author: By ALLEN, Circuit Judge.

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CLEVELAND TRUST COMPANY, Respondent.
    United States Court of Appeals, Sixth Circuit.
    No. 11966.
    Decided May 27, 1954.

      George J. Bott, Geni. Counsel, David P. Findling, Associate Geni. Counsel, A. Norman Somers, Asst. Geni. Counsel, Frederick U. Reel, Jean Engstrom, for National Labor Relations Board.
    Welles K. Stanley, Cleveland, Carl H. Clark, Stanley, Smoyer & Schwartz, Cleveland, Hawley E. Stark, Douglas, Stark, Jett & Biechele, for The Cleveland Trust Company.
    Before SIMMONS, Chief Judge, ALLEN AND MILLER, Circuit Judges.
   OPINION

By ALLEN, Circuit Judge.

This petition to enforce an order of the National Labor Relations Board arises out of a complaint charging that the respondent violated the National Labor Relations Act in the alleged discriminatory discharge of employee William Sorger, in the granting of wage increases and increased vacations with pay to the employees for the purpose of discouraging membership and activities on behalf of the union, and that it interrogated employees concerning their union affiliation and memberships and warned them to refrain from becoming members of the union. The trial examiner found that the discharge of Sorger was for cause without knowledge of Sorger’s activities on behalf of the union and was not discriminatory. The Board concurred in this ruling but held that upon the other charges the respondent had been guilty of unfair labor practices and. issued the usual cease and desist orders.

Respondent gave its employees two wage increases, one on November 21, 1950, and one on April 1, 1951. The union drive for membership was begun in the fall of 1950 and open organization meetings were held on October 19th and November 2nd in Cleveland, Ohio.

The trial examiner found that, because of a sudden turnover in employment in the area, the raising of wages by other employers in competing banks, the inflationary trend in the national economy, the rise in income tax rates, plus the threat of a wage freeze, the respondent did not by granting the increase of November 21, 1950, violate the Act. This finding was not sustained by the Board, which held the increase to be an unfair labor practice because it was announced in a letter which expressed hostility to the union.

The sending of the letter by respondent to its employees, dated November 21, 1950, which announced a salary increase effective November 15, 1950, came about as follows: When the union began to organize its campaign, some of the bank’s employees asked their supervisors for information concerning the union. These inquiries were referred to management and the president of the bank gave an extended talk to the supervisors. A copy of this talk was mailed ' to each employee November 21, 1950. The statements of fact made in this letter are not controverted. Both the examiner and the Board found that it contained no coercive or illegal statements and was protected by Section 8(c). In substance the supervisors were instructed as follows: The employees have a right to join a union and to convince others to join so long as the campaign is carried on during non-working time Employees have an equal right to refuse to join the union and to convince others that they should not join; if they have joined they have a right to withdraw. The anti-union campaign must also be carried on in non-working time. Representatives of management can neither threaten nor intimidate employees in the making of their choice, nor promise a benefit. Management representatives must refrain from interrogating employees regarding union activities and must not ask any employee if he has joined a union or attended union meetings, if he knows who has joined, and if he knows who has attended a meeting.

The letter called attention to benefits enjoyed by the employees, such as group life and accident insurance carried without cost to employees and the pension plan for employees which had been in effect for many years. It also stated that employees with over 19 years’ tenure would receive a three weeks’ annual vacation with pay instead of the two weeks’ paid vacation theretofore granted. Under Section 702(e) of the Defense Production Act of 1950 this increase in vacations with pay was included in the phrase “wages, salaries, and other compensation,” 64 Stat. 816, authorized to be stabilized or frozen. If the increase in vacation periods had not been granted prior to the issuance of the freeze order, January 26. 1951, which was expected to be made shortly, the increase in vacations could not have been given without the prior approval of the Wage Stabilization Board.

The reason for the salary increase was stated in the letter to be the recent increase in the cost of living, the increase in the federal income tax, and the possibility of a threatened wage freeze in the immediate future. The vacation increase for the employees with 19 years’ service had been discussed for a number of years. Similar increases had recently been made by other banks. 384 out of 1900 employees of respondent were eligible for this three weeks’ vacation. This explanation given fully in respondent’s answer was not controverted in the evidence. Counsel for the Board in open court stated that he did not question the truth of respondent’s statements in its literature. The Board offered no testimony and respondent’s explanation of its reasons for the salary and vacation increases is undisputed.

The Board set aside the finding of the trial examiner that the increase of salaries put into effect November 21, 1950, did not constitute a violation of the Act. The Board ruled that, since the wage increase was announced in the letter described above and about six weeks in advance of the regularly scheduled review of wages, this increase was intended and calculated to influence the employees to reject the union as their collective bargaining representative. The question, therefore, is squarely posed whether, in view of Section 8(c), it is a violation of the Act for an employer, in a non-coercive letter expressing opposition to the union, to call the employees’ attention to benefits already enjoyed by the employees, such as insurance without cost to the employees, pension plans, a change in vacation benefits already determined, a general wage increase already made, granted outside of the usual schedule, the date being advanced admittedly because of competitive pressure from similar organizations, conceded sharp increases in the cost of living and action of the Wage Stabilization Board.

