Court Opinion

ID: 9651410
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:18:48.502039+00
Date Added: 2024-06-11T18:12:33.636674
License: Public Domain

STONE, Circuit Judge.
This is an action to enjoin enforcement of an ordinance of the city of Harrisonville, Mo., levying a license tax upon appellant. From an order denying a temporary injunction, this appeal is brought.
The here material provision of the ordinance is as follows :
“Section 2-A. License: Each person, firm or corporation engaged in selling or delivering any goods or merchandise of any kind, at wholesale or retail, to any firm, person or corporation in the City of Harrisonville, Missouri, shall pay at the rate of $2.00 per day or $30.00 per month or $125.00 for six months or $200.00' per year; but this Section shall not apply to any person, firm or corporation selling at their regular established place of business. Any person, firm or corporation making any such sale or delivery, without first procuring a license and paying the said sum of $2.00 per day, or $30.00 per month or $125.00 for six months or $200.00 per year, shall be guilty of a misdemeanor, and, upon conviction, shall be fined in the sum of not less than $10.00 nor more than $25.00.”
This ordinance expressly applies to those who sell or deliver goods or merchandise in Harrisonville with no regular established place of sale therein. The undisputed business methods of appellant show it within the ordinance. Appellant has a large plant at Kansas City, Mo., where it makes bread and cakes. Among its customers are retail merchants in towns and cities which are sufficiently near to Kansas City to permit daily delivery by trucks of appellant over regularly established routes. One of these delivery routes covers seven communities, including Harrisonville. There are seven regular merchant customers in Harrisonville. These customers have standing orders (subject to approval of the plant manager) with appellant for daily deliveries to them at their places of business in Harrisonville. Each day -appellant’s deliveryman brings to each merchant the desired broad and cakes and picks up any unsold stock for return and credit. This is all of the business done by appellant in Harrisonville. That appellant has no regular established place of business in Harrisonville and that it makes deliveries of merchandise therein is clear. Also it is clear that the sales of the bread and cakes to the merchants at Harrisonville take place there. This is true because the necessary element of a sale is the passing of title (Norfolk & W. Ry. Co. v. Sims, 191 U. S. 441, 447, 24 S. Ct. 151, 48 L. Ed. 254; De Bary v. Souer, 101 F. 425, 428 [C. C. A. 5]; State v. Wingfield, 115 Mo. 428, 22 S. W. 363, 37 Am. St. Rep. 406) and this, under the above method of doing business, does not occur until the bread and cakes are delivered to the merchants there. At that time and place, title (as well as possession) passes, and not until that occurs is there any sale. The St. Joze Indiano, 1 Wheat. 208, 4 L. Ed. 73; The Carlos F. Roses, 177 U. S. 655, 20 S. Ct. 803, 44 L. Ed. 929; Buckingham v. Dake, 112 F. 258, 269 (C. C. A. 8); De Bary v. Souer, 101 F. 425 (C. C. A. 5); McElwee v. Metropolitan Lumber Co., 69 F. 302, 305 (C. C. A. 6); Scharff v. Meyer, 133 Mo. 428, 34 S. W. 858, 54 Am. St. Rep. 672. Cases where the seller made deliveries and the sale was held to be at the place of delivery are following: State v. Houts, 36 Mo. App. 265; Doster v. State, 93 Ga. 43, 18 S. E. 997; Merrill v. State, 175 Ind. 139, 93 N. E. 857, 44 L. R. A. (N. S.) 439; Cheadle v. Roberts, 150 Iowa, 639, 130 N. W. 368; Carter v. Bartel, 110 Iowa, 211, 81 N. W. 462; Cameron v. Fellows, 109 Iowa, 534, 80 N. W. 567; Bartel v. Hobson, 107 Iowa, 644, 78 N. W. 689; Com. v. Bottom, 140 Ky. 212, 130 S. W. 1091; Lochnar v. State, 111 Md. 660, 76 A. 586, 19 Ann. Cas. 579; Com. v. Hugo, 164 Mass. 157, 41 N. E. 123; Com. v. Eggleston, 128 Mass. 408; Com. v. Greenfield, 121 Mass. 40; State v. Kind, 80 N. J. Law, 176, 75 A. 438, affirmed 80 N. J. Law, 466, 78 A. 1135; Town of Montclair v. Scola, 76 N. J. Law, 137, 69 A. 451; Shuster v. State, 62 N. J. Law, 521, 41 A. 701, affirmed 63 N. J. Law, 355, 46 A. 1101; People v. Capen, 26 Hun (N. Y.) 377; State v. Wernwag, 116 N. C. 1061, 21 S. E. 683, 28 L. R. A. 297, 47 Am. St. Rep. 873.
