Plaintiffs, Ted Garbade and Frank Boynton, brought this suit under the uniform declaratory judgments act (§§ 6-601 to 6-616, O.C.L.A.), against the defendants, City of Portland and the Mayor, Commissioners, Chief Inspector of Licenses, City Attorney, and Chief of the Bureau of Police of the City of Portland, for the purpose of securing a judicial declaration that twenty-two ordinances passed by the City of Portland, as amendments to ordinance No. 76398, known as the License and Business Code of the City of Portland, are unconstitutional and void. These ordinances were enacted simultaneously on April 21, 1949, and, according to the provisions thereof, were to become effective on and after July 1, 1949. They are numbered 89173 to and including 89194, and they are intended to raise revenue, which the City Council of Portland found was necessary, for the proper operation of the city for the fiscal year 1949-1950. It was estimated, at the time of their enactment, that a minimum of $1,900,000 would be realized from them.
The assailed ordinances constituted an integrated revenue raising, or taxing, program by the city. Eleven of them increased existing license fees on certain designated businesses and occupations. Some of the other eleven ordinances created new classifications, such as retail merchants, wholesale merchants, manufacturers and food processors, and levied license fees upon such new classifications on the basis of a percentage of gross revenue of such businesses; and other new classifications were created upon which fixed license fees were
On April 22, 1949, the day following the enactment of these twenty-two ordinances, the City Council enacted ordinance No. 89196, which sought to impose a general profits tax of one per cent on all businesses and a tax of one-half of one per cent on salaries, wages and commissions. This tax was in addition to those levied by the twenty-two ordinances. Immediately after its passage a referendum petition was filed against ordinance No. 89196. The City Council thereupon, and on May 5, 1949, enacted ordinance No. 89310, providing that the twenty-two ordinances would not become operative if, on or before July 1, 1949, ordinance No. 89196 "has become effective and operative." Regardless of the last mentioned enactment, sufficient signatures were procured to the referendum petition against ordinance No. 89196 to effect its reference, thereby preventing it from becoming operative on or before July 1, 1949. Thereafter, and on July 20 and 23, 1949, ordinances Nos. 89620 and 89675 were enacted. These ordinances have reference to the manner in which the twenty-two ordinances shall be administered and interpreted. Their constitutionality is attacked in the complaint but is not questioned on this appeal.
The plaintiffs brought this suit in their capacity of residents, inhabitants, citizens, and taxpayers of the City of Portland. Plaintiff Garbade is a partner in and doing business as Garbade's Bakery, and is engaged in operating four places of business within the City of Portland, as a retail merchant, in the sale of bakery goods and merchandise; and plaintiff Boynton is engaged in the operation of a single place of business in the City of Portland as a retail merchant under the
The cause was tried on the issues raised by the complaint and the answer. The only evidence introduced was an agreed statement of facts by the litigants and exhibits consisting principally of copies of official documents. The circuit court made certain conclusions of law and based thereon "ordered, adjudged and decreed that that part of plaintiffs' complaint in which plaintiffs ask the court to find that the ordinances in question are null, void and invalid, and that part thereof which asks the court to perpetually enjoin the defendants from enforcing or attempting to enforce said ordinances be and the same is in all particulars denied". From this judgment and decree the plaintiffs have appealed.
Plaintiffs present the question of the alleged unconstitutionality of the twenty-two ordinances under four assignments of error. The first assignment reads as follows:
The License and Business Code, ordinance No. 76398, was passed December 18, 1941. It was a reenactment of existing ordinances, with the exception of a few matters relating to its administration. Its title is: "An ordinance to regulate and license private businesses and occupations in the City of Portland, and declaring an emergency." As enacted it contained an emergency clause. It is argued by plaintiffs that this ordinance (No. 76398) was not and could not
1. That part of article IX, § 1a of the state constitution, on which plaintiffs rely, provides: "The legislative assembly shall not declare an emergency in any act regulating taxation or exemption." This section refers only to the state legislative assembly and has no relevancy in respect to municipal legislative bodies. The authorities on which plaintiffs rely, to wit: Roy v. Beveridge, 125 Or. 92, 266 P. 230; Cameron v. Stevens, 121 Or. 538, 256 P. 395; Thielke v. Albee, 79 Or. 48, 153 P. 793; and Joplin v. Ten Brook, 124 Or. 36, 263 P. 893, do not support their contention that article IX, § 1a applies to municipalities. For instance, in Roy v.
