Laclede Gas Co. v. City of St. Louis
| Decision Date | 09 January 1953 |
| Docket Number | No. 43059,43059 |
| Citation | 363 Mo. 842,253 S.W.2d 832 |
| Parties | LACLEDE GAS CO. et al. v. CITY OF ST. LOUIS et al. |
| Court | Missouri Supreme Court |
James E. Crowe, City Counselor, John P. McCammon, Associate City Counsel, Forrest
G. Ferris, Jr., Associate City Counselor, St. Louis, for appellants.
Thomas A. Johnson, Gen. Counsel, Public Service Commission of Mo., Jefferson City, for intervener-respondent.
Thompson, Mitchell, Thompson & Douglas, James P. Brown and Edmonstone F. Thompson, St. Louis, for respondent.
The City of St. Louis, Missouri, Joseph T. Hayden, the city's License Collector, and Milton Carpenter, the city's Comptroller [all hereinafter referred to as defendants] have appealed from a declaratory judgment entered in an action wherein the petition of Laclede Gas Company, a corporation, [hereinafter called plaintiff] sought the court's construction of the city's Ordinance No. 41325 [Sec. 95-97, Chap. 55, Rev.Code of St. Louis, 1948] which imposed a license tax of 5% on plaintiff's gross receipts from the sale of gas in said city. The five persons named in the caption, who constitute the Public Service Commission of Missouri, [which is hereinafter called Intervenor] were permitted to intervene as plaintiffs in the cause. The defendants filed answer. The court's declaratory judgment was rendered upon the pleadings and upon a stipulation wherein the parties agreed to the hereinafter appearing facts. Inasmuch as it affirmatively appears that the amount in controversy is in excess of $7,500 there is no question as to our jurisdiction.
As a public utility plaintiff sells gas within the defendant city. Under our statutes the rates and charges of plaintiff for gas sold to its customers are subject to the jurisdiction of Intervenor. A portion of such gas so sold by plaintiffs was purchased by plaintiff from the Mississippi River Fuel Corporation [hereinafter called Mississippi]. The Federal Power Commission, having jurisdiction of Mississippi's rates and charges, 15 U.S.C.A Sec. 717 et seq. on April 6, 1943, initiated a proceeding which eventually resulted in lowering Mississipp's rates to plaintiff. While that proceeding was pending, on order of the Federal Power Commission and under protest, Mississippi filed on January 20, 1946, a new and lowered rate schedule. From January 20, 1946, until November 1, 1948, Mississippi, under protest, collected from plaintiff only the lower rates filed on January 20, 1946. Fearful that the lower rates it was paying Mississippi during the period in question might not be sustained, plaintiff voluntarily segregated, impounded and kept in its separate bank accounts monies which equalled the difference between the lower rates it was actually paying Mississippi and the monies it would have to pay if Mississippi succeeded in maintaining its original higher rates. Such segregated monies from its sale of gas in St. Louis for the period in question was $1,761,372.20. That sum was not segregated by plaintiff upon any order of any court or of Intervenor. Upon such last stated sum plaintiff paid for the period in question and without protest to the city a 5% license tax in the total sum of $88,068.61. The above $1,761,372.20 was only a portion of plaintiff's gross receipts for the period in question.
It also appears that the rates charged by Interstate Natural Gas Company, Inc., were under review in proceedings before the Federal Power Commission, and that in August, 1950, plaintiff received under a decree of the United States Court of Appeals, in the Interstate rate proceeding the sum of $169,251.31. Interstate was a gas supplier of Mississippi and thus a remote supplier of plaintiff. The last above amount plaintiff had collected from its St. Louis customers during the period in question in the Interstate case. The above decree, and the stipulations filed in the Interstate rate proceeding contemplated and provided for plaintiff's refund of said $169,251.31 to plaintiff's St. Louis customers under orders of Intervenor, and that money had been subjected to the instant license tax, and plaintiff paid the city 5% of the gross amount thereof, or $8,462.57. The above $169,251.31 represented monies collected by plaintiff from its customers as part of its rates and charges and paid to part of its rates and charges and paid to Mississippi, and in turn paid by the latter to Interstate. On November 1, 1948, plaintiff's rates to its customers were reduced to reflect the ultimate lower rates at which plaintiff was able to purchase gas.
