Thunder Oil Co. v. City of Sunset Hills

• Decision Date: 10 July 1961
• Docket Number: No. 47975,47975
• Citation: 349 S.W.2d 82
• Parties: THUNDER OIL COMPANY, a Corporation, Respondent, v. CITY OF SUNSET HILLS, Violet Wohlschlaeger, Alwal Moore, and Al Kitun, Appellants.
• Court: Missouri Supreme Court

Page 82

349 S.W.2d 82

THUNDER OIL COMPANY, a Corporation, Respondent, v. CITY OF SUNSET HILLS, Violet Wohlschlaeger, Alwal Moore, and Al Kitun, Appellants.

No. 47975.

Supreme Court of Missouri, En Banc.

July 10, 1961.

Rehearing Denied Sept. 11, 1961.

Robert C. Jones, Harold S. Cook, Cook, Murphy, Lance & English, St. Louis, for appellants.

Robert Grant Walsh, William H. Corcoran, Richard J. Brown, Walsh, Hamilton & Corcoran, St. Louis, for respondent.

Carroll J. Donohue, Shulamith Simon, Myron Gollub, Husch, Eppenberger, Donohue, Elson & Jones, St. Louis, for City of Olivette, amicus curiae.

F. William Human, Jr., Ziercher, Tzinberg, Human & Michenfelder, Clayton, for St. Louis County League of Municipalities, amicus curiae.

EAGER, Judge.

In this suit plaintiff seeks to restrain the enforcement of an ordinance and to have it declared void. We shall refer to the parties as they appeared below. Defendant Sunset Hills is a city of the fourth class in St. Louis County. Plaintiff operates a filling station at an important junction of highways within the city limits as, in fact, it did prior to the City's incorporation in June 1957. The individual defendants are officials of the City and have no personal interest in the matter. The defendant City (and we refer to it when 'defendant' is used in the singular) has a population of approximately 3,000, and is the fifth largest of the county's 97 municipalities. By ordinance enacted on July 16, 1957, and amended on August 14, 1957, defendant required a license of every person who stored for sale or engaged in the business of selling any 'motor fuel,' including gasoline; it further required monthly reports, fees computed at the rate of one cent per gallon of fuel sold, and the keeping of records; the city clerk and gasoline inspector were authorized to investigate all such records, and a failure to make the reports and pay the fee was declared a misdemeanor, punishable by a fine upon conviction, each day of failure or refusal to constitute a separate offense. The ordinance required that application for the license be made to the city clerk and it also required a compliance with all city ordinances, rules and regulations pertaining to health, welfare, safety and morals.

The parties stipulated such facts as they deemed pertinent. Among these are the following: that, in addition to the general Merchant's Tax Ordinance, the city had enacted ordinances levying license taxes on water service (5% of gross receipts), telephone service (5%), gas service (5%), manufacturers ($25-$250 per year), dealers in nonintoxicating beer ($22.50-$375 per year), restaurants ($25 a year), the sale of intoxicating liquor by the drink ($450 per year), package liquor ($50 per year), package beer ($22.50 per year), operators of swimming pools ($50 per year), and the erection of outdoor signs ($2-$15, plus 50% additional for annual inspection). The general 'merchant's' license tax ordinance, as amended, prescribed a fee of $1 per $1,000 of gross annual sales, and another ordinance fixed flat license fees of from $2 to $250 per year on sundry listed occupations and businesses not considered to be 'merchants.' Fines for violations were provided in all the licensing ordinances. Plaintiff was prosecuted and fined the sum of $100 and costs in the Police Court for its refusal to obtain the license and make the required reports; from this, it appealed. So far as is shown, the appeal is still pending.

The assessed valuation of real estate in the city for 1958 (the last year available) was $5,620,710, and that of personal property was $1,060,070; the tax rate of twenty-five cents per one hundred dollar valuation produced a return of $16,703.45. The property valuations for 1959 were expected to increase about 25%, with an expected return of about $25,000. The estimated city revenues for 1959 (total $118,000) included the following: merchants' licenses, $15,500; liquor licenses, $3,300; building fees and permits, $4,200; police court fines, $2,600; utility license fees, $19,000; county road refund, $8,000, and gasoline license fees, $36,937. The city had a surplus of $24,082.82 at the end of 1958; it anticipated an additional surplus of $50,465 for the year 1959 with the gasoline license fees, or $14,716 without them.

