Court Opinion

ID: 9541068
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:22:25.185154+00
Date Added: 2024-06-11T15:02:30.560225
License: Public Domain

Hale, J.
(dissenting) — The legislature will be disappointed, I think, to learn that, in enacting the Uniform Business Corporation Act in 1933, Laws of 1933, ch. 185, p. 770, it was not only dealing with the incorporation, regulation, merger and dissolution of private business corporations but it was also legislating with respect to the parking problem in Seattle. And I think its disappointment will continue unabated when it discovers that corporate merg*787ers accomplished pursuant to that same private Uniform Business Corporation Act, Laws of 1933, ch. 185, § 46 III, p. 805, will oust in part the licensing power of the City of Seattle and transfer it in substantial degree to private corporations.
The merger section of the Uniform Business Corporation Act in force when this case arose read:
The surviving or new corporation, as the case may be, shall possess all the rights, privileges and franchises possessed by each of the former corporations so merged or consolidated except that such surviving or new corporation shall not thereby acquire authority to engage in any business or exercise any right which a corporation may not be formed under this chapter to engage in or exercise;
RCW 23.01.500 (3).
Both the legislature and the City of Seattle could well assume, I think, that the comprehensive Uniform Business Corporation Act (RCW 23.01), had been enacted to enable three or more persons to organize and do business as a private corporation for profit. They had no way of anticipating — so divergent are the two subjects of legislation— that one day the courts would hold that the statute would also work a repealer of the city’s power to regulate and license the operation of parking lots under the police powers of a city.
That RCW 23.01.500(3) was substantially reenacted and supplanted after the events of this case by RCW 23A.20.060(3), (4), matters little. What is of controlling importance, however, is that there is utterly no relationship whatever between the “rights, privileges and franchises” of RCW 23.01.500(3) mentioned in the Uniform Business Corporation Act and the parking garage ordinance of Seattle or the general licensing laws of Seattle. Any connection between statutes providing for the creation, organization and operation of private business corporations for profit and the Seattle ordinances regulating or raising revenue from parking garages must be deemed no more than a coincidence so wide apart are the two subjects. The court’s opinion means, however, that the corporations statute now applies in case *788of corporate merger with equal force to all licensed activities in which corporations engage, and that licenses will pass to the surviving corporation through the merger. In such licensed areas of business activity as cabarets, amusement devices, theaters, restaurants, or the carrying on of a trade or calling particularly identified with the public interest or affecting the public health and safety, a transfer of license can now be accomplished merely by resort to corporate merger under the private Uniform Business Corporation Act. It is a consummation, I think, never dreamed of by the legislature.
Actually, the corporations act has little or nothing to do with regulating parking garages in Seattle. It was enacted under the state’s constitutional powers related to the formation, organization, liabilities and limitation upon private corporations under Const. art. 12. The city’s power to regulate, license and receive revenue from parking garages derives from the provision of the state constitution which, granting the police power to cities, reads:
Any county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws.
Const. art. 11, § 11. The two enactments, having neither a common purpose nor aim, and not relating to the same subject matter, ‘and being entirely different in nature, cannot, I think, be said to be and, therefore, ought not be construed as being in pari materia. 50 Am. Jur. Statutes § 350 (1944).
Thus, for example, where one statute empowered the court to order inspection of books and records and another statute authorized the court to fix the penalty of supersedeas bonds, the two enactments had no relationship to each other and could have no bearing on the judicial construction to be given the other. State ex rel. Meehan v. Superior Court, 193 Wash. 249, 74 P.2d 1012 (1938).
Conversely, it follows that statutes which relate to the same subject matter and the same things or persons, or classes of things or persons, are in pari materia and may be construed together. State v. Houck, 32 Wn.2d 681, 203 P.2d *789693 (1949); State ex rel. Chesterley v. Superior Court, 19 Wn.2d 791, 144 P.2d 916 (1944); Beach v. Board of Adjustment, 73 Wn.2d 343, 438 P.2d 617 (1968).
Diamond Parking, Inc., United Parking, Inc., and City Parking, Inc., as three separate corporate entities, were separately licensed by the City of Seattle to operate public garages in the city; each had paid all license fees required by Seattle City Ordinance No. 48022, § 147 (1924), as amended by ordinance No. 83500 (Oct. 15, 1954) (Seattle City Code 10.40.020), for the period March 31, 1966, to March 31, 1967. The three separate legal entities, pursuant to the Uniform Business Corporation Act, merged October 20, 1966, into Diamond Parking, Inc., leaving that corporation as the surviving entity.
When Diamond Parking succeeded to ownership and assumed operation of the public garages of the two merged corporations, so far as city licensing was concerned, two of the licensees were no longer in esse; they had ceased to exist. In demanding that Diamond Parking obtain new licenses and pay the fees for the locations which had been operated by City Parking and United Parking prior to the merger, and for the remaining 6-month unexpired term of their licenses, the city was doing no more than its ordinance directed.
The ordinance, No. 48022, § 5 (Seattle Code 10.02.050), under which the licenses were originally issued, expressly prohibits the transfer of such licenses, making them nontransferable as follows:
No license issued under the provisions of this chapter shall be transferable or assignable, unless specifically otherwise provided for.