From the inception of the above mentioned Mississippi and Interstate rate controversies plaintiff contemplated the refund to its customers of such savings as plaintiff might effect by those rate controversies and stood ready to pass on to its customers any saving or refund to it, in the price it paid Mississippi for gas. Plaintiff filed with Intervenor an application for an order directing the distribution by plaintiff to its customers of whatever it might save or be refunded as a result of the Mississippi and other related rate matters 'after deducting from such refunds, the actual and reasonable cost of such distribution, as well as any tax required to be paid with respect thereto,' etc. On June 20, 1944, Intervenor made such order and authorized such future distribution to be made by plaintiff 'after deducting therefrom the actual reasonable cost of distribution and any taxes required to be paid thereon.' Such provision for the deduction of taxes was also included in the stipulation between plaintiff and Intervenor which was filed in the Interstate case. Thereafter, and on the same day the instant action was filed, plaintiff filed with Intervenor another application seeking alternative authority, dependent upon the outcome of this instant case to (1) distribute to tis customers the above impounded ans segregated funds collected from its city customers less the cost of distribution thereof, or, (2) to distribute the above impounded and segregated funds less the taxes paid and the cost of distribution thereof.
The portion of the ordinance in question here provides: And another section of the ordinance provides the tax levied in the above section shall be in lieu of any other excise, license or occupation tax, but not in lieu of a tax upon real or personal property. By Section 96 of the ordinance, plaintiff is required to file with the city's comptroller, semiannually, 'a sworn statement of gross receipts for such business for the six calendar months preceding the filing of such statement,' and to pay to the city's license collector 'an amount equal to five per cent of the gross receipts as shown by the statement so filed.' The history of this ordinance is set out in City of St. Louis v. Mississippi River Fuel Corporation, D.C., 57 F.Supp. 549.
In its instant petition plaintiff prayed the court to declare and construe the term 'gross receipts,' as used in the ordinance above, to refer only to such monies as plaintiff was 'entitled to retain and use for the benefit of its business'; and to also declare as the true construction of said ordinance that plaintiff, in determining its gross receipts, by which to measure the amount of its license tax liability under said ordinance, may, in future tax periods wherein monies previously taxed are [pursuant to the order of Intervenor] returned or refunded to plaintiff's customers or former customers in the city, deduct from its actual gross receipts in such tax periods the amount so returned or refunded to its customers.
In its judgment and decree the lower court found that a justiciable controversy existed; it further declared that under the ordinance, (1) the amount of the tax 'is to be in relation to the benefit derived by the taxpayer from selling or distributing gas in the city'; (2) that 'gross receipts,' as used in the ordinance means 'money received by [plaintiff] * * * for gas sold or distributed in the city * * * less such refunds in such tax period of money previously taxed as part of its 'gross receipts"; (3) that plaintiff had been required to pay, as it had done, its license taxes, measured by sums, which included the sums plaintiff now proposes to refund pursuant to orders of Intervenor; and (4) that when plaintiff refunds to its customers and former customers the above segregated monies it 'may deduct, and defendants shall allow as a deduction, the amount of such refunds from plaintiff's receipts in the [future] tax period or tax periods in which the [refunds] shall be made in determining the amount of plaintiff's 'gross receipts' subject to tax * * * for such tax period or tax periods.'
It is so elementary as to require no citation of authority that the basic rule of construction of an ordinance or statute is to first seek the lawmakers' intention, and if possible to effectuate that intention. The law favors constructions which harmonize with reason, and which tend to avoid unjust, absurd, unreasonable or confiscatory results, or oppression. Automobile Gasoline Co. v. City of St. Louis, 326 Mo. 435, 32 S.W.2d 281; Wood v. Deuser, 349 Mo. 1187, 164 S.W.2d 303. This is a taxing ordinance and must be strictly construed. City of St. Louis v. Mississippi River Fuel Corporation, supra.
The very fact that the ordinance tax was fixed upon a percentage basis of gross receipts expresses a legislative intention to levy a tax which would be measured by the benefit to be realized by plaintiff from its gross receipts from the sale of gas in the city. The ordinance does not levy a fixed tax arbitrary in amount, but instead levies one which of necessity would fluctuate with the...
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