Opinion
No. 38116.
July 3, 1944. Rehearing Denied, September 5, 1944.
1. CONSTITUTIONAL LAW: Local or Special Law: Judicial Question: Application to City Ordinances. Section 53 of Article 4 of the Missouri Constitution prohibits local or special laws and applies to city ordinances. Whether a law is local or special is a judicial question.
2. CONSTITUTIONAL LAW: Test of Special Law: Exclusion. The test of a special law is the appropriateness of its provisions to the objects that it excludes. It is not what a law includes that makes it special, but what it excludes.
3. CONSTITUTIONAL LAW: Pleading: Special Law: Issue Sufficiently Raised. Plaintiff's petition is sufficient to raise the issue of a special law in violation of Sec. 53, Art. 4, Missouri Constitution.
4. CONSTITUTIONAL LAW: Public Utilities: Taxation: Exemption of Competitor: Special Class Created: Void Special Law. The ordinance of the City of St. Louis which levies a 5% license tax upon the gross receipts of electric companies, including plaintiff, excludes plaintiff's competitor, Union Electric Company, through creating a special class for said competitor into which neither plaintiff nor any other utility company could ever come. The ordinance is void as a special law in violation of Sec. 53, Art. 4, Missouri Constitution.
Appeal from Circuit Court of City of St. Louis. — Hon. David J. Murphy, Judge.
AFFIRMED.
Joseph F. Holland, City Counselor, and Oliver Senti, Associate City Counselor, for appellant.
(1) A municipality can lawfully impose a license tax upon a utility which already has the right to use the streets. Memphis Gas Light Co. v. Taxing Dist., 109 U.S. 398, 27 L.Ed. 976; St. Louis v. United Rys. Co., 210 U.S. 266, 52 L.Ed. 1054; Springfield v. Smith, 138 Mo. 645, 40 S.W. 757. (2) Ordinance 41572 does not violate the Constitution or the laws of Missouri. Neither the Constitution nor the laws of the state forbid reasonable classification for the purpose of taxation, and discrimination through classification is forbidden only when it is such as to preclude the assumption that it was made in the exercise of legislative judgment and discretion. Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339, 205 S.W. 196; State ex rel. v. Blaine, 332 Mo. 582, 58 S.W.2d 975; Welch v. Henry, 223 Wis. 319, 271 N.W. 68; Neb. Tel. Co. v. City of Lincoln, 82 Neb. 59, 117 N.W. 284; Lincoln Traction Co. v. City of Lincoln, 84 Neb. 327, 121 N.W. 435; Hines v. Hook, 338 Mo. 114, 89 S.W.2d 52; St. Louis Union Trust Co. v. State, 348 Mo. 725, 155 S.W.2d 107; St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124, 264 S.W. 654; Knoxville Ohio R. Co. v. Harris, 99 Tenn. 684, 43 S.W. 115; Great Atl. Pac. Tea Co. v. Maxwell, 199 N.C. 433, 154 S.E. 838; State v. Willingham, 9 Wyo. 290, 62 P. 797; Conrad v. State, 16 A.2d 121; In re Watson, 17 S.D. 486, 97 N.W. 463; Schaeffer v. Carter, 252 U.S. 37, 64 L.Ed. 445; Diefendorf v. Gallet, 51 Idaho, 619, 10 P. 307; Reed v. Bjorsen, 191 Minn. 254, 253 N.W. 102; State ex rel. Atwood v. Johnson, 170 Wis. 218, 175 N.W. 589; Barbier v. Connolly, 113 U.S. 27, 28 L.Ed. 923; Bell's Gap R. Co. v. Pennsylvania, 134 U.S. 232, 33 L.Ed. 892; New York Rapid Transit Corp. v. City of New York, 303 U.S. 573, 82 L.Ed. 1024; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435, 32 S.W.2d 281; Tax Commissioner v. Jackson, 283 U.S. 527, 75 L.Ed. 1248. (3) A classification for the purpose of taxation is proper when it is based on reason; when it prevents gross injustice in the burden of taxation; when the reasonableness of such classification cannot be determined by any fixed rule; in taxation there is a broader