Vincent Realty Co. v. Brown

• Citation: 126 S.W.2d 1162,344 Mo. 438
• Decision Date: 04 April 1939
• Docket Number: 36296
• Parties: Vincent Realty Company, a Corporation; Melene Realty Company, a Corporation, and Melcher-Schene Hardware & Lumber Company, a Corporation, v. Dwight H. Brown, Secretary of State; Forrest Smith, State auditor, William F. Baumann, Collector of the City of St. Louis; Fred A. Renick, License Collector of the City of St. Louis, and Roy McKittrick, Attorney General, Appellants
• Court: United States State Supreme Court of Missouri

126 S.W.2d 1162

344 Mo. 438

Vincent Realty Company, a Corporation; Melene Realty Company, a Corporation, and Melcher-Schene Hardware & Lumber Company, a Corporation, v. Dwight H. Brown, Secretary of State; Forrest Smith, State auditor, William F. Baumann, Collector of the City of St. Louis; Fred A. Renick, License Collector of the City of St. Louis, and Roy McKittrick, Attorney General, Appellants

No. 36296

Supreme Court of Missouri

April 4, 1939

Appeal from Circuit Court of City of St. Louis; Hon. Frank C O'Malley, Judge.

Reversed and Remanded (with directions).

James A. Waechter and Donald Gunn for William F Baumann; Edgar H. Wayman and Andrew J. Reis for Fred A. Renick.

(1) There is no justiciable controversy between the plaintiffs and these appellants. Declaratory Judgments by Borchard; Ashwander v. T. V. A., 297 U.S. 288, 80 L.Ed. 688 56 S.Ct. 466; Nashville, C. & St. L. Ry. Co. v. Wallace, 288 U.S. 249, 77 L.Ed. 730, 53 S.Ct. 345; Acme Finance Co. v. Huse, 192 Wash. 96, 73 P.2d 341; Washington Beauty College v. Huse, 80 P.2d 403; Parlor v. Buckner, 156 Tenn. 278, 300 S.W. 565; Revis v. Daugherty, 215 Ky. 823, 287 S.W. 28; Banning v. Marsh, 124 Neb. 207, 245 N.W. 775; Perry v. Elizabethton, 160 Tenn. 102, 22 S.W.2d 359; Joplin Waterworks Co. v. Jasper County, 327 Mo. 964, 38 S.W.2d 1068; School District v. Smith, 111 S.W.2d 167. (2) Their presence is not essential to bind them by the judgment, if any, herein rendered. City of Carondelet v. Picot, 38 Mo. 125; Holt v. Rea, 330 Mo. 1237, 52 S.W.2d 877. (3) The statute involved applies to every county in this State, and if these appellants are proper and necessary parties, then so are all other revenue officers of the State. In re Van Syckle, 118 N. J. L. 578, 194 A. 284; Arlington Oil Co. v. Hall, 130 Neb. 674, 266 N.W. 583; City and County of Denver v. Denver Land Co., 274 P. 743; Laws 1935, p. 219, sec. 11.

Roy McKittrick, Attorney General, Franklin E. Reagan and Edward H. Miller, Assistant Attorneys General, for Dwight H. Brown, Forrest Smith and Roy McKittrick.