The main contentions of appellant are that the ordinance is invalid as violating the Fourteenth Amendment, and also as being without the taxing power of the city under the state statutes and Constitution.
*673The Fourteenth Amendment. The contention as to violation of the Fourteenth Amendment is that the ordinance has made a taxation classification based upon nonresidence, and that such character of classification is arbitrary, unreasonable, and unjust, and denies that equal protection of the laws required by the Amendment. The ordinance is, in form, a revenue measure. We see no reason to disagree with the view of the trial court that the evidence failed to show any ulterior motive in its passage — such as police regulation under the disguise of a tax — and therefore we shall consider and determine the questions here raised from the basis that this is genuinely a revenue enactment.
The very nature and purposes of taxation usually prevent any exact equality. This situation is accentuated when the character of tax is that of a license or occupation imposition. Abstractly, there is no more reason to tax a butcher than there is to tax a baker, but the power to make selections among avocations for raising revenue exists, and the exercise of that power is governed by practical considerations which may appeal to the taxing body and are not subject to revision by courts. Southwestern Oil Co. v. Texas, 217 U. S. 114, 121, 30 S. Ct. 496, 54 L. Ed. 688. This selection is particularly free in license or occupation revenue legislation. Oliver Iron Mining Co. v. Lord, 262 U. S. 172, 179, 43 S. Ct. 526, 67 L. Ed. 929. In so far as the Fourteenth Amendment is concerned, the sole restriction upon such selection is that it shall not involve a classification which is “palpably arbitrary,” which is construed to mean that the classification “must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.” Ohio Oil Co. v. Conway, 281 U. S. 146, 160, 50 S. Ct. 310, 314, 74 L. Ed. 775. A very great many cases involving classifications for occupational or license taxes by states or political subdivisions thereof have been before the Supreme Court of the United States, and each has been necessarily rested upon the particular situation involved therein. However, we think the decision in Singer Sewing Mach. Co. v. Brickell, 233 U. S. 304, 34 S. Ct. 493, 58 L. Ed. 974, involved a situation so identical or at least analogous to .that here presented that it must govern our determination. The statute in that ease is identical in essentials with the ordinance here, and is more restrictive, in one sense, in that it expressly applied to but one article — sewing machines. In that ease, the Supreme Court sustained the tax classification between “the business of selling sewing machines from a regularly established store and the business of selling them from a delivery wagon” (page 315 of 233 U. S., 34 S. Ct. 493, 497), because there was a difference “in the mode of doing business” (page 315 of 233 U. S., 34 S. Ct. 493, 497). The same difference in “mode of doing business” is here present. The Fourteenth Amendment is.not violated by this ordinance.
