American Baseball Club v. Philadelphia , 312 Pa. 311 ( 1933 )

Mr. Justice MAXEY filed a dissenting opinion.

Argued April 10, 1933. Appellee, the owner of Shibe Park in Philadelphia, a stadium accommodating 30,000 persons, had scheduled some 77 baseball games for the season of 1932. An ordinance of the city enacted December 15, 1931, required those giving athletic contests or exhibitions at which an admission was charged to pay a license fee based upon a reasonable estimate of the number of policemen or firemen which, in the opinion of the director of public safety, would be necessary to protect the public safety at and on the premises at such contests or exhibitions, at the rate per man of $5.50 per day. Appellee and the Philadelphia National League Club were notified by the director of public safety that neither would be permitted to play its first scheduled game unless it applied for a license, and paid as the license fee for that particular game $66.00, and thereafter it would be required to pay a license fee for each of its scheduled games or exhibitions for the year 1932. The applications for licenses and payment of the fees were made under protest. Appellee and the Philadelphia National League Club filed a bill in equity against the city, its mayor, director of public safety and superintendent of police, to have the ordinance declared invalid and to restrain its enforcement. The court below decreed the ordinance invalid, restrained its enforcement, and directed the repayment of the fees already paid. The city appeals from this decree.

At the outset it must be noted that the ordinance deals with private enterprises engaged in a continuous seasonal business for profit, which make extraordinary use of municipal facilities in order to conduct their private business successfully. The profitable operation of these businesses involves the attraction of a large number of persons to a central place. They require a large number of police officers for the maintenance of public order, especially at the ticket windows and entrances, the speedy conduct of traffic on the highway, and the protection of appellees' property and business in supervising the attendance by preventing from attending those who fail to pay an admission fee. Without the presence of this unusual number of policemen, the proper ordering, protection and safety of the public would be impossible, where, as is usual at public athletic contests, large groups of persons gather together.

It has been recognized consistently by judicial authority that where it is necessary in the proper conduct of business that unusual demands be made on the city facilities, a reasonable charge may be made by the municipality to cover its actual expense in providing such special services: Point Bridge Co. v. Pittsburgh Rys. Co., 240 Pa. 105; Mahanoy City v. Hersker, 40 Pa. Super. 50; Gettysburg Boro. v. Gettysburg Transit Co., 36 Pa. Super. 598; Kittanning Boro. v. Nat. Gas Co., 26 Pa. Super. 355. It was said in the last case cited, page 361: "if a corporation 'so carries on its business as to justify, at the hands of any municipality, a police supervision of the property and instrumentalities used therein, the municipality is not bound to furnish such supervision for nothing, and may, in addition to ordinary property taxation, subject the corporation to a charge for the expense of the supervision.' " The conditions requiring these special services were created by appellees, and the municipality was required to render them. Manifestly the conduct of appellees' business imposes on the municipality a special burden, of which the municipality has a right to be relieved.

It is objected that the ordinance imposes a tax under the guise of a license fee and was enacted purely as a revenue producing measure. The history of the ordinance is set forth by appellees to substantiate this theory. In the broad sense every ordinance which requires the payment of money is a revenue producing measure, but the primary purpose of ordinances such as this under consideration is the reimbursement of the city for providing special services to the licensees. The preamble of the ordinance in part reads: "Whereas, it is necessary for the City of Philadelphia, acting through its department of public safety, to furnish the services of firemen and policemen to protect the public safety at athletic contests and exhibitions, by assigning police and firemen to regulate traffic created thereby and to guard against fire within the premises used for such contests and exhibitions." Though we may suppose the ordinance was imposed to increase the revenue, this does not invalidate it as a licensing ordinance if it clearly appears the city is seeking to compel the persons who cause expense to pay for it.

