Opinion
Argued January 24, 1935.
Affirmed March 12, 1935.
Appeal from Circuit Court, Multnomah County, HALL S. LUSK, Judge.
Jay Bowerman, of Portland (Manning Harvey, of Portland, on the brief), for appellant.
Frank S. Grant, City Attorney, of Portland (L.E. Latourette, Deputy City Attorney, of Portland, on the brief), for respondents.
IN BANC.
Suit by the Safeway Stores, Incorporated, against the City of Portland and others. From a judgment sustaining a demurrer to the complaint, plaintiff appeals.
AFFIRMED.
This is a suit to restrain the defendants from enforcing ordinance No. 61451, enacted September 23, 1931, as amended by ordinance No. 63550 of the city of Portland. A demurrer to plaintiff's complaint was interposed and sustained by the court. Plaintiff appeals.
Ordinance No. 61451 amended ordinance No. 40468 by adding thereto a new article, known as Art. XLV 3/4, relating to licensing and regulating stores in the city of Portland. That article provides, in so far as it is necessary to mention here, as follows:
"Section 1. License. That from and after January 1, 1932, it shall be unlawful for any person, firm, corporation, association or partnership, either foreign or domestic, to establish, open, maintain and/or operate, through ownership, lease, general control, management, supervision or otherwise any store or stores within the City of Portland, without first having obtained a license as herein provided.
Section 2. Definition. The term 'store' as used in this article shall be construed to mean and include any store or mercantile establishment in which goods, wares or merchandise of any kind are sold, either at wholesale or retail."
Section 6, providing for the fees to be paid, is as follows:
"Section 6. Fees. Every person, firm, corporation, association or partnership, either foreign or domestic, establishing, opening, maintaining and/or operating, through ownership, lease, general control, management, supervision or otherwise, any store or stores within this city shall pay an annual license fee or fees as follows:
(1) Where but a single store is being operated the annual license fee for such store shall be $6.00.
(2) If more than one, but not exceeding five stores, are being operated, the annual license fee for each of such stores in excess of one shall be $10.00.
(3) If more than five, but not exceeding ten stores, are being operated, the annual license fee for each of such stores in excess of five shall be $15.00.
(4) If more than ten, but not exceeding twenty stores, are being operated, the annual license fee for each of such stores in excess of ten shall be $20.00.
(5) Upon each and every store in excess of twenty operating, the annual license fee shall be $50.00."
Plaintiff asserts that this ordinance was intended as a revenue measure only and contains nothing which is designed to protect the public health, safety or convenience.
Section 5 of the original ordinance contained the following provision: "* * * All licenses must be renewed within thirty days after date of expiration, and all applications for renewals must be accompanied by the license fees herein prescribed."
Section 7 provided as follows:
"Licensee to pay only highest fee. The licenses provided for by the provisions of this article shall be in addition to all other licenses now applicable to any business hereby licensed; provided, however, that all licenses required shall be issued on the payment of the highest license fee applicable."
The city council passed ordinance No. 63550 on January 4, 1933. Sections 5 and 7 of the original ordinance were amended to read as follows: (In section 5 the part quoted above was deleted).
"Section 5. Expiration. All licenses issued under the provisions of this article shall expire on the 31st day of December of the year for which they are issued. Where a license is issued prior to the 1st day of July of any year, the full annual rate herein prescribed shall be paid, but where the license is issued on or after the 1st day of July in any year, one-half of the annual rate shall be paid."
"Section 7. License fees hereunder, when applicable. This ordinance shall not be construed as expressly or impliedly repealing any existing ordinance classifying licensing and regulating the business herein referred to, nor shall it exempt any licensee hereunder from the payment of license fees now provided by existing ordinances, but such license fees provided by existing ordinances shall continue to be paid and shall be in full of all fees required, until the amount of fees fixed by the schedule provided herein shall equal or exceed the aggregate of such other license fees, in which event the schedule herein shall be in full of all fees required in all classifications."
