Rosenbaum v. City of Newbern
| Decision Date | 10 March 1896 |
| Citation | 24 S.E. 1,118 N.C. 83 |
| Parties | ROSENBAUM v. CITY OF NEWBERN. |
| Court | North Carolina Supreme Court |
Appeal from superior court, Craven county; Starbuck, Judge.
Action by J. Rosenbaum against the city of Newbern to enjoin defendant from collecting taxes imposed by ordinance on plaintiff's business, and for other relief. From a judgment vacating a temporary injunction, plaintiff appeals. Affirmed.
Where a municipal corporation in good faith exercises discretionary powers of a public or legislative character, it is not liable to an action for damages for the manner of the exercise of such power.
W. E Clarke, M. De W. Stevenson, and W. D. McIver, for appellant.
W. W Clark, for appellee.
Where a municipality is clothed with the power to impose a tax upon persons engaged in mercantile business, the authority is subject to the fundamental restriction that it shall not be so exercised as to discriminate between persons of the same class. State Railroad Tax Cases, 92 U.S. 575. "It is unquestionably, however, in the discretion of the taxing power to graduate the tax according to the extent of the business so taxed, or to impose a single tax upon the occupation without regard to its extent." State v Powell, 100 N.C. 527, 6 S.E. 424. But the law of uniformity does not prohibit the classification by the municipality of dealers in a particular kind of merchandise separately from those whose business it is to sell other articles falling within the same generic term. The term "merchant" embraces all who buy and sell any species of movable goods for gain or profit. But courts everywhere lend their sanction to legislative acts putting dealers in dry goods and dealers in spirituous liquors, drugs, or fresh meats into different classes, and imposing a license tax upon the one, and a tax in proportion to capital employed or sales made on the others, or a tax or license fee of the same kind, but differing in amount, upon each of the subclasses created. In State v. Worth, 116 N.C. 1007, 21 S.E. 204, it was held that the business of manufacturing ice was comprehended under the general term "trade," and that, where a municipality was acting under the grant of authority to impose a privilege tax upon trades and professions, "a levy of $66 per annum for storage, manufacture, or sale of ice at wholesale, with the privilege of retailing," was reasonable and constitutional, because it provided for no discrimination between persons engaged in storing, manufacturing, or selling at wholesale or retail the particular kind of merchandise upon which the burden was imposed, but fixed the levy upon a class of traders distinctly defined in the ordinance. It was expressly held there that dealers in or manufacturers of different articles of merchandise might, in the discretion of the municipal authorities, be subjected, in separate classes, to license taxes varying in amount as to each of the classes. Of course, it follows that the overlooking of manufactures of shoes would not render invalid a tax upon another company whose product was ice, tobacco, or cotton goods. It is, therefore, settled that the only uniformity contemplated in the constitutional restriction (Const. art. 5, § 3) is that between those belonging to the same class (State Railroad Tax Cases, supra), and it would seem almost needless to cite authorities, other than State v. Worth, supra, in support of the proposition that the legislature had the authority to delegate to the defendant the power to make such levies. Const. art. 5, § 4.