With this fact established, we must consider the means by which a municipality may reimburse itself for the expense to which it is put in performing such services. A license fee is a customary incident of municipal authority. A license fee is valid if the amount thereof is reasonably commensurate with the actual cost to the municipality for special services rendered: Western Union v. Phila., 22 W. N.C. 39; Allentown v. Western Union, 148 Pa. 117; Point Bridge Co. v. Pittsburgh Ry. Co., supra; Delaware and Atlantic Tel. Tel. Co.'s Petition, 224 Pa. 55. The wage of policemen varies according to the length of service from $4.40 to $6.00 per day. The rate of $5.50 per man fixed by the ordinance is not excessive or unreasonable; it is based on a workday of eight hours and is the customary wage. From past experience, as well as by prior mutual arrangement, some 12 policemen under command of a sergeant were deemed necessary by the director of public safety of the City of Philadelphia and by appellee for the purposes heretofore mentioned. In addition, a considerable number of extra officers for the purpose of regulating traffic on streets neighboring appellees' parks, and for which no charge is made, were required.

However, it is contended by appellee that the ordinance involves a delegation of legislative authority in that the amount of the license fee is not fixed and determined by the ordinance, but is left dependent upon the number of men employed in performing the extra services for appellee; and that the number is wholly within the discretion of the director of public safety, an administrative official. Thus, it is pointed out, the amount of the license is in reality wholly determined by an administrative officer and not by the legislative body. If this conclusion is true, unquestionably the ordinance is invalid for the legislature may not delegate its law making authority; but an examination of the ordinance as related to the facts at once discloses that the means used to determine the amount of the license fees are similar to those involved in nearly all license legislation.

A rate is fixed, but the application of the rate is dependent upon extraneous facts to be found by an administrative official. Section 1 of the ordinance provides that the persons therein designated "shall pay . . . . . . a license fee based upon a reasonable estimate of the number of police and firemen which, in the opinion of the director of public safety, are necessary to protect the public safety at and on the premises . . . . . . at the rate per man of $5.50 per day." The rate and time are not seriously controverted, but the number that may be assigned is the question that gives apparent trouble. Generally speaking, in all cases where the reasonableness of the action of the administrative officer in fixing license fees is subject to the visitation of the courts, if the discretion lodged in such an official is abused, the courts will provide a remedy as the case arises.

From the very nature of the special services rendered no better or more definite standard could be fixed by council. A flat fee would tend to be arbitrary and unreasonable; such a fee might be commensurate with the services provided for one person and be wholly unreasonable and oppressive when considered in the light of services rendered another.

The administration of all taxing and licensing statutes is based on reasonableness as determined by some basic factor. In the levying of a realty tax, though the rate is fixed by proper authority, the basic factor is the value of the property to be taxed and that is determined by administrative officers. It is the determination of this value which fixes the amount of the tax. It is so with respect to telephone pole and wire license fees. The determination of reasonableness as to the charge is an administrative matter concluded by what is then considered proper. But this very element may change within a few months: what was then necessary may now be considered otherwise. In this case while the rate is definite, $5.50 per policeman required for an eight hour day, the base to which the rate is to be applied is left to administrative officers for determination: here the number of policemen necessary to maintain the public order, insure the public safety, protect and incidentally promote appellees' business. As was said in Buffalo v. Hill, 79 N.Y. App. Div. 402, 79 N.Y. Supp. 449, wherein an ordinance conferring discretionary power upon the city council of Buffalo was attacked on the ground that it placed no limitations upon the exercise of discretion: "The discretionary authority must rest somewhere, and experience has proven that its lodgment in some body or official of the municipality is more efficacious than to leave it with the Legislature, to whom the local situation may be unknown." See Fischer v. St. Louis,194 U.S. 361; Gundling v. Chicago, 177 U.S. 183; In re Flaherty,105 Cal. 558, 38 P. 981.

The case of O'Neil v. Ins. Co., 166 Pa. 72, is cited by appellees as governing the instant case. The preparation of a uniform contract policy of insurance was delegated to the insurance commissioner by the Act of 1891, P. L. 22. The act was held unconstitutional as a delegation of legislative power. The policy was to be the contract required by the parties by law and its use obligatory. The sole purpose of the act was the defining of the terms of the policy contract and enforcement of its use. No form had been drafted, but the whole matter was left to the commissioner with a penalty fixed for failure to comply with his requirements. In the instant case the purpose is declared, the subject-matter is definite, the acts to be licensed stated, the rate of the levy fixed, the official to levy named, the standard of reasonableness prescribed, and the penalty for disobedience determined. The ordinance is complete in the essential elements and only its application left to an administrative officer.

