Walters v. City of St. Louis

• Decision Date: 08 June 1953
• Docket Number: No. 43648,43648
• Citation: 364 Mo. 56,259 S.W.2d 377
• Parties: WALTERS et al. v. CITY OF ST. LOUIS et al.
• Court: Missouri Supreme Court

Page 377

259 S.W.2d 377

364 Mo. 56

WALTERS et al. v. CITY OF ST. LOUIS et al.

No. 43648.

Supreme Court of Missouri, en Banc.

June 8, 1953.

Rehearing Denied July 13, 1953.

Stanley M. Rosenblum, St. Louis, and A. Clifford Jones, St. Louis, for appellants.

James E. Crowe, James V. Frank, John P. McCammon and Charles J. Dolan, St. Louis, for respondents.

HOLLINGSWORTH, Judge.

This action involves the constitutionality of Ordinance No. 46,222 of the City of St. Louis, commonly called and herein referred to as the 'earnings tax' ordinance. The trial court upheld its constitutionality and plaintiffs appealed.

Appellants, one a resident of the City and the other a resident of St. Louis County, are wage compensated employees of the Shapleigh Hardware Company, a corporation domiciled and doing business in the City. Since the enactment of the ordinance and pursuant to its provisions, the employer has withheld and unless the ordinance is declared invalid will continue to withhold from their wages as they accrue one-half of one per centum thereof for disbursement to the City in discharge of the tax levied upon their wages under said ordinance. The petition, which names the City, its Mayor, its Collector, and Shapleigh Hardware Company as defendants, prays a judgment declaring the ordinance void, declaring the act of the Legislature which authorized its enactment void, and enjoining the defendants from carrying the ordinance into effect. It appearing to the trial court after submission that no issue was presented as to Shapleigh Hardware Company, it was conditionally dismissed from the action.

The grounds upon which plaintiffs sought judgment declaring the ordinance void and upon which they assign error of the trial court in refusing to so hold are:

(1) The enabling act of the 66th General Assembly upon which the ordinance is predicated, to wit: House Substitute for House Bill No. 50, now Secs. 92.110-92.200 RSMo 1949, V.A.M.S., is violative of the following provisions of the Constitution of Missouri, V.A.M.S.:

(a) Article, III, Sec. 40, prohibiting the enactment of local or special laws in the instances set forth in clauses (21) and (30) thereof;

(b) Article X, Sec. 11(f), authorizing enactment of general laws permitting a county or other political subdivision to levy taxes other than those ad valorem; and

(c) Said House Bill No. 50 was not enacted in compliance with Article III, Sec. 22, requiring each committee of the House and Senate to which a bill is referred to keep a record of its proceedings and report the vote of its members to be filed with all reports thereon.

(2) The ordinance and said House Bill No. 50 are arbitrary, unreasonable, discriminatory, vague and therefore violative of the due process clause of the Constitution of Missouri, to wit: Article I, Sec. 10; of the due process and equal protection clauses of the Constitution of the United States, to wit: the Fourteenth Amendment thereof; and of Article X, Sec. 3, of the Constitution of Missouri, requiring that taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and shall be levied and collected by general laws.

On the 19th day of May, 1950, the Board of Aldermen of the City of St. Louis adopted a resolution stating in part:

'We * * * do hereby take official recognition of the impending financial crisis confronting the City of St. Louis.

'Whereas, the cost of government in the City of St. Louis has increased from approximately $20,000,000 to $40,000,000 in the last ten years, and the ordinary sources of taxation have not been sufficient to meet this increase in the cost of municipal government, and it has heretofore been necessary to enact an earnings tax in the City of St. Louis for the maintenance of the solvency of our local government; and

'Whereas, the General Assembly of the State of Missouri has heretofore enacted enabling legislation authorizing the City of St. Louis to levy an earnings tax which has been productive of approximately $7,000,000 per year, and the authority heretofore granted by the said General Assembly expires on July 17, 1950, and that thereafter the City of St. Louis will not have authority to continue this vital source of income; and

'Whereas, the loss of the aforesaid income would necessarily result in a curtailment of City services, thus endangering the health, welfare and safety of our citizens.