Section 2-129 of the Charter of the City of Portland provides that
Article IV, § 20 of the Oregon Constitution likewise limits the contents of a statute. It provides: "Every act shall embrace but one subject and matters properly connected therewith, which subject shall be expressed in the title. * * *" We are not here concerned so much with the title of ordinance No. 76398, as originally enacted in 1941, as we are with the question whether that ordinance, as amended by the twenty-two ordinances, contains "more than one general subject".
2. In discussing the meaning of the word "subject" as used in the above quoted constitutional provision, this court, in Lovejoy v. Portland, 95 Or. 459, 466, 188 P. 207, observed:
In accord with the foregoing quotation is the following statement in 50 Am. Jur., Statutes, § 194, p. 175:
3. The two foregoing excerpts have reference to constitutional provisions relating to state legislation. The rule therein enunciated is also applicable to municipal legislation. In this connection we quote from 37 Am. Jur., Municipal Corporations, § 146, at p. 759:
The License and Business Code and the twenty-two ordinances, amendatory thereof, were purportedly enacted under § 2-105 (a), subd. 21, of the Portland City Charter, reading as follows:
The authority thus conferred upon the Council was contained in the charter granted by the state legislature to the City of Portland in 1903, Spec. Laws of Oregon, 1903, p. 3, et seq., and was incorporated in and made a part of the 1913 City Charter. Portland Charter, 1914 Revision, § 34, subd. 21.
4. We shall now consider whether the assailed ordinances contain matters unrelated to the ordinance which they amend. In Abraham v. City of Roseburg, 55 Or. 359, 105 P. 401, it was pointed out that "under
It would appear from what was said in the Lyons case that the court did not there consider that "licenses on a business, in the nature of an occupation tax or for revenue, as well as for the purpose of regulation" contained more than one general subject.
It was held in State v. Preston, 103 Or. 631, 206 P. 304, that there could be no objection "to the validity of a statute upon the sole ground that it combines a police regulation and an exercise of the taxing power". In other words, such a statute would not contravene the
Much reliance is placed by plaintiffs on Vernor v. Secretary of State, 179 Mich. 157, 146 N.W. 338. The constitution of Michigan, § 21, article V, provides that "No law shall embrace more than one object, which shall be expressed in its title." The title of the original act was as follows: "An act providing for the registration, identification and regulation of motor vehicles operated upon the public highways of this state, and of the operators of such vehicles." An attempt was made to amend that act, without changing the title, by providing a system of taxation of motor vehicles, both specific and ad valorem. It was held by the court that the original act was one for the registration, identification and regulation of motor vehicles and that the title of said act was not sufficiently broad to include the amendments thereto relating to the taxation of motor vehicles. The holding in that case is in accord with that in State ex rel Pardee v. Latourette, 168 Or. 584, 125 P.2d 750, and authorities therein cited.