The ordinance was enacted as an emergency ordinance and contained the following emergency clause:
"Section 3. Inasmuch as this ordinance is necessary for the immediate preservation of the public health, peace and safety of the City of Portland, in this: That the provisions of the ordinance hereby amended are impracticable in operation and discriminatory in favor of certain store owners, which defects must be immediately corrected, therefore an emergency is hereby declared to exist and this ordinance shall be in force and effect from and after its passage by the Council."
Section 47, Chapter 3, of the Portland Charter, prescribes the forms to be observed in passing ordinances, as well as emergency ordinances, and reads as follows:
"Every ordinance, other than emergency ordinances, shall have three public readings, not more than two of which shall be at the same regular legislative session. At least one week shall elapse between the introduction and final passage of any ordinance and no ordinance shall be amended within one week of its final passage, except in case of an emergency ordinance. An emergency ordinance may be enacted upon the day of its introduction, providing that it shall contain the statement that an emergency exists, and specify with distinctness the facts and reasons constituting such emergency. The unanimous vote of all members of the Council present, and of not less than four (4) members shall be required to pass an emergency ordinance."
The city is given the power to enact a license tax ordinance for revenue or regulation by section 34 of the charter, as follows:
"The Council has power and authority, subject to the provisions, limitations and restrictions in this Charter contained:
(1) To exercise within the limits of the City of Portland all the powers commonly known as the police power to the same extent as the State of Oregon has or could exercise said power within said limits.
(21) To grant licenses with the object of raising revenue or of regulation, or both, for any and all lawful acts, things or purposes, and to fix by ordinance the amount to be paid therefor, and to provide for the revoking of the same. * * *"
It is alleged in plaintiff's complaint, in substance, that the plaintiff owns and operates 72 stores within the city of Portland, dealing in groceries and other foods, tobaccos, nonintoxicating drinks and other similar products usually sold in grocery stores; that all of said stores are occupied under leases, many of which have substantial periods of time to run and contain no provision for the concellation thereof, and that said leases can not be cancelled except with the consent of both parties; that plaintiff's business is so conducted that a net profit of less than 1 per cent of the gross business is returned, and that in 23 of said stores the business is, and for months past, has been conducted at a loss, or on a margin of profit so small that the payment of the license tax demanded would exceed the profits at such stores and entail a loss in all of same, and this notwithstanding the exercise of every diligence to operate each of said stores at a profit.
It is further alleged that plaintiff made application for a license for each of said 72 stores, through its manager, and made full compliance with ordinance No. 40468 and tendered to defendant J.S. Hutchinson, license inspector, $6 in cash with each said application, making a total of $432, and requested from said defendant a license for each such store, and that said defendant Hutchinson declined and refused to grant said licenses, or any license to plaintiff for the operation of said stores unless and until there had been paid to him a total of $2,921, basing his claim therefor upon the terms of said amendatory ordinance No. 61451, as amended by No. 63550; that each of said stores had been licensed under the original ordinance No. 40468 up to January 1, 1933.
It is alleged that said ordinance No. 61451, as amended, is void, for the reason that it is a tax or revenue measure and violates section 32, Article I of the Oregon Constitution, in that it is not uniform on the same class of subjects within the territorial limits of the authority levying the tax; also, that it is void for the same reasons because it violates section 1, Article IX of the Oregon Constitution, and that it violates each of said constitutional provisions in that it arbitrarily and without reason levies a higher license tax on 71 stores of plaintiff than is levied upon or demanded from the owners or operators of more than 1,000 other grocery or food stores within the city limits, many of which carry a larger stock of goods, and many of which do a larger volume of business and make a larger profit than is made at any of the stores of plaintiff in Portland.