There are fourteen gasoline service stations in Sunset Hills; plaintiff has by far the greatest sales volume, it being a socalled 'cut rate' station. It estimated its sales for one year ending September 30, 1957, at 1,293,762 gallons of gasoline or a total dollar volume of $400,000, including oil and greases. On this volume its gallonage tax would have been $12,937.62; on the basis of the General Merchants' Tax it obviously would have paid $400. The total estimated gasoline license tax for 1959 from the fourteen stations was $36,937. It was stipulated that the ordinance is 'primarily and principally a revenue measure.' Other cities and villages of St. Louis County have levied gasoline license taxes, as follows: one at one and one-half cents per gallon; thirty-four at one cent per gallon (including several of the larger communities); twelve at one-half cent per gallon; and thirty-eight with none. The City of St. Louis levies a one cent gasoline license tax.

Upon these facts plaintiff insists that this enactment constitutes an attempt to tax gasoline as a commodity, which defendant may not do, and that it is a subterfuge; that the ordinance is unreasonable, unjust, discriminatory and oppressive, and that it constitutes an abuse of the taxing power and is wholly void. Plaintiff further points out: that there is no 'need' for this revenue in the light of the stipulated income and surplus of defendant, and that the share of taxes thus exacted from the filling stations (and from plaintiff particularly) is vastly out of proportion to the fees charged merchants generally; that the total estimated gasoline tax for 1959 was more than one half of the total estimated operating expense of the City. A point is also made concerning the fines provided for; this will be discussed later. The trial court held that the ordinance in question did not actually contemplate any regulation but only revenue, that the revenue therefrom was not needed by the City, that defendant was thus attempting to tax gasoline as a commodity without authority, and that the ordinance was unreasonable, discriminatory, oppressive and void. It entered a decree accordingly. Plaintiff pleaded certain specific constitutional questions, including claimed violations of the requirements of due process, uniformity of taxation, and equal protection, the Missouri Constitutional provisions (Art. 4, Sec. 30, V.A.M.S.) concerning the application of revenue derived from highway users, and the prohibition against the imposition of excessive fines. It has argued certain of these here. We have determined that we have jurisdiction under Art. 5, Sec. 3, Mo. Constitution, although the distinctions between constitutional constructions and mere applications are troublesome here, as indeed they generally are.

Plaintiff takes the position that this case presents a new question. We think not, the differences from prior adjudications being matters of degree only. In our discussion we shall combine various points and arguments made separately in the briefs; to do otherwise would unduly lengthen this opinion.

It is clear that defendant had authority to impose a license tax on filling stations. A municipal corporation has no power to levy such a tax except when the power has been granted to it by the State, but the grant may be either by statute or in a special charter. Automobile Club of Missouri v. City of St. Louis, Mo., 334 S.W.2d 355, 362; Siemens v. shreeve, 317 Mo. 736, 296 S.W. 415; City of Lamar v. Adams, 90 Mo.App. 35. Since this defendant is not a charter city, the authority must come from the statutes. Section 71.610 ¹ requires that the business or avocation to be so taxed shall be 'specially named as taxable,' in the charter or statute. No doubt exists here on that requirement, for Sec. 94.270, applicable to cities of the fourth class, specifically lists 'gasoline filling stations' among the businesses upon which license taxes may be levied and collected.

Plaintiff's first substantive argument is that the imposition of this license fee constituted an attempt to tax gasoline as a commodity, such being beyond the powers of the city, and that defendant's action is, in fact, a subterfuge. Following up the point, it argues that the tax was admittedly one imposed 'primarily and principally' as a revenue measure, and that actually the fee is a sales tax on gasoline enacted with the intention that it be paid by the purchaser; also, that no real intent of regulation or inspection was indicated. On the latter point, we note that the ordinance, as amended, contains provisions which require compliance with all ordinances, rules and regulations pertaining to health, welfare, safety and morals. This would certainly permit of some regulation, though it is said that similar provisions are not contained in any other licensing ordinance.

In Ploch v. City of St. Louis, 345 Mo. 1069, 138 S.W.2d 1020, a city excise tax of one dollar per thousand on cigarettes was upheld; the court held that the City might, if it wished, single out cigarettes for a special license tax, and that the levy thus imposed was not a tax upon the sale or upon the property sold, but was merely an occupation tax. We fail to see that the purchase of stamps by the dealer there and the affixing of these to the packages prior to the sale, makes any difference in the applicability of the case, as plaintiff claims here. In Edmonds v. City of St. Louis, 348 Mo. 1063, 156 S.W.2d 619, a flat license tax on coinoperated cigarette machines was upheld as a privilege tax, although clearly a revenue measure as distinguished from a police regulation. In Food Center of St. Louis, Inc. v. Village of...