Wells v. Torrey

Ostrander, J. (after stating the facts). The validity of the most of the objections set up could not be admitted in this court without overruling the cases of Sherlock v. Stuart, 96 Mich. 193 (21 L. R. A. 580), and People v. Blow, 120 Mich. 45, and we are not inclined to overrule either of these cases. It is settled law that license fees may be imposed for regulation or for revenue, and that the grant of a license may be made by the State directly, or it may be made indirectly through one of the municipal corporations of the State. A municipal corporation has no inherent power to grant licenses or to exact license fees. It must derive all its authority from the State, and the power must come by direct grant and cannot be taken by implication. 2 Cooley on Taxation (3d Ed.), pp. 1133, 1138. The same author says further: “ The terms in which a municipality is empowered to grant licenses will be expected to indicate with sufficient precision whether the grant is conferred for the purposes of revenue, or whether, on the other hand, it is given for regulation merely. It is perhaps impossible to lay down any rule for the construction of such grants that shall be general and at the same time safe; but, as all delegated powers to tax are to be closely scanned and strictly construed, it would seem that, when a power to license is given, the intendment must be that regulation is the object, unless there is something in the language of the grant, or in the circumstances under which it is made, indicating with sufficient certainty that the raising of revenue by means thereof was contemplated.” After laying down the rule that if a revenue authority is conferred, the extent of the tax, when not limited by the grant itself, is left to the judgment and discretion of [695] the municipal government, subject tó the implied limitation that it must not be so heavy as to be prohibitive, thereby defeating the purpose of the power; and after stating that, generally, a fee for a license should not exceed the necessary or probable expense of issuing the license and of inspecting and regulating the business which it covers, the same learned author proceeds as fol-. lows: “ But the limitation of the license fee to the necessary expenses will still leave a considerable field for the exercise of discretion, when the amount of the fee is to' be-determined. The fee, of course, must be prescribed in advance, and when it cannot be determined with any accuracy what the cost of regulation is to be. It must therefore be based upon the estimates, with more or less probability that the result will fail to come anything near a. verification of the calculations. Moreover, in fixing upon the fee, it is proper a.nd reasonable to take into account,, not the expense merely of direct regulation, but all the incidental consequences that may be likely to subject the public to cost in consequence of the business licensed. In some cases the incidental consequences are much the most important, and, indeed, are what are principally had in view when the fee is decided upon. The regulation of the business of huckster, for instance, could seldom be troublesome or expensive, but that of the manufacture and sale of intoxicating drinks could not be measured by anything like the same standard. * * * It cannot be questioned, therefore, if it is to be licensed by the public authorities, that it is legitimate and proper to take into the account all the probable consequences, or that the payment to be exacted should be sufficient to cover all the incidental expenses to which the public are likely to be put by means of the business being carried on. And all reasonable intendments must favor the fairness and justice of a fee thus fixed. It will not be held excessive unless it is manifestly something more than a fee for regulation. ’* The power to license saloons in the city of Flint is expressly conferred by the charter. The exercise of that power by the passage and enforcement of the ordinance which is in question must be held to be for the purpose of regulation, and not revenue, and must be sustained so far [696] as the amount of the license fee is concerned. This disposes of the first, second, third, fifth, and eighth of the objections set out in the application for the writ of certiorari. I think the fourth, sixth, and seventh objections are answered by the terms of the ordinance itself. If they are not, it does not appear that George Webb, the person against whom it was sought to have the warrant issued, has ever made any application to the council for a license or paid or tendered the license fee. It will be time enough to consider some of the points which are argued when a case is made involving a capricious or arbitrary enforcement of the ordinance. The duty of the magistrate to entertain the complaint and issue the warrant is clear, and the judgment of the court below is affirmed, with costs. Carpenter, C. J., and McAlvay, Hooker, and Moore, JJ., concurred.