Laclede Power & Light Co. v. City of St. Louis

• Decision Date: 03 July 1944
• Docket Number: 38116
• Parties: Laclede Power & Light Company, a Corporation, v. The City of St. Louis, a Municipal Corporation, Appellant
• Court: Missouri Supreme Court

182 S.W.2d 70

353 Mo. 67

Laclede Power & Light Company, a Corporation, v. The City of St. Louis, a Municipal Corporation, Appellant

No. 38116

Supreme Court of Missouri

July 3, 1944

Rehearing Denied September 5, 1944.

Appeal from Circuit Court of City of St. Louis; Hon. David J Murphy, Judge.

Affirmed.

Joseph F. Holland, City Counselor, and Oliver Senti Associate City Counselor, for appellant.

(1) A municipality can lawfully impose a license tax upon a utility which already has the right to use the streets. Memphis Gas Light Co. v. Taxing Dist., 109 U.S. 398, 27 L.Ed 976; St. Louis v. United Rys. Co., 210 U.S. 266, 52 L.Ed. 1054; Springfield v. Smith, 138 Mo. 645, 40 S.W. 757. (2) Ordinance 41572 does not violate the Constitution or the laws of Missouri. Neither the Constitution nor the laws of the state forbid reasonable classification for the purpose of taxation, and discrimination through classification is forbidden only when it is such as to preclude the assumption that it was made in the exercise of legislative judgment and discretion. Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339, 205 S.W. 196; State ex rel. v. Blaine, 332 Mo. 582, 58 S.W.2d 975; Welch v. Henry, 223 Wis. 319, 271 N.W. 68; Neb. Tel. Co. v. City of Lincoln, 82 Neb. 59, 117 N.W. 284; Lincoln Traction Co. v. City of Lincoln, 84 Neb. 327, 121 N.W. 435; Hines v. Hook, 338 Mo. 114, 89 S.W.2d 52; St. Louis Union Trust Co. v. State, 348 Mo. 725, 155 S.W.2d 107; St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124, 264 S.W. 654; Knoxville & Ohio R. Co. v. Harris, 99 Tenn. 684, 43 S.W. 115; Great A. & Pac. Tea Co. v. Maxwell, 199 N.C. 433, 154 S.E. 838; State v. Willingham, 9 Wyo. 290, 62 P. 797; Conrad v. State, 16 A.2d 121; In re Watson, 17 S.D. 486, 97 N.W. 463; Schaeffer v. Carter, 252 U.S. 37, 64 L.Ed. 445; Diefendorf v. Gallet, 51 Idaho 619, 10 P. 307; Reed v. Bjorsen, 191 Minn. 254, 253 N.W. 102; State ex rel. Atwood v. Johnson, 170 Wis. 218, 175 N.W. 589; Barbier v. Connolly, 113 U.S. 27, 28 L.Ed. 923; Bell's Gap R. Co. v. Pennsylvania, 134 U.S. 232, 33 L.Ed. 892; New York Rapid Transit Corp. v. City of New York, 303 U.S. 573, 82 L.Ed. 1024; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435, 32 S.W.2d 281; Tax Commissioner v. Jackson, 283 U.S. 527, 75 L.Ed. 1248. (3) A classification for the purpose of taxation is proper when it is based on reason; when it prevents gross injustice in the burden of taxation; when the reasonableness of such classification cannot be determined by any fixed rule; in taxation there is a broader power in classification than in some other exercise of legislation; classification for taxation is not reviewable by the courts unless palpably arbitrary; a classification is not invalid because it affects one person or corporation alone where it is broad enough to apply to others if they exist. Cooley on Taxation (4th Ed.), sec. 334. (4) A classification for taxation does not violate Section 3 of Article X of the Missouri Constitution if it bears alike upon all of the class established; and tends to require all persons in the business of supplying electricity for compensation to contribute their portion to the public revenue. State ex rel v. Blaine, 332 Mo. 582, 58 S.W.2d 975. (5) The public revenue is not limited to money received from taxes. Gass v. Gordon, 266 Mo. 394, 181 S.W. 1016. (6) A classification for taxation is not unconstitutional because it does not tax all in the same business. St. Charles ex rel. Palmer v. Schulte, supra; Conrad v. State, 16 A.2d 121; In re Watson, 17 S.D. 486, 97 N.W. 463; Brannon v. Harrison, 172 Ga. 669, 158 S.E. 319. (7) And that is true of a classification established for the purpose of taxation for revenue only. Ludlow-Saylor Wire Co. v. Wollbrinck, supra; State ex rel. Atwood v. Johnson, 170 Wis. 218, 175 N.W. 589; Diefendorf v. Gallet, 51 Idaho 619, 10 P.2d 307; St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124, 264 S.W. 654. (8) There is no good reason why electric companies may not be placed in classes depending on whether or not they are required by their charter to pay a percentage of their gross receipts to the company. Neb. Tel. Co. v. City of Lincoln, 82 Neb. 59, 117 N.W. 284; People ex rel. Met. Street Ry. Co. v. Board of Taxing Commissioners, 199 U.S. 1, 50 L.Ed. 65; Lincoln Traction Co. v. City of Lincoln, 84 Neb. 327, 121 N.W. 435. (9) The fact that a person is in a class so different from others that the law exempts him from burdens which others must bear, places him in a class different from those others when they are exempted from burdens which he must bear. Welch v. Henry, 223 Wis. 319, 271 N.W. 68. (10) The established rules of construction applicable to statutes also apply to the construction of the Constitution. State ex rel. Buchanan County v. Imel, 242 Mo. 293, 146 S.W. 783. (11) The fact that a license tax applies to only one person does not affect its validity. Village of Beverly Hills v. Schulter, 344 Mo. 1098, 130 S.W.2d 532. (12) The City of St. Louis can lawfully classify subjects and objects of taxation. It can divide occupations for the purpose of taxation. Charter of St. Louis, Sec. 2, Art. I; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435, 32 S.W.2d 281. (13) A classification for the purpose of taxation is valid if based on reasonable grounds. Cooley on Taxation (4th Ed.), sec. 334; Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339, 205 S.W. 196. (14) Courts will not declare an ordinance unreasonable unless no difference of opinion can exist. Wagner v. St. Louis, 284 Mo. 417, 224 S.W. 413. (15) Within the field of delegated authority the City may go to the boundaries of reason. C. Beck Co. v. City of Milwaukee, 139 Wis. 340, 120 N.W. 293. (16) The plaintiff may assert its own rights, but not the rights of others. State ex rel. Crandall v. McIntosch, 205 Mo. 689, 103 S.W. 1078; Ballentine v. Nester, 164 S.W.2d 378. (17) The ordinance of which Sections 2113 and 2123 of the Revised Code are a part expired April 15, 1940, and exemptions from the payment of the tax imposed by ordinance 41572 ended at that time.