power in classification than in some other exercise of legislation; classification for taxation is not reviewable by the courts unless palpably arbitrary; a classification is not invalid because it affects one person or corporation alone where it is broad enough to apply to others if they exist. Cooley on Taxation (4th Ed.), sec. 334. (4) A classification for taxation does not violate Section 3 of Article X of the Missouri Constitution if it bears alike upon all of the class established; and tends to require all persons in the business of supplying electricity for compensation to contribute their portion to the public revenue. State ex rel v. Blaine, 332 Mo. 582, 58 S.W.2d 975. (5) The public revenue is not limited to money received from taxes. Gass v. Gordon, 266 Mo. 394, 181 S.W. 1016. (6) A classification for taxation is not unconstitutional because it does not tax all in the same business. St. Charles ex rel. Palmer v. Schulte, supra; Conrad v. State, 16 A.2d 121; In re Watson, 17 S.D. 486, 97 N.W. 463; Brannon v. Harrison, 172 Ga. 669, 158 S.E. 319. (7) And that is true of a classification established for the purpose of taxation for revenue only. Ludlow-Saylor Wire Co. v. Wollbrinck, supra; State ex rel. Atwood v. Johnson, 170 Wis. 218, 175 N.W. 589; Diefendorf v. Gallet, 51 Idaho, 619, 10 P.2d 307; St. Charles ex rel. Palmer v. Schulte, 305 Mo. 124, 264 S.W. 654. (8) There is no good reason why electric companies may not be placed in classes depending on whether or not they are required by their charter to pay a percentage of their gross receipts to the company. Neb. Tel. Co. v. City of Lincoln, 82 Neb. 59, 117 N.W. 284; People ex rel. Met. Street Ry. Co. v. Board of Taxing Commissioners, 199 U.S. 1, 50 L.Ed. 65; Lincoln Traction Co. v. City of Lincoln, 84 Neb. 327, 121 N.W. 435. (9) The fact that a person is in a class so different from others that the law exempts him from burdens which others must bear, places him in a class different from those others when they are exempted from burdens which he must bear. Welch v. Henry, 223 Wis. 319, 271 N.W. 68. (10) The established rules of construction applicable to statutes also apply to the construction of the Constitution. State ex rel. Buchanan County v. Imel, 242 Mo. 293, 146 S.W. 783. (11) The fact that a license tax applies to only one person does not affect its validity. Village of Beverly Hills v. Schulter, 344 Mo. 1098, 130 S.W.2d 532. (12) The City of St. Louis can lawfully classify subjects and objects of taxation. It can divide occupations for the purpose of taxation. Charter of St. Louis, Sec. 2, Art. I; Automobile Gasoline Co. v. St. Louis, 326 Mo. 435, 32 S.W.2d 281. (13) A classification for the purpose of taxation is valid if based on reasonable grounds. Cooley on Taxation (4th Ed.), sec. 334; Ludlow-Saylor Wire Co. v. Wollbrinck, 275 Mo. 339, 205 S.W. 196. (14) Courts will not declare an ordinance unreasonable unless no difference of opinion can exist. Wagner v. St. Louis, 284 Mo. 417, 224 S.W. 413. (15) Within the field of delegated authority the City may go to the boundaries of reason. C. Beck Co. v. City of Milwaukee, 139 Wis. 340, 120 N.W. 293. (16) The plaintiff may assert its own rights, but not the rights of others. State ex rel. Crandall v. McIntosch, 205 Mo. 689, 103 S.W. 1078; Ballentine v. Nester, 164 S.W.2d 378. (17) The ordinance of which Sections 2113 and 2123 of the Revised Code are a part expired April 15, 1940, and exemptions from the payment of the tax imposed by ordinance 41572 ended at that time.
Jones, Hocker, Gladney Grand, Lon O. Hocker, Joseph H. Grand and Vincent L. Boisaubin for respondent.
