City of San José v. San José & Santa Clara R.R.

By the Court, Crockett, J.: The franchise granted by the Act of March 24th, 1868, to Bishop and his associates, to construct a railroad track along and through certain streets of the City of San José, and to run cars thereon, is not a contract in such sense as to exempt the business or occupation of operating the road from all proper police regulations, or from taxation in the same manner as other occupations may'be taxed, under legislative authority. ( Cooley on Taxation, 385-86; Frankford etc. R. R. Co. v. Philadelphia, 58 Pa. St. 119; Johnson v. Philadelphia, 60 Pa. St. 445.)

The charter of the City of San José, in defining the powers of the Common Council, authorizes it, amongst other things, “ to license and regulate all and every kind of business authorized by law, and transacted and carried on in said city, and to fix the rates of license tax upon said business.” In construing a similar power conferred upon the Board of Supervisors of the City and County of San Francisco, we said in Ex parte Frank, [48152] Cal. 606, “ when the power conferred upon the corporation, as in this case, is to ' license and regulate? callings and occupations, a question has sometimes arisen in the Courts, whether, under such a grant of power, the corporation could exact license fees for purposes of revenue, or should be limited to a sum reasonably sufficient to defray the expense of granting the license. (Dillon on Mun. Corp. 291.) But the rule as stated by Judge Dillon is, that in construing the words of the grant the whole charter and general legislation of the State respecting the subject-matter must be consulted in order to determine whether by the terms “ license and regulate ” it was intended to authorize licenses for purposes of revenue. Tested by this rule, we held that the power to “ license and regulate ” occupations in San Francisco included the power to raise revenue for municipal purposes by means of license fees; and the same rule of construction is applicable to the power conferred on the Common Council of San José. Indeed, the charter itself designates it as a “license tax upon such business,” indicating clearly that it is a tax on the occupation, and not merely a license to carry on the business.

That the Legislature of this State has the power under the Constitution to tax occupations and to authorize municipal corporations to tax them, was settled as early as the case of People v. Coleman, 4 Cal. 46, and we are not aware that the proposition has ever been denied or questioned in any subsequent case. On the contrary, it has been recognized and reaffirmed in Sacramento v. California Stage Company, 12 Cal. 134; Sacramento v. Crocker, 16 Cal. 120; Ex parte Hurl, 49 Cal. 557.