The finding that the announcement of the advancement of increases in salaries to November 21, 1950, was made in order to encourage opposition to the union and violates' the Act, ignores various emphatic circumstances. The explanation of the increase made by the respondent has never been denied. The Board is not authorized to ignore material uncontradicted facts. It is required under Section 7(c) of the Administrative Procedure Act to impose no sanction or rule or order or issue any rule or order “except upon consideration of the whole record .... and as supported by and in accordance with the reliable, probative, and substantial evidence.”

Moreover, the letter itself is a written statement and Section 8(c) protects any and all statements made by employers which contain no threat of reprisal or force or promise of benefit. The letter was found by both the examiner and the Boarcl to be protected by 8(c), in other words, to contain neither promises nor threats. As to the increase of November 21, 1950, the trial examiner who heard the witnesses stated that the testimony of Kingsbury, respondent’s personnel director, and the principal witness as to the increases, was credible and unc-ontroverted. The proposition for the particular increase was made in the late summer of 1950. when Kingsbury learned from personnel officers of two competing banks that they planned salary increases. In August. 3950, Kingsbury discussed with the bank’s president the advisability of taking similar action and recommended it. This was several weeks prior to the first organization meeting of the union (September 21, 1950) and prior to any knowledge on Kingsbury’s part of union activities. On October 5. prior to the union’s first open meeting (October 19. 1950), Kingsbury renewed this proposition with the bank’s president. The probability of the increase was announced to a group of the bank’s branch managers, on October 11 and the usual meeting to arrange the details of the increase with the branch managers and department heads followed. The fact that this increase was planned and approved before the union began its open organization campaign is uncontradicted. The fact that it was anounced in a statement in which the bank expressed opposition to the union does not make the increase an unfair labor practice. It is not a promise of future economic benefit when an employer recounts that an increase in salary has already been made, nor is it a violation of the Act to announce it. An employer is entitled, in absence of coercion or promise of benefit, to recount the beneficial effects of the relationship with his employees. This is part of freedom of speech and upon this point the order of the Board cannot be enforced.

As to the vacation increases, it is not disputed that they were made under the threat of wage stabilization, which was ordered in January; 1951, and that they were a part of the picture of inflationary inequities operating upon these employees with fixed salaries intended to be covered by the provisions for wage stabilization. There is no evidence in the record that the vacation increases were determined in order to influence employees to vote against the union.

The increase of April 1, 1951, also held invalid, was not announced in advance. No evidence was adduced controverting respondent’s sworn statement that this wage increase was made to correct inequities created by the increase in the cost of living The Wage Stabilization Board in its General Order No. 6 issued February 27, 1951, had declared that a 10% salary increase was necessary “to correct such inequities as nave arisen because of disparities between increases in wages and salaries and the increase in the cost of living since January 15, 1950.” From June 15, 1950, to October 15, 1950, the cost of living as shown by the United States Bureau of Labor Statistics, Cost of Living Index, increased by 4.6 points. From October 15, 1950, to February 15, 1951, the Cost of Living Index increased by 9.6 points. The aggregate amount of respondent’s November 15th and April 1st increases did not exceed the 10% increase found necessary by the Wage Stabilization Board to correct these inequities. While the April 1st increase was made after the union had filed its petition for representation, it was before the union had established that it had the necessary number of cards to demand the holding of an election. The election was a consent election and the second increase was made four weeks before the union and the bank agreed to the election and seven weeks before the election. We think the finding that the second increase constitutes an unfair labor practice is not based upon the record considered as a whole and arises out of an erroneous conception of the applicable law. The trial examiner stated that the explanation regarding the second increase is “not convincing.” The Board adopted this finding. But the burden of proof rests not upon the bank to convince the Board that the raise was not in violation of the Act but upon the Board to prove that the raise was illegal. N. L. R. B. v. Asheville Hosiery Co., 108 Fed. (2d) 288 (C. A. 4); Martel Mills Corp. v. N. L. R. B. 114 Fed. (2d) 624 (C. A. 4); N. L. R. B. v. Illinois Tool Works, 119 Fed. (2d) 356 (C. A. 7); Indiana Metal Products Corp. v. N. L. R. B., 202 Fed. (2d) 613 (C. A. 7); Cupples Co. Manufacturers v. N. L. R. B., 106 Fed. (2d) 100 (C. A. 8); Law v. N. L. R. B., 192 Fed. (2d) 236 (C. A. 10).

