Case 78 — Action by Herman X- Herzog against the City oe Covington to Prevent it Prom Requiring Him to Pay a License Tax as Real Estate Agent in .Said City.

Nov. 12.

#### City of Covington v. Herzog.

APPEAL EROM KENTON CIRCUIT COURT.

Prom a Judgment Overruling its Demurrer to the Petition Dependant Appeals.-

Reversed.

License Tax — Real Estate Agent — Ordinance—Constitutionality —Pleading—Conclusions op Law.

Held: , 1. An allegation that a license tax of $.25 on real estate agents is unequal, unjust, and disproportionate to that on other . ¡occupations, without the recital of.any facts to support it, is a mere conclusion of law.

2. Constitution, section 174, provides that all (property shall be taxed in ¡proportion to its value, and that nothing in the Constitution shall be construed to- .prevent the General Assembly from providing for taxation based on license. Section 181 provides that the ■General Assembly may delegate the power to cities to impose license . fees on trades, occupations, and professions. Held, That Kentucky ¡Statutes, 1899, section 3058, authorizing cities of the second class to a levy tax on “real estate agents and brokers, financial agents and brokers, house agents, rental agents, loan and . ¡brokerage companies,” and a city ordinance levying a license tax of $25 on real estate agents, 'so defined as to include all these classes, are not unconstitutional, though several) occupations are grouped under one head.

3?. J. HANLON, ATTORNEY EOR APPELLANT.

The constitutionality of the following ordinance is involved in this case:

“Each and every person or firm engaged in the capacity of, or following the business ¡of, real estate shall pay a license annually of $25. By a real estate dealer or .agent (for the purpost of this section), is meant each and every person; or firm, who buys or sells real estate, either at auction or private sale for a commission, or who loiams miomey on real estate, rents houses or collects rents therefrom, or sells mortgage or lien notes for com*726mission, 'shall be considered as engaged in the real estate business, and a such must ,pay the license herein prescribed.”

“Any perón, firm or corporation violating any of the provisions of this ordinance shall, upon conviction in the police court in the city of Covington, be fined in any sum mot less than $10 or more tha $50, and the costs of prosecution.”

.Section 181 of the present Constitution of Kentucky provides in part as follows, to-wit:

“The General Assembly may, by general law only, provide for the payent of license fees on franchises, stock used for (breeding purposes, and the various trades, occupations! and professions, or a special or excise tax; and may by general laws delegate the power to counties, towns, cities and other municipal corporations, to impose and collect license feesi on stock used for breeding purposes, on franchises, trades occupations and professions.”

The General Assembly pursuant to this authority, granted by ihe Constitution of the State, did, by an act of March 19, 1894, grant and empower cities of the scomd class to levy-a license tax upon all real estate agents,* as will be found under section 3(158, Revised Statutes, (subsection 2, which provides, in part, as follows:

“The general' council shall have power by ordinance to license, tax and regulate undertakers, auctioneers, real estate agents and brokers, financial agents an,d brokers, commission merchants, house agents, lightning-rod agents, rental agents, etc.” iSubsection 23 of section 3058 provides as follows:

“The general council shall have power by ordinance to im- ■ pose, enforce and collect fines, forfeitures and penalties for the - breach of any provision of this act or any ordinance; to1 punish the violation of any provision of thiá act or any ordinance of this city by fine or imprisonment, or by both fine and imprisonment; and no ordinance (shall fix a penalty for a violation thereof at less than that imposed by statute for the same offense.”

The court will observe that the amended ordinance of April 25, 1901, provides:

“That each and every person or firm engaged in the capacity of, or following the business of, real! estate agents, shall pay a license annually of $25.”

It is respectfully submitted that the license in question requiring “each and every person or firm engaged in the capacity of, or following the business of real estate agent shall pay a license annually of $25,” is constitutional and valid; and is a reasonable exercise of the power granted under the charter to *727cities of the second class. The license is upon all real estate agents, and the ordinance defines specifically wlio a real estate agent is, and the nature of his business!. The license is not oppressive, but on the contrary is reasonable and fair.