(1) Acceptance of the ordinances of St. Louis and compliance with their terms, as now embodied in Sections 2113 and 2123 of the Revised Code of St. Louis for 1923, created a contract between the City and the one so accepting, and the 5 per cent of gross receipts provided for therein was a rental charge and not a tax. St. Louis v. Laclede Power Light Co., 347 Mo. 1066, 152 S.W.2d 23; St. Louis v. Laclede Gas Light Co., 155 Mo. 1; Carondelet v. Picot, 28 Mo. 125; St. Louis v. Western Union Tel. Co., 148 U.S. 92; Plattsburg v. People's Tel. Co., 88 Mo. App. 306; Lancaster v. Briggs Melvin, 118 Mo. App. 570; Hartford v. Connecticut Co., 140 A. 734, 107 Conn. 312; Mitchell v. Dakota Tel. Co., 25 S.D. 409, 127 N.W. 482; Spokane v. Spokane Gas Fuel Co., 25 P.2d 1034; County of Tulare v. City of Dinuba, 188 Cal. 664, 206 P. 983; Des Moines v. Iowa Tel. Co., 181 Iowa 1297, 162 N.W. 329; Newport v. So. Covington Ry. Co., 89 Ky. 29, 11 S.W. 954; Lewis v. Nashville Gas Heat Co., 40 S.W.2d 409, 162 Tenn. 269; San Francisco-Oakland Term. Ry. Co. v. Alameda County, 225 P. 304, 66 Cal.App. 7; Nebraska Tel. Co. v. City of Lincoln, 82 Neb. 67, 117 N.W. 87; City and County of Denver v. Stenger, 295 F. 809. (2) Considered as imposing a license tax Ordinance No. 41572 is in violation of Section 3, Article X, of the Missouri Constitution. The ordinance provides for a license tax which does not bear equally and uniformly upon all persons engaged in the same class of business or occupation; and makes an arbitrary and unfair distinction between such persons so engaged; and arbitrarily and unreasonably exempts from its operation a part of the same class of persons engaged in the same business and occupation. Sec. 3, Art. X, Mo. Const.; 37 C.J., Licenses, sec. 53 (3); 17 R.C.L., Licenses, secs. 30, 31, pp. 507-511; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375; St. Louis v. Spiegel, 75 Mo. 145, 147; St. Louis v. Spiegel, 90 Mo. 588; Nafziger Baking Co. v. Salisbury, 329 Mo. 1014; Kansas City v. Whipple, 136 Mo. 475; Cape Girardeau v. Groves Motor Co., 346 Mo. 762, 142 S.W.2d 1040; Washington v. Washington Oil Co., 346 Mo. 1183, 145 S.W.2d 336; State v. Bengsch, 170 Mo. 81, 70 S.W. 710; Hoefling v. City of San Antonio, 20 S.W. 85, 85. Tex. 228, 16 L.R.A. 608. (3) Ordinance No. 41572 is unconstitutional as violative of Section 4, Article II, of the Missouri Constitution, which guarantees "that all persons have a natural right to life, liberty and the enjoyment of the gains of their own industry," and of Section 30 of said article, which provides "that no person shall be deprived of life, liberty or property without due process of law." State ex rel. Wyatt v. Ashbrook, 154 Mo. 375; Nafziger Baking Co. v. Salisbury, 329 Mo. 1014. (4) Ordinance No. 41572 is a special law, and hence violates Article IV, Section 53, of the Constitution of Missouri. State v. Walsh, 136 Mo. 400; Hull v. Baumann, 131 S.W.2d 721, 345 Mo. 159; State ex rel. Ashby v. Cairo Bridge Co., 340 Mo. 190, 100 S.W.2d 441; Springfield v. Smith, 322 Mo. 1129, 19 S.W.2d 1. (5) Ordinance No. 41572 deprives respondent of its property without due process of law, and impairs the obligation of contract. Gulf S.I.R. Co. and Yazoo M.V.R. Co. v. Adams, 90 Miss. 559, 45 So. 91; Detroit, etc., R. Co. v. Fuller, 205 F. 86. (6) An ordinance which discriminates between the persons engaged in a like business upon the basis of the length of time in which they have been so engaged is invalid. Cape Girardeau v. Groves Motor Co., 346 Mo. 762; Soares v. City of Santa Maria, 100 P.2d 1108; Ex parte Wacholder, 36 P.2d 705, 1 Cal.App.2d 254; Ex parte Dreibelbeis, 109 S.W.2d 476, 133 Tex.Crim. 83. (7) Differences in the dates of payment under the ordinance and the requirement for different dates for filing reports increase the tax burden of those affected by Ordinance No. 41572 as against those exempted thereby and, therefore, constitute unjust discrimination. Shipp, etc., v. Cummings, 