Titusville v. Gahan

• Decision Date: 07 October 1907
• Docket Number: 143-1907
• Citation: 34 Pa.Super. 613
• Parties: Titusville, Appellant, v. Gahan (No. 1)
• Court: Pennsylvania Superior Court

34 Pa.Super. 613

Titusville, Appellant, v. Gahan (No. 1)

No. 143-1907

Superior Court of Pennsylvania

October 7, 1907

Argued May 20, 1907 [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter] [Syllabus Matter]

Appeal by plaintiff, from judgment of C.P. Crawford Co., Sept. T. 1900, No. 20, for defendant on case stated in suit of Titusville v. John Gahan.

Case stated to determine the validity of a license tax on theaters and billposters.

From the case stated it appeared that the defendant was the owner of a theater or opera house in the city of Titusville, which was a city of the third class. For the years 1896, 1897, 1898 and 1899, licensed taxes were leved upon defendant both as the owner of the theater and as billposter under an ordinance entitled as follows: " An ordinance to provide for the levy and collection for general revenue purposes, of annual license taxes in the city of Titusville, __ Pa. __, approved June 25, 1888, and amendments and supplements thereto."

Thomas, P. J., filed the following opinion:

The claims in each of these cases are of the same nature and of a twofold character, though covering different periods of time. The actions are brought to recover license taxes imposed upon the defendant for the years mentioned in two different capacities. First, as the owner of an opera house, which was conducted and maintained as a theater and opera house in which public exhibitions were given for pay, which exhibitions were not for local, religious, educational or charitable purposes; and, secondly, as a billposter in said city of Titusville.

The question involved and the only serious contention, as we understand it, is as to whether the ordinance under which these taxes were imposed is valid as against the defendant for the purposes for which they were imposed.

It is urged that these taxes or licenses were lived for general revenue purposes, and that the city was without power so to do. As we understand the contention, the plaintiff practically admits that the assessments can only be imposed by virtue of the police power of the municipality, and whether this is admitted or not, we think that such is clearly the law.

Under the Act of May 23, 1874, P. L. 230, cities of the third class have power to " levy and collect licenses on auctioneers," etc., and " to regulate the same by ordinance," on a number of persons and institutions, including " shows, theaters and all kinds of exhibitions for pay."

The Act of May 24, 1887, P. L. 204, which was subsequently declared unconstitutional, is the act under which this ordinance was framed. By art. VII, sec. 2, clause 4, of said act cities of the class in which the plaintiff was included were allowed to levy and collect for general revenue purposes an annual license tax on auctioneers, etc., but it is significant that some of the terms in the act of 1874, and especially that of theaters, was omitted therefrom; but under clause 26 of said section said cities were given power " to license and collect license taxes from shows, theaters," etc., and " to regulate the same and to restrain and prohibit all exhibitions of an indecent or immoral character."

The Act of May 23, 1889, P. L. 277, art. V, sec. 3, empowers cities of the third class to " levy and collect for general revenue purposes a license tax not exceeding $ 100 each, annually, on all auctioneers," etc. This section follows that of 1887, and excludes theaters. The 25th clause of said sec. 3 of said act empowers the city to " license and collect a license tax from all skating rinks, operas, theaters," etc., and to " regulate the same and to restrain all exhibitions of an indecent or immoral character."

It is clear to us that clause 4, sec. 2 of art. VII, of the act of 1887, and clause 4, sec. 3, of art. V, of the act of 1889, relate to taxation for general revenue purposes, and that the state has not delegated to municipalities of this class the power or authority to levy and collect for general revenue purposes a tax against theaters, but that the same may be regulated and a license tax imposed under clause 26, sec. 2, of art. VII, of the act of 1887, and clause 25, sec. 3, of art. V, of the act of 1889, but that under these provisions the power delegated to the municipality is that of regulation and by virtue of police powers.

