshing Mach. Co.

• Citation: 87 S.W.2d 195,337 Mo. 913
• Parties: Kansas City, a Municipal Corporation, Defendant in Error, v. J. I. Case Threshing Machine Company, a Corporation, and Ellis Chadwick, Plaintiffs in Error
• Decision Date: 18 October 1935
• Court: United States State Supreme Court of Missouri

87 S.W.2d 195

337 Mo. 913

Kansas City, a Municipal Corporation, Defendant in Error, v. J. I. Case Threshing Machine Company, a Corporation, and Ellis Chadwick, Plaintiffs in Error

Supreme Court of Missouri

October 18, 1935

Motion for Rehearing Overruled October 18, 1935.

Appeal from Jackson Circuit Court; Hon. Ralph S. Latshaw Judge; Opinion filed at May Term, 1935, July 10, 1935; motion for rehearing filed: motion overruled at September Term October 18, 1935.

Reversed.

McCollum Schwind & Barnes for plaintiffs in error.

(1) The source of the city's power to levy and collect a license fee for revenue must be based on a legislative grant. (a) Under Sections 1 and 10, Article X, Missouri Constitution the grant of power to the city must be by statute. (b) This applies to all taxes for revenue purposes. (c) The nature of the fee exacted makes Section 2 of the ordinance a revenue measure. Barber Paving Co. v. St. Joseph, 183 Mo. 451, 82 S.W. 64; Morey Eng. & Const. Co. v. St. Louis Artificial Ice Rink Co., 242 Mo. 242, 146 S.W. 1145; State ex rel. v. Hudson, 73 Mo. 302; State v. Bixman, 162 Mo. 1, 62 S.W. 828; State v. Parker Distilling Co., 236 Mo. 270, 139 S.W. 453; State ex inf. v. Mo. Athletic Club, 261 Mo. 576, 170 S.W. 904; State ex rel. Tarleton D. G. Co. v. Alt, 224 Mo. 493, 123 S.W. 882; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375, 55 S.W. 627. (2) The city is restricted by statute which applies to merchants and Section 2 of the ordinance is violative of the limitations of Section 9006, Revised Statutes 1919, Section 7596, Revised Statutes 1929, and it is therefore void. Sec. 7596, R. S. 1929, Sec. 9006, R. S. 1919; State ex rel. Union E. L. & P. Co. v. Baker, 293 S.W. 401; State ex rel. Kersey v. Pemiscot Land & Cooperage Co., 295 S.W. 78. (3) Under applicable rules of construction Section 9006 (Sec. 7596, R. S. 1929) must be strictly construed in favor of the company and against the city; (a) "may" is to be construed as "shall;" (b) other modes of grading the tax are excluded. St. Louis v. Dreisoerner, 147 S.W. 998, 243 Mo. 217; Trenton v. New Jersey, 262 U.S. 182, 43 S.Ct. 537, 196 U.S. 549, 25 S.Ct. 329; 36 Cyc. 1160; 39 C. J. 1393, sec. 4; Steines v. Franklin County, 48 Mo. 178; State ex rel. Holladay v. Withrow, 24 S.W. 638; Cornell v. McAllister, 249 P. 961; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375, 55 S.W. 629; Montgomery v. Henry, 1 L. R. A. 658; Village of Kent v. United States, 113 F. 237; Rock Island Co. v. United States, 4 Wall. 435, 18 L.Ed. 419; State v. Mayor, 30 A. 532; State v. Lesser, 237 Mo. 318, 141 S.W. 888; Moberly v. Hoover, 93 Mo.App. 721; St. Louis v. Meyer, 185 Mo. 583, 84 S.W. 914; Peterson v. Ry. Co., 178 S.W. 182; State ex rel. v. St. Louis, 117 Mo. 1, 22 S.W. 910; Bates v. Comstock Realty Co., 267 S.W. 641; Fanchor v. Board of Commrs., 210 P. 241. (4) All charter powers of the city are held in subjection to the enactments of the General Assembly in matters of general as distinguished from purely local concerns. Section 2 of the ordinance must, therefore, yield to Section 7596, Revised Statutes 1929. State ex rel. v. Jost, 265 Mo. 72, 175 S.W. 591, Ann. Cas. 1917D, 1102; State ex rel. v. Mason, 153 Mo. 23, 54 S.W. 527; State v. Police Commissioners, 80 Mo.App. 206; State ex rel. Carpenter v. St. Louis, 2 S.W.2d 713; State ex rel. Garner v. M. & K. Tel. Co., 189 Mo. 83, 88 S.W. 41; Ex Parte Tarling, 241 S.W. 933. (5) To exact the tax defined in Section 2 of the ordinance instead of permitting the company to pay the tax which it is ready to pay, as defined in Section 3 of the ordinance, is to deny to the company and its codefendant due process of law and the equal protection of the law and is to deny the mandate of Section 3, Article X of the Constitution prescribing the rule of uniformity as applied to all subjects of taxation within the territorial limits of the taxing authority. Sec. 1, 14th Amend., U.S. Const.; Sec. 3, Art. X, Const. of Mo.