It is further alleged that said ordinance, as amended, violates said constitutional provisions in that it arbitrarily levies a higher tax per store on the stores owned by plaintiff than is levied per store upon the owners of other multiple unit retail grocery and food stores operated in the city of Portland upon the same merchandising principles as have been adopted and followed by plaintiff, and who possess a lesser number of stores within the city of Portland; that there are in Portland several multiple unit owned and operated grocery and food store systems consisting of approximately 5 stores each, which are located in close proximity to certain of the stores of plaintiff, and in direct competition with them; that these institutions adopt and follow the same principles in merchandising as are adopted and followed by plaintiff; that they enjoy a large and profitable business in competition with plaintiff, but as to certain of said multiple store systems consisting of five or less, the rate per store demanded or tax levied is substantially less per store than is levied upon the competing stores owned by plaintiff.
It is alleged further that in the city there are several so-called voluntary chain organizations which have a common buying organization through which all members thereof do or may make all of their purchases; that these concerns have a common and combined advertising medium through which all members advertise their goods and conduct regular weekly sales of groceries and other food products; that they adopt and follow a plan whereby the members paint their stores in a uniform color and generally conduct and operate their business along substantially the same lines as is followed by plaintiff, but that defendants exact a $6 license fee per store from each store within any such group; that there is in the city of Portland at least one organization dealing in food merchandise, consisting of a large number of owners of individual stores, who, in turn, have combined their assets and have acquired, own and operate a large wholesale institution through which they purchase the goods sold through their several retail stores; that they also engage in combined advertising and in other ways cooperate, work together and combine their talents, money and other assets and conduct their retail food business along lines substantially as adopted and followed by plaintiff, and that notwithstanding said facts the defendants demand and exact only $6 per each store within any such organization or group, and that each of said stores deal in the same character of goods as plaintiff; that there is another organization in the city of Portland dealing in food merchandise and every kind of merchandise sold by plaintiff, and other unrelated lines of merchandise, which is under one control, ownership and management, and which has approximately 50 separate departments conducted at six separate locations, each of which has its own manager and to all intents and purposes is a separate unit store; that the advertising for all departments is controlled through the common ownership and control of the entire business, and the volume of business transacted at any one of said places of business is larger than the business transacted at any store of plaintiff; that the profits made by said institution per store is greater than the profits made by plaintiff in any one of its stores in Portland, and that notwithstanding said facts, the defendants exact a tax under said ordinance of only $61 per year, for all of said stores.
It is further alleged that there are three large retail department stores in Portland; that in at least one of them there are 100 separate departments, under separate managership, with a stock of merchandise having a value 10 to 15 times greater than all of the merchandise of all of plaintiff's stores, and transacting an annual retail business several times the amount transacted by plaintiff in Portland; that each of said stores conducts sales and each advertises its business extensively, advertising all of the business of all of said departments in composite advertisements, but that notwithstanding, the highest license demanded by defendants and collected of any said store is the sum of $41, and except for the fact that said stores handle certain merchandise such as electrical and plumbing goods, requiring an inspector under the terms of other ordinances of the city of Portland, for which a separate license charge is made, each of said department stores would be licensed on the payment of $6, and no more.
It is alleged that the language contained in the ordinance does not expressly require the payment of any license fee for the first 20 stores in a case where, under one ownership, more than 20 stores are operated.
It is alleged that section 7 of ordinance No. 61451 was void in that it contained a complete contradiction.
It is alleged that plaintiff, through fair dealings with thousands of customers, has built up a large business with a large percentage of the 300,000 people residing in Portland, as well as a large number of other persons residing in the adjacent territory; that unless restrained by an order of the court, the defendants threaten to and will arrest the store managers of plaintiff, together with its executive officers, and that their arrest, and the necessity of their attending court and defending their rights, will greatly disorganize plaintiff's business and cause said store managers and executive officers to neglect their duties to plaintiff, and would cause a great deal of adverse comment and scandal among the general public and customers of plaintiff's stores, all of which would result in a great and irreparable injury, loss and damage to plaintiff.
It is further alleged that the original ordinance No. 40468, of which No. 61451 is an amendment, is entitled as follows: "An ordinance on the regulation of private business, including licenses, and declaring an emergency", and that, as its title indicates, it is an ordinance for the regulation of private business and the licensing thereof and is not a revenue measure, nor is it intended as such; that the title of said ordinance is insufficient to include the revenue provisions attempted to be included by the amendatory ordinances, and that the titles to the amendatory ordinances add nothing in this respect to the titles of the original ordinances, and that taken as a whole they are insufficient.