The City Council, in enacting the License and Business Code, and the twenty-two ordinances amendatory thereof, was not exceeding its authority. There is conferred by the City Charter on the Council "power and authority, subject to the provisions, limitations and regulations" contained in the charter, to "grant licenses with the object of raising revenue or of regulation, or both". Section 2-105 (a), subd. 21, Portland City Charter. The general subject of the License and Business Code, as amended by the twenty-two ordinances, relates to licenses, and although said code provides for the granting of licenses with the object of raising revenue or of regulation, or both, it can not be
Plaintiffs' second assignment of error reads as follows:
In the agreed statement of facts, it is stipulated that the ordinances in question "were divided up into the 22 separate ordinances which were ordained by the Council for various reasons, including (a) convenience of operation since some of the amendments applied to license periods of less than a year and others did not; (b) for ease of consideration by the Council since any decision by the Council to eliminate any portion of the ordinances would probably have resulted in a misnumbering of the remaining parts if the ordinances had been included in a single ordinance, or preparation of a substitute ordinance, and also (c) because the charter of the City of Portland provides in Sec. 2-131 that no ordinances shall be amended within one week of its final passage, except in case of an emergency ordinance." It is further stipulated that at the last general election on November 2, 1948,
It is plaintiffs' contention that the procedure adopted by the City Council in submitting its license program in the form of twenty-two ordinances amounted to a practical denial of an opportunity for referendum. In support of their assertion they direct attention to the number of valid signatures required to be obtained to each petition, the expense connected with the printing and circulation of the petitions, the cost to the sponsors of the petitions incidental to the checking of the signatures, and the limited time in which to procure the signatures.
Defendants, on the other hand, claim that the twenty-two ordinances embody a "plan" for raising revenue, and that there was nothing to have prevented the plaintiffs from referring the entire "plan" in a single petition. In other words, they argue that it was not necessary to circulate separate petitions against each ordinance for the reason that all of them could have been included in one petition. In support of this contention defendants rely on Knowlton v. Hezmalhalch, 32 Cal.App.2d 419, 89 P.2d 1109, and Dye v. Council of the City of Compton, 80 Cal.App.2d 486, 182 P.2d 623. Before discussing these cases we wish to call attention to certain sections of the state constitution, the Portland City Charter, and the Legislation and Elections Code of Portland relating to the referendum.
Section 1 of article IV of the state constitution, adopted June 2, 1902, reserves to the people power to propose laws and amendments to the constitution and to enact or reject the same, and to approve or reject any act of the legislative assembly, except laws necessary for the immediate preservation of the public peace, health or safety. And § 1a of article IV, adopted June 4, 1906, provides that "The referendum may be demanded by the people against one or more items, sections or parts of any act of the legislative assembly in the same manner in which such power may be exercised against a complete act." It is further provided in section 1a that "The initiative and referendum powers reserved to the people by this constitution, are hereby further reserved to the legal voters of every municipality and district, as to all local, special and municipal legislation, of every character, in or for their respective municipalities and districts." The manner of exercising said powers in the City of Portland has been prescribed by ordinance No. 77641, known as the Legislation and Elections Code, enacted August 6, 1942.
Referendum petitions are required to be filed with the auditor within 30 days (or in the case of a franchise ordinance, within 60 days) after passage of the ordinance
We shall now consider the authorities relied upon by defendants in support of their contention that the entire twenty-two ordinances could have been included in one petition. In Knowlton v. Hezmalhalch, supra, the City of Fullerton, California, passed four resolutions which were described in the opinion of the court as follows:
The court pointed out that the "appellant was obliged to adopt the form chosen by the city council in determining that the public interest of the city required that it should have a city hall; that the same should be located on the land offered for that purpose; that the offer should be accepted; that a suitable building should be erected thereon; that money belonging to the city should be appropriated and used in the construction thereof; and that when completed, the building should be occupied and used by the city officers as a city hall." The court then proceeded as follows:
Dye v. Council of the City of Compton, supra, involved the question whether the constitution of California extended "the power of referendum held by the electors of a city to sections and to parts or ordinances." The California constitution contains provisions similar to those contained in §§ 1 and 1a of
Plaintiffs have called our attention to the case of State ex rel. Patton v. Myers, 127 Ohio State 95, 169, 186 N.E. 872, 187 N.E. 241, 90 A.L.R. 570, as being opposed to defendants' contention that the twenty-two ordinances could have been included in a single referendum petition. One of the questions there involved was whether two separate enactments of the state legislature could be attacked in the same referendum petition. The court, in holding that "more than one enactment cannot be placed in the same petition calling for a referendum election", said, among other things, as follows:
A similar observation applies with equal force to the Oregon Constitution. For instance, article IV, § 1, in referring to the exercise of the referendum power reserved to the people, speaks of: "any act of the legislative
The Legislation and Elections Code uses these expressions: "the ordinance sought to be referred" (§ 2-608), and "a petition for submitting an ordinance by referendum * * *" (§ 2-609). Section 2-604 of that code provides that "* * * a full and correct copy of the measure on which referendum is demanded shall be attached to such sheet or aggregate of sheets, circulated for signatures by such person, and such full and correct copy of the title and text of the measure shall be shown to the voter before his signature is attached." (Italics added.) Just how the provisions of § 2-604 could be complied with if all these twenty-two ordinances were attempted to be referred in a single petition is not apparent.