Jones, Hocker, Gladney & Grand, Lon O. Hocker, Joseph H. Grand and Vincent L. Boisaubin for respondent.

(1) Acceptance of the ordinances of St. Louis and compliance with their terms, as now embodied in Sections 2113 and 2123 of the Revised Code of St. Louis for 1923, created a contract between the City and the one so accepting, and the 5 per cent of gross receipts provided for therein was a rental charge and not a tax. St. Louis v. Laclede Power & Light Co., 347 Mo. 1066, 152 S.W.2d 23; St. Louis v Laclede Gas Light Co., 155 Mo. 1; Carondelet v. Picot, 28 Mo. 125; St. Louis v. Western Union Tel. Co., 148 U.S. 92; Plattsburg v. People's Tel. Co., 88 Mo.App. 306; Lancaster v. Briggs & Melvin, 118 Mo.App. 570; Hartford v. Connecticut Co., 140 A. 734, 107 Conn. 312; Mitchell v. Dakota Tel. Co., 25 S.D. 409, 127 N.W. 482; Spokane v. Spokane Gas & Fuel Co., 25 P.2d 1034; County of Tulare v. City of Dinuba, 188 Cal. 664, 206 P. 983; Des Moines v. Iowa Tel. Co., 181 Iowa 1297, 162 N.W. 329; Newport v. So. Covington Ry. Co., 89 Ky. 29, 11 S.W. 954; Lewis v. Nashville Gas & Heat Co., 40 S.W.2d 409, 162 Tenn. 269; San Francisco-Oakland Term. Ry. Co. v. Alameda County, 225 P. 304, 66 Cal.App. 7; Nebraska Tel. Co. v. City of Lincoln, 82 Neb. 67, 117 N.W. 87; City and County of Denver v. Stenger, 295 F. 809. (2) Considered as imposing a license tax Ordinance No. 41572 is in violation of Section 3, Article X, of the Missouri Constitution. The ordinance provides for a license tax which does not bear equally and uniformly upon all persons engaged in the same class of business or occupation; and makes an arbitrary and unfair distinction between such persons so engaged; and arbitrarily and unreasonably exempts from its operation a part of the same class of persons engaged in the same business and occupation. Sec. 3, Art. X, Mo. Const.; 37 C.J., Licenses, sec. 53 (3); 17 R.C.L., Licenses, secs. 30, 31, pp. 507-511; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375; St. Louis v. Spiegel, 75 Mo. 145, 147; St. Louis v. Spiegel, 90 Mo. 588; Nafziger Baking Co. v. Salisbury, 329 Mo. 1014; Kansas City v. Whipple, 136 Mo. 475; Cape Girardeau v. Groves Motor Co., 346 Mo. 762, 142 S.W.2d 1040; Washington v. Washington Oil Co., 346 Mo. 1183, 145 S.W.2d 336; State v. Bengsch, 170 Mo. 81, 70 S.W. 710; Hoefling v. City of San Antonio, 20 S.W. 85, 85 Tex. 228, 16 L.R.A. 608. (3) Ordinance No. 41572 is unconstitutional as violative of Section 4, Article II, of the Missouri Constitution, which guarantees "that all persons have a natural right to life, liberty and the enjoyment of the gains of their own industry," and of Section 30 of said article, which provides "that no person shall be deprived of life, liberty or property without due process of law." State ex rel. Wyatt v. Ashbrook, 154 Mo. 375; Nafziger Baking Co. v. Salisbury, 329 Mo. 1014. (4) Ordinance No. 41572 is a special law, and hence violates Article IV, Section 53, of the Constitution of Missouri. State v. Walsh, 136 Mo. 400; Hull v. Baumann, 131 S.W.2d 721, 345 Mo. 159; State ex rel. Ashby v. Cairo Bridge Co., 340 Mo. 190, 100 S.W.2d 441; Springfield v. Smith, 322 Mo. 1129, 19 S.W.2d 1. (5) Ordinance No. 41572 deprives respondent of its property without due process of law, and impairs the obligation of contract. Gulf & S.I.R. Co. and Yazoo & M.V.R. Co. v. Adams, 90 Miss. 559, 45 So. 91; Detroit, etc., R. Co. v. Fuller, 205 F. 86. (6) An ordinance which discriminates between the persons engaged in a like business upon the basis of the length of time in which they have been so engaged is invalid. Cape Girardeau v. Groves Motor Co., 346 Mo. 762; Soares v. City of Santa Maria, 100 P.2d 1108; Ex parte Wacholder, 36 P.2d 705, 1 Cal.App. (2d) 254...