It is further alleged that ordinance No. 61451, as amended, violates the provisions of section 20, Article I of the Oregon Constitution, in that it grants to others engaged in the same business as plaintiff privileges and immunities which, on the same terms, are not equally granted to plaintiff herein. It is also alleged that this ordinance violates the established public policy of the state of Oregon in that it requires the payment of a higher rate of license tax per store on stores owned by plaintiff than is required from the owners of similar stores transacting an identical business, as a condition precedent to the conduct of a lawful business in the city of Portland.
It is alleged that the tax demanded, as aforesaid, would be confiscatory of plaintiff's property and business, and that payment of similar taxes in all of plaintiff's stores would compel it to cease doing business.
It is stated in the city's brief that there are 566 chain stores in the city of Portland, 494 of which are paying a license tax, as required by this ordinance.
Plaintiff asserts that the court erred in sustaining defendant's demurrer to plaintiff's amended complaint, thereby determining that the ordinance in question is valid, and that the court erred in not holding said ordinance to be void, and erred in entering a decree dismissing plaintiff's complaint.
Plaintiff contends that ordinance No. 61451 violates section 20, Article I of the state constitution, which provides: "No law shall be passed granting to any citizen or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens." Citing State v. Wright, 53 Or. 344, 348 ( 100 P. 296, 21 L.R.A. (N.S.) 349); Ideal Tea Co. v. Salem, 77 Or. 182, 186 ( 150 P. 852, Ann. Cas. 1917D, 684), and other authorities.
Section 32, Article I of the state constitution, as amended in 1917, provides as follows: "* * * all taxation shall be uniform on the same class of subjects within the territorial limits of the authority levying the tax."
Section 1, Article IX of that instrument, as then amended, provides as follows:
"The legislative assembly shall, and the people through the initiative may, provide by law uniform rules of assessment and taxation. All taxes shall be levied and collected under general laws operating uniformly throughout the state."
Prior to such amendment the limitations mentioned applied only to the taxation of property and did not apply to license privilege, occupation, excise and other taxes of like character, which, by common usage, are not laid on property. As to such taxes the state constitution, in its original form, imposed no restrictions upon the power of the legislature beyond those contained in the 14th amendment to the federal constitution: Standard Lbr. Co. v. Pierce, 112 Or. 314 ( 228 P. 812); Portland v. Portland Gas Coke Co., 80 Or. 194 ( 150 P. 273, 156 P. 1070); Portland v. Portland Ry. L. P. Co., 80 Or. 271 ( 156 P. 1058); Kellaher v. City of Portland, 57 Or. 575 ( 110 P. 492, 112 P. 1076); Oregon v. Pac. States Tele. Co., 53 Or. 162 ( 99 P. 427).
It has been shown that ordinance No. 61451, which is assailed by the complaint in this suit, provides that a store shall not be operated without a license. An annual license fee is required to be paid as follows: $6 for a single store; $10 for each store in excess of one, but not exceeding five; $15 for each store in excess of five and not exceeding 10; $20 for each store in excess of 10 and not exceeding 20; and $50 for each store in excess of 20.
In section 34 (§ 73 of charter of 1903), subd. 21, of the charter of the city of Portland, we find that the city is authorized to pass a license ordinance as follows: "To grant licenses with the object of raising revenue or of regulation, or both, for any and all lawful acts, things or purposes, and to fix by ordinance the amount to be paid therefor, and to provide for the revoking of the same." See Kellaher v. Portland, supra; Portland v. Portland Gas Coke Co., supra; Portland v. Portland Ry. L. P. Co., supra; Lovejoy v. Portland, 95 Or. 459 ( 188 P. 207); Korth v. Portland, 123 Or. 180 ( 261 P. 895, 58 A.L.R. 665).