In none of these sections are billposters directly made the subject of taxation for general revenue purposes, nor license regulation by virtue of police powers delegated to the municipality. But each of said acts contains a general welfare clause under which, in our opinion, billposters might be regulated, subject to the police powers of the city, to wit: under clause 47 of said sec. 2, of art. VII, of the act of 1887, and clause 46 of sec. 3, of art. V, of the act of 1889.

We see no reason why it would not be proper to regulate the occupation of billposter, both as to the structures where the bills might be posted, and as to the nature and character of the matter posted thereon. Certainly this looks to the protection, welfare and morals of the community, and, in our opinion, would be covered by the general welfare clause of each of said acts of assembly.

Having arrived at the conclusion that theaters are under the expressly delegated police powers of a municipality, and that billposters are subject to regulation under the general welfare clauses of said acts of assembly, it is necessary to determine whether the taxes here sought to be collected were imposed by virtue of the police powers or for general revenue. If for the latter, it seems clear to us that the city was without authority to so impose them. If for the former, they had the power so to impose them, and the defendant is liable therefor in this action.

From the title of the ordinance under which these taxes were imposed, it appears that the same was for the purpose of levying and collecting an annual license tax " for general revenue purposes." It is probably true that this does not determine the real character of the taxes imposed, but it will aid us somewhat in knowing what the purpose of the legislative body was in passing the ordinance, and may assist us in determining the purposes as provided by the ordinance itself. Most of the taxes imposed by said ordinance are allowed expressly by the act of assembly as a means for raising revenue, but not so as to theaters and billposters.

The state has the power as a means to an end, namely, the better exercise of the police power, to impose a fee or license upon property used in a certain manner or upon certain callings or occupations. Ordinarily, the state has no right under this power to impose license fees for purposes of revenue without regard to the question of the regulation, control or use of such property or occupation. The imposition of license fees, having for their purpose the better regulation and control of such occupations, or the use of certain property, is valid as coming within the proper exercise of the police power, when they are imposed not for the purpose of obtaining a revenue, but for the ostensible one: 1 Abbott on Municipal Corporations, p. 258.

Strictly speaking, there is a distinction between a license granted or required as a condition precedent before a certain business can be carried on, and a tax assessed on the business in which such license may authorize one to engage. In statutes, however, and even in the decisions of the courts, this distinction is frequently disregarded; and in order to determine whether a sum imposed by statute or ordinance is a license fee proper or a tax, it is generally necessary to ascertain the purpose of the exaction, and to determine the power by virtue of which it is made. Thus, where the fee is imposed for the purpose of regulation, and the statute requires compliance with certain conditions in addition to the payment of the prescribed sum, such sum is a license proper, imposed by virtue of the police power; but where the fee is exacted solely for revenue purposes, and payment of such fee gives the right to carry on the business without the performance of any further conditions, it is a tax: 21 Am. & Eng. Ency. of Law (2d ed.), pp. 773, 774.

We are persuaded that this is a proper definition, and when applied to the case in hand clearly reveals that this ordinance is one wholly for the purpose of raising revenue generally, and not for the purpose of regulation, and that the payment of the fee is the only prerequisite to the carrying on of the business taxed.

The plaintiff contends that this is a proper exercise of the police powers of the city, and refers us to several authorities on that subject. Our attention is first called to the case of the City of Chester v. P., R. & P. Telegraph Co., 148 Pa. 120. We are not informed as to the character of the ordinance in said case, but in the opinion of the lower court it is said: " It is not a tax for revenue, but a police charge for the necessary liability of the city to supervise the use of its streets." If such provisions were made it would seem that there was some legislation here with reference to regulations, but from the case as reported it is impossible for us to determine the terms of the ordinance. The case is decided, however, on the authority of Telegraph Co. v. City of Philadelphia, 22 W.N.C. 39, and the City of Allentown v. Western Union Telegraph Co., 148 Pa. 117. In the former of said cases to which our attention is called, the terms of the ordinances are not given, but, from the holding of the court that the city of Philadelphia had a right, as a matter of police regulation, to supervise and control the erection of poles upon and the stretching of wires along its streets, we are persuaded that some...