Ziedman & Pollie, Inc., v. City of Ashland

• Decision Date: 27 May 1932
• Citation: 244 Ky. 279
• Parties: Ziedman & Pollie, Incorporated, v. City of Ashland.
• Court: United States State Supreme Court — District of Kentucky

244 Ky. 279

Ziedman & Pollie, Incorporated, v. City of Ashland.

Court of Appeals of Kentucky.

Decided May 27, 1932.

1. Licenses. — Ordinance of third class city prescribing $1,500 weekly license fee upon carnival held invalid for excessiveness, whether

police or revenue measure, where city had become second class (Ky. Stats., secs. 3175, 3290-12).

2. Licenses. — Municipal license fee for carnival, if imposed as police measure, should in some measure correspond to cost of issuing license and extra police service.

3. Licenses. — Municipal license fee for carnival considered as revenue measure should correspond in some degree with fees for other similar public entertainments.

4. Licenses. — Those enacting license tax have broad discretion as to amount.

5. Licenses. — Discretion of those fixing license taxes, will not be interfered with, unless amount is so grossly excessive as to be unreasonable.

6. Licenses. — If excessive license fee which carnival paid city was voluntary, carnival could not thereafter recover it.

7. Payment. — Money paid under mistake of law may be recovered.

8. Taxation. — Illegal taxes paid voluntary may not be recovered.

9. Taxation. — Illegal taxes paid under compulsion which exists whenever they are collectible by summary process of fine and imprisonment may be recovered.

10. Taxation. — When taxes can be collected by suit only, action to recover taxes voluntarily paid cannot be maintained.

11. Licenses. — Carnival's payment of excessive license fee under bona fide mistake that it could be coerced by penalties of ordinance held involuntary and recoverable.

Appeal from Boyd Circuit Court.

H.O. WILLIAMS, SCHWARTZ & WILLIAMS, and J.B. ADAMSON for appellant.

JOHN T. DIEDERICH for appellee.

OPINION OF THE COURT BY JUDGE THOMAS.

Reversing.

The legislative department of the city of Ashland, Ky., enacted an ordinance entitled "Street Fair Ordinance." Its section 1 provided that it should be unlawful for any one to "put on" any fair or carnival within the city without first obtaining a license so to do, and then ordained that the license fee "shall be $1,500.00 per week, payable in advance of the application." Section 2 of the ordinance prescribed that

"any person who shall conduct or aid or assist in conducting any street fair or carnival without complying with this ordinance shall be guilty of a violation thereof, and subject to a penalty of $100.00 for each day any such person, firm or corporation shall put on, aid or assist in putting on said street fair or carnival shall be guilty of a separate offense."

While the ordinance was in force appellant and plaintiff below, Ziedman & Pollie, a corporation, applied for and obtained a license by paying the fee of $1,500, and thereupon "put on" and operated a street carnival within the city for one week. Later, and on August 12, 1927, it filed this action in the Boyd circuit court against the city to recover the amount of the license fee that it paid to the city under the ordinance upon the ground that it was void for a number of reasons stated in the petition, and that the payment of the license fee by it to the city was involuntary and was a coercive one because of the severe penalties imposed upon it, and its various employees numbering about 40, if the license was not obtained and the fee paid, which latter was a condition precedent to the granting of the license. Some of the grounds alleged for the contention that the ordinance was void were, (1) that the exacted fee of $1,500 per week was and is so grossly excessive as to invalidate the ordinance whether it was enacted as a police measure or as a revenue one, and (2) that there was no provision in it stating the purpose for which the fee or tax was levied and imposed, as is required by section 3175 of the present Kentucky Statutes, which is a part of the charter of cities of the second class to which Ashland now belongs, and also required under the provisions of subsection 12 of section 3290 of the same Statutes, which is a part of the charter of cites of the third class to which Ashland belonged at the time of the passage of the ordinance and the collection of the involved license fee.

Other objections are urged against the validity of the ordinance, but the conclusions we have reached render it unnecessary to either refer to or determine them. The answer denied the material averments of the petition, and, of course, contended that the payment of the license fee sought to be recovered was voluntary on the part of plaintiff, and that it was estopped to maintain the action, even though the ordinance for any reason should be held to be void. Following pleadings and motions made the issues and upon trial a jury was waived, and the cause submitted to the court, who rendered judgment dismissing the petition, and to reverse it plaintiff prosecutes this appeal.

Considerable discussion is made in brief for both sides as to whether the ordinance was and is a purely police measure and enacted pursuant to the police power of the city as delegated to it by the Legislature, or whether it is purely a tax measure enacted for the purpose of raising revenue for the city treasury. Counsel for defendant urges that it is a sort of dual measure enacted both under the police power of the city and also under its power to raise revenue, but we do not deem it material to the disposition of the case for us to decide that question, since we have concluded the amount of the fee is so excessive as to render the ordinance invalid whether it be a police or a revenue measure. If it is a police measure, then the amount charged as a license fee should in some measure correspond to the cost of the issuing of the license and the additional cost of extra police service that might be rendered necessary because of the licensed operation. That principle of law is thoroughly established in this jurisdiction, as will be seen from the cases of City of Henderson v. Lockett, 157 Ky. 366, 163 S.W. 199; Smith v. Commonwealth of Kentucky, 175 Ky. 296, 194 S.W. 367, and City of Mayfield v. Carter Hardware Co., 191 Ky. 364, 230 S.W. 298. Of course, in determining whether the charged license fee, in strictly a police ordinance may not exceed the limits so required, it was not intended, by the rule so announced, to require that the fee should correspond exactly with the rule for its proper measurement. However, those cases do determine and hold that the departure from such measurement should not be so great as to demonstrate its complete ignoring by the legislative body that enacted the ordinance. The evidence heard at the trial by no means convinces us that the extra cost of policing that might be produced because of the operation of the street fair, would in any wise approach the sum of $1,500, the amount charged and fixed in the ordinance in this case.

The same conclusion, it seems to us, is also inescapable, if the ordinance should be considered as exclusively a revenue measure. It is ten times higher than license fees for other public entertainments of a similar...