Court Opinion

ID: 9684397
Source: CourtListenerOpinion
Date Created: 2023-08-24 13:55:32.422414+00
Date Added: 2024-06-11T18:17:55.452765
License: Public Domain

On Rehearing
PER CURIAM:
Appellant’s motion for rehearing says that since Count II of the petition seeks an injunction against pending prosecutions, those of the plaintiffs who are under prosecution for violation of the ordinance do have standing to challenge the ordinance, charter amendment, and statute, on the basis of an unconstitutional discrimination even though they do not fit in the precise class discriminated against; that the opinion therefore has failed to pass on the claimed unreasonable distinction between resident individuals engaged in business who are taxed on their net profit whenever earned and incorporated companies which are taxed only upon their net profits from business conducted in the city; that the Walters v. City of St. Louis cases, referred to in the opinion, are not in point because they dealt merely with discrimination between taxing the gross salaries and wages of employed individuals on one hand, but only the net profits of the self-employed and business corporations on the other; that our present opinion holds in essence plaintiffs failed to sustain their burden of proof that the discrimination was in fact arbitrary and unreasonable, despite the fact that plaintiffs’ allegations in this regard were admitted by the motion to dismiss ; that the court should have, under the circumstances, returned the case for evidence to determine whether the classification can be shown to be arbitrary and unreasonable.
However, as appellants tacitly concede, and as the allegations of the petition ex*851pressly show, none of the plaintiffs claims to be an individual resident of St. Louis conducting a business from which he earned net profits outside as well as in the city. Hence, none could be directly adversely affected by the difference in treatment, assuming, without deciding, that such is unconstitutional. Therefore, plaintiffs are not in position to raise the point, Missouri Pacific Railroad Co. v. Morris (Mo.Sup. banc) 345 S.W.2d 52, 60, 88 A.L.R.2d 798; Ex parte Lockhart, banc, 350 Mo. 1220, 171 S.W.2d 660, 666; State v. Armour Pharmacy, Inc., (Mo.Sup.) 152 S.W.2d 67, 68; Stouffer v. Crawford (Mo.Sup.) 248 S.W. 581, 585. Appellant cites State v. Bengsch, 170 Mo. 81, 70 S.W. 710, 719 for the proposition that one under prosecution “may raise the question of the constitutionality of a discrimination which would invalidate the Act, even though he may not fit in the precise class discriminated against”. An examination of the Bengsch case, 70 S.W. l. c. 719, however, shows it involves the situation where the act in question “ * * * was framed and enacted as an entirety, and would not have received the legislative sanction but for the fact that it was intended to operate as a whole. Then, this being the case, any party prosecuted under the challenged act may raise the question of the unconstitutionality of a portion of the act, in the circumstances already related, and thereby show the invalidity of the whole * * *» (Emphasis added). In the Bengsch case the court held the act was invalid in its entirety.
But in the present case even if the portion of the original act, S.B. 3, Laws 1953, 2nd Ex.Sess., p. 14, approved April 21, 1954, which referred to an earnings tax “on the net profits of associations, businesses or other activities conducted by residents” were invalid, it would not make the balance of the act invalid. The group of taxpayers so described was only one of five different groups separately described, was probably the smallest numerically of all the groups, and very likely was not expected to produce a major part of the revenue. It was well known the City of St. Louis needed additional tax revenues, Walters v. City of St. Louis, banc, 364 Mo. 56, 259 S.W.2d 377, 380, and that the earnings tax provided by the 1951 act, H.B. 50, Laws 1951, p. 334, expired April 1, 1954. S.B. 3, supra, contained an emergency clause. We do not believe there is the slightest doubt but that the legislature would have enacted the other provisions of the 1954 bill without the one claimed by appellants to be void. We see no reason why the other provisions of the bill standing alone, are not complete and capable of being executed in accordance with the legislative intent without the allegedly void portion mentioned above. This being so, the rule announced in the Bengsch case is not available to appellants here. We note there is no severability clause in the 1954 or succeeding acts, but this is of no significance in determining whether the entire statute must fall, Sec. 1.140, RSMo 1959, V.A.M.S.; St. Louis County v. City of Florissant (Mo.Sup.) 406 S.W.2d 281, 285. We accordingly overrule appellants’ point above set out and discussed.
In the motion for rehearing, plaintiffs also point out that section 10 of the 1954 act was repealed in 1959, by S.B. 27, approved April 23, 1959. S.B. 27 increased the amount which could be levied from ½% to 1%. In lieu of section 10 it enacted a section to be known as 92.200 providing as follows:
“No ordinance enacted under this act shall be effective unless it is authorized pursuant to a charter amendment of such city; provided, that any ordinance authorized by charter and presently in effect shall remain in effect until an ordinance is adopted under the authority of this act.”
S.B. 27 did not affect the charter amendment, adopted by the St. Louis voters, September 30, 1954, or the ordinance carried forward thereunder, because the proviso in S.B. 27 specifically continued in effect any ordinance presently in effect and authorized by charter amendment. Then, pursu*852ant to S.B. 27, on July 14, 1959, the voters of St. Louis adopted a charter amendment authorizing the increase from ½% to 1%. On July 24, 1959, an ordinance was enacted setting the rate at 1%, which ordinance, together with other ordinances pertaining to the earnings tax, became Chapter 145 of the Revised Code of St. Louis. This is the ordinance before us.
By S.B. 65, Laws 1961, p. 219, approved June 27, 1961, Secs. 92.170 and 92.200, RS Mo 1959, V.A.M.S., were repealed. A new Sec. 92.170 was enacted lowering the amount which an employer could retain as compensation for collection of employee’s taxes by withholding from 3% to 1 ½%. A new Sec. 92.200 was also enacted providing:
“No ordinance enacted under this act, except an ordinance limited to the purposes of section 92.170, shall be effective unless it is authorized pursuant to a charter amendment of such city; provided that any ordinance authorized by charter and presently in effect shall remain in effect until an ordinance is adopted under authority of this act.”
Pursuant to S.B. 65, St. Louis did enact an ordinance reducing the employer’s compensation for withholding from 3% to 1'½% November 1, 1961. It took no action on the earnings tax as such however, as the proviso in Sec. 92.200, as enacted by S.B. 65, continued the effect of the charter amendment adopted July 14, 1959, and the ordinances enacted pursuant hereto.
It is clear, therefore, that the St. Louis earnings tax has continued to exist by virtue of a charter amendment, first for and then for 1%, authorizing its legislative body to impose the tax defined by the 1954 act. The fact continues that the income which the legislature did not want subject to the earnings tax is not being taxed by the city and the fact also continues that this result is not being reached by Sec. 6 of the 1954 act, but by Sec. 145.080 of the ordinance. As stated in the original opinion we need not concern ourselves as to what the situation would be if the city were, under its charter amendment authority, to attempt to tax such income. We therefore, overrule plaintiff’s contention that the repeal of Sec. 10 of the 1954 act requires a change in the result of our decision.
As to the remaining portions of the motion for rehearing, it is fair to say they are either reargument of issues determined by the opinion or relate to matters which cannot be said to be material as to law or fact or to have been overlooked or misinterpreted by the court, see rule 83.16, V.A.M.R. The motion is therefore in all respects overruled.