Court Opinion

ID: 8863147
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:55:23.917571+00
Date Added: 2024-06-11T17:05:53.965751
License: Public Domain

SHIRAS, Circuit Justice
(after stating the facts). It must he regarded as settled that it is lawful for a state to impose taxes upon property owned and used within it by a corporation of another state, even when such corporation is engaged in interstate commerce, and that the exaction of a license tax ,is a valid exercise of power by municipal corporations, in order to cover expenses to which they may be put in the enforcement of their police rules and regulations. Telegraph Co. v. Attorney General, 125 U. S. 530, 8 Sup. Ct. 961; License Tax Cases, 5 Wall. 462; Wiggins Ferry Co. v. City of East St. Louis, 107 U. S. 365, 2 Sup. Ct. 257; Postal Tel. Cable Co. v. City of Charleston, 153 U. S. 692, 14 Sup. Ct. 1094. But these propositions are not disputed by the plaintiff in error. It is, in fact, conceded, that the charges in question were imposed under the police power, and are valid if they are reasonable in their amount and in their mode of collection. The claim is that such charges, to be reasonable, must be limited to such amount as is necessary to reimburse the municipality for the expenses to which it is subjected in the enforcement of such inspection rules and regulations as it may lawfully enact, and that *461in the present case the amount of the charges imposed by the ordinances is excessive, and so far above the reasonable expenses of the city that the ordinances are void. Whether the ordinances are reasonable can be judicially inquired into. When it is said, in some of the cases, that such a question is for the determination of the court, it is not meant that the question may not properly be submitted to a jury. What is meant by such observations is that courts are not precluded from considering the reasonableness of the legislative act prescribing the terms and amount of the charges. It has sometimes been urged that such questions are peculiarly suited for legislative determination. And it must be admitted that there is a presumption in favor of the validity of the action of the legislative body, and that the evidence to justify a court in holding otherwise must be clear and convincing. Still, it must be regarded as conclusively settled that the legislative authority to impose license fees or charges is not absolute, and must be exercised with due regard to the rights of the corporations to be affected.
Regarding, then, the issue to be tried as one of fact, we think it is one which, from its nature, is eminently tit for the determination of a jury. The expenses attending direct regulations and oversight are not only to be considered, but also ihe incidental cost to which the municipality is subjected in providing for and maintaining a proper system of supervision. We cannot undertake to specify all the particulars which should be brought into view where the reasonableness of a municipal ordinance is challenged in a court; but we think that the rule laid down in Cooley, Const. Lim. (Ed. 1886) p. 242, may be safely adopted: “A municipal corporation may impose under the police power such a charge for the license as will cover the necessary expenses of issuing it, and the additional labor of officers and other expenses thereby incurred.” While we think that the determination of such difficult questions of fact falls properly within the province of a jury, we do not mean to attribute error to the action of the court below' in withdrawing the present case from the jury by giving a peremptory charge to find for one of the parties. That was done, as the record discloses, at the request of the counsel of both the parties, and. of course, would not present a proper ground of exception to such action, of the court.
In speaking of the question as one specially suited for determination by a jury, we have reference to an action at law brought, like the present one, to enforce the provisions of an ordinance; not to a case where, by a suit in equity, the validity of the ordinance is assailed, and where, of course, the evidence is to be considered and the question determined by the chancellor. But whether the question is left to the determination of the jury, or, as in the present case, the court gives a peremptory charge, in either event a wide scope should be given to the admission of evidence. Not only is there a presumption in favor of the validity of the action of the legislative body, but the facts upon which that action proceeds are so numerous, and so liable to frequent changes, courts should act cautiously in dealing witli such a case, and admit evidence of all facts and circumstances that seem to bear, even somewhat remotely, upon the issue. As was said by *462the supreme court of Pennsylvania, in Allentown v. Telegraph. Co., 148 Pa. St. 119, 23 Atl. 1070, the amount of the license charges rests with t'he city councils in the first instance, and it is only where such discretion has been manifestly abused that the courts are justified in interfering.
In this view of the peculiar nature of the case, we think the trial court erred in excluding the evidence offered on behalf of the city, going to show .that considerable additional expense, in providing a greater number of fire companies and apparatus, is rendered necessary by the electric wires suspended in the streets. If, indeed, a new condition of affairs has been caused by the erection of wires and poles in the thoroughfares of the city, which makes it proper for the authorities, in order to protect life and property, to increase its police and fire force and equipment, we think such a state of facts might be shown, and was a proper matter for consideration in fixing the amount of the license charges, and in passing upon their reasonableness. So, further, we think there was error in excluding the evidence offered of the expenses to which the city is, from time to time, put in connection with the meeting of its councils for the purpose of regulating the erection of wires and poles. Undoubtedly, there is force in the observation of the court, in rejecting this offer, that it was too remote, vague, and uncertain; and if the rejection had been placed upon that ground alone, leaving it open'for the plaintiff to amend his offer, by making it more specific, we should not have f.-lt inclined to overrule the action of the trial court in this particular. But this ruling must be considered in connection with that just previously made, and in which the court defined and restricted the field of inquiry in the following terms: “For the purposes of this trial, the evidence must be confined to the issue thus stated, -‘that the license fee which can be sustained is only such as will legitimately assist in the regulation, and. it shoxLld not exceed the necessary or probable expense of issuing the license, and of inspecting and regulating the business which it covers.’ ” We are unwilling, in a case like the present, to approve the total exclusion from consideration of expenses occasioned by the necessity of additional or more frequent meetings of the councils. Wha t would be a proper allowance for such items it is not easy to say. But such expenses may be regarded, in a legal sense, as incurred at the request or instance of the companies whose business renders them necessary. The difficulty of estimating and apportioning such expenses is, no doubt, great; but it lies in the nature of the subject-matter, and does not warrant the contention of the companies that the license charges should not be influenced by any consideration of such necessary expenses.
By its reference to the previous case between the same parties, reported in 40 Fed. 615, we do- not understand the trial court to have meant that the judgment in that case was conclusive of the present controversy. It was not so pleaded. On the contrary, it was merely claimed, in the affidavit of defense, that the judgment in the former-case was conclusive in respect to the charges for the years 1886, 1887, and 1888. This -was conceded by the plaintiff, and the present trial was restricted to the charges for the subsequent years, 1889 and 1890. *463Nor was the record of the previous case put in evidence. Not having pleaded the former judgment as res adjudieata, and not having put in evidence the record, the defendant was in no position to demand that the former judgment should be regarded as conclusive in the present case. No such proposition was urged in the court below, nor is it before this court for consideration. Understood, then, as referring' to the previous case as authority for holding the question of the reasonableness of the ordinances to be open to judicial inquiry, the observations of the court below were proper, and, indeed, as already said, such view of the law is not questioned by either of the parties. The first, second, and third assignments of error are sustained; the judgment of the circuit court is reversed; and the cause is remanded to that court, with directions to award a new trial.