State ex rel. the School District v. Boyd

Holcomb, J.,

concurring in conclusion only.

I concur only in the conclusion reached by the chief justice in the foregoing opinion, but find myself wholly unable to agree to many of the views therein expressed. To my mind, the tendency of the opinion is to unsettle, if not directly overthrow, several prior decisions of the court on the same general subject. The sole question, as presented by the record, is whether the moneys in dispute are license moneys within the meaning of section 5, article 8, of the constitution, belonging to the common-school fund, or whether they should be regarded as revenues derived from an exercise of the taxing power alone, and therefore subject to the control of the city of Auburn in defraying its expenses of municipal government. This court has frequently expressed itself on the question of the distinction between a license and an occupation tax. It has also laid down the doctrine that to engage in business declared unlawful, unless a license is first obtained, may be punished criminally, while the collecting of a tax levied solely for revenue purposes can only be enforced as other civil liabilities. With these decisions, and the soundness of the views supporting the same, I am satisfied, and believe they should be followed and adhered to.

In the case at bar the ordinance under which the revenues in controversy were collected, in my judgment, should be construed as an ordinance for the levying and *833collecting of an occupation tax. This construction must, I think, result from a consideration of both its form and substance. And I must say that, in my judgment, the form is entitled to consideration as well as the substance; and in doing so I do not wish to be understood as suggesting that form alone is the controlling factor. But to ascertain . its objects and purposes, and what is sought to be accomplished by its enactment, we must give heed to the expressions therein contained, and the manner in which given utterance. The ordinance provides for the imposition of an occupation tax only. It contains no suggestion of regulation, or for licensing the businesses sought to be taxed. It contemplates the taxation of businesses or callings that by another ordinance are authorized to engage in the business when licensed. That is, by another and prior ordinance the payment of a license tax is exacted as a condition precedent to the right to engage in such business, and the ordinance in question provides for levying and collecting an occupation tax on such licensed businesses. This alone makes it manifest that the sole object and purpose of the ordinance last enacted, which is under consideration, was to raise revenues for municipal purposes. In short, it is a revenue-producing measure, and is devoid of the elements making it an ordinance for the purpose of licensing and regulating the businesses mentioned, and authorizing the persons licensed to engage in the business only when the license tax provided for has been paid to the proper authority, and a license issued therefor. An occupation tax presupposes a lawful business which should bear a part of the expense of municipal government, while a license tax ordinance declares the business unlawful without a license to engage therein having first been obtained. Call it by whatever name you will, or hide it beneath the most ingenious and skillfully drawn ordinance that maybe constructed, if the business is made unlawful, except upon payment of a sum as a precedent condition to the right to engage in such business, and obtaining a license or permit to engage in the business, for which the payment *834of a stated tax is required, the money thus derived is license money, to be applied as the constitution directs; and it can not lawfully be diverted from such purposes under the pretense that the ordinance is only for the purpose of collecting revenues. If the license tax thus exacted can not be justified as such, the act requiring its payment would be illegal and void for other purposes.

