McMillan v. City of Knoxville

• Decision Date: 01 March 1918
• Parties: MCMILLAN v. CITY OF KNOXVILLE.
• Court: Tennessee Supreme Court

202 S.W. 65

139 Tenn. 319

MCMILLAN v. CITY OF KNOXVILLE.

Supreme Court of Tennessee.

March 1, 1918

Appeal from Circuit Court, Knox County; Von A. Huffaker, Judge.

Suit by the City of Knoxville against James McMillan. There was a judgment in favor of the City by the city recorder, and from a like judgment on defendant's appeal to the circuit court, he again appeals. Affirmed.

WILLIAMS J.

This suit involves the liability of plaintiff in error for conducting the business of an emigrant agent without obtaining a license, as required by a city ordinance. The case was tried upon an agreed statement of facts. McMillan was found guilty by the city recorder and, on appeal, by the circuit judge. He has prosecuted an ap peal to this court and assigned error.

The General Assembly of 1917 (Pub. Acts 1917, c. 70) made the conducting of the business of an "emigrant agent" a privilege, and fixed the tax at $500 per annum; and the city, in pursuance of statutory power, subsequently by ordinance made the same a city privilege. The ordinance recites, substantially in the language of the statute:

"Emigrant Agent.

Each emigrant agent, or person engaged in hiring or soliciting emigrants in this city to be employed or to go beyond the limits of the state, must pay an annual license each per annum, $500."

Before the passage of the act and ordinance McMillan had paid the privilege tax prescribed for "employment agencies" in Acts 1915, c. 101, and the license issued to him did not expire until October 8, 1917.

There was also passed in 1917 another act (Pub. Acts 1917, c. 78) providing for the regulation and supervision of "employment agencies," which made it the duty of one engaging in that business to pay a fee and obtain a license from the state to be issued by the department of factory inspection. The act sets forth the details of the regulation by and the reporting to be made to the department and prescribed a penalty for failure to comply. It is claimed by appellant that the passage of this last act operated to repeal by implication the other act or acts.

A further question is whether McMillan is liable for the emigrant agent's tax of $500; and whether the license that he held as operator of an employment agency protects him in doing the acts complained of, which were done after the passage of the ordinance, but before that license had expired.

The errors assigned are fairly indicated in the discussion which follows, and will not be formally stated.

At the outset it becomes material to determine the nature of the license as employment agent so held by McMillan, and of the one issuable under the regulating statute. Chapter 78 of Acts 1917.

By article 2, § 28, of our Constitution, it is provided that the Legislature shall have power to tax privileges in such manner as they may from time to time direct, thus stamping a privilege to pursue an occupation as a tax--more strictly speaking an "occupation tax," but usually called in this jurisdiction a "privilege tax."

A "license," in its truer sense, is issued under the police power, while a license may be issued on the payment of an "occupation tax," levied under this taxing power embodied in the Constitution, revenue being its primary object, though regulation may be in mind as an incident. The two charges and licenses are distinct things, but confusion of thought arises at times, due to the fact that a license may be issued in either case. In the one case, the power exercised is that to license, and in the other to tax and to license. 3 McQuillin, Mun. Corp. § 961.

Judge Cooley says that under the authority to license in the truer sense "a municipal corporation may by ordinance require a license to be first taken out, and charge a reasonable sum for issuing the same, and keeping the necessary record, but it cannot, by virtue of this authority, without more, levy a tax upon an occupation itself." Mayor of Nashville v. Linck, 12 Lea (80 Tenn.) 507. A license in this sense is a permit issued not for revenue, but for regulation. As said, an occupation tax is levied for revenue primarily, and, in instances, for regulation incidentally.

We are of opinion that it was competent for the Legislature to provide a regulatory license for, and also an occupation tax upon, such agencies. The two are not inconsistent; neither impinges on the other. 17 R. C. L. p. 486. Therefore the enactment of chapter 78 did not repeal chapter 70 of the Acts of 1917.

It was competent for the Legislature to add to whatever regulation was manifested in the imposition of the privilege or occupation tax, by providing for the more detailed policing regulation set forth in Acts 1917, c. 78, and to fix a fee therefor.

A true license fee, as contradistinguished from such a tax, should be fixed to cover the expense of issuing it, the service of officers, and other expenses directly or indirectly incident to the supervision of the particular business or vocation. There is no attempt in this case to question the amount of the license fee as being excessive or so unreasonable as to partake of the nature of a tax. Ex parte Cramer, 62 Tex. Cr. R. 11, 136 S.W. 61, 36 L. R. A. (N. S.) 78, Ann. Cas. 1913C, 588.

McMillan also insists that since he had a privilege license to operate an "employment agency" until October 8, 1917 (which license was issued to him under Pub. Acts 1915, c. 101), he could not be required by the city, in order to continue emigrant business, to take out a license under chapter 70 of the act of 1917, which, as stated, together with the ordinance thereunder, was passed while his license was current. The city's counter contention is that, after the passage of the act of 1917 and its own ordinance, McMillan exercised a separate privilege from the one formerly exercised under his license as employment agent.

Did the license held by McMillan when it was originally issued cover the emigrant feature of his business?

We think that an "employment agency" may be defined to be one for the brokerage of labor for a fee paid by the applicant for employment or by the prospective employer, and that any definition of the phrase "employment agency," in the absence of restrictive words, would include the employment of laborers to work for another either in or beyond the state. It is, moreover, made clear that the act of 1915 should be so construed, since the Legislature itself proceeded upon that construction of the phrase "employment agency" in Pub. Acts 1917, c. 78, wherein it is stipulated that it shall be unlawful for any person conducting an "employment agency" to ship any number of employés to any point without the state without first advising the applicants as to the existence of strikes, etc. The phrase "employment agency" does not imply the placing of laborers and domestic servants in the borders of this state only. Had McMillan engaged in the hiring of laborers for out of state employment only, prior to 1917, without procuring a license under the...