People v. City and County of Denver

• Decision Date: 26 November 1928
• Docket Number: 12019.
• Citation: 272 P. 629,84 Colo. 576
• Parties: PEOPLE v. CITY AND COUNTY OF DENVER.
• Court: Colorado Supreme Court

272 P. 629

84 Colo. 576

PEOPLE v. CITY AND COUNTY OF DENVER.

No. 12019.

Supreme Court of Colorado, En Banc.

November 26, 1928

Error to District Court, City and County of Denver; George F Dunklee, Judge.

Suit by the People against the City and County of Denver. Judgment sustaining a demurrer to the complaint, and the People bring error.

Reversed with direction.

Campbell J., dissenting in part.

William L. Boatright, Atty. Gen., and Oliver Dean, Ass't Atty. Gen., for the People.

Thomas H. Gibson, E. V. Holland, and George Hetherington, all of Denver, for defendant in error.

DENISON C.J.

The people of the state of Colorado brought suit to compel the city and county of Denver to pay gasoline and gasoline inspection taxes. A demurrer to the complaint was sustained, and the state brings error.

There were five causes of action. By the first the state sought to recover the excise tax of two cents per gallon for gasoline used or offered for sale by the city while the Act of 1919, p. 566, as amended by section 1, c. 153, S. L. 1923, was in force, from July 1, 1925, to May 1, 1927.

The city's principal objection to this cause of action is that municipalities are not subject to excise taxes unless they are expressly or by necessary implication within the scope of the statute which creates the tax, and that the above-mentioned statute does not include them. The state says that it does include them by necessary implication, and its argument is as follows:

(1) The act (section 1, c. 153, S. L. 1923) says 'an excise tax of two cents is hereby levied and shall be collected on each gallon of gasoline * * * offered for sale or used for consumption for power purposes in propelling motor vehicles.' This is broad enough to include gasoline used or sold by the city.

(2) All the roads of the state are used by the city and her citizens and also redound incidentally to her and their benefit.

(3) The city paid the tax for a while, but in 1925 refused to do so longer, whereupon the Legislature at the first opportunity, in 1927 (Laws 1927, p. 530), amended the statute so as to include cities. That this was an express reiteration of what had been implied in the previous act and indicates that that implication was intended.

(4) That, since the small municipalities of the state are compelled to buy their gasoline from retail dealers who surcharge the tax, while Denver buys hers in carload lots without the tax, the exemption she claims would be a discrimination in her favor, which is not to be presumed.

In these propositions there is no claim that the statute expressly includes cities, nor do we see any necessary implication to that effect. The implication should be such as to be equivalent to an express statement or 'specific declaration' of inclusion. Denver v. Bonesteel, 28 Colo. 483, 65 P. 628. Then, too, an amendment generally instead of implying an intent to reiterate implies an intent to change the amended law. The act of 1927 therefore indicates that the law of 1923 did not include cities.

As to the fourth proposition, we cannot take judicial notice that small cities are unable to obtain gasoline without payment of the tax, and there is no evidence on that point. The contrary is probable.

The second cause of action claims an inspection fee of one mill per gallon due the state for inspection of gasoline used or offered for sale by the city, according to the act of 1915. C. L. § 3623.

It seems clear enough that the city is subject to this tax. It is a measure not for revenue but for public protection, and the arguments which support the exemption of the city from a revenue tax, set forth in Denver v. Bonesteel, supra, are without force. All the reasons for inspection fit the use of the city as well as that of others. We are informed of no case which holds a municipality to be exempt from such a tax.

The third cause of action is for the three cents per gallon on gasoline offered for sale or used by the city since the act of 1927 (i. e., in May, 1927), and the fourth for that used by Denver and the Denver board of water commissioners for the month of June, 1927. They can best be treated together.

The act of 1927 specifically indicates cities as among the persons subject to the tax, so the objection discussed with respect to the first cause is not here involved.

It is not controverted that Legislatures ordinarily have power by 'specific declaration' (see Denver v. Bonesteel, supra) to tax cities, but it is claimed that article 10, § 4, of the Colorado Constitution, forbids it. That section is as follows: 'The property, real and personal, of the state, counties, cities, towns and other municipal corporations and public libraries, shall be exempt from taxation.'

This claim is unsound, because the tax in question is an excise tax, and not a tax on property, real or personal. Altitude Oil Co. v. People, 70 Colo. 453, 454, 202 P. 180; D. C. Ry. Co. v. Denver, 21 Colo. 350, 41 P. 826, 29 L.R.A. 608, 52 Am.St.Rep. 239. The Constitution was not directed to such. State v. Life Ins. Co., 8 Idaho 240, 67 P. 647. It is not a tax on the gasoline, but on the right to sell it, offer it for sale, or use it to propel motor vehicles. See, also, State v. Camp Sing, 18 Mont. 129, 44 P. 517, 32 L.R.A. 635, 56 Am.St.Rep. 551; Ex parte Shaw, 53 Okl. 654, 661-664, 157 P. 900. The argument that the tax must ultimately come out of the citizens is true of every kind of tax, and proves nothing for the courts, whatever weight it might have with the Legislature. In its last analysis, it is an argument of expediency, and is for the General Assembly and not for us. The case of Dispensary Commissioners v. Thornton, 106 Ga. 106, 108, 31 S.E. 733, seems against our conclusions, but we do not follow it.

The city relies upon In re Inheritance Tax of Macky's Estate 46 Colo. 79, 97, 102 P. 1075. It was...