Power Under State Law. The Missouri statutes (Rev. St. Mo. 1929, § 7287, formerly Rev. St. Mo. 1919, § 8702) provide that “no municipal corporation in this state shall have the power to impose a license tax upon •any business avocation, pursuit or calling, unless such business avocation, pursuit or caEing is speeiaEy named as taxable in the charter of such municipal corporation, or unless such power be conferred by statute.” HarrisonviEe is not a charter city, but is a city of the “Fourth Class,” organized under general statutes governing cities of that class. Therefore its power to levy license taxes must be “conferred by statute.” The statute relied upon by appeEee as conferring the power to impose this tax is section 7046, Rev. St. Mo. 1929 (formerly section 8497, Rev. St. Mo. 1919, as amended by Laws of 1923, p. 267), which is a grant of power to cities of the fourth class to levy Hcense taxes.1
*674While this section, after an extended enumeration of avocations, uses the words “and all other business, trades and avocations whatsoever,” the Missouri decisions seem to nullify this provision and to hold, not only that it does not extend the enumerations, but that it has not even the value of allowing application of the doctrine of ejusdem generis. Keane v. Strodtman, 323 Mo. 161, 18 S.W.(2d) 896, 898; Siemens v. Shreeve, 317 Mo. 736, 296 S. W. 415, 416; Viquesney v. Kansas City, 305 Mo. 488, 266 S. W. 700; Pierce City v. Hentschel (Mo. Sup.) 210 S. W. 31; Kansas City v. Grush, 151 Mo. 128, 52 S. W. 286, and see Kansas City v. Lorber, 64 Mo. App. 604. In the Siemens Case, the court traces the judicial history (St. Louis v. Laughlin, 49 Mo. 559; St. Louis v. Herthel, 88 Mo. 128; City of St. Louis v. Bowler, 94 Mo. 630, 7 S. W. 434) whieh led up to the enactment of this section and in which cases the doctrine of ejusdem generis had been upheld, and. (page 743 of 317 Mo., 296 S. W. 415, 418) says:
“Prom the foregoing it appears that the city of St. Louis, under its constitutional grant of power to frame a charter had by a blanket clause arrogated to itself the power to impose a tax on all occupations, professions, and pursuits, whether specially named or not, and what the city of St. Louis had done every other city, whether chartered under constitutional grant of power or by legislative enactment, would seek to do. Such was the situation after the Bowler decision in 1887, and it was evidently for the purpose of cheeking this wholesale delegation of the taxing power through a statutory expression of a previously well-defined, salutary policy that section 1900, R. S. 1889, was enacted. It is, in effect, a legislative finding and declaration of policy that, unless the business avocation, pursuit, or calling sought to be taxed by the municipal corporation is specially named as taxable in the charter, or unless such power is conferred by statute, the power to tax is not clearly and unambiguously delegated, and therefore consistent with the general sound policy of the law, it cannot be exercised. We think this statute applies to all municipal corporations whether under general or special charter. We inferentially so held in Pierce City v. Hentschel (Mo. Sup.) 210 S. W. 31, loc. cit. 32; Kansas City v. Grush, 151 Mo. 128, loc. cit. 134, 52 S. W. 286, and Viquesney v. Kansas City, 305 Mo. 488, loc. cit. 498, 266 S. W. 700. Such was the direct and unequivocal ruling of the Kansas City Court of Appeals in Kansas City v. Lorber, 64 Mo. App. 604, loc. cit. 607. In Viquesney v. Kansas City, 305 Mo. 488, 266 S. W. 700, and City of St. Louis v. Baskowitz, 273 Mo. 543, 201 S. W. 870, eases especially relied upon by respondents, this particular question was neither raised nor considered, and hence they are not controlling authorities in this case.”
While some of the.above cases are based upon charter powers, there seems to be no reason why the same principle of construction should not apply in treating grants of power under charters and grants under a statute when the relation in thought of charter and statute grants in section 7287 is considered. Therefore we accept the above decisions as determining that there must be specific enumeration of the avocation, and that no avocation is taxable by appellee, unless it comes within one of those set forth in section 7046.
Appellant urges that, if this ordinance (may be regarded as taxing a calling whieh is included within any of the avocations enumerated in the statute, it does this by subdividing such avocation, and that such is not permissible because the classifications for license tax purposes are made by the statute itself. It cites several Missouri eases. We have examined all of these citations as well as others. There are expressions in several opinions whieh, taken alone, support this contention (see City of St. Louis v. Baskowitz, 273 Mo. 543, 563, 564, 201 S. W. 870; State v. Miksicek, 225 Mo. 561, 125 S. W. 507, 511, 135 Am. St. Rep. 597; Kansas City v. Grush, 151 Mo. 128, 135, 52 S. W. 286), but in all of these eases the subclassification was in itself regarded as arbitrary. Unless these decisions be held to mean that no sub-classification is allowable where such is arbitrary, it is difficult to reconcile them with Eldorado Springs v. Highfill, 268 Mo. 501, 188 S. W. 68, whieh is later than the Grush and Miksieek Cases, only slightly older than the Baskowitz Case and decided by the same *675court. Attempting to reconcile the Highfill Case with the other cases, we think the rule to be deduced is that there may not be sub-classifications of an avocation enumerated in the statute unless such subelassifieation be reasonable and natural; that is, not arbitrary.