The council enacted Article XLV 3/4 of ordinance No. 61451, by virtue of the authority of the provision above quoted. In Kellaher v. Portland, supra, it is said:
"It is not questioned that the council has power to license vehicles for revenue, as attempted to be done in this case, as well as for the purpose of regulation. The charter provision (section 73, sub-sec. 21) grants this power. Certain trades and callings may be taxed without including all businesses that may be legally taxed for revenue, but the classification must be on some reasonable basis, so that it will apply to all engaged in the same business occupation."
And in Lovejoy v. Portland, supra, this court said:
"The city is authorized by its charter to impose licenses and taxes. The charter (section 73, subd. 21), granted by the legislature in 1903 (Sp. Laws 1903, C. 1) empowered the Council to 'grant licenses, with the object of raising revenue or of regulation, or both, for any and all lawful acts, things, or purposes, and to fix, by ordinance, the amount to be paid therefor, and to provide for the revoking of the same. * * *'"
The matter with which we have to deal is ably presented by the briefs of counsel. The question has been discussed pro and con by able jurists, and while, in the early stages of the discussion, the decisions were far from being unanimous, at the present time it appears that it could be mentioned no longer as an open question. At least we do not feel free to make corrections of the opinions of the Supreme Court of the United States deciding, in principle, the controversy which we have before us.
The ordinance providing for licenses and taxes for the purpose of raising revenue and also for regulation, No. 61451, is not in conflict with section 32 of Article I, section 1 of Article IX, nor section 20 of Article I of the constitution of Oregon: Standard Lbr. Co. v. Pierce, supra; Kellaher v. City of Portland, supra; J.C. Penney Co. v. Diefendorff (Idaho), 32 P.2d 784; Safeway Stores, Inc. v. Diefendorff, (Idaho), 32 P.2d 798; State Bd. of Tax Com'rs. v. Jackson, 283 U.S. 527 ( 75 L.Ed. 1248, 51 S.Ct. 540, 73 A.L.R. 1464), and notes in 85 A.L.R. 699.
In the very nature of things, it is impossible to devise a tax law that will operate with perfect equality on all. Where the classification for the purpose of taxation is a natural one, or a reasonable ground for the distinction exists, the law or ordinance will be upheld: 17 R.C.L. 509, §§ 30, 31.
The question of classification of objects on which a license fee is imposed is purely legislative, and in the absence of abuse will not be interfered with by the court. In the case of State Bd. of Tax Com'rs. v. Jackson, supra, it was recognized as well settled that a state has the power to classify the objects of taxation and to treat the several classes differently, so long as the classification is reasonable and based upon some real and substantial difference, is not purely arbitrary or fictitious and all persons within the class, similarly circumstanced, are treated alike. It is too firmly established at the present day to admit of a doubt. It was there held that there was sufficient difference between chain stores and the different departments or units of department stores or associations of individual stores for the purpose of cooperative buying, exchanging of ideas as to advertising, sales methods, etc., to sustain the classification in question. The Indiana statute was there upheld. The license fees therein prescribed were as follows: Upon one store, the annual license fee is $3; upon two stores or more, but not to exceed five, $10 for each such additional store; upon each store in excess of five, but not to exceed 10, $15 for each such additional store; upon each store in excess of 10, but not to exceed 20, $20 for each such additional store; upon each store in excess of 20, $25 for each such additional store. In principle we think it was like the ordinance in question.
In Great Atlantic Pacific Tea Co. v. Maxwell, 199 N.C. 433, ( 154 S.E. 838), affirmed in 284 U.S. 575, ( 52 S.Ct. 26, 76 L.Ed. 500), it was said: "* * * there is a real and substantial difference between merchants who exercise the privilege of carrying on their business in this state, by means of two or more stores, and those who maintain and operate only one store, * * *." The case was affirmed by the Supreme Court of the United States, Mr. Justice Van Devanter and Mr. Justice Sutherland, who had formerly dissented in the Jackson case, taking the view that the question was no longer an open one.