We see no resemblance between the factual situation in the Dye case and that confronted by us in the instant suit. We are not concerned with the question, involved in the Dye case, whether a section or a part of an ordinance may be referred but whether twenty-two ordinances can be referred by means of a single petition. Nor does the Knowlton case, in our opinion, support defendants' contention as the facts in that case are entirely different from those here. The resolutions involved were considered by the court as constituting one act. Moreover, the court, in that case, does not refer to the provisions of any statute, city charter, or ordinance governing the exercise of the
5. In Oregon neither the constitutional provisions nor the city ordinance relating to the exercise of the referendum power contemplate the placing of more than one ordinance in a single referendum petition. It is therefore our opinion that the plaintiffs could not have included the entire twenty-two ordinances in a single petition.
Had an emergency existed, the City Council could have attached the emergency clause to each ordinance. However, since no emergency was declared by the City Council, these twenty-two ordinances were all subject to referendum. The fact that the City Council might have declared an emergency does not answer the contention made by the plaintiffs that the enactment of twenty-two ordinances, instead of a single ordinance on a general subject, amounted to a virtual denial of the opportunity to invoke the referendum against the entire twenty-two ordinances, thereby rendering the same unconstitutional and void.
No one has attempted to refer the twenty-two ordinances, or any of them, to the electorate. They were passed April 21 and became effective July 1, 1949. This suit was not started until July 15, 1949. Plaintiffs now say that the procedure adopted by the City Council, in submitting its license program in the form of twenty-two ordinances, amounted to "practical denial of opportunity for referendum" because of the limited time in which to procure signatures to the petitions and the expense connected with the printing, circulating and checking of the petitions.
6. To the City Council of Portland is committed the authority, power, and duty to enact all local, special, and municipal legislation affecting the City of Portland. In carrying out this duty it has a wide latitude of discretion. It is for the City Council, and not the courts, to determine the manner in which legislation shall be enacted. There is no contention that the City Council, by a planned design, or otherwise, sought through subterfuge or chicanery to subvert and avoid the right of the electorate to refer any one, or all, of these ordinances. We know of no rule of law that requires legislative bodies to so legislate as to invite or to facilitate the exercise of the referendum. What was said in Marr v. Fisher, 182 Or. 383, 187 P.2d 966, is appropriate here. We quote:
7. In our opinion the validity of these twenty-two ordinances was not affected by the manner of their enactment.
Plaintiffs' third assignment of error is thus stated:
In discussing this assignment numerous references are made by both plaintiffs and defendants to the state income tax. Plaintiffs contend that there are expressions in our decisions and in the opinions of the attorney general intimating, if not directly holding, that the
Article XI, § 11, of the Oregon Constitution was proposed by initiative petition and adopted at the general election on November 7, 1916. As originally adopted, it read, as far as material here, as follows:
There appeared in the official voters' pamphlet an argument in support of the measure but none against it. The affirmative argument, which was by the
In 1932, § 11 was amended by deleting the words "the year", after the phrase, "the total amount levied by it in", and adding in lieu thereof the following: "any one of the three years". General Laws of Oregon, 1933, p. 6.
