Koons v. Bd. Of Com'rs Of Atl. City.

• Decision Date: 14 June 1946
• Parties: KOONS v. BOARD OF COM'RS OF ATLANTIC CITY.
• Court: New Jersey Supreme Court

134 N.J.L. 329

47 A.2d 589

KOONS

v.BOARD OF COM'RS OF ATLANTIC CITY.

Supreme Court of New Jersey.

June 14, 1946.

Certiorari proceeding by Luella Koons against the Board of Commissioners of Atlantic City to review an ordinance of Atlantic City levying a sales tax pursuant to N.J.S.A. 40:48-8.1 et seq.

Ordinance set aside.

May term, 1946, before DONGES, HEHER and COLIE, JJ.

Powell & Parker, of Mount Holly (Harold T. Parker and Robert W. Criscuolo, both of Mount Holly, of counsel), for prosecutrix.

Leon Leonard and Chaim H. Sandler, both of Atlantic City, for defendant.

John Lloyd, Jr., of Atlantic City, for Atlantic City Hotel Ass'n.

Ralph Harcourt, of Atlantic City, for Atlantic City Planning & Improvement Ass'n.

Alfred T. Glenn, Jr., of Atlantic City, for Atlantic City Chamber of Commerce.

Vincent S. Haneman, of Atlantic City, for Atlantic City Restaurant Ass'n.

Thomas H. Munyan, of Atlantic City, for Committee for Improvement of Atlantic City through Sales Tax.

HEHER, Justice.

The question here is the constitutional sufficiency of Ch. 156 of the Laws of 1945, Pamph.L. p. 544, N.J.S.A. 40:48-8.1 et seq. The writ brings up for review an ordinance of Atlantic City which levied a sales tax pursuant to the statute.

It is said that the act is special and local in contravention of Article IV, Section VII, paragraph 11 of the State Constitution, N.J.S.A., proscribing private, local or special laws regulating the internal affairs of towns and counties. The Legislature thereby declared ‘an emergency * * * to exist in municipalities bordering upon the Atlantic Ocean which are seaside or summer resorts and which because of their size have a great fluctuation in the number of visitors,’ in consequence of the damage wrought by the hurricane of September 14, 1944, the ‘continued erosion of beaches and the danger of hurricane in the near future, all of which make it impossible for such municipalities to function normally as seaside or summer resorts during the next three fiscal years unless some additional revenue’ be raised to provide ‘the facilities which attract visitors' to such resorts; and the power to levy a retail sales tax, subject to certain limitations and conditions, is expressed to be conferred upon ‘any city having a population in excess of fifty thousand inhabitants, which borders upon the Atlantic ocean and is a seaside or summer resort, and in which an emergency is' therein ‘declared to exist.’ The act expires of its own limitation on January 1, 1948.

Atlantic City is the only seaside resort which falls into this statutory category; and it is urged that the classification is illusory, in that ‘population and form of municipal government bear no relationship either to the avowed purpose of the act or to the nature of the remedy it provides.’ The essence of the argument contra is that the class is delimited by a reasonable standard ‘predicated on size and the degree of the fluctuation in the visitor population,’ i. e. ‘great fluctuation of population,’ and the classification therefore rests upon differences that are real and substantial and germane to the object of the act, and, since there is an inclusion of all cities within the ‘emergency class,’ as so delimited, the constitutional requirement is met. In a word, it is said that the proofs reveal substantial differences between Atlantic City and the other seashore resorts-‘differences which are due to, or related to, differences in their population’-which serve to place that municipality ‘in a class by itself’ as regards the subject matter of the challenged legislation, which, it is insisted, is ‘peculiarly adapted to’ its ‘distinctive needs.’

The statute is read as setting up ‘a standard compounded of several requisites:’ and it is argued that, while ‘some of these requisites are common to all of the resorts named, many are peculiar to Atlantic City alone’; that ‘the proofs show that those requisites which are peculiar to Atlantic City alone are the reference to size, great fluctuation in visitor population and damage caused by the recent hurricane’; and that prosecutrix has failed to sustain the burden of proving that the resorts excluded from the operation of the act ‘possess these qualities and qualifications in any degree even remotely comparable to Atlantic City.’ Again, it is urged that ‘the catastrophic proportions of hurricane damage suffered by Atlantic City alone coupled with its already high tax rate and staggering debt load served to create the emergency condition declared by and recognized in the act’; that ‘the mere fact that other resorts may have a high tax rate and heavy debt is not sufficient to qualify them for inclusion in the same class with Atlantic City,’ since the excluded municipalities ‘have failed to meet one or more of the requisites as laid down in the act’; and that Atlantic City ‘possesses distinctively individual characteristics entirely dissimilar from other resort cities,’ and is therefore ‘a proper subject of individual classification’ for the purposes of the particular legislation, and hence the act is general in constitutional intendment.