The Board considered that, since the bank in the middle of May mailed out the non-coercive letters of various employees opposing the union, an inference was raised that its salary increase made on April 1st was for an unlawful purpose. But the uncontradicted testimony as to the reason for this increase, which was the same as for the increase of November 21st, forbids such an inference. On the record considered as a whole, the bank made these increases for exactly the reason stated in the respondent’s sworn answer and in respondent’s testimony, much of which the trial examiner found to be uncontradicted and credible. None of the testimony was found to be false. Moreover, the employer was not compelled to ignore the inequity created by high living costs and recognized by a national official board. Such a principle would mean that it is the duty of the employer to refrain from benefiting his employees in order to make them more inclined to vote for a union. A similar holding was made in N. L. R. B. v. W. T. Grant Co., 208 Fed. (2d) 710 (C. A. 4). The court decided that an increase in wages between the date of hearing and the date of the election was not made to discourage union membership and did not amount to an unfair labor practice. As the court pointed out:

“Certainly it cannot be laid down as a governing rule that during a union campaign, management must deny to its employees increased advantages which in the absence of the campaign would be granted. It should be noted that in this case there was no certified union with which the employer could bargain and therefore the case does not fall within the ruling that an employer should not grant an increase of wages without notice to a duly appointed bargaining agent, since such action minimizes the influence of organized bargaining.”

The court held that the Board’s conclusion that the purpose and effect of the wage increase was unlawful and unfair is based only on an inference too tenuous to support its order. Cf. Peter J. Schweitzer, Inc., v. N. L. R. B., 144 Fed. (2d) 520, 524 (C. A. D. C.). N. L. R. B. v. Bailey Co., 180 Fed. (2d) 278, decided by this court, presents a different factual situation and is not controlling here. In that case- the employer was not confronted with the situation created by the Korean crisis, the inflation, the Defense Production Act, a wage freeze order of the Wage Stabilization Board, and the further order permitting an increase of wages in order to correct these inequities. The decision of the Board with reference to the increases of November 15, 1950, and April 1, 1951, is set aside.

The finding and decision of the Board that the respondent committed an unfair labor practice by paying for the mimeographing and distribution of letters at the request of employees who opposed union representation cannot be sustained. Three letters drawn up by employees were mimeographed and mailed by the bank at the request of the employes. Two of these were framed by the so-called “Employees’ Committee” headed by Wayne Moffitt. The trial examiner found that the Employees’ Committee was a labor organization, but the Board reversed this finding. The Committee clearly was not a labor organization for the uncontradicted testimony shows that it was formed for the sole purpose of opposing unionization, that it worked to that single end, and 'was disbanded after the election. Hence, the respondent’s dealings with the Committee, which were initiated by the employees themselves, do not constitute domination of or interference with the formation or administration of any labor organization or contribution of financial or other support to it, which under Section 8(a) (2) is declared to be an unfair labor practice.

The third letter was drafted by an employee of the Real Estate Loan Department and signed by numerous men and women in his department. It is uncontradicted that the proposition of taking action about the coming election and oí mailing the letters emanated from the employees themselves. The only suggestions of respondent’s attorney with reference to the form of the letters were that three statements critical of union sympathizers be deleted from the letters of the Employes’ Committee. The total expense of mimeographing and distributing amounted to $468.24. The union conceded at the hearing that it had spent at least an equal amount on mailing to the employees various union newspapers or literature during the entire seven months of the campaign. There was no secrecy as to who defrayed the expenses of the letters and certainly no unfair advantage over the union, which exercised the same privilege. Apart from these circumstances, the mailing was protected by Section 8(c), which provides that the expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of the Act, if such expression contains no threat of reprisal or force or promise of benefit. It is not contended that anything in these letters was coercive or that they contained any promise of benefit. The contention is that the employer had no right to express or disseminate the views of the employees at their request. We think the broad provisions of the statute clearly cover and protect this action.

The finding of the Board with reference to coercive statements charged to have been made by two supervisors, in so far as these statements are found to constitute an unfair labor practice on the part of the respondent, ia not supported by the applicable law. The trial examiner found that the occurrences charged were “isolated incidents” and that, although “there was considerable activity engaged in by union employees as well as non-union employees during working time .... no employee was visited with reprisals for engaging in such activities.” He found that the coercive statements did not constitute an unfair labor practice on the part of the employer.

Approximately 200 supervisors with varying degrees of authority are employed by respondent. The president had stated to the employees in several letters that they were free to engage in union activities outside of working time and to ioin and vote either for or against the union. The two instances charged to constitute violations of the Act each involved only a single conversation with two separate employees and had been specifically forbidden by the president’s letter. Some six months prior to the election an employee had requested of a supervisor to be allowed to copy nis list of names and addresses of all the employees in his department. This request was refused and in the1 talk which followed the supervisor said, “Are you satisfied with your job?” and, “1 hate to see you hurt yourself.” This conversation took place the day before the supervisor and the employee received the copies of the talk given by the bank’s president condemning such statements. The occurrence was not reported to the management. The other incident occurred several weeks after the election when another supervisor reprimanded an employee for leaving her work during working hours to talk with a claimed officer of the union who was also an employee. The employee reprimanded said that she had been discussing a matter of personal business, but the supervisor made coercive statements to her as to union matters. The supervisor was reprimanded for this conduct by his immediate superior, and the employee criticized was reminded on the witness stand of the request by the management of the bank that under such circumstances criticism of supervisors for violation of rules should be given to management.