At the time of the adoption of article XI, § 11, there had been considerable agitation for an income tax but no legislation had been enacted providing for such a tax. At the general election in November, 1912, the electorate of the state voted against a proposed amendment to article XI of the constitution which provided that taxes might be imposed on income. At the general election in 1922, the electorate defeated a proposed income tax measure submitted by initiative petition. The 1923 legislative assembly enacted an income tax law, Ch. 279, Oregon Laws, 1923, against which the referendum was invoked, and at the special election in November of that year the measure received the approval of the voters of the state. At the general election in 1924 the voters repealed the income tax measure
The income tax having become a live issue, the legislature in 1927 submitted a proposal to amend the constitution by adding thereto a section to be numbered and known as section 11a, article XI, which proposed amendment read as follows:
This proposed constitutional amendment was submitted to the people at a special election on June 28, 1927, and was defeated by a vote of 84,697 to 19,393. The voters' pamphlet contained neither an affirmative nor a negative argument about it. At this same election an income tax measure, submitted by the legislature, was defeated by a vote of 67,039 to 48,745.
Plaintiffs, without mentioning the foregoing proposed amendment, call attention to house joint resolution
Shortly after the adoption of article XI, § 11, of the constitution, and during its 1917 session, the legislature enacted chapter 203, General Laws of Oregon, 1917. Section 3-d of that chapter, codified with amendments as § 101-109, O.C.L.A., provided for a tax of two and one-half per cent on the gross amount of premiums received by every foreign or alien insurance company, which tax was in addition to the license fees required to be paid by these companies to the insurance commissioner. Subdivision 6 of that section provides that the taxes, fees and charges "as herein and elsewhere
We shall now briefly discuss the opinions of the attorney general, hereinafter referred to as "A.G.", which are cited by plaintiffs and defendants.
On October 8, 1923, A.G., 1922-1924, p. 417, the attorney general ruled, based upon Northern Pac. Ry. Co. v. John Day Irr. Dist., 106 Or. 140, 211 P. 781, that the six per cent limitation had "no relation to special assessments for benefits to property as made by an irrigation district under § 7328, Oregon Laws"; and, on December 6, 1923, A.G., 1922-1924, p. 498, based upon the same Oregon case, he held that the six per cent limitation did not apply to street and sewer assessments. In an opinion on February 23, 1929, A.G., 1928-1930, p. 130, the attorney general advised a member of the House that the revenue realized from an excise tax was not subject to the six per cent limitation but that a "tax upon intangibles is a tax upon property" and that the revenue from such tax was within the limitation fixed by § 11 of article XI. At the time
Again, the attorney general, on December 5, 1933, A.G., 1932-1934, p. 482, in an opinion to another state representative, advised him that the revenue from taxes imposed by two house bills then pending before the Second Special Session of the Thirty-seventh Legislative Assembly, 1933, would not be subject to the six per cent limitation. One of these bills imposed upon every individual a tax of two per cent upon his entire net income, to be used for certain designated purposes; the other bill imposed a tax on the transfer of estates of decedents. The following excerpt from the attorney general's opinion in reference to article XI, § 11, is very pertinent to our present discussion:
In an opinion to the state treasurer under date of March 23, 1938, A.G., 1936-1938, p. 596, the attorney general observed: "It has been uniformly held that the 6 per cent limitation upon the power to levy taxes imposed by section 11 of article XI, of the constitution of Oregon, does not apply to miscellaneous revenue or to revenue derived from corporation excise, intangibles or personal income taxes."
The other cited opinions of the attorney general do not appear to have any bearing on the subject under discussion. One opinion, not cited, dated November 17,
Defendants assert that the ruling in Sprague v. Fisher, 184 Or. 1, 197 P.2d 662, 203 P.2d 274, "contains the plain implication that the limitation does not apply thereto [income tax]." We have found nothing in any of the several opinions in that case which seems to support defendants' statement. Plaintiffs contend that this court in School District No. 24 v. Smith, 97 Or. 1, 191 P. 506, "held a $10.00 per capita tax for the school fund to be within the 6 per cent limitation." They then say: "This was not an ad valorem or property tax, but a straight $10.00 per capita tax, ordered by the legislature. How, in the face of this case, can respondents say that the 6 per cent limitation has always been understood to be confined in its application to ad valorem or property taxes?" The statute providing for this tax is chapter 156, Laws of 1919, and is set forth in the opinion. The statute provides that the county courts of the several counties "are hereby required to levy at the same time other taxes are levied, a tax for school purposes upon all the taxable property of the county, which agregates an amount which shall produce at least $10 per capita for each and all the children within the county between the ages of four and twenty years * * *." The taxes which county courts are required to levy are against real and personal property, in other words, property taxes. We know of no other taxes which county courts could have levied in 1920, when the decision in that case was rendered.