14 S.W.2d 747, 158 Tenn. 526; Ewert v. Taylor, 160 N.W. 797, 38 S.W. 124. (8) The City has no power to exempt any person from the payment of any tax. Charter of City of St. Louis, Art. IV, Sec. 26; State v. Hannibal St. Joseph R. Co., 75 Mo. 208. (9) The ordinance is in effect a tax on respondent's franchise which the City has no power to assess. State ex rel. v. Gehner, 286 S.W. 117; State v. Bengsch, 170 Mo. 81, 70 S.W. 710; Montana-Dakota Power Co. v. Weeks, 8 F. Supp. 935; Miller v. Milwaukee, 272 U.S. 713; Macallen v. Massachusetts, 279 U.S. 620. (10) Ordinance No. 41572 is prohibited by the State Sales Tax Law. Laws 1937, p. 568, sec. 47; Laws 1937, p. 556, sec. 1 (g); Ploch v. St. Louis, 345 Mo. 1069, 138 S.W.2d 1020. (11) Section 5 provides that the tax imposed by Section 2 of the ordinance shall not apply to any person — 1. ". . . who has heretofore accepted ordinance twelve thousand seven hundred twenty-three . . ." 2. ". . . and has complied with the terms and provisions of section 2113 . . ." 3. ". . . and who shall make the payments therein required . . ." Union is included in the class established by Section 2, but by Section 5 is exempted from payment of the tax, and no one else now or hereafter engaging in the occupation taxed can ever meet the conditions which would entitle them to the benefits of the exemption. Therefore: the challenged ordinance is a special law where a general law should and could be made applicable, and violates paragraph 32, Section 53, Article IV, and Section 3, Article X of the Constitution of Missouri, which are: Article IV, Sec. 53. "The General Assembly shall not pass any local or special law: "(32) . . . In all other cases where a general law can be made applicable, no local or special law shall be enacted; . . ." Article X, Sec. 3. ". . . all taxes shall be levied and collected by general laws." Ex parte Lerner, 281 Mo. 18, 218 S.W. 331; Springfield v. Smith, 322 Mo. 1129, 19 S.W.2d 1; State ex rel. Harris v. Herrmann, 75 Mo. 340; Dunne v. K.C. Cable, etc., 131 Mo. 1, 32 S.W. 641; Reals v. Courson, 349 Mo. 1193, 164 S.W.2d 306; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375, 55 S.W. 627; State ex rel. v. Roach, 258 Mo. 541, 167 S.W. 1008; City of Atlanta v. Hudgins, 19 S.E.2d 508; Arps v. State Highway Comm., etc., 90 Mont. 152, 300 P. 549. (12) The challenged ordinance grants to the Union a special or exclusive right, privilege, or immunity, in violation of paragraph 26, Section 53, Article IV of the Constitution of Missouri, which provides: "Sec. 53. The General Assembly shall not pass any local or special law: (26) . . . Granting to any corporation, association, or individual any special or exclusive right, privilege or immunity," etc. State v. Miksicek, 225 Mo. 561, 125 S.W. 507; State ex rel. v. Kimmel, 256 Mo. 611, 165 S.W. 1067; State v. Thomas, 138 Mo. 95, 39 S.W. 481; Phoenix Fire Marine Ins. Co. v. Tennessee, 161 U.S. 174; Dike v. State, 38 Minn. 366, 38 N.W. 95. (13) Section 5 provides that the tax imposed by the ordinance shall not apply to the Union, a member of the class established by Section 2, if it "shall make the payments required" by the rental ordinances. Thereby the challenged ordinance grants Union a tax dispensation as well as the power to determine whether the tax shall be applicable to it or not. It thus levies and provides for the collection of a tax which is not "uniform upon the same class of subjects within the territorial limits of the authority levying the tax," and violates Section 3, Article X of the Constitution of Missouri, Section 30, Article II, of the Constitution of Missouri, and the Fourteenth Amendment of the Constitution of the United States, which are: Sec. 3, Article X — "Taxes may be levied and collected for public purposes only. They shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and all taxes shall be levied and collected by general laws." Sec. 30, Article II — ". . . that no person shall be