The court in Pittsburgh Steamship Co. v. N L. R. B., 180 Fed., (2d) 731, affirmed 340 U. S. 498, considered a similar situation in which more extensive violations of the express instructions of the employer by a few minor supervisors were concerned and held that these violations could not be imputed to the employer.

The petition for enforcement is denied.


source: Caselaw Access Project

author: Per CURIAM:

license: Public Domain

text:
    STATE, ex rel. PECYK et, Plaintiff-Relators, v. GREENE et, Defendants-Respondents. STATE, ex rel. BROWNLEE et, Plaintiffs-Relators, v. GREENE et, Defendants-Respondents.
    Ohio Appeals, Eighth District, Cuyahoga County.
    Nos. 22997, 22301.
    Decided October 19, 1953.

      Walter & Haverfield, Brownlee & Gamble, Cleveland, for relators, Pecyk and Brownlee.
    Frank T. Cullitan, County Pros., Saul S. Danaceau, Asst. County. Pros., Cleveland, for respondents.
   OPINION

Per CURIAM:

These are original actions in mandamus in this court brought by the relators seeking writs of mandamus directing the respondents, the deputy state supervisors and inspectors of election of Cuyahoga County, Ohio, to have the names of the relators’ candidates for the office of councilman of their respective wards of the City of Cleveland, printed and placed on the official ballot of the City of Cleveland for the next ensuing general election to be held November 3, 1953 and to compel the respondents to certify said electors as duly nominated nominees for the office of councilman of their respective wards as prayed for in the petition. The two cases raising the same issues were consolidated by agreement of the parties.

The stipulations of fact are as follows:

“1. Within the time prescribed by law there was filed in the office of the Board of Deputy State Supervisors and Inspectors of Election the respective nominating petitions of the Relators herein for the office of councilman of the City of Cleveland.
“2. This act on behalf of Relators entitled their names to be placed on the ballot in their respective wards for submission to the electors at the Primary Election, September 29, 1953.
“3. The results of said Primary Election were as follows:
“Ward 2
Steve Suhajcik 2,095
ARTHUR P. STEINMETZ (Relator herein) 1,178
Joseph Morrow 870
“Ward 3
Joseph E. Flannery 3,234
DANIEL LINK (Relator herein) 527
William D. McE'lroy 231
“Ward 21
David C. Murphy 1,866
ERNEST C. T. SANTORA (Relator herein) 991
Ray Jablonowski 640
Joseph Nosan 135
“Ward 28
Joseph W. Kovach 2,104
ANTHONY PECYK (Relator herein) 1,497
Richard Hart 493
“4. At a Special Election held September 29, 1953 there was submitted to the electors of the City of Cleveland a proposed charter amendment to the Charter of the City of Cleveland in the form as set forth in and identified as ‘Exhibit A,’ attached hereto and made a part hereof.
“5. Said charter amendment received a majority of the votes cast thereon.
“6. The abstract of said Special Election was certified to the Secretary of State under date of October 3, 1953.
“7. The repealed Section 10, The Charter of the City of Cleveland, Chapter 3, provided as set forth in and identified as ‘Exhibit B,’ attached hereto and made a part hereof.
“8. In each of the election contests involving Relators, the candidate receiving the largest number of votes also received a majority of the votes cast for the office of councilman.
“9. Under date of October 8, 1953 the Board of Deputy State Supervisors and Inspectors of Election ruled that the said charter amendment applied to the Primary Election held September 29, 1953, consequently Relators were not declared nominated.”

Exhibit A as referred to in paragraph 4 of the foregoing stipulation being a copy of the Official Questions and Issues Ballot presented to the electors of Cleveland at the special primary election held.September 29, 1953 is as follows:

CITY OF CLEVELAND
PROPOSED CHARTER AMENDMENT
SEC. 10. SELECTION OF CANDIDATES
A majority vote is necessary for passage
VOTE BALLOT WITH AN X
Shall existing Section 10 of the Charter be amended for the purpose of nominating officers to be elected at the General Election in the year 1953 and thereafter to read as herein set forth. This amendment if approved by a majority of the electors voting thereon at the Special Election, September 29th, 1953 shall become a part of the Charter of the City of Cleveland, effective as of the date of the certification of the abstract of said election to the Secretary of State by the Board of Elections as provided by law, and Section 10 of the present charter shall thereby be repealed.
SECTION 10. SELECTION OF CANDIDATES
- No -
The number of candidates for any office at any regular municipal election, in the City at large or in each ward, as the case may be, shall be the two candidates on the primary election ballot receiving the highest number of votes at the primary election. Provided, that if any candidate at a primary election shall have received a majority of all of the votes cast for such office at the primary election he shall be the candidate for such office at the regular municipal election. In case there shall not be for any office more than two persons who shall have filed petitions as provided for in this charter, the said persons shall be the candidates at the regular municipal election and the primary for that particular office shall not be held. The name of each person who is nominated in compliance herewith shall be printed on the official ballot at the general election and the names of no other candidates shall be printed thereon.

