Court Opinion

ID: 8021776
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:26:24.220517+00
Date Added: 2024-06-11T16:36:41.365442
License: Public Domain

MR. JUSTICE SMITH
delivered the opinion of the court.
This action was brought to test the validity of ordinance No. 85 of the city of Missoula, imposing a license tax on nearly every business and profession carried on in the city, including the grocery business conducted by the appellant. He paid his license tax of $20 under protest and began this action to recover the same, and also to enjoin the city authorities from demanding the tax in future. The court below tried the cause without a jury, found the issues in favor of the defendants, and entered' judgment in their favor. Plaintiff has appealed.
It is alleged in the complaint that said license tax is exacted for the sole and only purpose of raising revenue to defray the general municipal expenses of the city; that plaintiff’s business is a lawful one, endangering neither the health, safety, morals, *7nor comfort of the inhabitants; and that as conducted it does not require, and is not the subject of, any police regulation whatever. The answer denies that the license tax was collected for the purpose of raising revenue, but admits that the moneys so collected were placed in the general fund of the city and that the general expenses of the city are paid from that fund. It is alleged affirmatively that the plaintiff deals in certain articles and commodities the storage and sale of which require and receive police regulation. It also alleges that all moneys received from licenses, all moneys received from general taxes, except moneys received from taxes for road and street purposes, all moneys received «from all other sources, except poll taxes, are paid into the general fund of the city, and all expenses in connection with collecting and issuing licenses, the printing thereof, clerical hire in connection therewith, cost of inspection, cost of enforcing all police regulations, and all expenses of every nature and kind whatsoever, save and except expenses of grading, cleaning, and repairing streets and alleys, are paid out of the general fund. It is further alleged that ordinance No. 85 was not passed for the purpose of raising revenue, “but was passed for the purpose of police regulation, and all money received from licenses issued thereunder was and is not received for the purpose of paying the general expenses of the city, but was and is received for the purpose of defraying the cost of all necessary and proper police regulations and all necessary and proper expenses in connection therewith. ’ ’
The plaintiff testified that the city did not, to his knowledge, make any inspection of the articles handled in his store; that “they never had any inspector there to inspect anything in the store”; that he spends nearly all of his time there, except evenings, and would know if any inspection “was going on along that line”; that the authorities have never at any time during the last three years made any “regulation” of his business, “excepting the fire chief would come around and tell us to clean up probably before the Fourth of July or sometime before a celebration, about once a year.” He also testified, over objection, that not anything carried by him in stock required or necessitated police regulation or inspection; that he did not know of *8anything associated with his business that required or necessitated supervision; that he did not know of anything connected with his business that would menace the safety, good order, morals, or health of the community; that, since the payment of the sum mentioned in the complaint under protest, he has continued to pay a license tax, but there has been no inspection or regulation of his business by the city subsequent to that date, except by the fire chief aforesaid; that the city has been to no expense at all in the regulation or inspection of his business; that the health officer might have walked through his store and looked around, he could not say, but no known official visit was ever •made; that no representative of the city could have come into his place of business without his knowledge.
The defendant city treasurer testified for the plaintiff that the employees of the city are paid out of the general fund; that the expenses of keeping the streets clean and “everything nice for the business men” are also so paid; but, aside from such expenditures, he had no knowledge of any payments that inured to the benefit of the plaintiff that were paid out of the general fund. He also testified that he knew of no expenditure on the part of the city of Missoula “having been made for the direct purpose only of inspecting and regulating the interior of the business of the plaintiff”; that he knew of no expenditure in the past three years for the purpose of inspecting any article handled by the plaintiff in his business, or for regulating his business. He also testified that he collected the license taxes; that probably forty days out of every three months were required to do so; that the business of collecting license taxes requires receipt books and license books; that the salaries of the sanitary inspector and board of health are paid out of the general fund; that the board of health has the regulation and inspection of all places of business and residences, “to see that they are kept in a sanitary and healthful condition”; that the city of Missoula does not exercise any regulatory measures toward professional men, doctors, dentists, .or lawyers, regulating their business, supervising or inspecting them; that his services in collecting licenses do not cost tha city anything, because he is working for the city anyway.
*9Samuel Bellew, the city clerk, testified that he knew of no amount having been expended by the city for any supervision, regulation, or inspection of plaintiff’s business; that 100 licenses and receipts would cost about $3; that the sanitary inspector under the board of health, has the duty of inspecting and regulating places of business.
Defendants offered no evidence. It was admitted by the pleadings that the city of Missoula has passed certain ordinances providing for the inspection of all meats, vegetables, milk, and butter sold or offered for sale; also ordinances limiting the quantity of coal-oil, petroleum, gasoline, naphtha, and other inflammable, explosive, and dangerous liquids, and plaintiff testified that he carried coal-oil, vegetables, fruit, butter, condensed milk, and smoked and dried meats in stock.