George Kingsley, Roy B. Cunningham and William F. Allen for defendant in error.

Kansas City under its charter has power to license, tax and regulate any and every person, firm, association or corporation in anywise engaged in the occupation, business, trade, pursuit, profession, calling, employment, vocation, avocation, or practice of . . .; dealer or distributor of goods, wares, or merchandise . . .; and to fix the license and occupation taxes to be paid thereon and therefor; and in the exercise of the foregoing powers, to divide any one or more of the various occupations, businesses, trades, pursuits, professions, callings, employments, vocations, avocations, corporations, institutions, establishments, articles, utilities and commodities into different classes. Constitutional Amendments, secs. 16, 17, Art. IX; Laws 1921, pp. 701-703; Secs. 7287, 7289, R. S. 1929; Campbell Baking Co. v. Harrisonville, 50 F.2d 670; Automobile Gasoline Co. v. St. Louis, 32 S.W.2d 281; Ex parte Asotsky v. Beach, 5 S.W.2d 22; Viquesney v. Kansas City, 305 Mo. 488; St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124; American Mfg. Co. v. St. Louis, 270 Mo. 40; American Mfg. Co. v. St. Louis, 250 U.S. 459; Kansas City v. Richardson, 90 Mo.App. 450; St. Louis v. Railways, 263 Mo. 387; St. Louis v. Railways, 241 U.S. 647; St. Louis v. Baskowitz, 273 Mo. 543; City of Aurora v. McGammon, 138 Mo. 38.

OPINION

Hyde, C.

This is a proceeding by writ of error to review the conviction and fine assessed against defendants for violating an ordinance of Kansas City requiring payment of an occupation tax. The case was tried de novo in the circuit court upon an appeal from the municipal court upon an agreed statement of facts, as follows:

"The J. I. Case Threshing Machine Company is a corporation organized under the laws of the State of Wisconsin, and as such foreign corporation is duly licensed to transact business in the State of Missouri; and now maintains and for a number of years last past has maintained within the corporate limits of Kansas City, Missouri, at 2117 Broadway, and within the territorial jurisdiction of said Municipal Court of Kansas City, Division No. 2, an implement dealer's branch house. Said company is engaged at Racine, Wisconsin, in the manufacture and sale of farming machinery, implements and equipment, but does not manufacture any machinery or other products in Kansas City.

"Ellis Chadwick is the manager of the company's branch house located as aforesaid in Kansas City and is engaged in no other pursuit or calling except as such branch manager.

"The company through its manager, Ellis Chadwick, conducts at its said branch house in the following business: It keeps on hand therein certain farming machinery, implements and equipment in the said branch house, such as tractors, plows, cultivators, harrows, discs and threshing machines, which said machinery is sold to customers out of said branch house.

"The said company at its said branch house located as herein stated now occupies, and for more than one year last past has occupied, in connection with its said business more than fifty thousand (50,000) square feet floor space.

"The Commissioner of Licenses of Kansas City, Missouri, heretofore made demand upon defendant company through its manager, Ellis Chadwick, to pay the sum of five hundred dollars ($ 500.00) as a license fee as provided by Section 2 of above ordinance for 'Implement dealer's branch house occupying over 50,000 square feet of floor space in the conduct of its business.' Defendants refused to comply with said demand, whereupon Kansas City instituted prosecution under said ordinance for the violation thereof, defendants were adjudged guilty in Division 2 of the Municipal Court of Kansas City and a fine of twenty-five dollars ($ 25.00) was assessed against each of said defendants. Whereupon both defendants, appealed to the Circuit Court of Jackson County, Missouri. The facts herein set out are submitted for all purposes in this case, being now tried de novo on appeal.

"On the second day of August, 1929, this defendant, through its branch manager, Ellis Chadwick, codefendant herein, made out, upon a form provided by the commissioner of licenses of the city an affidavit of its gross annual receipts for the 12 months period ending July 1, 1928, as provided in and contemplated by said Section 3 of said ordinance, in which said affidavit the gross annual receipts of this defendant's said business for the period last aforesaid were truly shown to be sixty-two thousand, five hundred and sixty-four dollars and ninety cents ($ 62,564.90) and together with said affidavit tendered to said commissioner its check No. 6170 dated August 2, 1929, for the sum of thirty-one dollars and fifty cents ($ 31.50), being the true and just amount of said license tax based at the rate provided in said Section 3 of said ordinance. The commissioner of licenses of the city refused to receive said tender of payment of the license tax computed as aforesaid, and refused to accept the payment of said tax, or to issue to defendant company a merchant's license; and has ever since refused to accept the payment of said tax under said Section 3 and to issue to this company a license thereunder. The defendant company is now and at all times herein mentioned has been ready and willing to pay a license tax based on its gross annual receipts of the business conducted by it as aforesaid under said Section 3."

An ordinance of the city entitled, "An ordinance providing for the regulation and licensing of occupations, callings and trades and fixing a penalty for the violation of the same," Section 2, provides that:

"Every person, firm, association or corporation in this ordinance described, and every person, firm, association or corporation engaged in any business,...