The Charter of the City of Cleveland, chapter 3. Section 10, as shown by Exhibit B referred to in paragraph 7 of the stipulations of fact provided as follows:

“The number of candidates for any office at any regular-municipal election, in the city at large or in each ward, as the case may be, shall be the two candidates on the primary election ballot receiving the highest number of votes of the primary election. In case there shall not be for any office more than two persons who shall have filed petitions as provided for in this charter, then said persons shall be the candidates at the regular municipal election and the primary for the particular office shall not be held.
“The name of each person who is nominated in compliance herewith shall be printed on the official ballot at the general election, and the names of no other candidates shall be printed thereon.”

Two questions of law are presented to us for consideration and determination—

(1) Is the charter amendment in conformity with the constitution of the State of Ohio?

(2) Does the charter amendment adopted by a majority of the voters at the primary election held September 29, 1953 or, does the charter provision before the adoption of such amended charter govern and control the placing of the names of candidates on the official ballot for the office of councilman to be presented to the voters at the general election to be held November 3, 1953.

The constitutional question will be first considered. Relators claim that, the subject amendment to the Charter of the City of Cleveland is in direct violation of the Constitution of Ohio, Art. XVII, Sec.. 1; and therefore void.

Art. XVII, Sec. 1 reads as follows:

“Elections for state and county officers shall be held on the first Tuesday after the first Monday in November in the even numbered years; and all elections for all other elective officers shall be held on the first Tuesday after the first Monday in November in the odd numbered years.”

Amended Sec. 10 of the Charter, supra, provides in part that, “if a candidate at a primary election shall have received a majority of all of the votes cast for such office at the primary election he shall be the candidate for such office at the regular municipal election.”

The people of the City of Cleveland under the Home Rule Provisions of the Constitution of the State of Ohio contained in Article XVIII, Sections 7 and 9 have the absolute right to change the fundamental law of the city provided such changes are not repugnant to constitutional provisions.

In the case of Reutener v. Cleveland, 107 Oh St 117, paragraph 1 of the syllabus provides:

“The power given by the Ohio Constitution, Section 9, Article XVIII, to the electors of a city to amend their municipal charter, includes the power to repeal or strike out provisions.”

And on page 139, the Supreme Court said:

“To hold valid this system of voting adopted by the people of Cleveland is merely to carry out the plain meaning of the constitutional provision that municipalities shall have all powers of local self-government, and to give effect to the power which rightly takes precedence over all statutes and court decisions, the will of the people, as expressed in the organic law.”

Now it is contended by the relators that the practical effect of the mentioned proviso of the charter amendment is the automatic election of the candidates receiving a majority of the votes cast at the primary election and tantamount to the holding of a general election simultaneously with a primary election involving identical offices as far as those who are affected by the majority proviso are concerned arid consequently in violation of Article XVII, Sec. 1 of the Constitution of Ohio.

In our opinion, this contention of the relators is untenable because it is clear from a reading of the charter amendment that it merely determines the number of candidates for any office at any regular municipal election and provides that the names of each candidate nominated in accordance therewith be printed on the official ballot at the general election and that the names of no other candidates be printed thereon. The proviso alluded to, therefore, does not determine the election of candidates receiving a majority of the votes cast for the office since their names will appear on the official ballot at the general election for a vote of the people and section 13 of the Charter of the City of Cleveland provides for a blank space where voters may write in the names of any other qualified person they may desire to vote for and elect.

Our Supreme Court in Fitzgerald v. Cleveland, 88 Oh St 338 at 357 had the following to say:

“The system or plan to be followed in the nomination and election of the officials of any city is only of interest and concern to the people within the limits of the city, and when governmental powers have been conferred upon the city, it acts within its authority when it adopts its own plan, provided it violates no constitutional requirement.”

We therefore conclude that Section 10 of the Charter as amended is not in conflict with Article XVII, Section I of the Constitution of the State of Ohio.

The question whether the charter amendment, effective from the date of its certification to the Secretary of State, October 3, 1953, governs and controls the placing of the names of candidates on the official ballot at the general municipal election to be held November 3, 1953, despite the fact that candidates were voted on and nominated in accordance with the old Charter provision in effect at the time of the primary election on September 29, 1953, presents a more difficult problem.

There can be no doubt that the charter provided at the time when these relators were voted on at the primary election that “the number of candidates for any office at any regular municipal election — in each ward — shall be the two candidates on the primary election ballot receiving the highest number of votes at the primary election. The name of .each person who is nominated in compliance herewith shall be printed on the official ballot at the general election * * *.”

