84 Neb. 327 | Neb. | 1909
Lead Opinion
Tlxis action was originally commenced in the district court for Lancaster county by the Lincoln Traction Company against the city of Lincoln. The pleadings are quite lengthy and cannot be set out here in full. They may be fairly summarized as follows: It is alleged in the petition that plaintiff is a corporation duly organized under the laws- of the state, and defendant is a municipal corporation, a city of the first class having more than 40,000 and less than 100,000 inhabitants; that on the 10th day of December, 1906, the city council of defendant by a majority vote attempted to pass an ordinance entitled “An ordinance providing for and assessing an occupation tax upon all street railway companies operating and maintaining street railway systems in said city of Lincoln, fixing the amount thereof, providing for the enforcement and collection thereof and interest and penalty for non-payment when due and payable, and designating the funds to be credited with the amount so paid”; and that the mayor of said city approved said ordinance on the 13th day of the same month. Section 2 of said ordinance is set out in the petition as follows: “Section 2. That all street railway companies operating and maintaining a system or systems of street railway in the city of Lincoln are hereby required to pay the city of Lincoln as an occupation tax the sum and amount of five per cent. (5#) of the gross receipts of said company derived from its business as a common carrier of passengers and as a street railway company within the corporate limits of the city of Lincoln, payment thereof is to be made as follows: Beginning with January 1, 1907, said company or companies shall on the 15th day of each and every month thereafter pay the city of Lincoln five per cent. (5$) of the gross receipts of said company or companies for the preceding month as hereinbefore provided, as an occupation tax, and all deferred payments shall draw interest at the rate of one per cent. (1$) per
The answer of defendant admits the corporate capacity of both plaintiff and defendant; that the ordinance imposing the occupation tax was passed and approved as alleged; and tliat the provisions of section 2 of said ordinance are correctly stated. It is alleged that said ordinance is a legal and valid exercise of the power vested by law in the mayor and council of the city, and that the tax is a legal and valid liability against plaintiff. The allegation that said ordinance violates any of the provisions of the constitution of the United States or of this state is denied, and a general denial of all averments of the petition, not admitted, is entered, and defendant prays for an accounting of the amount due, and for judgment against plaintiff for the amount thus found, and that said judgment be decreed a lien upon the property of plaintiff, and that the temporary injunction be dissolved and plaintiff’s action be dismissed and for general relief. The cause was tried to the district court, the result being a dismissal of the case. The findings of the court are general, to the effect that the ordinance is valid and the tax a legal liability. The final order is the dissolution of the temporary injunction before that time issued; that plaintiff file with the city clerk of defendant a detailed statement as required by the ordinance, showing its receipts, and that plaintiff pay the tax and penalty in accordance with the provisions of the ordinance. From this judgment plaintiff appeals to this court.
We have thus stated the issues formed by the pleadings in order .that the questions at issue may be clearly understood and for the purpose of avoiding the necessity of re-examining many of the questions presented. In the case of Nebraska Telephone Co. v. City of Lincoln, 82 Neb. 59, many, if not all, the questions here presented were passed upon in an opinion by Judge Letton. That case has been thoroughly re-examined on motion for re
The ordinance imposing an occupation tax of 5 per cent, of the gross receipts of street railway companies is objected to on account of the provision that companies required by existing ordinances to pay a percentage of their receipts shall be credited with the amount so paid upon the occupation tax. A provision similar to this in its terms was passed upon under a like contention in Nebraska Telephone Co. v. City of Lincoln, supra, and it was held that such a provision did not render the ordinance invalid. We consider the holding upon that question in that case decisive of this, as the principle involved is the same. As viewed by the writer, the provision was a legitimate method of equalizing the burdens imposed upon the street railway companies in the nature of an occupation tax and was entirely fair, and was in no sense a discrimination against plaintiff and of which it is in no position to complain. At any rate we adhere to the decision above referred to.
The authority and right of the- city to impose an occupation tax for the use and occupation of its streets and the operation of a line of business thereon is also recognized in that decision, and the authority to measure the amount of the tax by the gross earnings of the person or corporation enjoying and making use of that privilege is also maintained, and it is held that the imposition of such occupation tax measured by the gross earnings of the company occupying and using the streets as such privilege, and'which franchise is also taxed in connection with its tangible property according to its value as a going con
An able and elaborate brief has been presented by a friend of the court, which we have perused with care, but do not think it necessary here to review and distinguish the many cases cited. We think there can be no doubt of the power or right of the city, under its charter, the constitution and former holdings of this court, to impose an occupation tax upon the business of a public service corporation within its limits; that the tax may be measured by the earnings of the business, and that such tax is not upon the property. In the telephone case above cited it is said: “A business tax measured by gross earnings is a tax upon the business which is actually performed, and is not a tax upon property in any sense, while a tax levied by valuation on the right to do business is a tax upon property, irrespective of whether or not any business or' occupation has been carried on. It seems clear that a property tax based upon the value of the franchise and a business or occupation tax based upon the gross earnings of a public service corporation are in nowise identical as to the subject of taxation, and do not constitute double taxation in any sense.” This being true, the occupation tax being based upon, limited and governed by the earnings of the corporation cannot be considered in connection with the property tax and is not objectionable for that reason. For the same reason the 5 per cent, tax upon gross receipts cannot be said to be excessive or confiscatory.
The judgment of the district court must therefore be affirmed, which is done.
Affirmed.
Concurrence Opinion
I concur in the judgment of affirmance, but not in the approval of the proviso in the ordinance levying an occupation tax on street railways. The recitals in the records introduced in. evidence disclose that prior to 1905
In State v. Citizens Street R. Co., 80 Neb. 357, it was held that said transaction was a sale of the property rights of the city. The provision for payment of a percentage of the gross receipts was unquestionably the chief consideration moving to the city. The $1,000 cash would not have paid the expense of the elections held whereby consent was given the original holders of the franchises to operate their lines of railway.
There is nothing in the title to, or body of, the ordinance to suggest that the council was exercising legislative pOAver. If the obligation of the Citizens company to pay for said property is not contractual, then there is no legal power to prevent the council from amending the ordinance and thereby relieve said company from paying the consideration it agreed to pay. If said obligation is not contractual, then, if the legislature should repeal the
The title to the ordinance sought to be enjoined provides for the levy and collection of an occupation tax upon street railways in said city. The proviso can only apply to the Citizens company, and is an attempt to modify the contract between that corporation and the city. Such legislation is not expressed in the title to said ordinance, as required by section 73, ch. 13, art. I, Comp. St. 1905, and is, for that reason, if no other, void.
The remaining part of the ordinance is complete without the proviso, and capable of enforcement. While its burdens are considerable, they are not confiscatory, and the judgment of the district court is properly affirmed.
I agree with the foregoing opinion of Judge Root.