It is provided in § 11, article XI, that "any part of any levy of taxes made by the state or any county,
8. In our opinion § 11, article XI of the constitution applies only to property taxes. It has no application to the revenue raised from taxes imposed by any of the twenty-two amendatory ordinances here involved. The conclusion here reached is inescapable when we consider the language of § 11; the argument accompanying its submission to the voters for their approval or rejection; the failure of the voters in 1927 to amend the constitution so that the limitation in § 11 would apply to both income and property taxes; the construction placed upon that section by the attorney general and the agency of the state which had charge of its administration; and other matters hereinbefore mentioned.
Plaintiffs state that in the twenty-two ordinances 198 specifically enumerated businesses, professions, trades and callings are taxed, and that in addition thereto ordinance No. 89177, referred to as the omnibus ordinance, taxes "any business, profession, trade, or calling not specifically covered in said [License and Business] code".
The discussion of this assignment by plaintiffs is very general. They take a broadside shot at the entire twenty-two ordinances. Attention is directed to ordinance No. 89176 in which are listed 66 service businesses, all subject to a tax of $25, plus $3 for each employee. They then say: "What justification, what possible `reasonable basis' can there be for taxing restaurants the same as mothproofers, fur blenders as ship joiners, title abstractors as carpet layers, just to name a few of the more ridiculous examples." They next call attention to ordinance No. 89190 which, in their language, has "the lawyers in with the astrologers, dentists with `planning consultants,' whatever they are, the undertakers in with free lance writers."
After referring to the foregoing matters, plaintiffs argue that what the City Council did indicates that there was "no attempt at classification on a reasonable basis," or any attempt at anything "except to get everything and everybody that the classified section
Plaintiffs continue along the same line of argument for about five more pages.
The contention made by plaintiffs that the tax imposed by these twenty-two ordinances is not uniform but is discriminatory, rendering the ordinances unconstitutional and void, is answered adversely to their contention in Carmichael v. Southern Coal Co., 301 U.S. 495, 81 L.Ed. 1245, 57 S.Ct. 868, which is one
See to the same effect: Steward Machine Co. v. Davis, 301 U.S. 548, 81 L.Ed. 1279, 57 S.Ct. 883; State Board of Tax Commissioners v. Jackson, 283 U.S. 527,
9, 10. The uniformity exacted in the imposition of an excise tax is geographical, not intrinsic. Under the equal protection clauses of the state and federal constitutions the state is not confined "to a formula of rigid uniformity in framing measures of taxation." It "may tax some kinds of property at one rate, and others at another, and exempt others altogether", and it "may lay an excise on the operations of a particular kind of business, and exempt some other kind of business closely akin thereto." Steward Machine Co. v. Davis, supra (301 U.S., at pp. 583, 584), and the cases therein cited. The above enunciated rules are applicable to municipalities.
11, 12. All presumptions and intendments are in favor of the constitutionality and validity of these ordinances. The City Council did not "record a complete catalogue of the considerations which" moved "its members to enact" these ordinances, and, as said in Carmichael v. Southern Coal Co., supra: "In the absence of such a record courts cannot assume that its action is capricious, or that, with its informed acquaintance with local conditions to which the legislation is to be applied, it was not aware of facts which afford reasonable basis for its action."
13. There is nothing in the record before this court which would justify us in holding that the license tax imposed upon various classes of businesses, professions, trades, and callings is in violation of the equal protection, due process, or uniformity clauses of the state and federal constitutions.
The decree appealed from is affirmed. Costs will not be awarded to either party in this court.