deprived of life, liberty, or property without due process of law." Fourteenth Amendment of the United States — ". . . nor shall any state deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws." American Union Express Co. v. St. Joseph, 66 Mo. 675; Washington v. Washington Oil Co., 346 Mo. 1183, 145 S.W.2d 366; St. Louis v. Spiegel, 75 Mo. 145; St. Louis v. Spiegel, 90 Mo. 587, 2 S.W. 839; Cape Girardeau v. Groves Motor Co., 346 Mo. 762, 142 S.W.2d 1040; Nafziger Baking Co. v. City of Salisbury, 329 Mo. 1014, 48 S.W.2d 563; State v. Miksicek, 225 Mo. 561, 125 S.W. 507; State ex rel. Ralston v. Railroad Co., 246 Mo. 512, 152 S.W. 28. (14) In view of the constitutional requirement that taxes shall be "uniform upon the same class of subjects within the territorial limits of the authority levying the tax," and that "All taxes shall be levied and collected by general laws," the circumstance that Union does and Laclede does not pay rent, taxes, or charges under other ordinances has no reasonable relation to the subject of taxation dealt with by the challenged ordinance — namely, an occupation tax upon the business of selling electricity in St. Louis — and, therefore, it is not a valid ground for either exemption, or separate classification; State v. Hannibal, etc., 75 Mo. 208; Tarver v. Mayor, 134 Ga. 462, 67 S.E. 929; Hamilton v. Collins, 114 Fla. 276, 154 So. 201; Pullman Palace Car Co. v. State, 64 Tex. 274, 53 Am. Rep. 758; Poteet v. State, 53 S.W. 869; Hoefling v. San Antonio, 20 S.W. 85, 85 Tex. 228, 16 L.R.A. 608; Salt Lake City v. Utah Light Ry. Co., 45 Utah, 50, 142 P. 1067; City of Portland v. Portland Ry. Light Co., 80 Or. 271, 156 P. 1058; Ewing v. Wright, 159 Ga. 303, 125 S.E. 445; Woco Products, etc., v. Montgomery, 213 Ala. 452, 105 So. 214. (15) The good intentions of the municipal legislature in enacting the challenged ordinance is no valid ground either for an exemption or separate classification for the purpose of imposing an occupation tax on the business in which both Union and Laclede are engaged. Kroger Grocery Baking Co. v. St. Louis, 341 Mo. 62, 106 S.W.2d 435; State ex rel. Y.M.C.A. v. Gehner, 11 S.W.2d 30, 320 Mo. 1172; City of Seattle v. Rogers, 12 Cal.App. 60, 106 P.2d 598; City of Mobile v. Kiernan, 170 Ala. 449, 54 So. 102. (16) Appellant's briefs and the Divisional Opinion confuse the subject of the challenged ordinance, which is an occupation tax on the business of selling electricity in St. Louis, with the City's object or purpose for enacting the ordinance, namely, the raising of revenue by equalizing Union's and Laclede's contributions to the City's treasury, improperly and erroneously relating the differences in the situations between the companies to the object and purpose motivating the enactment of the ordinance rather than the subject matter of the ordinance itself. White v. Railroad, 230 Mo. 287; Thompson v. St. Louis-S.F. Ry. Co., 69 S.W.2d 936, 334 Mo. 958; Cape Girardeau v. Groves Motor Co., supra; State ex inf. Atty. General v. Hedrick, 294 Mo. 21, 241 S.W. 402; State ex rel. Saline County v. Wilson, 288 Mo. 315, 232 S.W. 140; Reals v. Courson, 349 Mo. 1193, 164 S.W.2d 306; In re French, 285 S.W. 513, 315 Mo. 75; State ex rel. v. Shipman, 290 Mo. 65; Kansas City v. Frogge, 352 Mo. 233, 176 S.W.2d 498; Ohio Oil Co. v. Conway, 281 U.S. 146; Campbell Baking Co. v. City of Harrisonville, 50 F.2d 670; Spencer v. Hunt, 147 So. 282; Lasdon v. Hallihan, 36 N.E.2d 227; Kendrick v. State, 120 So. 142; Poulnot v. Cantwell, 123 S.E. 651; C. Thomas Stores Sales System v. Spaeth, 297 N.W. 9; Sley System Garages v. City of Philadelphia, 5 A.2d 583; Pullman Palace Car Co. v. State, supra; Lyman v. Chase, 226 N.W. 842; State v. Morgan, 48 N.W. 313. (17) Appellant's briefs and the Divisional Opinion are based upon cases, some of which involve questions of classification in respect of subject matters of taxation other than that of an occupation tax, and all of which involve