Petrolene, Inc. v. City of Arnold, 58298

• Citation: 515 S.W.2d 551
• Decision Date: 12 November 1974
• Docket Number: No. 58298,No. 1,58298,1
• Parties: PETROLENE, INC., et al., Plaintiffs-Respondents, v. CITY OF ARNOLD, Defendant-Appellant
• Court: United States State Supreme Court of Missouri

Page 551

515 S.W.2d 551

PETROLENE, INC., et al., Plaintiffs-Respondents, v. CITY OF ARNOLD, Defendant-Appellant.

No. 58298.

Supreme Court of Missouri, Division No. 1.

Nov. 12, 1974.

Thurman, Nixon, Smith, Howald, Weber & Bowles, Jeremiah, Nixon, Joseph P. Cunningham, III, Hillsboro, for plaintiffs-respondents.

Robert L. Brown, Arnold, for defendant-appellant.

David V. G. Brydon, James C. Swearengen, Graham & Hawkins, Jefferson City, for amicus curiae.

LAURANCE M. HYDE, Special Commissioner.

Action to declare an ordinance of the city void in its application to plaintiffs and to enjoin its enforcement against plaintiffs. The court found for plaintiffs and enjoined defendant from enforcing the ordinance against plaintiffs. The city has appealed and we affirm.

Plaintiffs are distributors of liquid petroleum products, known as LPG. Defendant is a third class city. The ordinance involved provided for a license tax of five per cent of the gross receipts on public utilities 'engaged in the business of supplying or furnishing electricity, electrical power, electrical service, gas, gas service, telegraph service or exchange telephone service in the City of Arnold.' Public utility was defined as 'every individual, firm, corporation, partnership, joint venture, business trust, receiver and any other person, group, combination or association' engaged in such business.

'[M]unicipal corporations have no inherent power to levy and colect taxes, but derive their powers in that respect from the lawmaking power. * * * 'The taxing power belongs alone to sovereignty. '' Thus municipal corporations 'have no inherent power of taxation, consequently they possess only such power in respect thereto which has been granted to them by the Constitution or the statutes.' State ex rel. Emerson v. Mound City, 335 Mo. 702, 73 S.W.2d 1017, 1025 (banc 1934), 94 A.L.R. 923, 934. Therefore, both parties say we have jurisdiction on the ground that this case involves the construction of the revenue laws of this state. Section 941.110, RSMo 1969, V.A.M.S. cited as the law to be construed authorizes third class cities to levy and collect a license on many businesses; the one relied on by the city specifies 'gas companies.' Plaintiffs claim they are not 'gas companies' meant by § 94.110. They also raise constitutional grounds hereinafter stated. We hold we have jurisdiction under § 3, Art. V, Mo. Constitution, V.A.M.S., as amended 1970. Cases holding jurisdiction is in this court on the construction of revenue laws involving taxes imposed by city ordinances (authorized by statute) are General Installation Co. v. University City, 379 S.W.2d 601, 602 (Mo.banc 1964); Long v. City of Independence, 360 Mo. 620, 229 S.W.2d 686 and cases cited 687 (1950).

The principal issue here is whether LPG dealers come within the licensing authority granted to the city by § 94.110. Plaintiffs cite City of Odessa v. Borgic, 456 S.W.2d 611 (Mo.App.1970), and Siemens v. Shreeve, 317 Mo. 736, 296 S.W. 415 (banc 1927), holding licensing authority granted is to be strictly construed against the city. This is the general rule thus stated in 71 Am.Jur.2d, State and Local Taxation § 87, p. 410: '(A) grant by the legislature of the taxing power to a municipal corporation is to be strictly construed.' As held in Siemens (296 S.W. l.c. 418): '(U)nless the business avocation, pursuit, or calling sought to be taxed by the municipal corporation is specifically named as taxable in the charter, or unless such power is conferred by statute, the power to tax is not clearly and unambiguously delegated, and therefore consistent with the general sound policy of the law, it cannot be exercised.' This ruling was followed by this court in Automobile Club of Missouri v. City of St. Louis, 334 S.W.2d 355, 362 (Mo.1960), 83 A.L.R.2d 612. See also City of St. Charles v. St. Charles Gas Co., 353 Mo. 996, 185 S.W.2d 797 (1945); Moots v. City of Trenton, 358 Mo. 273, 214 S.W.2d 31 (1948); City of Bolivar v. Ozark Utilities Co., 238 Mo.App. 860, 191 S.W.2d 368 (1945); City of Hannibal v. Minor, 224 S.W.2d 598 (Mo.App.1949); City of Odessa v. Borgic, 456 S.W.2d 611, 617 (Mo.App.1970). Furthermore, § 71.610, RSMo 1969 V.A.M.S., provides: 'No municipal corporation in this state shall have the power to impose a license tax upon any business avocation, pursuit or calling, unless such business avocation, pursuit or calling is specially named as taxable in the charter of such municipal corporation, or unless such power be conferred by statute.'

LPG is transported and sold in liquefied state, measure by the gallon and stored by customers in a liquid state. Natural gas is handled in a gaseous state and is measured by the cubic foot. LPG dealers do not have or need the power to place pipes in public streets or condemn property. These and other differences have caused our Legislature to provide for different regulation and supervision by different state agencies. The Public Service Commission Law, Chapter 386, applies to 'gas corporation' meaning those 'owning, operating, controlling or managing any gas plant operating for public use.' § 386.020(11). 'Gas plant,' § 386.020(10) stated as being property 'used (for) * * * the manufacture, distribution, sale or furnishing of gas, natural or manufactured, for light, heat or power.' The term 'public utility' includes 'gas corporations.' § 386.020(25). See also Chapter 393, §§ 393.010--393.510. Liquid petroleum gas companies are not included under the jurisdiction of the Public Service Commission but are regulated instead by the Department of Revenue under Chapter 323 (§§ 323.010--323.110). Chapter 323 is entitled 'Liquefied Petroleum Gases' and provides for registration, regulation and inspection of distributors of liquefied petroleum gas with penalty for violation. Thus it is...