The constitutionality of the South Carolina chain store tax law came in question in Southern Grocery Stores v. South Carolina Tax Commission, 55 F.2d 931. The act provided that every person, firm, corporation or association engaged in the business of operating or maintaining in the state, under the same general management, supervision, or ownership, one or more retail stores, should pay an annual license tax, in addition to all other license fees or charges, for each store or mercantile establishment situate in any incorporated city or town in the state, in accordance with the schedule given in the act, the amount of the tax being $5 for the first store, $10 for the second store, $15 for the third store, and so on, so that the tax on each successive store was increased by $5, up to and including the 30th store, for which the tax was $150, and the same sum for each store in excess of 30. The law did not apply to gas filling stations. The court held that, in the light of State Bd. of Tax Com'rs. v. Jackson, supra, and other recent decisions of the United States Supreme Court, there could be no question as to the constitutionality of the statute.
The case of Penney Stores v. Mitchell, 59 F.2d 789, involved a Mississippi statute enacted in 1930, which imposed an annual privilege tax upon the business of selling any kind of property equal to one-fourth of 1 per cent of the gross income of the business, with the proviso that "if any person shall operate any more than five stores in this state, at or by which any such property is sold, at retail, there is likewise hereby levied on, and shall be collected of, such person, an additional tax equivalent to one-fourth of one per cent of the gross income of the business of all such stores."
The court said:
"The legislative right to classify being established, we see no reason to strike down the Mississippi statute because it has only two classes instead of five, as in Indiana, or because of a difference of opinion between state legislatures as to the number of units necessary to constitute a chain store."
In Liggett Co. v. Lee, 288 U.S. 517 ( 77 L.Ed. 929, 53 S.Ct. 481, 85 A.L.R. 699), it appears that the Florida statute imposed upon every person, firm, corporation, association, or copartnership opening, establishing, operating, or maintaining one or more stores within the state under the same general management, supervision, or ownership, a license fee for the privilege of carrying on such business, measured by the number of stores maintained or operated, the fee being fixed at $5 for one store; $10 for two or more, but not exceeding 15 stores, where the same were located in any one county; $15 for each additional store from two to 15, where the same are located in different counties, etc., and, in addition, imposed a fee of $3 for every $1,000 of value of stock carried in each store. The Florida supreme court upheld the classification. The Supreme Court of the United States, while sustaining the constitutionality of the act, in every other respect, held that the feature thereof which increased the rate of taxation, where stores were located in more than one county, was not based upon any reasonable classification. See also Great Atlantic Pacific Tea Co. v. Morrissett, 58 F.2d 991 (Affirmed in 284 U.S. 584 ( 76 L.Ed. 506, 52 S.Ct. 127)).
It is interesting to read the dissenting opinions. They display great learning and ability. They are, nevertheless, opinions without a decision. The majority still rules.
In J.C. Penney Co. v. Diefendorff and Safeway Stores, Inc. v. Diefendorff, supra, the court said: "If it does not clearly appear that this schedule of fees in question is such that the owners of chain stores will be so greatly handicapped thereby as to make their business unprofitable, while the business of independent operators who handle and sell the same or similar goods may be conducted profitably, such fees can not be held to be confiscatory."
In Interstate Busses Corporation v. Blodgett, 19 F.2d 256, 260 (Affirmed in 276 U.S. 245 ( 48 S.Ct. 230, 72 L.Ed. 551)), the court said: "The reasonableness of an excise tax for revenue does not depend upon whether a hardship may be worked in a single case, but upon the general operation of them all in the class to which it applies."
As long as the ordinance of the city of Portland comes within the radius of the authority of the city charter, that is, to grant licenses with the object of raising revenue, or of regulation, or both, the ordinance, within the municipal limits of the city, has the same force and effect as a statute of the state. The city council was authorized by the charter to enact the ordinance in question: Portland v. State Bank of Portland, 107 Or. 267 ( 214 P. 813); Grand Ave. Ry. Co. v. Citizens' Ry. Co., 148 Mo. 665, 671 ( 50 S.W. 305); 2 McQuillin, Munic. Corp. (2d Ed.) § 674.