At the close of the voting on primary day, these relators were duly nominated candidates for the office of councilman of their respective wards and had acquired the privilege of having their names printed and placed on the official ballot at the general municipal election to be held November 3, 1953.

However, on October 3, 1953, the new charter amendment became effective. Its schedule when submitted to the voters for approval stated that “Section 10 of the charter be amended for the purpose of nominating officers to be elected at the General Election in the year 1953 * * (Emphasis ours)

If Section 10 as amended is to be applied to the general election on November 3, 1953 these relators do not qualify as candidates for the office of councilman of their respective wards and their names cannot be placed on the official ballot.

It, therefore, is manifest that if the charter amendment controls the status of these relators for the general municipal election of November 3, 1953, their privileges as candidates at such general election ceased to exist and to that extent the charter amendment would be retrospective in effect.

Constitutions, as a general rule, are interpreted to operate prospectively and not retrospectively unless a contrary intention clearly appears.

8 O. Jur., 172, Sec. 70:

“It is held that, for a constitutional provision to have a retrospective effect, such an intent must be manifest beyond reasonable question, on the face of the instrument.”

In our opinion the schedule to the charter amendment stated a retrospective purpose when it submitted to a vote of the people the question whether existing “Section 10 of the charter be amended for the purpose of nominating officers to be elected at the general election in the year 1953 ” This was voted on simultaneously with the charter amendment. Section 10 as amended, as a consequence, controls the nomination of candidates for the ensuing general municipal election and supplants and supercedes any nominations not in accordance with its specific provisions.

“Constitutions, as well as statutes, are construed prospectively only, unless, on the face of the instrument or enactment, the contrary intention is manifest beyond reasonable question.”

Shreveport v. Cole, 129 U. S. 36.

Relators claim that even though the charter amendment be interpreted to affect a nomination of the relators retrospectively it is void pro tanto because under the general principle of law no legislation for retroactive or ex post facto operation can disturb, impair or nullify vested rights acquired under former law.

That principle of law has no application here for the reason that no person holding office under our system of government has any vested right to the same. Any office created by the will of the people can be abolished at any time by the will of the people. There being no vested right in a public office, can there possibly then be a vested right in the mere nomination to office? The people have the power to give and the people have the power to take away. This, in effect, they did by voting upon the amendment to Section 10 of the charter at the same time at which they nominated officers under Section 10 as it existed prior to said charter amendment.

A comparable question was dealt with by the supreme court in the case of State ex rel v. Schirmer, 131 Oh St 455. In that case, a candidate for Judge of the Common Pleas Court circulated and finally filed with the board of elections petitions for the office which he sought which were sufficient to entitle him under the law then in existence to have his name placed on the ballot. Thereafter, in a special session of the legislature, the law was repealed under which he had filed for the office and the office vacated. A mandamus action was filed to compel the board of elections to place his name on the ballot inasmuch as he had become a candidate prior to the repeal of the law. The court at page 456 in denying the relator’s prayer for a writ, said:

“The court of appeals found that relator by reason of filing such petition acquired no vested, constitutional or other right to have his petition considered by respondents for an office provided for by the repealed section, that such office ceased to exist and had been abolished; and that relator’s name should not, therefore, be placed upon the ballot for an office wnieh had been abolished subsequent to the filing of his nominating-petition and previous to the election covering such office. A writ of mandamus was denied by the court of appeals.”

We wish to emphasize the proposition that this court, in considering the issues here involved, is not concerned with the wisdom of the legislation nor can it substitute its judgment for that of the people of the City of Cleveland who have adopted the charter amendment by majority vote as provided by law. The power resides in the people to change their municipal charter as they see fit, and no court has the right to override a clearly expressed desire of the people except upon a clear showing that such action does violence to some constitutional provision. See State ex rel v. Krause, 131 Oh St 97, bottom of page 100.

It is therefore the unanimous conclusion of this court that the relators have not shown a clear legal right to compel respondents to print and place their names for the office of councilman of their respective wards of the City of Cleveland on the ballot at the ensuing general election to be held November 3, 1953 and that the writ of mandamus prayed for accordingly should be denied. Writ denied. Exception of relators noted.

HURD, PJ, KOVACHY, J, SKEEL, J, concur.


author: By BARTLETT, J.

text:
    GALLOWAY, Plaintiff, v. COLUMBUS-BROAD CORPORATION, d. b. a. BROAD-LINCOLN HOTEL, Defendant.
    Common Pleas Court, Franklin County.
    No. 190207.
    Decided October 11, 1954.
    Samuel L. Zuravsky, Columbus, for plaintiff.
    Hamilton & Kramer, Columbus, for defendant.
   OPINION

By BARTLETT, J.