The levy complained of was not imposed upon property, but upon the business of selling secondhand clothing. Had the tax been imposed upon the clothing sold as a property tax, it must have been levied in conformity to the requirements of the constitution, both as to the uniformity and value. But it was within the sound discretion of the municipal legislators, if they were empowered to tax the occupation or business at all, to determine what amount should be paid by every person belonging to a well-defined class pointed out in an ordinance. State v. Powell, supra. It is clear that the city had authority to "levy and collect a license tax for the privilege of carrying on any trade, profession, or business" within the limits of the city, not only under the charter, but under the general law. State v. Worth, supra; Code, § 3800. Whatever power the legislature possesses under the constitution has been delegated to the municipality, and the question for consideration here is, not whether the court, in the exercise of a sound discretion, will hold the ordinance to be just, reasonable, or wise, but whether, resolving all doubts as to the exercise of legislative authority by its agent as would be done in favor of a statute enacted by the legislature itself, it clearly appears that the ordinance is unconstitutional. The authority "to levy and collect a license tax for the privilege of carrying on any trade, profession, or business," subject to a prescribed limit as to amount, necessarily carried with it, by implication, the power to classify the various kinds of business, just as the legislature might have done. If, therefore, it be conceded that the court can revise the classification adopted by the city, when it does not appear upon its face that there was a purpose to discriminate in restraint of trade, there is no reason why any one of the taxes imposed in Schedules B and C of the revenue act (chapter 116, Laws 1895) should not be brought before the courts for review, on the ground that it is unreasonable to levy it on that particular class of subjects, though it be admitted that it sometimes constitutes a distinct kind of business, because some dealer may have chosen to make his business more general in its character. In the absence of any evidence of a purpose to break down the sale of this species of goods, courts are powerless. It is the peculiar province of the legislature to reform the laws so as to make the benefits extend to, and the burdens bear equally upon all classes of people.
The plaintiff complains that, in addition to the tax of four dollars per month levied upon her as a dealer in secondhand clothing, she is liable, under another ordinance, to a license tax of one dollar per month for the privilege of selling other general merchandise. If the city of Wilmington would have been authorized to levy the tax imposed in Worth's Case upon a general merchant, notwithstanding the fact that he added to his general business that of wholesale dealer in ice, it is clear that the plaintiff could not evade a tax on one distinct business by combining with it another. Because clothing may be comprehended under general merchandise, the courts cannot question the honesty or the soundness of the discretion of the city authorities in subdividing a larger class of dealers into two or more, distinguished by the lines of goods sold by each. Indeed, it is the duty of the courts to impute to all who exercise legislative authority proper motives, and, as between two constructions of their legislation, to adopt, if possible, that which brings it within the purview of their powers. State v. Moore, 104 N.C. 714, 10 S.E. 143. It does not seem to be contended that the municipality is attempting to exact from the plaintiff license taxes greater in the aggregate yearly amount than the limit fixed by the charter, though another ordinance provides that a tax of one dollar per month shall be imposed on general merchants, and four dollars on any dealer whose business, in part or in whole, is selling secondhand clothing, since the limit applies only to the amount of any single license tax, not to the aggregate amount of two when they are lawfully imposed. The rule laid down in State v. Powell precludes us from reviewing the exercise of the discretion in classifying those subjected to such burdens, or in determining what amount shall be imposed upon each. But the constitution of North Carolina authorizes the legislature, not only to impose a license tax upon the occupation of selling, but a property tax upon the goods sold, provided the statute, upon its face, allows no discrimination; and, subject to the same restrictions, the legislature may delegate this power to municipalities. State v. Stevenson, 109 N.C. 731, 14 S.E. 385.
The plaintiff, by way of recital, sets forth that the defendant has passed, and has already enforced, another ordinance which imposes a fine of $50 for selling or offering for sale secondhand clothing without having it disinfected by fumigation, and by paying a price fixed according to the nature of the garment, as set forth in the ordinance. A part of the relief asked is, not only that the city authorities be restrained from collecting more than one dollar per month as a license tax, but that they be restrained from exacting, in future, fees so large as plaintiff has paid for disinfecting the clothing now on hand. This ordinance was passed, clearly, in the exercise of police power claimed to have been delegated by the state, and is an assumption of authority quite distinct from the power to levy license or taxes. Though relating to the same subject-matter, the validity of the two acts is in no way dependent upon the same grants of power (State v. Stevenson, supra), and the passage of the one has no bearing upon the right to enact the other. The previous passing of the ordinance requiring disinfection does not tend to show that the ordinance, the enactment of which was declared in Powell's Case to be an unreviewable exercise of sound discretion, was unauthorized. The license tax was lawfully imposed, if the municipality was clothed with the power to classify, and did not discriminate in the exercise of its delegated authority. The ordinance requiring...
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