constitutional provisions unlike those of this State. Springfield v. Smith, supra; Kroger Grocery Baking Co. v. St. Louis, 341 Mo. 62; Hermitage v. Goldfogle, 199 N.Y.S. 382; Great Atlantic Pac. Tea Co. v. Kentucky Tax Comm., 128 S.W.2d 581. (18) The challenged ordinance indirectly imposes a tax upon the sale of electricity in St. Louis, and, although it be an occupation tax, it nevertheless violates the 1937 Missouri Sales Tax law because it imposes a tax in connection with a sale. In re Oppenstein, 289 Mo. 421; State ex rel. v. Smith, 338 Mo. 409, 90 S.W.2d 405; State ex rel. Union Elec. v. Public Service, 337 Mo. 419; Sims v. Weldon, 263 S.W. 42; Ohio Oil Co. v. Knox, 277 U.S. 218; Citizens' Bank v. Parker, 192 U.S. 73; State of Minn. v. Keeley, 126 F.2d 863; Fleming v. Hawkeye Pearl Button Co., 113 F.2d 52; In re Valhoff, 238 F. 405; Cannole v. Norfolk W. Ry. Co., 216 F. 823; Judde v. Board of Ed., etc., 15 N.E.2d 576; Peoples Gas Light Co. v Ames, 194 N.E. 260, 359 Ill. 152.
William G. Marbury amicus curiae.
Section 47 of the 1937 State Sales Tax Law prohibits the City of St. Louis from levying, imposing or collecting an occupational license tax for the privilege of selling electricity within the City of St. Louis. Laws 1933-1934 (Ex. Sess.), p. 155, Secs. 2, 2-A; Laws 1935, p. 415, sec. 2; Laws 1937, p. 556, sec. 2, p. 568, sec. 47, p. 568, sec. 48; Laws 1939, p. 871, secs. 47, 48; Laws 1941, p. 713, secs. 11454, 11455; Laws 1943, p. 1029, secs. 11454, 11455; Ploch v. St. Louis, 138 S.W.2d 1020, 345 Mo. 1069; Rust v. Missouri Dental Board, 348 Mo. 616, 155 S.W.2d 80; Morgan v. Jewel Construction Co., 230 Mo. App. 425, 91 S.W.2d 638.
This is an action for a declaratory judgment to determine the validity of Ordinance No. 41572 of the City of St. Louis. Plaintiff seeks to have this ordinance declared invalid and to obtain a permanent injunction against its enforcement. The plaintiff prevailed in the circuit court and the city has appealed.
An opinion, reversing the trial court's decree was adopted in Division 2 at the May Term 1943 and En Banc at the September Term 1943. Thereafter a rehearing was granted and the cause was re-argued at the present term. We adopt the statement of facts and issues from the Divisional opinion, by Barrett, C., as follows:
"The history and factual situation of the controversy is this:
"In 1857 the State of Missouri, through its General Assembly, granted the Laclede Gas Light Company a perpetual franchise to use the streets of the City of St. Louis (within the corporate limits as defined in 1839), for the purpose of conducting its business. Laws Mo. 1856-57, pp. 598-600; Laws Mo. 1868, p. 187. Under the terms of an instrument executed in 1926 the Laclede Power Light Company, the plaintiff, is the successor to these franchise rights, as well as the franchise rights of the Phoenix Light, Heat Power Company, and since that time has been supplying electric power to certain areas of the city.
"The Union Electric Company, (which counsel states is the only competitor of Laclede Power Light Company), was organized in 1884 and obtained its franchise from the City of St. Louis and in so doing accepted and agreed to comply with Sections 2113 and 2123 of what is now the 1936 Code of the City of St. Louis. It may be added here that the plaintiff and its predecessor, Phoenix Light, Heat Power Company, comply with those ordinances in so far as power is furnished in the so-called "underground" section of the city. Those ordinances were enacted in 1884 and provided, in substance, that a power franchise would not be granted unless the company seeking the franchise accepted the ordinances and semi-annually paid the city five percent of its gross receipts. So, since that time the Union Electric Company and that part of the plaintiff's business transacted as a successor to Phoenix Light, Heat and Power Company have paid and are now paying the City of St. Louis five percent of their gross receipts.
