City of Columbia v. Putnam

Taylor, Chief Justice.

Appellant was convicted of violating the Business and Professional License Ordinance of the City of Columbia.

Appellant is State Manager of Southern Farm Bureau Casualty Insurance Company which maintains an office in Columbia. He was charged with failure to pay for and procure a business license for said Company. It is admitted that no such license was applied for and that no license fee has been paid by said company.

Appellant contends that the ordinance is discriminatory, arbitrary and unreasonable (as applied to his Company) in that there is no maximum amount imposed by the ordinance as limited by Section 47-407, Code of Laws of South Carolina, 1952, as amended.

The pertinent portions of Columbia’s City Ordinance relating to Insurance Companies’ licenses fees, which is in controversy, appears as follows:

“A69-3. On gross premiums collected through offices or agents located in the city or collected on policies written on *197property located in the city, whenever the premiums are collected, the following rates shall apply:
“Fire Insurance companies.2%
Casualty companies (accident, collision, fidelity, guaranty, indemnity, liability, plate glass, surety, theft or any other form) .:.2%
“B69-4. Life, Health and Hospital Companies
On first year of operation.$ 50.00
On gross premiums not exceeding $ 1,000. . . . 50.00
On gross premiums not exceeding $ 5,000. . . . 100.00
On gross premiums not exceeding $ 20,000. . . . 150.00
On gross premiums not exceeding $ 50,000. . . . 200.00
On gross premiums not exceeding $ 70,000. . . . 250.00
On gross premiums not exceeding $100,000. . . . 300.00
On gross premiums not exceeding $130,000. . . . 350.00
On gross premiums not exceeding $160,000. . . . 400.00
On gross premiums not exceeding $190,000. . . . 450.00
On gross premiums not exceeding $220,000. . . . 500.00
On all premiums exceeding $220,000 — $1.50 per $1,000 for premiums collected provided that
No license shall exceed.$1,000.00”

With respect to the power of municipalities to tax, Art. 8, Sec. 6, of the Constitution of South Carolina, 1895, provides:

' “The corporate authorities of cities and towns in this State shall be vested with power to assess and collect taxes for corporate purposes, said taxes to be uniform in respect to persons and property within the jurisdiction of the body composing the same; * * *. License or privilege taxes imposed shall be graduated so as to secure a just imposition of such tax upon the classes subject thereto.”

This constitutional provision has been held to be not a direct granting of power to the municipalities but merely directory to the General Assembly, Gaud v. Walker et al., 214 S. C. 451, 53 S. E. (2d) 316; Charleston Heights Co. v. City Council, 138 S. C. 187, 136 S. E. 393.

*198Section 47-407, Code of Laws of South Carolina, 1952, as amended, provides that:

“Cities of over sixty-five thousand inhabitants may require the payment of such sum of money, not exceeding twenty-five hundred dollars, for a license as in their judgment may be just and wise by any person or corporation engaged, or intending to engage, in any calling, business or profession, in whole or in part, within the limits of such cities, except those engaged in the calling or profession of teachers and ministers of the gospel. But whenever the amount of the license shall exceed one thousand dollars the concurrence of two-thirds of the whole council and the mayor shall be necessary in the passage of any ordinance requiring such license.”

The power of a municipality to fix different rates for licenses where the classes are different has been upheld by this Court many times, Hill v. City Council of Abbeville, 59 S. C. 396, 38 S. E. 11; Cowart v. City Cuncil of Greenville, 67 S. C. 35, 45 S. E. 122; Great Atlantic & Pacific Tea Co. v. City of Spartanburg, 170 S. C. 262, 170 S. E. 273; American Bakeries Co. v. City of Sumter, 173 S. C. 94, 174 S. E. 919; Triplett v. City of Chester, 209 S. C. 455, 40 S. E. (2d) 684. Such license, however, must be graduated as to the affected classifications in compliance with the provisions of the Constitution and Statute. Town of Forest Lake et al. v. Town of Forest Acres, 227 S. C. 163, 87 S. E. (2d) 587; and this Court stated in Hill v. City Council of Abbeville, 59 S. C. 396, 38 S. E. 11, that:

“* * * The constitution (sec. 6, art. VIII) only requires that the license or privilege tax shall be just. The requirement in said section that taxes must be uniform in respect to persons and property does not apply to the license or privilege tax. As all callings, occupations, and kinds of business differ, more or less, the one from the other, ‘the very power to impose a tax that will be just on each class, involves the right to make distinctions between [different] trades, and between essentially different methods of con*199ducting the same general character of business or trade’ * * *, and ‘what is a reasonable license fee must depend largely upon the sound discretion of the city council,’ * *

We are of opinion that an ordinance setting the amount of license fees on a percentage of gross premiums as provided for in the present ordinance in respect to casualty companies is not invalid in that Southern Farm Bureau Casualty Insurance Company is treated equally with other casualty companies in the same class. The fact that one class may pay more proportionately than other classes does not of itself make the license fee unreasonable or arbitrary since this is largely within the discretion of City Council. Great Atlantic & Pacific Tea Co. v. City of Spartanburg, 170 S. C. 262, 170 S. E. 273.

Appellant contends further that the ordinance under attack is discriminatory and unreasonable in that fire and casualty companies are treated differently from life, health and hospital companies. Section 37-133, Code of Laws of South Carolina, 1952, as amended by the 1961 Acts, page 273, requires different treatment with respect to fire insurance companies in that no license fee for fire insurance companies or their agents shall be charged “in any other manner than on a percentage of the premiums.” It is evident, therefore, that the Legislature has seen fit to deal with fire insurance companies as a separate class; and while no such treatment has been accorded casualty companies, it is persuasive of the conclusion that such treatment on the part of the municipality is not discriminatory or unreasonable.

The ordinance does not mention the maximum amount as set forth in Sec. 47-407, Code of Laws of South Carolina, 1952, as amended; however, any ordinance passed thereunder is controlled by the provisions set forth in the Code.

For the foregoing reasons, we are of opinion that all exceptions should be dismissed and the Order appealed from affirmed; and IT IS SO ORDERD, Affirmed.

*200Moss and Lewis, JJ., and Legge, Acting J., Concur. Bussey, J., dissents.