We shall address ourselves, first, to a discussion of the pertinent legal principles.

Article I, paragraph 19, of the State Constitution accords recognition to the common-law division of municipalities into counties, cities, boroughs, towns, townships and villages. This classification is permissible under the Constitution for the purposes of local government; and laws limited to any of such classes are general in the constitutional sense, even though there may be municipalities in one or more of the other classes which have the like characteristics and attributes, considered in relation to the subject matter of the legislation. This view has long had general acceptance. But the law-making authority may subdivide the common-law municipalities into subordinate classes; and the validity of such legislative classification depends upon the existence of distinguishing qualities and attributes related to the subject matter of the legislation. The characteristic constituting the basis of the classification must be reasonably appropriate to the object of the law. Unless it rests upon distinctions that are substantial and not merely illusory, the classification is wanting in the virtue of constitutional generality. The test is whether the statutory class has a logical and reasonable basis, free from artificiality and arbitrariness, embracing all and omitting none naturally falling into that category. Is the legislation of such a character as that it is equally appropriate to all forming the statutory class, and is that class embracive of all in like situation and circumstances, and therefore natural members of the class? If, viewed in the light of the legislative design, the necessity and propriety of the classification reasonably appears, it is not within the constitutional interdict. Wanser v. Hoos, 60 N.J.L. 482, 525, 38 A. 449, 64 Am.St.Rep. 600; Hermann v. Guttenberg, 63 N.J.L. 616, 44 A. 758; Boorum v. Connelly, 66 N.J.L. 197, 48 A. 955, 88 Am.St.Rep. 469; Lewis v. Board of Education of Jersey City, 66 N.J.L. 582, 50 A. 346; Raymond v. Township Council of Teaneck, 118 N.J.L. 109, 191 A. 480.

Ordinarily, the exclusions from the statutory class are determinative of the generality of the act in constitutional intendment. ‘A law is special in a constitutional sense when, by force of an inherent limitation, it arbitrarily separates some persons, places, or things from others, upon which, but for such limitation, it would operate. The test of a special law is the appropriateness of its provisions to the objects that it excludes.’ Budd v. Hancock, 66 N.J.L. 133, 48 A. 1023, 1024. And, in resolving the question, the substance and practical operation rather than the form of the statute control. Alexander v. City of Elizabeth, 56 N.J.L. 71, 28 A. 51, 23 L.R.A. 525.

Thus, population forms a valid basis of classification in statutes relating to the structure and machinery of municipal government only ‘where population bears a reasonable relation to the necessities and proprieties of the various grades of municipal government.’ Lewis v. Board of Education of Jersey City, supra [66 N.J.L. 582, 50 A. 347]. In applying the general rule adverted to, Chief Justice Depue declared that the classification is illusive unless it is founded on ‘some characteristic or peculiarity plainly distinguishing the places included from those excluded, and making the legislation fit and appropriate to those included, and inappropriate to those which are omitted. It must embrace all, and exclude none, whose conditions and wants render such legislation equally appropriate to them as a class.’ And in Lowthorp v. Trenton, 61 N.J.L. 484, 40 A. 442, affirmed 62 N.J.L. 795, 44 A. 755, 756, the Court of Errors and Appeals held that ‘population bears a reasonable relation to the subject matter of the legislation * * * only when such legislation deals with the structure or machinery of municipal government. Classification on the basis of population for any other purpose than those mentioned is illusive and unsubstantial, and consequently is within the constitutional prohibition.’

Classification on the ratio of population ‘cannot be made the means of evading the constitutional interdict of local or special laws. The question whether any particular statute is local or special must be determined, not upon its compliance with a legislative classification, but upon whether, having regard to the character of the legislation and the limitation upon it contained in the act, the statute is or is not a general law, as defined by the courts.’ Wanser v. Hoos, supra [60 N.J.L. 482, 38 A. 450]. The question is whether ‘the provisions of the act are such as are germane to population.’ Mortland v. Christian, 52 N.J.L. 521, 20 A. 673, 674. The case of Foley v. Hoboken, 61 N.J.L. 478, 38 A. 833, 834,...