Case Title: Evers v. City of Dadeville

Citation: 61 So. 2d 78

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1952-10-23T00:00:00Z

Document:
61 So. 2d 78 (1952)
EVERS et al.
v.
CITY OF DADEVILLE.
5 Div. 513.

Supreme Court of Alabama.
October 23, 1952.
Walker & Walker, Opelika, and Tom F. Young, Alexander City, for appellant.
Lawrence K. Andrews, Union Springs, and Sam W. Oliver, Dadeville, for appellee.
Hill & Robison, Montgomery, and Leader, Tenebaum, Perrine & Swedlaw, Birmingham, amici curiae.
*79 BROWN, Justice.
This appeal is by the complainants, nineteen in number, from a final decree of the Circuit Court of Tallapoosa Circuit Court, in equity sitting, sustaining the defendant's demurrer to the complainants' bill and dismissing the same.
The complainants other than Robert Lester and Clyde Jackson are resident citizens and taxpayers residing within the corporate limits of the City of Dadeville. Lester and Jackson reside within the police jurisdiction of the City of Dadeville and beyond the corporate limits thereof.
The bill seeks to have declared void and enjoin enforcement of Ordinance No. 192, adopted and promulgated by the City of Dadeville on the 15th of December, 1949. Section two of said ordinance provides:
The ordinance does not require, as does the State sales tax, that the amount of the tax must be added to the sales price and collected from the purchaser. In this respect the ordinance provides:
As stated, Section 2 of the ordinance provides: "There is hereby levied, in addition to all other taxes of every kind now imposed by law, and shall be collected as herein provided, * * *."
The bill further alleges in short that the ordinance sets out innumerable articles which are exempted from the tax. Section 4 provides: "The tax levied under the provisions of this ordinance * * * shall be due and payable in monthly installments on or before the twentieth day of the month next succeeding the month in which the tax accrues." This section also provides that "every person on whom the taxes levied by this ordinance are imposed, shall render to the City of Dadeville on a form prescribed by the City, a true and correct statement," etc. It is provided that the taxpayer may use the forms prescribed and used by the State of Alabama under the State Sales Tax Law of Alabama, Code 1940, Tit. 37, § 670 et seq. Section 5 of the ordinances provides, "any person taxable under this ordinance" may report cash sales only and may thereafter include collections when made on credit sales.
Section 6 provides, "It shall be the duty of every person engaging, or continuing, in this City in any business for which a privilege tax is imposed by this ordinance, to keep and preserve suitable records," etc. Section 7 provides that any person who fails to keep such records or refuses to permit their examination or who violates any other provisions of the ordinance shall be fined not less than $25 nor more than $100 for each offense and that each month of failure shall constitute a separate offense. Any person failing to render any report as required shall be subject to like fine. Any *80 person violating any other provisions of the ordinance is to be punished "within the limits of and as provided by § 586, Title 37, Code of 1940."
The ordinance does not require the payment of the tax imposed as a condition precedent to the doing of business, it does not require the issuance of a license, does not make unlawful the doing of business without the payment of the prescribed tax or the procuring of a license. The ordinance does not purport to license the doing of business for any stated period or at a particular place or places.
The bill alleges that complainants have under protest been making the required reports and making the payments to the city. The bill also alleges that the complainants have as consumers, since the effective date of the ordinance, made purchases of tangible personal property of other merchants within the City of Dadeville and expect to continue to do so and are subject to having said tax charged against them on purchases under Section 11 of the ordinance. The bill continues:
The bill prays (1) for a decree of the court declaring the said ordinance null and void; (2) that its enforcement be enjoined; (3) that complainants recover the respective amounts paid by them under the ordinance, and (4) for general relief.
The demurrer is to the bill as a whole.
The case was submitted on regular call on briefs without request or motion for severance in the assignments of error. All appellants join in the assignments of error, which are as follows:
The appellants, however, only argue and insist upon the second assignment of error.
As pointed out by the appellee in brief, the demurrer contains grounds other than the general demurrer for want of equity in the bill, among which are the following: Misjoinder of parties complainant; misjoinder of causes of action; no showing of irreparable damages; a plain and adequate remedy at law; not entitled to injunctive relief; no averment of facts calculated to show that the license is grossly excessive and confiscatory in amount; averments of conclusion and not of facts; that the averments of the bill and the exhibit thereto affirmatively show that the City was at the time of the adoption of the ordinance, authorized by the statute to adopt said ordinance; that said ordinance does not impose a tax on property but is a license tax which the city was legally authorized to adopt; that the averments of the bill show that the ordinance imposes a license tax on occupations; that the complainants have not complied with Title 37, § 476, Code of 1940; that suit is prematurely brought in that it is not shown that complainants complied with the provisions of Title 51, § 332 et seq. of the Code; that the complainants have not complied with Title 51, § 890 of the Code; that complainants had a plain and adequate remedy at law under §§ 890 and 891, Title 51, Code of 1940; that the averments of the respective paragraphs of the bill are conclusions of the pleader and are immaterial; that it affirmatively appears from the averments of paragraph 9 of the bill that the ordinance legally imposes a license tax on the complainants.