Seattle Code 10.02.050. The three corporations applied for and received their parking garage licenses under the same ordinance, No. 48022, as amended, as follows:
It shall be unlawful for any person to own, operate or maintain a public garage without having first obtained a license so to do, to be known as a “public garage license.” The fee for a public garage license shall be, and the same is hereby, fixed, at the rate of five dollars per year for *790each one thousand square feet of floor or ground space contained in such public garage and used for storage purposes.
Seattle Code 10.40.020.
It shall be unlawful to demand or collect any charge for parking or keeping of any motor vehicle in any public garage unless there is maintained at or near the entrance of said garage a sign designating each rate to be charged for such parking or keeping and the hours applicable thereto and the name of the licensee and such sign shall be clearly legible from a distance of fifty feet and adequate to apprise anyone entering for the purpose of using such garage of such rates; and it shall be further unlawful to charge any rate other than as designated on such sign; provided, that the provisions of this section shall not apply to rates determined by weekly, monthly or longer periods of time or to rates determined by written contract.
Seattle Code 10.40.040.
It is not questioned that the licensing of parking garages is a legitimate exercise of the police power. Seattle Code 10.40.030 (ordinance No. 48022, § 148), explicitly requires the licensee and his agents to keep the garage free from fire hazards; to comply with all building, health and sanitation laws; to notify the police of any parked vehicle which may have been stolen or employed in a crime; and to post publicly the parking rates. The court now implies that through corporate merger and consolidation — possibly of entirely disparate types of enterprises — private corporations may exercise the police power in licensing one another.
As I see it, the merger provision of the Uniform Business Corporation Act (RCW 23.01.500(3)), has not the remotest connection with or relevance to the exercise of the police power by the City of Seattle in regulating parking garages, curbing crime, and controlling traffic. We should thus apply the general principle that where there is conflict between two statutes, one of general application and the other particular and detailed, the particular will govern the general.
Where the Uniform Business Corporation Act, RCW 23.01 (now RCW title 23A), is a code of general applica*791tion, broadly applicable to all private business corporations within the state, the city ordinance (No. 48022) under which the City of Seattle seeks to exercise its police powers is a narrow piece of legislation, applicable only to persons and corporations who intend to operate public garages within the city limits. Thus, as between the two laws — one a statute of general application providing for the establishment, organization and conduct of private business corporations for profit, and the other a municipal ordinance designed under the state constitution to exercise the police powers with respect to parking garages — the local ordinance should prevail. Edmonds School Dist. 15 v. Mountlake Terrace, 77 Wn.2d 609, 465 P.2d 177 (1970). This comports with the general idea that, where the same or similar subject matter is covered by two statutes, one general and the other specific, the specific will control. Airway Heights v. Schroeder, 53 Wn.2d 625, 335 P.2d 578 (1959).
Nor do I concur in the court’s assertion that a new business is not created by a merger of corporations, but an old one is merely continued. Actually, the merger creates a new legal entity and one sui juris, and it need not pursue its former business activities. Unless otherwise proscribed, the surviving corporation is under no limitations as to the kinds of lawful business activities in which it may engage. The court’s opinion will allow the surviving corporate entity to enter a licensed field of activity without applying and qualifying for a license, for under the aegis of the Uniform Business Corporation Act it may achieve a licensed status simply by merger. This, as I see it, is contrary to our holding in State ex rel. Don Williams Export, Inc. v. Timm, 78 Wn.2d 520, 477 P.2d 15 (1970). See majority opinion, page 785.
There is nothing in the Uniform Business Corporation Act, as amended, to show that the legislature intended to curtail or affect the police powers of the state as delegated to cities or to supersede the jurisdiction of municipalities over parking, traffic and larceny of automobiles, automotive accessories and equipment. A governmental license con*792fers upon the licensee privileges to do acts which, without the license, would be unlawful. State v. Lake City Bowlers’ Club, Inc., 26 Wn.2d 292, 173 P.2d 783 (1946). Licenses are granted under the police power. Pacific Tel. & Tel. Co. v. Seattle, 172 Wash. 649, 21 P.2d 721 (1933). The requirement of a license necessarily involves reasonable controls and standards concerning who is eligible to receive it, and it must be reasonably designed to protect the public from injuries or damages the public , might suffer from persons who are ineligible to be licensed. Ellestad v. Swayze, 15 Wn.2d 281, 130 P.2d 349 (1942).
Thus, the licensing authority has the power to prescribe reasonable conditions, standards and requirements for eligibility, make reasonable inspections to determine whether these standards and conditions 'are met and complied with, and deny or revoke the license. Plumas v. Cosmopolis, 128 Wash. 697, 223 P. 1052 (1924). That regulation of public parking garages by municipalities is a legitimate exercise of the police power is a well-established principle. Annots., 40 A.L.R. 341 (1926); 55 A.L.R. 372 (1928); and 84 A.L.R. 1147 (1933). Necessarily included within these powers is the power to make the license nontransferable. In regulating parking garages, requiring a license for their operation and declaring the license nontransferable, the city is exercising the delegated police powers of the state. Const. art. 11, § 11; Lenci v. Seattle, 63 Wn.2d 664, 388 P.2d 926 (1964). If corporations may by merger alone transfer municipal licenses from one to the other, the licensing power of cities is to a substantial degree rendered negatory.
I do not think that the legislature intended in enacting the Uniform Business Corporation Act, or amending it, to impair or curtail this power.
The judgment should, therefore, be reversed.
Finley and McGovern, JJ., concur with Hale, J.
February 10, 1971. Petition for rehearing denied.