"But the plaintiff and its predecessor, Laclede Gas Light Company, have never accepted nor complied with the terms of these ordinances and have never paid five percent of their gross receipts from business in the chartered area, though the city has attempted to compel them to do so. Because the Laclede Gas Light Company's perpetual charter was obtained from the state in 1857 and prior to the enactment of these ordinances and because it had never accepted them and was not compellable to do so because the five percent provided in them has been held to be contractual and a rental for a franchise and not a license tax the company and its predecessor has been held not liable for such sums under those ordinances. City of St. Louis v. Laclede Gas Light Co., 155 Mo. 1, 55 S.W. 1003; City of St. Louis v. Laclede Power Light Co., 347 Mo. 1066, 152 S.W.2d 23.
"While the latter cause was pending and in May 1939 the city enacted the ordinance in question, No. 41572, and the pertinent and questioned sections are as follows:
"'Section Two. — Every person now or hereafter engaged in the business of supplying electricity for compensation for any purpose in the City of St. Louis shall pay to the City of St. Louis as a license tax a sum equal to five percent of the gross receipts from such business.
"'Section Five. — The tax in this ordinance provided shall not apply to any person, or successor thereto or assignee thereof, who has heretofore accepted ordinance twelve thousand seven hundred twenty-three and ordinance eighteen thousand six hundred eighty, or either of said ordinances, and has complied with the terms and provisions of Sections 2113 and 2123 of the Revised Code of St. Louis, 1936, and who shall make the payments therein required on the gross receipts from supplying electricity both within and outside of [72] the underground district of the City of St. Louis.'"
"Under these circumstances the respondent contends that the ordinance (No. 41572) violates Missouri constitutional restrictions and is therefore void as to it. The chief objection to the ordinance is that it violates Section 3, Article X of the Constitutional of Missouri in that it provides for a license tax which does not bear equally and uniformly upon all persons engaged in the same class of business and by its exemptions makes an unreasonable, discriminatory, arbitrary and unfair classification of persons engaged in the same business. It is argued that the ordinance violates Sections 4 and 30 of Article II and Section 53 of Article IV of the Missouri Constitution in that it deprives the respondent of its property without due process of law and is, in fact, a prohibited special law or act. Furthermore, it is argued that the ordinance impairs the obligation of contract."
Section 53 of Article 4 provides: "The General Assembly shall not pass any local or special law": (Specifying 33 items, of which plaintiff points to item 26 and the general provision in item 32.) ". . . 26. Granting to any corporation, association or individual any special or exclusive right, privilege or immunity, . . . 32. . . . In all other cases where a general law can be made applicable, no local or special law shall be enacted; and whether a general law could have been made applicable in any case is hereby declared a judicial question, and as such shall be judicially determined, without regard to any legislative assertion on that subject." We pointed out, in City of Springfield v. Smith, 322 Mo. 1129, 19 S.W.2d 1, that there are only "three other states, viz., Minnesota, Kansas, Michigan, which have constitutional provisions expressly making the determination of the question of whether a general law can be made applicable a judicial question." As also pointed out in that case "the above constitutional inhibition applies to city ordinances as well as state laws."
In Reals v. Courson, 349 Mo. 1193, 164 S.W.2d 306, we stated the definition and test of a special law thus: "A statute which relates to persons or things as a class, is a general law, while a statute which relates to particular persons or things of a class is special . . ."
"'The test of a special law is the appropriateness of its provisions to the objects that it excludes. It is not, therefore, what a law includes, that makes it special, but what it excludes.' . . ."
"If in fact the act is by its terms or 'in its practical operation, it can only apply to particular persons or things of a class, then it will be a special or local law, however carefully its character may be concealed by form of words.'"
