Court Opinion

ID: 3986595
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:42:44.34824+00
Date Added: 2024-06-11T14:18:19.313819
License: Public Domain

The chief question presented is the validity of chapter 91, Laws Utah 1929, referred to in the prevailing opinion. It is asserted by the plaintiffs and denied by the defendants that the act is forbidden by article 13, § 5, of the State Constitution. Whether the act offends other constitutional provisions is not argued. The trial court holding the act violative of article 13, § 5, seemingly found it unnecessary to consider whether it did or did not infringe upon other constitutional provisions. Hence the parties, by this appeal, present the question on the ground only on which the trial court held the act invalid. *Page 403 
What chiefly divides the parties with respect thereto is the meaning of the word "taxes" as used in article 13, § 5. By the defendants it is contended that the word "taxes" refers only to a property tax and not to a license fee or tax; by the plaintiffs that it includes both; by the defendants, that the provision of the Act relating to the $5 license fee is a mere license and not a tax; by the plaintiffs, that the license fee is a tax; by the defendants, rather faintly, that the act, or at least a part of it, is a sort of police measure; and by the plaintiffs, that the act, including the $5 license fee, is a revenue and not a police measure.
By the prevailing opinion, the conclusion is reached that the act in no sense is a police measure, and that it essentially is a revenue measure; but that by the Act it also was intended to give those producing butter an advantage over those producing oleomargarine, which, as I think, renders the act obnoxious even as a revenue measure.
I concur in the view that the act is not a police measure. I also concur in the view that it was intended as a revenue measure. But I think it more than that. Requiring the payment of a $5 fee for a permit to sell oleomargarine and a payment of 10 cents on every pound of artificially colored oleomargarine sold to consumers is in effect a tariff laid on oleomargarine to protect the production and price of butter by increasing the price of oleomargarine to consumers, thereby lessening the consumption of it, and correspondingly increasing the consumption of butter. The act is not only a tariff for revenue, but one to foster and protect the production and price of one domestic commodity as against another.
I think the $5 license fee, in substance and effect, is a tax. The general rule is, and as stated in 37 C.J. 170, that, where the fee is exacted primarily for revenue purposes, and payment of it gives the right to carry on a business or occupation without the performance of any further conditions, it is not a license fee, but a tax imposed, regardless of the *Page 404 
name by which it may be called. Many cases are cited by the plaintiffs and referred to in the prevailing opinion in support of such view, including the cases of Matthews v. Jensen,21 Utah 207, 61 P. 303; Royall v. State of Virginia,116 U.S. 572, 6 S. Ct. 510, 29 L. Ed. 735; Waters-Pierce Oil Co. v. Cityof Hot Springs, 85 Ark. 509, 109 S.W. 293, 16 L.R.A. (N.S.) 1035; City of Portland v. Portland Gas  Coke Co., 80 Or. 194,150 P. 273, 156 P. 1070; Ex parte Mayes, 64 Okla. 260,167 P. 749; State ex rel. Wyatt v. Ashbrook, 154 Mo. 375,55 S.W. 657, 48 L.R.A. 265, 77 Am. St. Rep. 765.
That the word "taxes" in article 13, § 5, is not restricted to a mere property tax, but includes license fees or taxes as well, was held in a well-considered case, People v. Martin, 60 Cal. 153, under similar constitutional provisions. There are other cases cited by the plaintiffs to the same effect. To that effect, too, at least in principle, is the case of Kimball v.Grantsville, 19 Utah 368, 57 P. 1, 45 L.R.A. 628. The defendants, as to such proposition, chiefly rely on the cases ofState v. Camp Sing, 18 Mont. 128, 44 P. 516, 517, 32 L.R.A. 635, 56 Am. St. Rep. 551; State v. Union Central Life Ins.Co., 8 Idaho 240, 67 P. 647; and State v. Nelson, 36 Idaho 713,213 P. 358. In such cases the phrase that the Legislature shall not impose taxes for the purpose of any county, etc., was held to apply only to a property tax; but the Montana Constitution is different from ours; and in Idaho, where the constitutional provision in question is similar to ours, the court reached such conclusion by considering other provisions of the Idaho Constitution which are not present in ours. Neither the Idaho nor the Montana court disapproved the holding in People
v. Martin, but distinguished the case on the ground of different constitutional provisions. But, whatever conflict there may be in such decisions, I think the decision of the California court is the more persuasive and the better supported by fundamental principles of construction, and what was decided inKimball v. Grantsville, supra, is more in line therewith than with the decision *Page 405 
of either the Montana or the Idaho court. And I do not understand the prevailing opinion disapproves the California decision.
This brings me to the real point upon which we are divided. By the prevailing opinion, as I understand it, the case is ruled on the point that the $5 so-called license fee referred to in the Act is mere compensation for services rendered, and hence not a tax. With that I cannot concur. In that connection the act provides that it shall be unlawful for any person, etc., to sell, or offer for sale, oleomargarine without first obtaining a permit therefor. The permit thus is a prerequisite to the lawful selling, or offering for sale, oleomargarine. No other conditions or obligations are imposed; nor does the act contain any restrictions or regulations for the carrying on of the business; nor does it attempt to regulate or control those engaged in it. The business is only prohibited for the purpose of the license fee, which, in such case, under the great weight of judicial authority, is a tax. If it is a tax, I cannot see how it may be regarded as compensation for services rendered. The Act provides that the permit shall be granted by the boards of county or city commissioners and boards of trustees of towns upon the payment of a license fee of $5 to the treasurer of the city, town, or county, and which shall be "credited to the general fund of the city, town or county collecting the same." The fees paid do not go to the boards of trustees or to any officer or clerk granting the permit or performing any duties or service with respect thereto. They are required to be paid to the treasurer who in the premises has no duties to perform, except to receive the fees and credit them to the general fund of the city, town, or county, and which become a part of the public moneys of the city, town, or county. Such fees may not, any more than any other part of the public moneys, be applied to services rendered in issuing the permits or in performing any other duties or services with respect thereto. Hauser v. Miller, 37 Mont. 22, 94 P. 197. *Page 406 
I do not see anything in the act which, either expressly or by implication, indicates that the license fees to be paid are to be regarded as, or were intended to be, compensation for services rendered. The fact that the fees are required to be paid to the treasurer and credited to the general fund of the city, town or county, and to become a part of the public moneys thereof, precludes, as it seems to me, any claim or contention that such fees were intended to be compensation for services. I see no more basis for such a claim than for one that the payments of 10 cents a pound for every pound of oleomargarine sold to consumers and required to be made to the state treasurer were intended to be for services rendered. The general scope and purpose of the act, and as stated in the prevailing opinion, being a revenue measure, and the license fee required to be paid to obtain a permit to sell or offer for sale oleomargarine being a part and parcel of the act, and, under the great weight of judicial authority, a tax, the inevitable conclusion that the act in such respect falls within the constitutional inhibition forbidding the Legislature from imposing taxes for the purpose of any county, city, or town may not be avoided by calling such license fee required to be paid mere compensation for services rendered, when, as I think, there is not anything in the Act, either expressly or by implication, to indicate any such purpose or intent.
I therefore am of the opinion that the judgment of the court below should be affirmed.