The classification attempted by this ordinance is of persons selling or delivering within Harrisonville who have no established place of sale therein. Such a classification has been held not arbitrary. Singer Sewing Mach. Co. v. Brickell, 233 U. S. 304, 34 S. Ct. 493, 58 L. Ed. 974. This classification is general, in that the ordinance does not specify any particular article of sale nor any particular calling beyond that it shall be such as involves a sale or delivery within the city without an established place of sale therein. Thus it might attach to more than one of the avocations enumerated in the statute — such as “hawkers, peddlers, * * * merchants of all kinds, grocers, confectioners, * * * butchers, * * * lumber dealers * * * photographers,” and possibly others. Since we have above determined that appellant sells and delivers in Harrisonville, and has no established place of sale therein, it comes within the broad terms of the ordinance. However, those broad terms cannot be applied to appellant, unless the business which it transacts in Harrisonville is within an avocation enumerated in the statute to which the meaning of the ordinance can be properly attached.
Appellee urges that such business may properly be regarded as coming within any of the statutory enumerations following: Peddler, bakery wagons, manufacturer, or merchant. We are directed to a statutory definition of peddler (Rev. St. Mo. 1929, § 13312), but that definition is for police and not revenue purposes (State v. Webber, 214 Mo. 272, 279, 113 S. W. 1054, 15 Ann. Cas. 983; Emert v. Missouri, 156 U. S. 296, 311, 15 S. Ct. 367, 39 L. Ed. 430). A judicial definition of peddlers is “persons who practice carrying merchandise about from place to place for sale, as opposed to traders who sell at established shops” (St. Louis v. Meyer, 185 Mo. 583, 595, 84 S. W. 914, 918) or “an itinerant or traveling trader who carries goods about in order to sell them, and who actually sells them to purchasers, in contradistinction to a trader who has goods for sale, and sells them in a fixed place of business” (Id., 185 Mo. page 596, 84 S. W. 914, 918). In general, the idea of a peddler necessarily includes the carriage of articles around in search of customers to whom sales and deliveries are made. Appellant does no such character of business, but sells and delivers to merchants who are its daily customers under an established business arrangement.
There is no enumeration of “bakery wagons” in the statute. There is a general enumeration of “all other vehicles,” but this ordinance is not, by its terms or any natural intendment, a “vehicle” tax. The term “manufacturing * * * corporations,” as used in the statute, implies a business of manufacturing which is carried on within the city —the license being for the privilege of carrying on that character of business within the city.
“Merchants of all kinds” is a broad designation. There is a statutory definition of merchant (Rev. St. Mo. 1929, § 10075 and section 10099), which is as follows:
“Who Declared to he a Merchant. — Every person, corporation or copartnership of persons, who shall deal in the selling of goods, wares and merchandise, including clocks, at any store, stand or place occupied for that purpose, is declared to be a merchant.”