AUTHORITIES CITED.

iCity of Covington v. Woods, 98 -Ky., 344; Elliott v. City of iLouisville, 19 Ky. Law Rep., 414; Bullitt v. City of Paducah, 8 Ky. Law Rep., 870; Levi v. City of Louisville, 97 Ky., 394; Hall v. Commonwealth, 19 Ky. Law Rep., 578; Bowser, &c., v. Thompson, 20 Rep., 31; Wilson & Bro. v. City of Lexington, 20 Rep., 1593; Fidelity Casualty Co. v. City of Louisville, 20 Ky. -Law Rep., 1785; Baker v. City of Lexington, 21 Ky. Law Rep., 809; 1 Dillon, p. 4Í0, &c..; see 338-341; Ky. Stats., sec. 3058, subsec. 23; Const., see. 161; Ky. S'tats., sec. 3058, subsec. 2.

MYERS *&*SOWARDS, attorneys for appellee.

The amended petition recites more fully and clearly the basis of the action. From its reading it will be seen that appellee’s contention is threefold:

(1) That the amount of the tax levied is oppressive, unequal, unjust and disproportionate to those borne by tradesmen and professional men generally within the city of Covington, and is disproportionate and unequal to the license or occupation taxes levied generally in said ordinance by the city of Covington, and is an unauthorized taking of private property for public use.

(2) That the license ordinance in question and~.subsection .2 of section 3058 of the Kentucky Statutes, the same being a provision of charters of cities of the second class, are invalid and void because they and each of them have divided and ¡subdivided appellee’s occupation into six occupations, said section 3058 authorizing said divisions and subdivisions and said ordinance levying a license tax for each of said, divisions -and subdivisions1 or limiting appellee to the following of one-sixth of his 'occupation in consideration of the payment of the one license fee.

(3) Thai the city has no right to fine or imprison appellee for a failure to pay a license or occupation tax,

A municipal corporation has no power or right to do anything other than what it is expressly given the right to do under its charter. The charter of a municipal corporation is a delegation of powers to its governing authority by the legislative branch of the government, and no powers will be presumed to have been *728■granted, that are not mentioned or mot necessarily included in a general grant of power. This is particularly true of its right to tax.

The charter of appellant very fully states the procedure necessary to assess, levy and collect ad valorem taxes, biit is silent •as to the manner of the collection of license or occupation taxes and its right to proceed by arrest and fine is ,an implied one. It is our contention that least the same degree of care and exactness is required of the governing authority in levying, assessing and collecting license or occupation taxes that is required in assessing, levying and collecting ad valorem taxes. One is as much a tax as the other.

AUTHORITIES CITED.

Elliott v. City of Louisville, 19 R.,' 415; Simrall v. City of Covington, 90 Ky., 444; 1 Dillon on Mun. Corp., sec. 322; Mayor of Mobile v. Yuille, 3 Ala., 137; Robinson v. Mayor of Franklin, 1 Hump., 156; Anderson v. City of Wellington, 40 Kan., 173; Ex parte Frank, 52 Cal., 606; Mayor, *&c.,*of Nashville v. Althrop, 5 Cold., 554; Cooley on Taxation, pp. 437, 570; Am. & Eng. Ency. of Law, vol. 25, ,p. 311; St. Louis v. Green, 7 Mo. App., 468; Marshall v. Wadsworth, 64 N. H., 386; St. Louis v. Stern-berg, 4 Mo. App., 453; .S'haw v. Pickett, 26 Vt,. 482.

Opinion op the court by

CHIEF JUSTICE BURNAM

Reversing.