The O'Neill case frequently has been considered by this court, in its bearing on different legislation the validity of which was challenged because, it was claimed, it involved an unlawful delegation of legislative authority, and this court decided adversely to appellees' contention. In Com. v. Puder, 261 Pa. 129, Mr. Chief Justice FRAZER pointed out the inapplicability of the O'Neil case to the situation when an act, regulating the business of lending money, vested in the commissioner of banking, the administrative function of exercising his discretion in granting licenses to applicants, if satisfied with their character and general fitness. To the same effect are Jermyn v. City of Scranton, 186 Pa. 595; Baldwin Township's Annexation, 305 Pa. 490. See also U.S. v. Grimaud, 220 U.S. 506.

Furthermore, appellee contends that the ordinance is discriminatory as offending our own and the federal constitution in that it (1) does not apply to forms of amusement and entertainment and other businesses where people congregate other than athletic contests, and (2) because it imposes no license fee on athletic contests where no admission is charged. As to the first ground, it seems hardly necessary to point out that there is a considerable difference between the necessity for policing athletic contests and other forms of amusement and entertainment, such as theaters, musical concerts, art exhibitions and the like. It is commonly known that larger numbers of people usually congregate at one time for an athletic contest than at places of other forms of amusement. The conduct of persons congregating at athletic contests is different from that of those attending other forms of entertainment. Considering the distinction made by the ordinance between athletic contests where admission is paid and where no admission is paid although police supervision may be necessary, we may point out that such a classification is not arbitrary nor without a sound basis. Where admission is charged, the maintenance of the exhibition or contest is in the nature of a business for profit, while in the case where no admission is charged there is present no suggestion of business. It is not without reason that where a profit is expected, and the whole purpose of the exhibition is to produce a profit, the city authorities should conclude that it is improper to require the public to contribute to the success of the business to a greater extent than is necessary in the conduct of other businesses. It does not appear as unreasonable that the municipal authorities should require those who demand special services from it in order to conduct their businesses at a profit to pay for the additional services, and not burden other citizens of the municipality with the cost of such services.

Complaint is made that appellees are taxpayers and as such they are entitled to these services. In answer we may say it is true the city is obligated to render services to all taxpayers, but where that service is worked into the success of their business so that they may make a profit, a different question arises. There is a vast distinction between great public buildings which house thousands, great department stores where thousands visit daily, great industrial plants where tens of thousands are employed, who at noon and evening hours discharge on the public streets tens of thousands who need no extra police supervision, and an athletic contest such as a baseball game which imposes on the city an extraordinary expense. In brief the city should not be required to help defray the operating costs of a business of this kind.

An ordinance somewhat similar to the one here discussed was involved in Tannenbaum v. Rehm, 152 Ala. 494, and was sustained by that court. In that case the ordinance provided that "not exceeding four regular or special officers" might be detailed to attend any theater to preserve strict order, etc. We do not consider the presence of this maximum limitation feature essential to the validity of an ordinance of this kind because four policemen might be a wholly unreasonable number and the cost of their services an arbitrary levy for a license to operate a particular theater, while a proper number and expense therefore as to another theater.

Reasonableness of the administrative official's action is still the standard. We quote with approval from the opinion of the Alabama Supreme Court: "The purpose of the ordinance is manifest. Its chief object is the protection of persons against the dangers of fire and the preservation of human life. Its enactment is an exercise of police power. . . . . . The ordinance cannot be said to be unreasonable, in that the city assumes to designate the man to perform the particular service, or imposes the cost of such service upon the manager. The duty of protecting the person or citizen from dangers of fire in the exercise of the police power would seem to carry with it the right to employ the most effective means to that end, and this would include the right of designating competent agents or servants for the performance of such duty. The doctrine as to the right of the municipality to impose the cost of the performance of such services by the firemen on the manager of the theater, as was done in the case at bar, was upheld in New Orleans v. Hop Lee, 104 La. 601, 29 So. 214, and in the case of Harrison v. Baltimore, 1 Gill (Md.) 264. Of course, such cost or expense must be fair and reasonable." Any challenge to the feature of reasonableness and the cost required to be actually paid may be settled in an appropriate proceeding.

We are of the opinion that the ordinance in question was clearly within the police power of the municipality, and it is not unreasonable.

The decree is reversed and bill dismissed; costs to be paid by appellees.