In Reals v. Courson, the questioned act was held an invalid special act because it applied "to an existing state of facts only, that is to the one county in Missouri then falling within the classification". It is plaintiff's contention that the italicized portions of Section 5, of the ordinance herein challenged, make it impossible for it or anyone else to ever be in or come into the exempted class set up therein and also that Union is specially favored by being given a fixed limit of a five percent payment to the city while any future competitors would be required to pay ten percent. (Both the five percent street rental and the five percent license tax.) In other words, plaintiff contends that Union is the only one which is or ever can be exempted from paying the license tax, under this ordinance.
The City says: "If the Union fails to make the payment provided for in Section 2123, it immediately falls out of the exempted class and into the same class as the Laclede; that is, the class on which the tax is imposed. Any other company which the City might authorize to use its streets for the purposes described in Section One, might fall into either class depending on the condition on which its privileges were granted." The City further says: "The purpose of the ordinance was to increase revenue of the city and in doing so to require all persons engaged in the distribution of electricity to contribute the same amount to its revenue. It is obvious that it was the legislative intent to require all persons so engaged to contribute 5 per cent of their gross receipts to the support of the city government. If necessary to carry out that intent, the word 'and' following the figures '1936' and preceding the word 'who' in Section 5 of the ordinance will be read as 'or'. It is a well-settled rule that laws will be so construed as to make them constitutional if possible."
The City further says that plaintiff cannot raise the question of violation of [73] Section 53, Article 4 because its petition did not invoke that section. However, the petition did state that this was "a special ordinance, applicable only to plaintiff, under the guise of a general ordinance." Furthermore, the petition did invoke Section 3, Article 10 which provides that "all taxes shall be levied and collected by general laws." We, therefore, hold that the question of violation of Section 53, Article 4 may now properly be considered.
It seems to us that this ordinance puts Union in a fixed class (which does not have to pay the five percent license tax imposed by Section 1) into which neither plaintiff nor anyone else could ever come, because this class was limited to one "who has heretofore accepted ordinance 12723", or 18680 or either of them, "and has complied with" Section 2113 and 2123, Revised Code of 1936 "and who shall make the payments therein required." Undoubtedly this says and means that the exemption from the license tax applied only to one who met all three conditions, namely: (1) had accepted one of the specified ordinances prior to the adoption of this new ordinance; (2) had complied with the specified sections of the City Code prior to the adoption of this new ordinance; (3) and thereafter continued to make the payments (for street rental) which it had previously agreed to make and had made up to the adoption of this new ordinance. This described Union specifically and completely because that was its situation. It also just as completely and specifically prohibited plaintiff or any future competitors from getting into this class.
It is true that Union could get out of this exempt class by ceasing to make the payments (although it was not likely to do so because its payments were semi-annual while the license tax payments were quarterly and there were other probable advantages); but it was the only one in the business to be taxed which had such an option. Moreover, and more important, plaintiff could not get into Union's class and, likewise, no new competitors could ever do so either. This is true because neither plaintiff nor any new competitor could comply with conditions 1 and 2. Furthermore, under the literal meaning of this ordinance, no new competitor could get a franchise without paying the five percent rental (unless the City repealed existing ordinances) and, therefore, because it could not meet the terms for exemption in Section 5 would have to pay the five percent license tax also, It is no answer to say that the city might, in the future, grant more lenient franchise terms because the validity of this ordinance must be ruled on what it provides with reference to existing laws. To follow the City's suggestion of making the word "and" (before condition 3) read "or" would do violence to the meaning of this Section. It then would, if literally applied, exempt Union from the license tax regardless of whether or not it continued to make the rental payments. It would also exempt new firms, while making the payments, even if they never accepted the ordinances. Clearly that was not the legislative intent.
Our conclusion is that the ordinance offends against the rule stated in Reals v. Courson, supra, and authorities therein cited, by excluding plaintiff, and all others who might hereafter engage in the same business, from ever coming into the class in which Union is placed by this ordinance. Thus Union is and always would be the company exempted from the license tax (unless it voluntarily decides it does not wish to be) and no one else could ever obtain such exemption under this ordinance. (It may also cover the business of Phoenix operated by plaintiff but it would nevertheless be a special law if the exempt class is permanently limited to two instead of one.) We, therefore, hold that this makes this ordinance a prohibited special law and that it is invalid under the provisions of Section 53, Article 4. It is unnecessary to pass on the other questions raised.
The judgment is affirmed. All concur.