The appellant, the city of Covington, appeals from a judgment of the Kenton Circuit Court overruling its general demurrer to the petition of appellee, and the entry of a judgment prohibiting the city from prosecuting appellee for con-, ducting a real estate business without license as required by ordinance. The petition of appellee alleges “that he has for many years been employed as the agent of other persons in buying, selling, and renting real estate, and in buying and selling mortgage and other real estate lien notes;” that the city of Covington on the 25th of April, 1901, passed an ordinance relating to the licensing of various lines of business; that section *á*of the ordinance provides: “Real Estate. Each *729and every person or firm, engaged in the capacity of or following tSie business of real estate agents shall pay a license annually of $25.00. By real estate agent for the purpose of this section is meant each and every person or firop, who buys or sells real estate, either at' auction or private sale, for a commission; or who loans money on real estate, rents houses and collects rents therefrom, or sells mortgage or lien notes for commission shall be considered as engaged in the real estate business, and as such must pay the license as herein prescribed.” That this ordinance and section 3058 of the Kentucky Statutes of 1899, which is a provision of charters of cities of the second class, were both unconstitutional and void in so far as they authorize the levy of a license tax on real estate agents, because they subdivide the' business into six distinct occupations, • namely, “real estate agents and brokers,” “financial agents and brokers,” “house rental agents,” “loan and brokerage companies;” that under the statute and ordinance the city had the right to levy a license tax on persons pursuing any. one of these various occupations, which were in reality the same business; and that the license tax of $25.00 was oppressive, unequal, unjust, and disproportionate to those borne by tradesmen and professional men generally within the city of Covington and disproportionate and unequal to the license or occupation taxes levied generally by the ordinance.

Section 171 of the Constitution provides that “all property, whether owned by natural persons or corporations, shall be taxed in proportion to its value, unless exempted by, the Constitution; and all corporate property shall pay the same rate of taxation paid by individual property. Nothing in this Constitution shall be construed to prevent the General Assembly from providing for taxation based on income, license, or franchises.” Section 181 of the Constitution pro*730vides that “the General Assembly may, by general laws only, provide for the payment of license fees on franchises, stock used for breeding purposes, the various trades, occupations, and professions, or a special or excise tax; and may, by genei'al laws, delegate the power to counties, towns, cities and other municipal corporations to impose and collect license fees on stock used for breeding purposes, on franchises, trades, occupations and professions.” In. pursuance to these provisions of the Constitution, the'General Assembly, in the charter of cities of the second class, provides that the general council of such a city shall have power by ordinance to tax and regulate every known kind of occupation and pursuit, including auctioneers, real estate agents and brokers, financial agents and brokers, rental agents, etc., and the ordinance in this case conforms substantially to the provisions of section 3058 of the Kentudky Statutes of 1899. While appellee alleges that the license tax of $25.00 is unequal, unjust, and disproportionate to that levied upon other similar occupations, no facts are cited to support the averment, and tiie allegation, as it stands, is nothing more than a conclusion of law. While there is a general similarity in each of the various occupations grouped in the ordinance under the head of dealers in real estate, and the same person might well engage in all of them at the same time, yet they are by no means identical, and either of them might furnish sufficient employment to occupy the entire time of a person, firm, or corporation. We see no ground for complaint on the part of appellee because the ordinance has grouped all of these separate occupations under a single head, and levied a single tax, as though they only constitute one occupation!. If the city had seen fit to separate each of these occupations into separate heads, and required the payment of a license tax for the prosecution of each one of them, appellant would have had better grounds for,complaint. We *731have had similar contentions before us as to the constitutionality of this provision of appellant’s charter, which also appears in the charters of cities of the first, third, and fourth classes, in the cases of Commonwealth v. Laundry Companies, 105 Ky., 259, 20 R., 1172, 49 S. W., 26; City of Covington v. Woods, 98 Ky., 344, 17 R., 927, 33 S. W., 84; and Crosdale v. City of Cynthiana, 21 R., 36, 50 S. W., 977. In all of these cases the constitutionality of the statute and the ordinances pursuant thereto were upheld. The mere avernient of the petition that the tax is oppressive and unequal is not sufficient averment of facts to'support a cause of action.

For reasons indicated, the judgment is reversed, and the cause remanded, with instructions to sustain the demurrer filed by the city, and for other proceedings consistent herewith.

Petition £or rehearing by appellee overruled.