KANSAS CITY, MISSOURI, Appellant, v. G. W. FROGGE
No. 38365
Court en Banc
November 1, 1943
Rehearing Denied, January 3, 1944
176 S. W. (2d) 498
“Mr. Shapiro: Will you agree if plaintiff is entitled to recover attorney‘s fees, $1,500 is a reasonable attorney‘s fee, if we are entitled to a judgment?
“Mr. Swearingen: I can‘t agree until we hear the testimony.
“The Court: Would you agree (and it would be a very liberal agreement) if recovery was had for approximately $7,500, actual recovery, a penalty of $1,500 would be a reasonable fee, and if the recovery would be less, it would be proportionate to that.
“Mr. Swearingen: The amount of the fee will be in proportion to the final recovery, that is, as to the $1,500?
“Mr. Shapiro: That is all right.
“The Court: We will now adjourn until 9:30 o‘clock tomorrow morning.”
These comments between the attorneys and the court could be interpreted as an agreement. However, that is not necessary because courts are themselves experts on the question of attorneys’ fees and the judge who personally tries a case and is acquainted with all the issues involved is in a position to fix the amount of attorneys’ fees without the aid of evidence. Blackhurst v. Johnson, 8th Circuit, 72 Fed. (2d) 644, l. c. 648 (15-18). The point is ruled against appellant. What we have said disposes of all the points preserved for review.
The judgment is affirmed. Bohling and Barrett, CC., concur.
PER CURIAM:—The foregoing opinion by WESTHUES, C., is adopted as the opinion of the court. All the judges concur.
VAN OSDOL, C.—This is an action to recover the amount of tax imposed upon defendant by plaintiff city under the provisions of its Ordinance Number 5504. The case was submitted in the trial court on an agreed statement of facts. Finding and judgment was for defendant; the trial court did not indicate the ground upon which it declared the ordinance to be invalid. Plaintiff has appealed.
The ordinance, taxing the storage, use or other consumption of certain tangible personal property in Kansas City, Missouri, is attacked
Plaintiff is a municipal corporation organized under a special charter adopted by its people for its own local self-government, under the provisions of
“WHEREAS, it is deemed necessary and proper to complement the Sales Tax Act of State of Missouri and to impose a compensating
“Section 2. An excise tax is hereby imposed and levied upon the storage, use or other consumption in this city of tangible personal property purchased after the effective date of this ordinance for storage, use or other consumption in this city, at the rate of two (2) per cent of the sales price of such property, . . .
“Every person storing, using or otherwise consuming in this city tangible personal property purchased after this ordinance has gone into effect, shall become a taxpayer hereunder . . .
“Section 3. The storage, use or other consumption in this city of the following tangible personal property is hereby specifically exempted from the tax imposed by this ordinance:
“(a) Property, the gross receipts from the sale of which are required to be included in the measure of the tax imposed under the Sales Tax Act of this State. . . .
“(e) Property, the storage, use, consumption or sale of which has already been subjected to a tax equal to or in excess of that imposed by this ordinance, whether under the laws of this State or some other State of the United States; . . .
“Section 5. The tax imposed by this ordinance shall not apply (a) with respect to the use of any article of tangible personal property purchased, produced or manufactured outside of this state until the transportation of such article into this city has finally ended and such article has come to a repose in this city, or has become commingled with the general mass of property in this city . . . ”
This is the first case touching upon the validity of a “compensating use tax” in Missouri. The compensating use tax is not a new or novel one, however; a number of the states have made provision for such a tax. An interesting discussion of the tax, particularly with relation to its validity under the commerce clause (
“The privilege of use is only one attribute, among many, of the bundle of privileges that make up property or ownership (citing cases). A state is at liberty, if it pleases, to tax them all collectively, or to separate the faggots and lay the charge distributively.”
But the question of the validity of a compensating use tax of a state enacted to complement the sales tax of a state is not within the purview of the case at bar, but the question here presented is the validity of such a tax enacted by a municipality.
A reference to the record including plaintiff‘s assignments of error in its motion for a new trial and herein, as well as the remarks of counsel during the trial of the cause, indicates that the trial theory was not limited to the issues of invalidity as specifically alleged in the answer but that the trial was had on the theory that a fundamental question inheres in the case; that is, has the plaintiff city the power to levy and collect such a tax?
Plaintiff city asserts that it has the charter power to assess, levy and collect taxes for all general and special purposes on all subjects and objects of taxation (Paragraph (1) of Section 1, Article I of the Charter of Kansas City); that an act of the legislature is “neither necessary nor useful toward empowering Kansas City to levy a use tax“; that the general power to impose some kind of taxes in order to raise revenue to enable the performance of municipal functions is implied from the grant of the right to plaintiff city to frame a charter for its own government; that it gets its power to tax directly from the Constitution subject to the condition that such power may be controlled by general laws of the state, and that “if there be no general law of the state upon the subject of any particular tax then Kansas City is limited in regard to imposing such a tax only by the power reserved in its charter.” (Our italics.)