1. This court held, in Johnson v. City of Great Falls, 38 Mont. 369, 16 Ann. Cas. 974, 99 Pac. 1059, that while the legislature may not confer upon cities and towns the right to impose a license tax upon professions and occupations for the purpose of raising revenue, it may, in the absence of constitutional limitation, authorize them to impose such a tax in aid of police regulations. Ordinance No. 85 of the city of Missoula ostensibly and [1] presumptively imposes a license tax upon the business or occupation of the appellant in the exercise of the police power of the municipality. On its face this ordinance appears to be valid. But of course the city cannot do by indirection what it is not permitted to do directly. If this license tax was 'in fact imposed for purely revenue purposes and not for regulation, its collection was an illegal act. The evidence heretofore quoted discloses to our minds, beyond question, that as a police regulation the ordinance is a dead letter upon the ordinance book. Apparently no attempt was made to regulate, supervise, or inspect the grocery business of the appellant. It is impossible to escape the conclusion that the tax was collected for purely revenue purposes. The money was paid into the general fund of the city and used to pay its general operating expenses. Approximately 800 licenses and receipts were issued annually at an expense for printing of about $24. No extra expense was incurred on ac*10count of salaries of the city clerk and city treasurer. In fact, the entire expense to the city grew out of the collection of these same license taxes, and were it not for such collections the city would have been at no expense whatever. We shall not stop to inquire on whom the burden of proof rests. It may be presumed, we think, that the two city officers who were sworn as witnesses would have some knowledge as to whether the business of the plaintiff was in fact subjected to police regulation. Both declared that, so far as they knew, nothing of the kind was ever attempted. The respondents offered no evidence. Under these circumstances we are inclined to the opinion that the appellant made a prima facie showing that the tax paid by him under protest was collected for the purpose of raising revenue solely, and was therefore illegal.
2. It is contended that the judgment should be affirmed for the reason that the appellant presented to the council no claim [2] against the city before bringing action. The provisions of sections 3282 and 3283, Revised Codes, are invoked to support the contention. The reason underlying these statutory provisions is found in the consideration that the legislative purpose was to protect cities and towns from actions upon demands of which they had had no previous notice, and no opportunity to investigate, or to settle without litigation. The reason of the law is its life, and when the reason fails the law dies. The city of Missoula, having formally passed an ordinance requiring the appellant to pay a license fee, could only return the same to him, voluntarily, in violation of its ordinance-. It would have been an idle act to demand a return of his money from the same power that advisedly exacted it from him.
3. Again, it is contended that the appellant cannot maintain this action because at the time of filing his original complaint [3] he had not complied with the provisions of sections 5504 to 5509, Revised Codes, relating to an individual transacting business in this state under a fictitious name or style, or designation purporting to be a firm name. Appellant testified that he was doing business as an individual under the name of P. M. Reilly &' Co. The record shows that he complied with the statute before *11filing his second amended complaint. The only answer found in the record is directed to this complaint. Without deciding whether the statutory provisions heretofore referred to apply to the plaintiff, it is sufficient to hold, on the authority of Carson-Rand Co. v. Stern, 129 Mo. 381, 32 L. R. A. 420, 31 S. W. 772, and Nicholson v. Auburn Gold Min. & M. Co., 6 Cal. App. 547, 92 Pac. 651, that it is not the right to begin an -action, but the right to maintain it, that is withheld by the statute for failure to comply with its terms; and if, before the defense is interposed, the plaintiff complies with the statutory provisions, the action may be maintained. The defense is an affirmative one and is waived unless pleaded in the answer. (Vaughan v. Kujath, 44 [4] Mont. 484, 120 Pac. 1121; California S. & L. Society v. Harris, 111 Cal. 133, 43 Pac. 525.) The appellant alleged that he had complied with the statute, and, while this allegation was not necessary in order to state a cause of action, it was, nevertheless, denied, and we think the denial was sufficient to raise the issue. But so long as the statute was complied with by the appellant before the answer was interposed, the action should not abate. The right to maintain the action is simply suspended until the statute is complied with.
4. Finally, it is contended that the action should have been commenced under the provisions of section 2741, Revised Codes, [5] authorizing a suit in equity to restrain the collection of an illegal or unauthorized tax, and not under section 2742, giving the right to recover an unlawful tax paid under protest. A nice distinction is made in the brief of the respondents between an illegal tax and an unlawful one. We do not, however, find it necessary to analyze or distinguish the two words. Section 2741 gives a cause of action, at law, in all cases where taxes are paid under protest. Section 2742 provides for a suit in equity in certain cases. The remedy in equity is limited, but that at law is unlimited. (Montana Ore Pur. Co. v. Maher, 32 Mont. 480, 81 Pac. 13.) In this connection it is suggested by counsel that section 2742 does not give a right of action against a city for taxes or licenses paid under protest, for the reason that the concluding paragraph thereof provides that the tax so paid shall be held *12by the county treasurer and no part thereof paid to the state treasurer until the determination of the action brought for the recovery thereof. We are satisfied, however, that section 2742, as originally enacted, was designed to create a right of action in all eases. Its phraseology so indicated. It provided that an action might be brought against the officer to whom the tax or license was paid, or against the county or municipality on whose behalf the same was collected. (See section 4024, Political Code of 1895.) The legislative assembly of 1905 (Haws 1905, Chap. 108) amended the measure by adding the last paragraph, just referred to; and the language therein employed, reading the amended act as a whole, might indicate that the entire section related only to actions against a county. But such is not the case. The reason for the amendment was: It was found necessary to provide that taxes and license fees paid to the county treasurers under protest should remain in their hands until the final determination of any action brought to recover the same; otherwise the portion paid to the state would not be available for refunding purposes, in case of an adverse judgment.
5. The case of Hopkins v. City of Butte, 16 Mont. 103, 40 Pac. 171, involved a controversy which arose in 1891 before the statute giving a right of action for the recovery of taxes and licenses paid under protest was enacted. Mr. Justice Hunt said: ‘ ‘ The common-law rule, * * * in the absence of statute, must govern.”
For the reasons herein given, the judgment of the district court is reversed and the cause is remanded, with instructions to enter a judgment in favor of the appellant.

Reversed and remanded.

Mr. Justice Holloway concurs.