Section 5, article 8, of the constitution provides: “All * * * license moneys arising under the rules, by-laws, or ordinances of cities,' villages, towns, precincts, or other municipal subdivision less than a county, shall belong and be paid over to the same respectively. All such * * license moneys shall be appropriated exclusively to the use and support of common schools in the respective subdivisions where the same may accrue.” If moneys are collected under an ordinance providing for licensing; different occupations or callings, and as a license tax, it is license money, and no refinement of reasoning can change its character. It seems to me, the majority opinion sets up arbitrary standards by which to measure ordinanc.es imposing license and occupation taxes, and altogether loses sight of the constitutional provision quoted. A license is defined by Webster to be “a permission from authority to do some act; a grant of permission.” Bouvier says a license is “an official permit to carry on a business or trade or perforin other acts forbidden by law except to persons obtaining such permit.” By another authority, when applied to government, it is defined as “an authorization by the government to an individual to do certain acts, or carry on a certain business.” Cyclopedic Law Dictionary. How, then, can it be successfully contended that an occupation tax may be levied and enforced by requiring the issuance of a permit or license to do business, and making it unlawful to engage in the business until such tax is paid and a license is issued? This would permit the nullification of the provisions of the constitution, and the collection of the occupation tax by means that are the very essence and substance of a law providing for a license tax. *835In State v. Aitkin, 61 Nebr., 490, this court has decided: First, the payment of an occupation tax can not be made a condition precedent to obtaining a license to conduct the business taxed; and, second, when a tax is collected or paid as a condition of obtaining- a license, it is license money, under the provisions of section 5, article 8, of the constitution. The opinion in that case was but following different prior decisions, and rested upon what is believed to be the application of sound and- well-settled principles, proper and necessary in order to give due force and effect to the provisions of the constitution, and which can not, as it appears to me, be successfully assailed. State v. Wilcox, 17 Nebr., 219; State v. Bennett, 19 Nebr., 191. If the money is collected as an occupation tax, as I am satisfied it was in the case at bar, and as a result of the exercise of the taxing power, merely for the purpose of raising revenues, the right to levy and collect the tax presupposes the right of the party taxed to engage in the business; and the burden is imposed on him by the application of the same general principles underlying- the authority to raise revenues for the expenses of government by levying a tax upon those who enjoy its protection and benefits, and only such means may be legally resorted to for the collection of such taxes as are recognized and applied in the collection of public revenues generally.

The provisions in the ordinance under consideration declaring it unlawful to engage in the occupation or calling-taxed unless the taxes levied thereon are paid, and providing for arrest and fine upon conviction of a violation of the ordinance by a criminal prosecution, are clearly in excess of the powers of the municipality, and, under repeated decisions of this court, are void and non-enforceable.

In an early case, State v. Green, 27 Nebr., 64, the subject first received judicial consideration, and it is there decided: “A village has authority to levy a reasonable occupation tax which conforms to the requirements of the constitution and statute; but such a tax is a mere civil liability to be collected by levy and sale of property and not *836by. arrest and imprisonment.” The distinction between a license and occupation tax, and the means of enforcing the occupation tax and punishing those engaging in business without a license, is made clear. Regarding a license tax it is stated: “Where it is necessary to license a traffic — as the sale of intoxicating liquors — or a particular kind of business which if not licensed and regulated may be used to defraud individuals or the public, the right to punish by imprisonment for a failure to pay the license fee and take out license is unquestioned, because such power is necessary for the preservation of order and welfare of society, but this power does not apply to a mere occupation tax.” The doctrine enunciated in the Green Case was adhered to and reaffirmed in Magneau v. City of Fremont, 30 Nebr., 844, and Templeton v. City of Tekamah, 32 Nebr., 542, and State v. Aitkin, supra. But it is said that, because the charter of cities expressly declares that all ordinances may be enforced by the infliction of fines and penalties, for that reason an ordinance providing for the levying and collection of an occupation tax may be enforced by the infliction of such punishment,if not complied with. If it is meant by this to say that the criminal processes and powers of a court may be invoked for the purpose of inflicting such punishment, I most earnestly dissent from the proposition. Such a power would, in my' judgment, conflict with the paramount law, which declares imprisonment for debt shall not be permitted. It is true, a tax levied for revenue purposes is not a debt, in the strict and technical sense of the word, but it is a civil liability or obligation, to be enforced against the person liable as other civil liabilities, and comes within the letter and spirit of the constitution. There are many civil liabilities which may be created by ordinance, most noted of which are those for raising revenues by general or special assessments; and yet a failure to discharge the obligation so imposed would not justify a resort to criminal prosecutions against the delinquent, even though an ordinance might expressly so provide. The authority to enforce ordinances by the infliction of fines *837and. penalties, when used in a sense as applying to criminal punishment, must be taken to mean only those violations which involve acts either mala in se or mala prohibita, and not to all ordinances indiscriminately.

It is said the decisions of this court are in opposition to the authorities in other jurisdictions. An examination of the authorities, however, discloses that they are based on the principles underlying the collection and enforcement of license taxes, and not to revenue-producing acts alone. In principle, when so considered, they coincide with the prior utterances of this court on the same subject.