In Bradley v. Richmond, 227 U.S. 477 ( 33 S.Ct. 318, 57 L.Ed. 603), a tax was imposed by an ordinance on the conduct of various businesses and gave a power of classification to a committee of the council. That committee classified private bankers, placing a tax of one amount on certain of them and of a different amount on others. It appeared that the business of those in the one class was that of lending money at high rates upon salaries and household furniture, while that done by the other class was that of lending money upon commercial securities. The classification was held not to offend the constitutional provision for equal protection of the laws. In Metropolis Theatre Co. v. Chicago, 228 U.S. 61 ( 33 S.Ct. 441, 443, 57 L.Ed. 730), an ordinance classified theatres for license fees based on and graded according to the admission charged. Some of the theatres charged a higher admission and had less revenue than those charging a smaller price, and therefore paid lower license fees. The court in that case held the classification was valid.
There is a real, recognized difference between a business carried on in one store and a business operated by means of a chain of stores. Whether it is wise or expedient, based upon such difference, to classify such chain stores in a class by themselves for the purpose of levying a license tax is, as we understand, a legislative question to be determined by the lawmakers.
Differences in organization, management and type of business transacted, between the business of chain stores and the other type of store, are such as to justify the classification made by a state statute or city ordinance imposing an occupation tax on the operation of mercantile establishments, graduated according to the number of stores owned, R.C.L. Per. Sup. "Licenses" (1934) (Pocket part, 1157, § 32).
Mr. Justice McCOURT in Standard Lbr. Co. v. Pierce, supra, at page 332, quoted from Knowlton v. Moore, 178 U.S. 41 ( 44 L.Ed. 969, 20 S.Ct. 747), as follows:
"Taxes imposed with reference to the ability of the person upon whom the burden is placed to bear the same have been levied from the foundation of the government. So, also, some authoritative thinkers, and a number of economic writers, contend that a progressive tax is more just and equal than a proportional one. In the absence of constitutional limitation, the question whether it is or is not is legislative, and not judicial."
A careful comparison of the articles of the constitution of Oregon, referred to, with those of the state of Indiana, leads us to believe that there is no essential difference, as applied to the ordinance in question. The ordinance is not in conflict with any of the provisions of the Oregon constitution.
Plaintiff contends that in the enactment of the ordinance the rights of the unorganized general public are lost sight of, as an increase of retail prices may result. It may be that there was lurking in the minds of the municipal legislators the thought that if the chain stores were enormously increased, competition would be swept away and there would be danger that there would occur a rise in the prices of retail articles to the detriment of the general public.
In Midwestern Petroleum Corp. v. State Bd. of Tax Com'rs, (Ind.) 187 N.E. 882, 884, it is said:
"But here it is urged that the legislation can be justified under what Judge Cooley calls 'the police or equivalent power.' Commentators generally regard this type of legislation as designed and intended to discourage chain stores and encourage and protect local industry. We agree with this view as to the purpose of the Indiana statute, and will consider the question of its constitutionality upon that basis."
Plaintiff contends that the requirement of the payment of the license fees is confiscatory. The amount of the license tax does not indicate that the rates are so oppressive as to be arbitrary or confiscatory.
In Fox v. Standard Oil Co., 55 S.Ct. 333, 79 L.Ed. ___, we read:
"The tax now assailed may have its roots in an erroneous conception of the ills of the body politic or of the efficacy of such a measure to bring about a cure. We have no thought in anything we have written to declare it expedient or even just, or for that matter to declare the contrary. We deal with power only." See also Hall v. State, 217 Ala. 403 ( 116 So. 369, 58 A.L.R. 1333).