“The taxing power belongs alone to sovereignty. No such power inheres in municipal corporations. This principle is universally recognized. Therefore as municipal corporations have no inherent power of taxation, consequently they possess only such power in respect thereto which has been granted to them by the constitution or the statutes. . . . And since the authority to levy taxes is an extraordinary one, it should never be left to implication unless it be a necessary implication. The grant relied upon must be evident and unmistakable, and all doubts will be resolved against its exercise, and in favor of the taxpayer.” 6 McQuillin, Municipal Corporations, 2d Ed., sec. 2523, pp. 313-316.
Cases relating to the power of taxation, its source and its limitations, as it may be exercised in plaintiff city (and other cities of
Said the court in Kansas City v. J. I. Case Threshing Machine Co., supra:
“certain functions have, by this court, definitely been determined governmental, the control of which remains in the State. The police power is one. A municipal corporation has no inherent police power, but derives it solely from delegation by the State.
“There can be no doubt that the power to tax falls within this class. It is a governmental function inherent in the State . . . ”
While the power to tax is inherent in the state, the exercise of the power of taxation (the power to impose taxes, the power to levy taxes) is in the General Assembly for legislative power, subject to certain limitations, is granted to the General Assembly by
The General Assembly may impose taxes upon municipal corporations or upon the inhabitants thereof for other than strictly municipal purposes,
“A charter framed by a city for itself under direct constitutional grant of power so to do has, within the limits therein contemplated, the force and effect of one granted by an act of the legislature when unrestrained by constitutional provision.” (Our italics.) Ex parte Siemens v. Shreeve, supra. See also State ex rel. Carpenter v. St. Louis, supra; and Morrow v. Kansas City, 186 Mo. 675, 85 S. W. 572.
By the grant to plaintiff city of the right to frame and adopt a charter, the people of the state transferred or granted part of the legislative power of the state (subject to constitutional limitation in the grant,
The plaintiff city‘s power to impose taxes is, therefore, not the power to impose any tax, except as “limited by the power reserved in its charter” and uncontrolled by general law; but is the power to impose those taxes which has been delegated by the General Assembly under statute or by its people under its charter, if unrestrained by constitutional limitation.
“The municipal corporation known as ‘Kansas City‘” has power under Paragraph (1) of Section 1, Article I, Charter of Kansas City as follows:
“(1) To assess, levy and collect taxes for all general and special purposes on all subjects or objects of taxation and to provide for enforcing the prompt payment thereof by any appropriate means.”
This paragraph does not enumerate the “subjects and objects” on which the plaintiff city may assess, levy and collect taxes, nor does it state the kind of taxes the plaintiff city may assess, levy and collect However, subjects and objects of taxation and kinds of taxes which may be levied thereon are enumerated in the charter of plaintiff city, Paragraphs 57-58-59-60 of Section 1, Article I (excise or license) and Article XII (ad valorem), Charter of Kansas City.
The subjects and objects of taxation on which plaintiff city may assess, levy and collect taxes under Paragraph (1), Section 1, Article I of its charter are construed as those subjects and objects on which the plaintiff city has been delegated the authority under statute or charter (for municipal purposes) to assess, levy and collect taxes; and the kinds of taxes which the plaintiff city may assess, levy and collect are the kinds of taxes which the plaintiff city has been authorized under statute or charter to assess, levy and collect upon the particular subjects or objects taxed.
No statute, or provision of plaintiff city‘s charter, expressly authorizes plaintiff city to separate the “bundle of privileges that make up property or ownership” and empowers the city to levy an excise tax, according to the sales price of the property, upon that privilege of property or ownership which may be called “the privilege of the storage, use or other consumption” of property.
In a sense it is true, as plaintiff city contends, that the general power to impose some kind of taxes is implied from the grant to a city of the right to frame a charter for its own government. This follows of necessity because no municipal functions can be carried on without
(It is expressly noted that the validity of a delegation to plaintiff city, under the provisions of statute or charter, to impose the “use tax” in question has not been considered herein.)
Although the plaintiff city has sought to uphold the validity of Ordinance Number 5504 as a revenue measure, it could be urged that the ordinance may be justified as an exercise of the police power—in order that retail sellers of Kansas City will be helped to compete upon terms of equality with retail sellers in other states who are exempt from a sales tax or any corresponding burden—as was suggested as one of the practical effects of a compensating use tax in Henneford et al. v. Silas Mason Co., supra.
“There are some cases in which levies are made and collected under the general designation of taxes, . . . where the imposition of the burden may fairly be referred to some other authority than to that branch of the sovereign power of the state under which the public revenues are apportioned and collected. The reason is that the imposition has not for its object the raising of revenue but looks rather to the regulation of relative rights, privileges and duties as between individuals, to the conservation of order in the political society, to the encouragement. of industry, and the discouragement of pernicious employments. . . . This manifestation of the sovereign authority is usually spoken of as the police power.” 1 Cooley, Taxation, 4th Ed., sec. 26, p. 94.