'Now, Therefore, Be It Resolved, that we * * * do hereby urge the Honorable Forrest Smith, Governor of the State of Missouri, to call a special session of the General Assembly for the purpose of continuing the authorization of this City to levy an earnings tax, and we further request the members of the General Assembly of the State of Missouri to act favorably upon said proposed legislation; * * *.'

The City of St. Louis is a constitutional charter city, having a population of more than 700,000 inhabitants as determined by the decennial census of 1950. Organized under Article IX, Secs. 20-26, Constitution of 1875, in the dual character of both a city and county, it has the unique distinction of being the only city specifically named in the Constitution of 1945, Article VI, Sec. 31. It is also agreed that, although possible, it is a practical certainty no other such constitutional charter city of more than 700,000 inhabitants will come into existence in Missouri during the period of time in which House Bill No. 50 is effective.

(Although not specifically named in the Constitution of 1945, Kansas City was and still is a constitutional charter city, and, subsequent to the adoption of the 1945 Constitution, University City, Columbia, Springfield, and possibly others, have framed and adopted their own charters. Section 82.010 RSMo 1949, V.A.M.S., recognizes their status in that respect along with that of the City of St. Louis.)

In its dual capacity as a city and county, the expenditures of the City of St. Louis for the fiscal year 1943-1944 amounted to $21,752.165, and its expenditures in said dual capacity in the fiscal year 1951-1952 amounted to $43,052,595. Established sources of revenue, absent an earnings tax, or an increase of other taxes, or a levy of additional taxes, are insufficient to meet the requirements of appropriations as passed by the Board of Aldermen. In the fiscal year 1951-1952 the operating deficit amounted to $3,307,138. The enabling act approved by the Governor on the 28th day of May, 1948, authorizing the City to levy a tax on earnings for the period ending July 17, 1950, and the tax levied pursuant to said act of 1948, yielded a tax during the two -year period of the existence of said ordinance amounting to $12,906,085, and during the two years said tax was in effect the City was able to operate without a deficit.

The enabling act here involved, hereinafter referred to as House Bill No. 50, became effective (unless held to be unconstitutional) on July 29, 1952. Insofar as pertinent, it provides:

Sec. 92.110. 'Any constitutional charter city in this state which now has or may hereafter acquire a population in excess of seven hundred thousand inhabitants, according to the last federal decennial census, is hereby authorized to levy and collect, by ordinance for general revenue purposes, an earnings tax on the salaries, wages, commissions and other compensation earned by its residents; on the salaries, wages, commissions and other compensation earned by nonresidents of the city for work done or services performed or rendered in the city; on the net profits of associations, businesses or other activities conducted by residents; on the net profits of associations, businesses or other activities conducted in the city by nonresidents; and on the net profits earned by all corporations as the result of work done or services performed or rendered and business or other activities conducted in the city.'

Sec. 92.120. Such tax shall not be in excess of one per centum per annum.

Sec. 92.150. 'The net profits or earnings of associations, businesses or other activities, and corporations shall be ascertained and determined by deducting the necessary expenses of operation from the gross profits or earnings.'

Sec. 92.200. The act shall expire April 1, 1954.

Appellants thus state their first contention:

'The gravamen of appellants' charge that House Bill No. 50 is unconstitutional is found in those provisions of our Constitution of 1945 prohibiting special legislation, namely, Article III, Section 40, subparagraphs 21 and 30, and Article X, Section 11(f). Simply stated, appellants submit that the classification of constitutional charter cities by population according to the last federal decennial census when read with the final section of the act causing it to expire April 1, 1954, six years before the next federal decennial census, makes the act applicable only to the City of St. Louis under a then existing state of facts and by its very terms fails to hold the class open so that other constitutional charter cities might come within it. This requirement that a statute be 'open-ended' in order to avoid the constitutional prohibition against special legislation is well-settled in Missouri; and this fundamental requisite of a general law--its 'open-endedness'--is as applicable to the City of St. Louis as to any other political subdivision in this state.'

Respondents' answer to this contention is that Article WI, Sec. 31, of the Constitution of 1945, classifying the City of St. louis in its dual capacity of city and county and affirming its powers, organization, rights and privileges, being special in its terms, prevails over the general provisions of Article III, Sec. 40, prohibiting the General Assembly from passing any local or special law, clause (21) regulating the affiairs of counties and cities, or clause (30) where a general law can be made applicable.

Respondents' contention fails, however, to take into consideration the...