(1) The court committed an error in overruling appellant's demurrer; the petition does not state a cause of action. Laws 1937, sec. 459a, p. 208. The State may impose a lien upon any property for any and all taxes owing by the taxpayer. Carey v. Keith, Inc., 250 N.Y. 216, 164 A. 912; Getchell v. Walker, 278 P. 93, 129 Ore. 602; Union Central Life Ins. Co. v. Black 247 P. 486, 67 Utah 268; Peckham v. Milllikan, 99 Ind. 352; Isaacs v. Decker, 41 Ind. 410; Bodertha v. Spencer, 40 Ind. 353; California Loan & Trust Co. v. Weis, 50 P. 697, 118 Cal. 489. (2) Section 4598a contains but a single subject; the regulation and taxation of corporations is not a violation of Article IV, Section 28 of the Missouri Constitution. State ex rel. v. Danuser, 6 S.W.2d 907, 319 Mo. 799. The purpose of Article IV, Section 28 is to prevent fraud and deception upon members of the Legislature. State ex rel. v. Ranson, 73 Mo. 86; Asel v. City of Jefferson, 229 S.W. 1048, 287 Mo. 195; State v. Brodnax and Essex, 228 Mo. 25, 128 S.W. 177. (3) Section 4598a does not violate the uniformity provision of Article X, Section 3 of the Missouri Constitution. Corporations may be treated as a separate class. Mass. Bonding & Ins. Co. v. Chorn, 274 Mo. 29, 201 S.W. 1122. The uniformity rule applies to the rate of levy of taxes. State ex rel. v. Switzler, 143 Mo. 287, 45 S.W. 245; Ex parte Asotsky, 5 S.W.2d 22, 319 Mo. 18; State ex rel. v. Schulte, 305 Mo. 124, 264 S.W. 654; State ex rel. Sedalia v. Standard Oil Co., 66 F.2d 757, 290 U.S. 706, 78 L.Ed. 607. The uniformity provision (Art. X, Sec. 3) does not apply to penalties. State ex rel. v. Koeln, 61 S.W.2d 750, 332 Mo. 1229. (4) Section 4598a does not take from respondents' property without due process of law. There is no right in Missouri to transfer property free and clear of taxes then due and owing thereon. (a) The public policy of this State has been to protect the State and its subdivisions by liens for debts due. Secs. 3153, 4647, 9937, R. S. 1929. (b) The highest evidence of the public policy of this State is the statutory law. Moorshad v. United Rys. Co., 203 Mo. 121, 96 S.W. 261. (c) Title of real estate may be divested either through transfer by the owner or default of the owner. State ex rel. v. Bader, 78 S.W.2d 835, 336 Mo. 259; Masterson v. Roberts, 78 S.W.2d 856, 336 Mo. 158. (d) All property of the owner may be subjected to a lien for taxes. Cooley, Taxation (4 Ed.), sec. 1236, p. 2459. Section 4598a is a penalty statute. (5) Section 4598a does not deny to respondents the equal protection of the laws in violation of the Fourteenth Amendment to the Constitution of the United States. State v. Mo. Pac. Ry. Co., 242 Mo. 366, 147 S.W. 118; State v. Freehold Inv. Co., 264 S.W. 702, 305 Mo. 88; Lindsley v. Natl. Carbonic Gas Co., 220 U.S. 61; White River Lbr. Co. v. Ark., 270 U.S. 692, 49 S.Ct. 457, 73 L.Ed. 903; Fort Smith Lbr. Co. v. Ark., 251 U.S. 532, 40 S.Ct. 304, 64 L.Ed. 396; Winona & St. Paul Land Co. v. Minn., 159 U.S. 526, 16 S.Ct. 83, 40 L.Ed. 247; Fla. C. & P. Ry. Co. v. Reynolds, 23 U.S. 471, 22 S.Ct. 176, 46 L.Ed. 283. (6) The burden of proof is upon respondents to establish beyond a reasonable doubt the unconstitutionality of the statute in question. Kavanaugh v. Gordon, 244 Mo. 722, 149 S.W. 547; State ex rel. Rodes v. Warner, 197 Mo. 656, 94 S.W. 962; Thomas v. Buchanan County, 330 Mo. 627, 51 S.W.2d 98.

Jones, Hocker, Gladney & Grand, Joseph H. Grand and Lon Hocker, Jr., for respondents.

