Mayor and Council of Wilmington v. Dukes, s. 55 and 57

• Decision Date: 10 February 1960
• Docket Number: Nos. 55 and 57,s. 55 and 57
• Citation: 2 Storey 318,157 A.2d 789,52 Del. 318
• Parties: , 52 Del. 318 MAYOR AND COUNCIL OF WILMINGTON, a municipal corporation of the State of Delaware, Appellant, v. James B. DUKES, Appellee. James B. DUKES, Appellant, v. MAYOR AND COUNCIL OF WILMINGTON, a municipal corporation of the State of Delaware, Appellee.
• Court: Supreme Court of Delaware

Page 789

157 A.2d 789

2 Storey 318, 52 Del. 318

MAYOR AND COUNCIL OF WILMINGTON, a municipal corporation of

the State of Delaware, Appellant, v. James B. DUKES, Appellee.

James B. DUKES, Appellant, v. MAYOR AND COUNCIL OF WILMINGTON, a municipal corporation of

the State of Delaware, Appellee.

Nos. 55 and 57.

Supreme Court of Delaware.

Feb. 10, 1960.

Stewart Lynch, City Solicitor, Wilmington, for plaintiff.

Edmund D. Lyons, of Morris, James, Hitchens & Williams, Wilmington, for defendant.

Before SOUTHERLAND, C. J., and WOLCOTT and BRAMHALL, JJ.

BRAMHALL, Justice.

The questions raised by these appeals relate to (1) the right of the City to institute a civil suit to collect license fees where the only remedy expressly provided in the Ordinance is a criminal penalty; (2) the applicability of the Ordinance in the case of a physician employed by another physician who operates a clinic for a hospital; (3) the question whether the Ordinance exceeds the authority provided in the statute; and (4) the question whether the statute of limitations operates against the City in a civil suit for the collection of the license fee.

The City brought suit against defendant, charging him with practicing medicine within the City of Wilmington since 1952 without having paid the license fee ordained to be paid by § 2062 of the Revised Code of Wilmington, 1942, providing that no one shall within the City of Wilmington engage in, among other businesses and professions, the practice of medicine without first having obtained a license therefor. The Ordinance provided a penalty for the violation thereof but did not expressly provide for any other action or remedy for the collection of the license fee, although in § 2064 of the Ordinance, after providing a penalty for its violation, we find the words 'besides being liable to the payment of the license fee'.

The authority of the City to pass such an Ordinance stems from 31 Laws of Delaware, Ch. 29, § 1 thereof, authorizing the City to issue licenses and require license fees from the 'owner or owners of any vehicle, business, avocation, profession, pursuit, or calling, operated, carried on or engaged in, within the corporate limits of the City of Wilmington'. Defendant denied that he was subject to the provisions of the Ordinance. The court below held that the Ordinance was valid and that the defendant was responsible for the license fee, but it also held that the statute of limitations was operative as to any license fees for the years preceding 1955 and that defendant therefore could not be held responsible for license fees prior to that time. Both the City and defendant appeal to this Court.

(1) We first consider the right of the City to institute a civil suit to collect the license fees alleged to be due.

Defendant contends that the Ordinance provides for but one method for the collection of license fees, a criminal proceeding, in which a penalty is provided for the violation thereof, and that in the absence of an express authority in the Ordinance, no other remedy may be invoked.

The City contends that the defendant became, and continued to be, liable for the payment of the license fee when he commenced practicing his profession within the corporate limits of the City and that he thereby impliedly contracted to pay the fee required by the Ordinance.

The Ordinance in question was enacted by virtue of the authority granted to the City under 31 Del.Laws, Ch. 29 (1929), the first paragraph of § 1 thereof, the pertinent part of said Act, being as follows:

'Section 1. That in order to provide for the payment of its debts and expenses the Council of the Mayor and Council of Wilmington in addition to the powers now conferred upon it shall have power and authority by ordinance or ordinances to issue licenses to and to require and receive a license fee from the owner or owners of any vehicle, business, avocation, profession, pursuit, or calling, operated, carried on or engaged in, within the corporate limits of the City of Wilmington including business occupations, animals and things not now exempted by law from tax in this State; provided, however, that no license shall be required from the owner of any vehicle who is not a resident of the City of Wilmington nor shall anything in this act apply to or affect any case wherein under existing laws a gross sum is paid to the State in lieu of all taxes under any and all laws of this State nor to any railroad company engaged in operating any railroad in this State under a lease or stock ownership thereof authorized by existing law.'