In the consideration of the ordinance as an exercise of the police power, as in the consideration of the ordinance as an exercise of the taxing power, the question of the validity of the compensating use tax of a state to complement the sales tax of a state is not within the purview of this inquiry, but the question here to be considered is the validity of such a measure enacted by a municipality.
The people of Kansas City have delegated to the city under its charter very broad and comprehensive police powers. Plaintiff city has express power under its charter to license, tax and regulate any and every person, firm, association or corporation in anywise engaged in almost every occupation, business, trade, pursuit, profession, calling, employment, vocation or avocation in the city. This and other express powers within the scope of the exercise of police power may be found among the provisions of Article I, Charter of Kansas City. It also has a general (prosperity-welfare) provision authorizing it to enact all needful ordinances for protecting public and private property, and for promoting the public health, safety,
We have hereinbefore ruled on the validity of the use tax provided in Ordinance Number 5504 as a revenue measure, and in so doing considered the use tax apart from any relation to the Sales Tax Act of Missouri. But it is better that we should not consider whether plaintiff city has the power to impose a fee, as a police power measure, under the general regulatory provisions of its charter, apart from the relation the fee (as provided in Ordinance Number 5504) may bear to the Sales Tax Act of Missouri; this, for the reason that some economic condition which is not due to the Sales Tax Act of Missouri could possibly justify a regulation of competitive relations in trade and commerce in plaintiff city under the general regulatory provisions of its charter. Consequently, we must test the validity of (Ordinance Number 5504) a regulatory fee provided by a municipality to equalize competitive conditions within a city as may be resultant of the Sales Tax Act of Missouri.
The state by granting to plaintiff city the right to adopt and frame a charter for its own government did not confer upon plaintiff city the right to assume under its charter all of the powers which the state may exercise within the city, but conferred the right to assume those powers incident to it as a municipality. There are governmental powers, the exercise of which is essential to the prosperity and welfare of the people of a city, yet are not essentially appertaining to city government. These powers, unless delegated by the state, are reserved in the state to be exercised by it. City of St. Louis v. King, 226 Mo. 334, 126 S. W. 495; State ex rel. Garner v. Mo. & K. Tel. Co., 189 Mo. 83, 88 S. W. 41. See also Municipal Corporations, 43 C. J., sec. 176, p. 178; 43 C. J., sec. 203, p. 204; and State ex rel. Carpenter v. St. Louis, supra.
The Sales Tax Act,
It seems clear that Ordinance Number 5504 does not regulate within Kansas City a competitive condition which is local or munici-
The judgment is affirmed.
PER CURIAM:—The foregoing opinion by VAN OSDOL, C., in Division One, is adopted as the opinion of the Court en Banc. All concur except Gantt, J., absent.
PER CURIAM:—Plaintiff city has filed motion for rehearing urging that the court has failed to give consideration to Subsection 2, Section 1, Article I, Charter of Kansas City, wherein the municipal corporation known as “Kansas City” is given power “(2) To classify the subjects and objects of taxation and each or any of them.” And, further plaintiff city urges, that the court has failed to give consideration to the rule of construction embodied in the Charter of Kansas City, Section 3, Article I, which is as follows, “Sec. 3. GENERAL POWERS NOT LIMITED. The enumeration of any particular power granted in this charter shall not be construed to limit or impair any general grant of power in this charter contained.”
Our opinion does not question the power of the city to reasonably classify those subjects and objects of taxation which the city is by its charter or statute authorized to tax. And we see no conflict between the decision, Automobile Gasoline Co. v. City of St. Louis, 326 Mo. 435, 32 S. W. 2d 281, and our decision herein.
Of the rule of construction, Sec. 3, supra: this may not be held to delegate to the municipal corporation the power to assess, levy and collect taxes which have not been authorized by charter or statute. The power of taxation, a sovereign power, should be strictly construed as against the taxing municipality.
Plaintiff city further asserts that the opinion herein is in conflict with State ex rel. People‘s Motorbus Co. of St. Louis v. Blaine, 332 Mo. 582, 58 S. W. 2d 975. In that case this court stated (332 Mo. at page 587), “Paragraph 1 of Section 1 of Article I of the charter of the city of St. Louis provides that the city shall have power ‘to assess, levy and collect taxes for all general and special purposes on all subjects or objects of taxation.’ There can be no question but what this language of the charter is sufficiently broad to authorize the city to
The motion for rehearing is overruled.
GERTRUDE MOONEY, Administratrix of the Estate of NEIL P. MOONEY, Deceased, v. TERMINAL RAILROAD ASSOCIATION OF ST. LOUIS, a Corporation, Appellant
No. 38122
Division Two
January 3, 1944
176 S. W. (2d) 605
Carleton S. Hadley, Arnot L. Sheppard and Joseph A. McClain, Jr., for appellant.