(1) The constitutional provisions invoked all require that every act operating on a limited class bear a reasonable and just relation to the classification. Mo. Const., Art. II, Sec. 30, Art. IV, Sec. 53, Art. X, Sec. 3; U.S. Const., Amend. XIV; State v. Jacksonville T. Co., 41 Fla. 374, 27 So. 221; State ex inf. Barker v. Southern, 265 Mo. 275, 177 S.W. 640; State ex rel. v. Ashbrook, 154 Mo. 375, 55 S.W. 627, 48 L. R. A. 265, 77 Am. St. Rep. 765; Mo. Const., Art. IV, Sec. 54; State ex inf. Gentry v. Armstrong, 315 Mo. 298, 286 S.W. 705; State v. Julow, 129 Mo. 163, 31 S.W. 781; In re French, 315 Mo. 75; Cotting v. K. C. Stock Yards, 183 U.S. 79. (2) A corporation is a "person" within the meaning of the Constitution. Cement Co. v. Gas Co., 255 Mo. 1, 164 S.W. 468; Ann. Cas. 1915C, 151. (3) For certain purposes the separate legislative classification of corporations is valid; for other purposes, invalid. State ex inf. v. Standard Oil Co., 218 Mo. 1, 116 S.W. 902; Russell v. Croy, 164 Mo. 69, 63 S.W. 849; Quaker City Cab Co. v. Pennsylvania, 277 U.S. 389; State ex rel. v. Shipman, 290 Mo. 65, 234 S.W. 60; Columbia Terminals Co. v. Koeln, 319 Mo. 445, 3 S.W.2d 1021; State ex rel. Mo. State Life Ins. Co. v. Gehner, 320 Mo. 691, 8 S.W.2d 1068; Ward v. Board of Equalization, 135 Mo. 309, 36 S.W. 648; State ex rel. v. Cairo Bridge & Term. Co., 100 S.W.2d 441, 340 Mo. 190; Secs. 4641, 4648, R. S. 1929. (4) The challenged act bears no reasonable and just relation to the separate classification of corporations. Laws 1937, p. 208, sec. 4598a; Secs. 4569, 4572, 4647, 4648, R. S. 1929; U.S. Const., Amend. XIX; In re French, 315 Mo. 75. (5) Where a bill is not multifarious, but descends to details in its title, it is always possible to pronounce, ex post facto, a single subject which would have done for a title. Fidelity Adjustment Co. v. Cook, 339 Mo. 49, 95 S.W.2d 1162; Thomas v. Buchanan County, 330 Mo. 634; Massey-Harris Harvester Co. v. Fed. Reserve Bank, 340 Mo. 1133, 104 S.W.2d 385; State ex rel. v. Danuser, 319 Mo. 799, 6 S.W.2d 907. (6) The challenged act deals with no less than four distinct subjects. Laws 1937, p. 204, Title, Prefix; Chap. 32, R. S. 1929; State ex inf. Crain v. Moore, 339 Mo. 492, 99 S.W.2d 17; Williams v. Rathburn, 332 Mo. 1208, 61 S.W.2d 708. (7) Where a bill and its title are both multifarious, the whole enactment fails. State v. Hurley, 258 Mo. 275; State ex rel. Penal Institutions v. Becker, 329 Mo. 1041; State v. Lancaster Co., 17 Neb. 87; Colonial Inv. Co. v. Nolan, 131 So. 178.

John C. Meredith, amicus curiae, for Real Estate Board of Kansas City and Kansas City League of Building & Loan Associations.

(1) The lien and prohibition against sale in Section 4598a is the taxation of a property right. Art. II, Secs. 4, 30, Mo. Const.; Amend. V, U.S. Const.; State v. Julow, 129 Mo. 163; Liggett Co. v. Baldbridge, 49 S.Ct. 57, 278 U.S. 104; Kentucky Finance Corp. v. Paramount Auto Exchange Corp., 43 S.Ct. 636, 262 U.S. 544; Cement Co. v. Gas Co., 255 Mo. 1; State ex rel. v. Revelle, 257 Mo. 529; McClung v. Pulitzer Publ. Co., 279 Mo. 370. (2) Property for the purpose of taxation ad valorem can only be divided into two classes, the property taxed and the property exempt, and the taxation must be uniform under our constitutional provision. State ex rel. Tompkins v. Shipman, 290 Mo. 65; Art. X, Secs. 3, 4, Mo. Const. (3) This Section 4598a divides property taxed by general law ad valorem into several classes, without any reasonable basis for the classification. Quaker City Cab Co. v. Commonwealth of Pa., 48 S.Ct. 553, 277 U.S. 389; Liggett Co. v. Baldbridge, 49 S.Ct. 57, 278 U.S. 106.

OPINION

Gantt, J.

Action under the Declaratory Judgment Act (Laws 1935, pp. 218, 220; Mo. Stat. Ann., sec. 1097a et seq., p. 1388). The petition alleged that plaintiffs are business corporations duly organized by law and liable for the payment of taxes and fees to the officers of the City of St. Louis and State of Missouri; that Section 4598a, Laws of Mo. 1937, pages 208 and 209, establishes a lien for the payment of taxes and fees due the State or its political subdivisions, and avoids the sale of property exceeding fifty per cent of the taxpayers' assets when said taxes and fees have not been...