This definition is in a taxing statute, but it is part of a statute having to do with an ad valorem property tax on the amount of “all goods, wares and merchandise which they may have in their possession or under their control” (section 10077), and the license required is purely to aid in procuring the property tax — the fee therefor is nominal, being but 50 cents (section 10086). A necessity for an ad valorem tax of this character would be the location within the state of the goods taxed. This is not necessarily a definition of “merchants óf all kinds,” as used in section 7046, which relates only to license or privilege taxes. As applied to privilege taxes, the term is defined as “ ‘one making a business of buying and selling commodities; a trafficker; a trader.’ Secondary meaning: ‘One who carries on a retail business’ ” (Vi-quesney v. Kansas City, 305 Mo. 488, 498, 266 S. W. 700, 703), and by this court as “persons engaged in the business of buying and selling merchandise or other personal property in the usual course of trade” (Union County Nat. Bank v. Ozan Lumber Co. [C. C. A.] 179 F. 710, 715). Appellant sells bread within the city of Harrisonville and would therefore seem to be a merchant, because it is “one making a business of * * * selling commodities” (bread) and one “engaged in the business of * • * selling *676merchandise or other personal property in the usual course of trade.” Also see City of Kansas v. Vindquest, 36 Mo. App. 584. Appellant contends it is simply a manufacturer. But a manufacturer may, as to the articles made by him, become a merchant when he sells them. Ozan Lumber Co. v. Union County Nat. Bank, 207 U. S. 251, 256, 28 S. Ct. 89, 52 L. Ed. 195; State v. Richeson, 45 Mo. 575; State v. Whittaker, 33 Mo. 457; Kansas City v. Ferd Heim Brewing Co., 98 Mo. App. 590, 73 S. W. 302.
We think appellant comes within the terms of the ordinance and within the description of “merchant” in the statute, and therefore is subject to this tax.
Some argument is made as to the ex-eessiveness of this tax showing its invalidity, but the evidence fails to show such excess. It shows appellant’s sales in Harrisonville are approximately $8,000 annually, while the total tax for a year under this ordinance is $200, or 2% per cent, of the sales. This is not so excessive as to suggest unreasonableness — even if the amount of a tax under a purely revenue measure can be considered as a test of the validity of the imposition.
The order denying the temporary injunction is affirmed.

 “Sec. 7046. Power to license, tax and regulate certain businesses and occupations. — The mayor and board of aldermen shall have power and authority to regulate and to license and to levy and collect a license tax on auctioneers, druggists, hawkers, peddlers, banks, brokers, pawnbrokers, merchants of all kinds, grocers, confectioners, restaurants, butchers, taverns, hotels, public boarding houses, billiard and pool tables and other gaming tables, bowling alleys, hay scales, lumber dealers, livery stable keepers, real estate agents, loan companies, loan agents, public buildings, public halls, opera houses, public grounds, concerts, photographers, bill posters, artists, agents, porters, runners, drummers, public lecturers, public meetings, circuses and shows, for parades and exhibitions, moving picture shows, horse or cattle dealers, patent right dealers, stockyards, wagon yards, inspectors, gaugers, mercantile agents, insurance companies, insurance agents, express companies and express agents, telegraph companies, telephone companies, manufacturing and other corporations or institutions, automobile agencies, and dealers, public garages, automobile repair shops or both combined, dealers in automobile accessories, gasoline filing stations, soft drink stands, ice cream stands, ice cream and soft drink stands combined, soda fountains, street railroad cars, hackney -arriages, omnibuses, carts, drays, transfer and job wagons, ice wagons, oil wagons, , whether wholesale or retail, and all other vehicles, traveling and auction stores, plumbers, and all other business, trades and avocations whatsoever, and fix the rate of carriage of persons and wagonage, dray-age and cartage, of property; and to license, tax, regulate or suppress ordinaries, money brokers, money changers, intelligence and employment offices and agencies, public masquerades, balls, street exhibitions, dance houses, fortune tellers, pistol galleries, *674corn doctors, private venereal hospitals, museums, menageries, equestrian performances, horoscopic views, telescopic views, lung testers, muscle developers, magnifying glasses, ten-pin alleys, ball alleys, billiard tables, pool and other gaming tables, theatrical or other exhibitions, boxing and sparring exhibitions, shows and amusements, tippling houses, gift enterprises and sales of unclaimed goods by express companies, or common carriers; to license, tax and regulate hackmen, draymen, omnibus drivers, porters and all others pursuing like occupations, with or without vehicles, and to prescribe their compensation; and to regulate, license and restrain runners for steamboats, cars, stages, and public houses; and to license ferries, and to regulate the same and the landing thereof within the limits of the city, and to license and tax auto liveries, auto drays and Jitneys.”