1. Motion of the defendant for judgment in his favor upon the pleadings sustained.

2. If the allegations of plaintiff’s petition suggest a reasonable inference that the plaintiff himself was negligent or at fault, it then becomes necessary for him in his pleading to negative such inference; otherwise not.

3. In a negligence action, the petition may aver such ultimate facts as to establish, as a matter of law, the contributory negligence of the plaintiff.

4. Where petition of plaintiff averred that he entered the restaurant and bar room of a hotel; that “the room was in a darkened condition,” that he then entered another doorway where there were three or more steps leading down into said restaurant and bar, and there were “no lights upon the stairway”; that he did not see the steps, and that he fell down the steps, causing him to sustain personal injuries, to his damage in the sum of $5000.00; that the negligence of the defendant was the direct and proximate cause of plaintiff’s personal injuries, in defendant’s “failing to keep said stairway or approach lighted,” and “in maintaining said stairway or the approach to said stairway in a darkened condition.” There was no averment in the petition that plaintiff’s injury was caused without the fault or negligence of himself.

Held, the facts stated in the petition suggest a reasonable inference that the plaintiff himself was negligent or at fault, by proceeding in the room “in a darkened condition; and in the absence of an averment negativing such inference, such facts establish, as a matter of law, the contributory negligence of the plaintiff, and require the Court to sustain a motion for judgment on the pleadings in favor of the defendant.”

This is an action for negligence. The defendant filed its answer to the petition of the plaintiff, and thereafter filed its motion for judgment in its favor on the pleading. The essential allegations of the petition necessary to a decision on such motion, are set forth in Syllabus 4 above stated.

“It is the duty of an individual to exercise ordinary, reasonable, or due care for his own protection and safety. Ordinary care is that degree of care which an ordinarily reasonable and prudent person would exercise, or is accustomed to exercise, under the same or similar circumstances. The standard of ordinary care is, in law an unvarying one, but manifestly, what action or inaction will amount to ordinary care depends on the facts and circumstances of each particular case.” 29 O. Jur. Negligence, Sec. 94, p. 543.

“In general, a plaintiff cannot be excused from using due care for his own safety by showing that he relied upon a stranger to do it for him.” Ibid, Sec. 95, p. 547;
“He must not voluntarily expose himself to sudden peril.” Ibid, Sec. 99, p. 555;
“The rule is, — that one who exposes himself to an obvious and appreciated danger, even though he should not appreciate the full extent of the danger, assumes the risk of injuries that may result to him therefrom. * * * One who voluntarily assumes a risk thereby waives the provisions of a statute made for his protection.” Ibid, Sec. 91, p. 536;
“It is one of the fundamental rules of the common law that there can be no recovery for injuries, where it appears that person injured was guilty of contributory negligence, or in other words, where the injury was the result of the united, mutual, concurring, combined, and contemporaneous negligence of the parties to the transaction.” Ibid, Sec. 83, p. 501.
“If the allegations of his pleading (plaintiff’s petition) suggest a reasonable inference that the plaintiff himself was negligent or at fault, it then becomes necessary for him in his pleading to negative such inference; otherwise not.” Myers v. N. and W. Ry. Co., 122 Oh St 557, 558, Per Curiam opinion; Street R. R. Co. v. Nolthenus.
“1. In a negligence action, the petition may aver such ultimate facts as to establish, as a matter of law, the contributory negligence of the plaintiff.” Jacques, Admx., v. Dayton Power and Light Co., 80 Oh Ap 258 (2nd Appellate District);
“Where a night watchman in checking a plant at night took a number of steps in total darkness, though carrying a flashlight, and fell into an unguarded pit left by defendant, an independent contractor, who had been moving heavy equipment in the plant for several weeks, such action constituted contributory negligence as a matter of law.” Burkland v. Darin and Armstrong, No. 23123, Supreme Court.

Motion to certify record filed. Ohio Bar September 13, 1954, p. 683; Plaintiff going up and down stairs in dark, “took many steps in the dark before he missed a tread and fell. He was not lured into the darkness by anything the defendant did.” Motion for instructed verdict sustained. Streeton v. Roehm, et al., 83 Oh Ap 148, 155; Plaintiff, invitee, from a lighted room, opened a closed door “was confronted with total darkness, * * *.” “Stepped in such total darkness beyond the door, to his injury * * * raises an inference of negligence on his part which, in the absence of any evidence tending to refute such inference, will require a directed verdict for the defendant.” Flury v. Central Pub. House, etc., 118 Oh St 154; same directed verdict upheld where plaintiff tenant in building, stepped in a “semi-dark elevator shaft.” Johnson v. Citizens Natl. Bank, etc., 152 Oh St 477.

The Court, therefore, sustains the motion for judgment on the pleadings in favor of the defendant, on the ground that the ultimate facts averred in the petition establish, as a matter of law, the contributory negligence of the plaintiff.