Appellant asserts that the emergency clause attached to ordinance No. 63550, which amended sections 5 and 7 of article XLV 3/4 of ordinance No. 40468, is void, and therefore the entire ordinance is void. We have devoted considerable attention to this emergency clause, but careful examination shows that this amendatory ordinance only changes sections 5 and 7 of article XLV 3/4 of ordinance No. 40468. The question is not devoid of a good deal of difficulty. Section 47 of the city charter requires that an emergency clause shall contain the statement that an emergency exists and specify with distinctness the facts and reasons, constituting such emergency. The emergency clause is as follows:
"Inasmuch as this ordinance is necessary for the immediate preservation of the public health, peace and safety of the City of Portland, in this: That the provisions of the ordinance hereby amended are impracticable in operation and discriminatory in favor of certain store owners, which defects must be immediately corrected, therefore an emergency is hereby declared to exist and this ordinance shall be in force and effect from and after its passage by the Council." See State v. Dalles City, 72 Or. 337 ( 143 P. 1127, Ann. Cas. 1916B, 855).
However, as section 5, as amended, relates to the manner of collecting the license tax and leaves article XLV 3/4 of ordinance No. 40468 entirely intact, we fail to see that the question is very material. The city contends that the amendment to section 5, being a deletion of the following: "All licenses must be renewed within 30 days after date of expiration, and all applications for renewals must be accompanied by the license fees herein prescribed." That this requirement caused the applications to be made in mass and was inconvenient for the license bureau, and therefore the change was made for municipal convenience. Section 7, before the amendment, required store owners to pay separate license fees for certain different branches of business conducted. A drug store which carried electrical goods would be required to pay an electrical license in addition to $6, the store license. The druggist who carried curling irons, heating pads, etc., was required to pay about double the amount of the other druggist, and the section, as amended, avoids this burden to a considerable extent by providing that the store owner shall not be required to pay additional fees when the store license fee equals or exceeds what the other fee or fees would amount to. While the emergency clause is questionable, under the circumstances it does not have vital effect on this case.
The construction of section 6 of ordinance No. 61451, providing for the fees to be paid, as placed by the city officials, is challenged by plaintiff. It contends that where there are more than 20 stores in one ownership, the ordinance makes no provision for the payment of any tax on the first 20 stores. The construction contended for by plaintiff would run counter to section 1 of the ordinance above quoted, making it unlawful for any person to operate a store "without first having obtained a license, as herein provided", and also there would be no compliance with section 6 of the ordinance as to the first 20 stores, which requires every person operating "any store or stores within this city shall pay an annual license fee or fees * * *". While the language of said section 6 is abbreviated, we think the meaning conveyed thereby does not warrant the contention of plaintiff.
It is alleged and claimed that the title of the original ordinance No. 40468, of which ordinance No. 61451 is an amendment, is not sufficient to include a revenue measure. The charter of the city is the organic law of the municipality and it bears the same relation to the ordinances of a city that the constitution of the state bears to the statute. An ordinance must be passed in the manner prescribed by the city charter: 2 McQuillin, on Munic. Corp., §§ 676 and 682.
Section 45 of the charter of Portland directs that "No ordinance except one making an appropriation shall contain more than one general subject," but there is no requirement that such subject shall be embraced in the title, as indicated by the general rule. The ordinance is not invalid on account of its title.
It is argued that the ordinance violates the established public policy of the state of Oregon, as bills containing a similar provision to those of the ordinance have been introduced in the legislature, and have failed to pass. The policy of the state is shown by its constitution and enacted laws. The public policy of the state of Oregon is not indicated by measures which have been introduced in the legislature but have not been enacted into laws. The ordinance does not conflict with the purpose or spirit of the substantive laws of the state of Oregon: 49 C.J. 1073.
The briefs on the part of plaintiff contain a wealth of authorities which might be said to be somewhat analogous to the principle involved. To discuss all of the different cases cited would render this memorandum too lengthy.
The whole case is plainly portrayed by plaintiff's complaint. We do not think that any different result would be obtained upon a hearing or taking of testimony.
It follows that the demurrer to the complaint was properly sustained. The judgment of the circuit court is therefore affirmed.
KELLY and BAILEY, JJ., not sitting.