Sallsbury v. Equitable Purchasing Co.
Decision Date | 23 October 1917 |
Citation | 177 Ky. 348 |
Parties | Sallsbury, et al. v. Equitable Purchasing Company. |
Court | Kentucky Court of Appeals |
Appeal from Boyd Circuit Court.
JOHN T. DIEDERICH for appellant.
JOHN W. WOODS and J. F. STEWART for appellees.
This suit brought by the appellee in the Boyd circuit court challenges the validity of an ordinance passed by the city council of the city of Ashland on February 1, 1915. The sections of the ordinance imposing the burdens complained of are numbers 1 and 2, they being as follows:
The plaintiff has a capital stock of $10,000.00, and is engaged in the business attempted to be taxed and regulated by the two sections of the ordinance, which business it conducts in the city of Ashland, and the appellants (defendants below) are the mayor, chief of police, police judge and city treasurer of the city of Ashland. The suit seeks an injunction against the various officers from enforcing either of the sections.
It is alleged in substance that section 1 of the ordinance is "unreasonable, confiscatory and prohibitive," and that the license fee of $400.00 charged will amount to more than fifty per cent. of the net earnings of plaintiff and all others engaged in the same business in the city of Ashland. It is further alleged that the ordinance was passed with the intention and purpose on the part of the council to prohibit the transaction of the business upon which the license is imposed, and was not intended to be a revenue ordinance.
The validity of section 2 of the ordinance is assailed because it is unreasonable, arbitrary and oppressive; that it invades the privacy of a legitimate business and imposes extraordinary, unnecessary and burdensome expenses, and that the requirement therein provided was enacted for the avowed purpose of putting plaintiff and others engaged in like business to great and unnecessary work and expense, and for the purpose of harassing and embarrassing them so as to force them to cease business.
A temporary restraining order was obtained upon the filing of the suit, and on final hearing a perpetual injunction was granted restraining the defendants from enforcing the ordinance, and to reverse it the city's officers prosecute this appeal.
No answer was filed to the petition, and its allegations stand admitted in this record. Notwithstanding this, evidence was taken, and it is shown by the treasurer and perhaps other officers of the plaintiff, that the business which it transacts is done in compliance with the requirements of section 4758a of the Kentucky Statutes, and that the total sum of the net earnings of plaintiff for the year preceding the passage of the ordinance was $1,207.95, and that this was more than the net earnings of any other person engaged in like business in the city of Ashland.
There is no question but that the city has the right to levy a reasonable tax upon the various occupations of its citizens, and it is equally clear that each occupation, if applicable to all who are engaged in it, may be the subject of a separate classification for the purpose of levying the tax.
Section 181 of the constitution authorizes the legislature to confer such power upon the municipalities of this Commonwealth, and that authority of the legislature was exercised in the enactment of charters for cities of the fourth class, a part of which is section 3490 of the Kentucky Statutes, and subsection 1 of that section expressly confers the power upon a municipality to impose and collect a license tax on trades, occupations and professions carried on within its limits. Notwithstanding the power of the city thus possessed, it is the settled law that a municipality in the exercise of the power may not impose a license tax in a sum that would be unreasonable, and which would amount to a prohibition of the continued engagement in that business. Ordidarily, and so long as the municipality stays within the bounds of reason, the size of a license fee is a question for its determination, and so long as it exercises a reasonable discretion the courts will not interfere on the ground that the fee is unreasonable or prohibitive. This rule is of universal recognition and application, and we will not encumber this opinion with authorities other than some of the most recent ones from this court. Hall v. Commonwealth, 101 Ky. 382; Fiscal Court of Owen Co. v. F. & A. Cox Co., 132 Ky. 738; City of Louisville v. Pooley, 136 Ky. 286; Tandy & Farley Tobacco Co. v. City of Hopkinsville, 174 Ky. 189; Hagar, Auditor, v. Walker, 128 Ky. 1, and authorities therein referred to.
It will be observed that section 1 of the ordinance here involved has for its purpose the raising of revenue, not under the authority to levy and collect an ad valorem tax, but by the levying and collecting of a license upon occupations. The courts cannot control the discretion of the taxing authority in the imposition of ad valorem taxes so long as the right is exercised within constitutional or statutory limits, and if there are no such limitations the amount of the ad valorem tax is a matter exclusively within the discretion of the taxing authority. Hagar, Auditor, &c., v. Walker, supra. In that case the rule to which we have just adverted is fully recognized, but it is further held that such freedom is not given in the exercise of the power to levy license taxes upon occupations, the court saying:
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Commonwealth for Use and Ben. of City of Wilmore v. McCray
... ... City of ... Hopkinsville, 174 Ky. 189, 192 S.W. 46; Sallsbury v ... Equitable Purchasing Company, 177 Ky. 348, 197 S.W. 813, ... L.R.A. 1918A, 1114. Under ... ...
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Ziedman & Pollie, Inc. v. City of Ashland
... ... determined, since we held in the case of Sallsbury v ... Equitable Purchasing Co., 177 Ky. 348, 197 S.W. 813, ... 814, L. R. A. 1918A, 1114, that ... ...
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Peel v. Dummit, Atty. Gen.
...apply the same rule to it that we apply to any other useful or legitimate occupation." To the same effect is Salisbury v. Equitable Purchasing Company, 177 Ky. 348, 197 S.W. 813, L.R.A. 1918A, 1114. In Asakura v. City of Seattle, 265 U.S. 332, 343, 44 S. Ct. 515, 517, 68 L. Ed. 1041, the pr......