Leavitt v. City of Morris

• Decision Date: 24 July 1908
• Citation: 117 N.W. 393,105 Minn. 170
• Parties: LEAVITT et al. v. CITY OF MORRIS.
• Court: Minnesota Supreme Court

105 Minn. 170

117 N.W. 393

LEAVITT et al.

v.CITY OF MORRIS.

Supreme Court of Minnesota.

July 24, 1908.

Appeal from District Court, Stevens County; S. A. Flaherty, Judge.

Action by Silas W. Leavitt and others against the city of Morris. From an order overruling a demurrer to the complaint, defendant appeals. Affirmed.

(Syllabus by the Court.)

James B. Ormond, for appellant.

E. T. Young and George W. Peterson, for respondents.

START, C. J.

Action by the state board of control, commenced in the district court of the county of Stevens, to recover from the city of Morris 2 per cent. of the money received by it on account of licenses issued for the sale of intoxicating liquors. The defendant demurred to the complaint, on the ground that it did not state facts sufficient to constitute a cause of action, and appealed from an order overruling the demurrer. The action is based upon chapter 288, p. 387, Laws 1907, which the defendant contends is unconstitutional. If it be so, the order overruling the demurrer is erroneous; otherwise, it is correct.

1. The first contention of the defendant is that the act is unconstitutional for the reason that a tax is attempted to be levied upon nontaxable property. The act is entitled ‘An act creating and establishing a hospital farm for inebriates, and authorizing the state board of control to purchase lands therefor, and to provide means for the building and maintenance of such institution.’ This act, after authorizing the purchase of a tract of land and the erection of suitable buildings thereon to be used as a hospital farm for inebriates, then provides the means for the erection and maintenance of such hospital. This is done by section 19 of the act, which is to the effect following: For the building and maintenance of such hospital a tax of 2 per cent. is hereby levied upon all license fees for the sale of intoxicating liquors under the laws of this state, and, whenever a license is granted by any municipality for the sale of intoxicating liquors, 2 per cent. of the amount charged for such license shall be set aside by such municipality for the payment of the tax herein specified and shall be immediately remitted to the State Treasurer, who shall credit the same to a fund known as the ‘Inebriate Fund.’ The cost and expenses of the maintenance of the hospital shall be paid from such fund, if sufficient, and any deficit shall be paid from the appropriations made by the Legislature. Section 20 reads as follows: ‘If any city, village, county or other municipality shall fail or neglect to comply with the provisions of the last section, the board of control is hereby authorized to recover said taxes in a civil action, brought in the name of said board, against such city, village, county or other municipality making default in the payment of said tax.’

It is urged that the provisions of section 19 violate section 3, art. 9, of our state Constitution, which provides that ‘public property used exclusively for any public purpose shall be exempt from taxation,’ in that license fees, when paid, are public property, and that section 19 levies a tax on such public property. It is obvious that, if the act in question levies a tax on money belonging to a municipality held by it for a public purpose, it is a violation of the provision of the Constitution quoted. The question, then, is whether the act does levy a tax on the money of the municipalities of the state. It is true that prior to the passage of the act in question all money received by a municipality as fees for liquor licenses belonged to the municipality issuing the license; but this right was conferred by the Legislature, which has the power to take away the right in whole or in part as to license fees in the future. The whole subject of the licensing of the sale of intoxicating liquors is within the control of the Legislature, which may, in its discretion, forbid the sale of such liquors, or provide the terms and conditions upon which sales may be made when licensed, and the disposition to be made of the money received for licenses. The act does not purport to deal with fees for liquor licenses received by municipalities before the date of its enactment. Therefore, if the legal effect of the act is an apportionment of the license fees received by municipalities in the future between them and the state, it is a valid law. It is the settled law of this state that license fees are not taxes, within the meaning of our Constitution, and that the Legislature may appropriate money received for liquor licenses for the erection and maintenance of an asylum or hospital for inebriates. City of Rochester v. Upman, 19 Minn. 108 (Gil. 78); State v. Cassidy, 22 Minn. 312, 21 Am. Rep. 765.

It is clear, then, that the defendant's claim that the act in question levies a tax upon public property cannot be sustained, unless it must be construed as levying a tax on money belonging to and in possession of the municipalities of the state. The fact that section 19 uses the words ‘tax’ and ‘levied’ does not necessarily determine the question; for we must construe the section as a whole, and ascertain just what the effect is of its provisions. Now, the section does not purport to levy a tax upon any money belonging to any municipality, but upon license fees for the sale of intoxicating liquors. It also provides that, whenever a license is granted, 2 per cent. of the amount charged (received) for such license shall be set aside and immediately remitted to the State Treasurer. It is manifest that the 2 per cent. is to be set aside-that is, segregated-and at once sent to the State Treasurer when received; hence 2 per cent. of every license fee received by a municipality is not its property, but it belongs to the state, and that the so-called tax is not levied upon the property of the municipality. We accordingly hold that the legal effect of the act is to appropriate 2 per cent. of all liquor license fees to the state for the erection and maintenance of a hospital farm for inebriates, and that it is not unconstitutional for the alleged reason that it levies a tax upon property exempt from taxation by our Constitution.

2. It is the further contention of counsel for the defendant that the general provisions of the act relating to the arrest, examination, commitment, detention, and treatment of an inebriate at the hospital are unconstitutional, because they deprive him of his liberty without due process of law, and that, such being the case, the whole act is void, for the reason that the Legislature would not have provided for the acquisition and maintenance of a hospital farm for inebriates if it had been advised that the commitment features of the act were void. Counsel has submitted an exhaustive brief and argument is support of this contention. If the act had made no provisions for the commitment of inebriates to the hospital, and their detention and treatment therein, it would not, for that reason, have been unconstitutional. Chapter 10, p. 119, Gen. Laws 1873, entitled ‘An act to establish a fund for the foundation and maintenance of an asylum for inebriates,’ contained no provisions as to the commitment and detention of inebriates therein. In this respect it simply provided for commissioners, to be appointed by the Governor, to locate and erect a state asylum for inebriates, the same to be conducted under the guardianship of the state and upon the same general plan as other charitable institutions of the state. The law was held constitutional. State v. Cassidy, 22 Minn. 312, 21 Am. Rep. 765. The Legislature, however, in the act here in question, undertook to and did provide a general scheme for the commitment of inebriates to, and their treatment in, the proposed hospital; and it may be conceded...