The Ordinance in question provides in part as follows:

'* * * no person * * * without first having obtained a proper license therefor * * * shall within the limits of the City of Wilmington, engage in * * * the practice of medicine * * *.

'From and after the first day of April, A.D. 1953, no person or persons, firm, company or corporation, without first having obtained a proper license therefor, as hereinafter provided shall within the limits of the City of Wilmington, engage in, prosecute, follow or carry on any trade, business, pursuit or occupation in this section hereinafter next mentioned, that is to say: * * *.'

As the statute specifically provides that any such Ordinance passed by virtue of the authority contained therein shall be 'for the payment of its debts and expenses', it is clearly for revenue purposes. Obviously, the Ordinance based thereon is in the same category. It is also clear from the Ordinance that the payment of the license fee is a prerequisite for those engaged in the pursuit of the trades, businesses, professions, or other callings, therein enumerated.

The provisions of the general statute for the collection of taxes are generally not applicable to statutes or ordinances relating to license fees unless expressly made so in the statute or ordinance relating to licenses. See cases cited in 53 C.J.S. Licenses § 52, p. 682. As defendants state, and as the decisions in this and other states hold, as a general rule a tax is not based upon a contract, the consent of the taxpayer is not necessary for its collection and the tax is in no sense a debt within the meaning of the term. Boyd v. Dillman, 9 W.W.Harr. 231, 197 A. 830. City of Detroit v. Proctor, 5 Terry 193, 61 A.2d 412.

We think that this holding should be construed in the light of the rule that where a statute or ordinance fails to provide an adequate remedy for the collection of license taxes, it must be implied that it was intended to give to the taxing agency the right to institute a civil suit for the collection of the tax. City of St. Louis v. United Rys. Co., 263 Mo. 387, 174 S.W. 78, 93, State ex rel. Smith, Atty. Gen. v. Snell, 127 Kan. 859, 275 P. 209. We believe that this is especially true in the case of a personal tax, such as a license tax, which is a tax upon the person and not upon any article or thing. See State ex rel. Smith, Atty. Gen. v. Snell, supra.

This implication is not defeated by the fact that a penalty or fine is provided for failure to pay the license tax. Such a remedy is wholly insufficient since it provides only for the punishment for those who violate the Ordinance and does not provide directly for the payment of the tax. City of Lexington v. Wilson, 118 Ky. 221, 227, 80 S.W. 811. Turner v. State, 226 Ala. 269, 146 So. 601; City of St. Louis v. United Rys. Co., 263 Mo. 387, 174 S.W. 78, supra; City of Independence v. Hindenach, 144 Kan. 414, 61 P.2d 124, 107 A.L.R. 645; State ex rel. Smith, Atty. Gen. v. Snell, supra. As previously stated, § 2246 of the Ordinance, after setting forth the penalty for the violation thereof, uses the language 'besides being liable to the payment of the license fee'. We think that this language indicates clearly an intention on the part of the City to hold the licensee responsible for the payment of the tax, even though under criminal prosecution the licensee is compelled to pay a penalty for failure to comply with the Ordinance. Certainly, when the City enacted the Ordinance imposing a license tax, it intended that the license fee should be collected. If we should find in this case that the criminal penalty is exclusive, the purpose of the City in passing the Ordinance would be somewhat frustrated.

We are of the opinion that the remedy provided in the statute for a criminal penalty is not exclusive and that a civil action will lie for the collection of the tax.

(2) Is the Ordinance applicable in the case of a physician employed by another physician who operates a clinic at a hospital?

Defendant contends that his legal status is that of an employee and that he 'owned' nothing in the sense that that word is used in the statute. Defendant relates his position to that of an agent or employee of the owner of a business, citing cases to show that the license requirement is always against the owner of the business, not against his agent or employee.

The defendant is licensed to practice medicine by the appropriate authorities of the State of Delaware. He is employed by another physician in the Radiology Department of a hospital on a salary basis. It is conceded by defendant that the work performed by him constitutes the practice of medicine. But defendant denies that he is the 'owner' of the profession as that term is used in the statute. To determine defendant's standing, we must look at the meaning of the word 'owner' as used in said statute as it applies to the practice of medicine.

We do not agree with defendant's contention. We think that it would be true that a secretary or a technician working under the direct supervision of a physician would not be practicing medicine and would not be considered the 'owner' of a profession. We, of course, agree that the agent or employee of the owner of a business would equally not be required to procure a license. But that is not the situation in this case. Here defendant is unquestionably...