The major contention made in brief filed by the appellants and supporting briefs amicus curiae, is that the ordinance undertakes to levy a consumer's sale tax, which, at the option of the taxpayer, may be passed to the consumer of goods purchased from the taxpayer and that the statute conferring on municipal corporations the power of taxation grants no such authority. In support of this contention it is urged that the ordinance makes no specific provision for the issuance of a license authorizing a taxpayer to engage in business and provides no fee or charge for the issuance of such license.
It is further insisted that the fact that the ordinance confers on the taxpayer the option to use forms issued by the State Tax Commission, applicable to the State Sale Tax, and adopts the terminology of the statute levying the sale tax, is determinative of the character of the tax and stamps it as the levy of a sale's or consumer's tax.
The applicable statute, § 735, Title 37, Code of 1940, provides:
The levy here authorized is against persons engaged and continuing in the business of selling merchandise, goods and chattels and the basis for computing the tax is "one-half of one percent of the gross receipts of the business conducted within the corporate limits of the city, and one-fourth of one percent, against persons so engaged or continuing in business within the police jurisdiction of said city." Said last mentioned levy is authorized by § 733, Title 37, Code of 1940, as rewritten in Act No. 502, approved July 9, 1943. General Acts of Alabama Regular Session 1943, Special Session 1942, p. 477; Code of 1940, Tit. 37, Pocket Part, p. 278.
The force of the suggestion that the ordinance under attack adopts the terminology of the statute levying the sale tax is dispelled when it is observed that the sale tax levied by the legislature and passed on to the consumer by operation of law and the basis for computing the tax under the Sale Tax Act is 2% of the gross receipts of each individual retail sale, which must be collected from the purchaser, consumer, and accounted for by the taxpayer. While the basis for computing the tax here is the gross receipts of the taxpayer for a prescribed time, which he may, at his option, figure into his overhead expense and add to the sale price without liability to account therefor.
The sale tax is "a privilege or license tax against the person". The statute so declares. Code of 1940, Tit. 51, § 753; Frazier v. State Tax Commission, 234 Ala. 353, 175 So. 402, 110 A.L.R. 1479; Lone Star Cement Corp. v. State Tax Commission, 234 Ala. 465, 175 So. 399; Alabama Gas Co. v. City of Montgomery, 249 Ala. 257, 30 So. 2d 651; State v. Commercial Loan Co., 251 Ala. 672, 675-678, 38 So. 2d 571.
The character of the tax and whether or not the respondent municipality was authorized to levy it, is a question of law for the court, to be determined by the provisions of the statute and the contents of the ordinance, which is attached to and made a part of the complainants' bill. City of Andalusia v. Fletcher, 240 Ala. 110, 198 So. 64; Hawkins v. City of Prichard, 249 Ala. 234, 238 (7th headnote), 30 So. 2d 659.
The insistence that the ordinance is lacking in validity because it makes no provision for the issuance of a license is fully met by the provisions of § 754, Title 37, Code of 1940, which makes it unlawful, "for any person, firm, or corporation, or agent of a firm or corporation, to engage in any of the businesses or vocations in a city for which a license may be required without first having procured a license therefor * * *."
The privilege tax levied by the ordinance on its face not being in excess of the amount authorized by the statute, is presumptively valid, in the absence of allegations of fact, showing that the tax is excessive, arbitrary or otherwise wanting in validity. Van Hook v. City of Selma, *83 70 Ala. 361; Benson v. City of Andalusia, 240 Ala. 99, 195 So. 443. No such facts are alleged in the bill. The facts alleged in the bill are admitted by the demurrer, but the city controverts the legal conclusions drawn therefrom by the complainants who assert that the ordinance which is attached to and made a part of the bill, is a sale's tax or "consumer's tax", which the statute does not authorize the City of Dadeville to levy. The defendant on the other hand contends that said ordinance is a privilege or license tax, which the defendant has authority to adopt and ordain, thus presenting purely questions of law, within the province of the court to determine. Frazier v. State Tax Commission, 234 Ala. 353, 175 So. 402, 110 A.L.R. 1479; City of Andalusia v. Fletcher, 240 Ala. 110, 198 So. 64; Hawkins v. City of Prichard, 249 Ala. 234, 30 So. 2d 659.
Moreover, the allegations of the bill show that each and all of the complainants have made reports to the city required by the ordinance for ascertainment of the amount of the tax and have paid the same under protest.
Ordinarily where the bill for a declaratory judgment shows a bona fide factual, justiciable controversy, the demurrer thereto should be overruled, and declarations of rights made and entered only after answer and on such evidence as the parties may deem proper to introduce on submission for final decree. City of Bessemer v. Bessemer Theatres, Inc., 252 Ala. 117, 39 So. 2d 658. However, where, as here, there is no factual, justiciable controversy that can be brought forward and made available by answer and evidence and where the facts alleged are admitted and only a question of law is presented to the court for decision, the court may declare the rights and status of the parties as a matter of law. City of Andalusia v. Fletcher, 240 Ala. 110, 198 So. 64; Hawkins v. City of Prichard, 249 Ala. 234, 30 So. 2d 659. The effect of the decree on demurrer rendered by the trial court was to declare as a matter of law that the governing board of the City of Dadeville had the authority to levy the license tax, that the ordinance which it passed and adopted levied such tax, that the ordinance is valid and that the complainants are not entitled to a decree recovering the tax which they have paid under said ordinance. Therefore, the decree of the circuit court is due to be affirmed and it is so ordered.
Affirmed.
LIVINGSTON, C. J., and LAWSON and STAKELY, JJ., concur.