Entry accordingly with exceptions by counsel for plaintiff.


author: By DOYLE, J:

text:
    MARLIN, Plaintiff-Appellant, v. BOARD OF ELECTION OF CUYAHOGA COUNTY, Defendant-Appellee.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 23148.
    Decided April 21, 1954.
    Laurence W. Marlin, for appellant, In Propria Persona.
    Frank T. Cullitan, Pros. Atty., Saul S. Danaceau, Asst. Pros. Atty., Cleveland, for appellee.
    (DOYLE, J, of the 9th District, sitting by designation in place of KOVACHY, J.)
   OPINION

By DOYLE, J:

There was filed in the Common Pleas Court of Cuyahoga County, a petition to restrain the Board of Elections of Cuyahoga County, from placing the name of Walter T. Kinder on the Democratic ballot for the primary election to be held on May 4, 1954, as a candidate for the office of Judge of the Probate Court, full term, commencing February 9, 1955; likewise, to enjoin the said board “from certifying the validity of said declaration of candidacy.”

The petition alleged that:

1. Kinder “is not and has never been a member of the Democratic Party;”

2. He “voted in the primary election of 1948 and declared himself as a Republican;”

3. He “violated §3513.191 R. C., when he swore * * * that he was a member of the Democratic Party;”

4. The Board of Elections violated §3513.191 R. C., “by accepting said declaration of candidacy and not examining their voting records showing said candidate as a registered and declared Republican and not eligible to present himself as a candidate in a primary on the Democratic ticket.”

To this petition, the Board of Elections filed the following motion:

“Now comes the Board of Elections of Cuyahoga County, Ohio, and moves that the petition be dismissed for the reason that neither the plaintiff nor anyone else filed a protest against the candidacy of Walter T. Kinder for the office of Judge of the Probate Court for the term set forth in the petition, as provided by §3513.05 R. C., and for the reason that the facts stated in the petition do not constitute a cause of action nor may injunctive relief be predicated thereon.”

Upon hearing on the motion, the trial court ruled:

“Motion of defendant, Board of Elections * * * to dismiss petition is heard and granted. Petition is dismissed at costs of plaintiff, for which judgment is rendered.”

Appeal has been perfected to this court from the judgment so rendered, with the following assignments of error:

1. The trial court “erred in holding that as a matter of law a protest to the Board of Elections was a mandatory requirement as a condition precedent to the determination of all issues with regard to elections.”

2. The trial court “erred in its refusal to the plaintiff to permit introduction of records of the Board of Elections and examination of the candidate in question.”

1. Recent amendments to the election laws of this state have not rendered obsolete the principles which have pertained for decades, that the declarations of candidates for public office, their qualifications for nomination, and their election, being to the political branch of the government, and that they are not per se the subject of judicial cognizance. The legislative department of government makes the rules, and the executive departments carry them out. Pierce v. Brushart, et al, etc., 153 Oh St 372, and cases cited at pages 379-380.

2. “In the absence of fraud or bad faith, the courts may not override a finding of a board of elections, having jurisdiction of the subject matter, to the effect that a declaration of candidacy and petition of a candidate for nomination to a public office is valid, where no protest against such declaration and petition was filed with such board within the time required by statute.” Ibid, parag. 1 of syllabus.

3. Allegations of fraud, corruption, or abuse of discretion must be specific. Likewise, allegations must be specific in charging a flagrant misinterpretation of a statute or a clear disregard of the statutory law.

State ex rel Maxwell, Pros. Atty. v. Schneider, 103 Oh St 492.

State, ex rel. Crull v. Eidgenoss, 108 Oh St 493.

Koehler Jr. v. Board of Elections, 125 Oh St 251.

State, ex rel. Columbus Blank Book Mfg. Co. v. Ayres, Auditor, 142 Oh St 216.

State, ex rel. Burgstaller v. Franklin County Board of Elections, 149 Oh St 193.

4. Sec. 3515.05 R. C., provides the method for protesting the candidacy of persons seeking party nomination. In so far as pertinent, it is:

“Protests against the candidacy of any person filing a declaration of candidacy for party nomination or for election to an office or position, as provided in this section, may be filed by any qualified elector who is a member of the same political party as the candidate, or by the controlling committee of such party. Such protest must be in writing, and must be filed not later than six-thirty P. M. of the eightieth day before the day of the primary election. Such protest shall be filed with the election officials with whom the declaration of candidacy and petition was filed. Upon the filing of such protest the election officials with whom it is filed shall promptly fix the time for hearing it, and shall forthwith mail notice of the filing of such protest and the time fixed for hearing it, to the person whose candidacy is so protested. They shall also forthwith mail notice of the time fixed for such hearing to the person who filed the protest. At the time fixed such election officials shall hear the protest and determine the validity or invalidity of the declaration of candidacy and petition.”

From the foregoing, it appears obvious that, if an elector desires to challenge the candidacy of a person for the nomination of his party, he must avail himself of his statutory remedies before the board, instead of resorting in the first instance to a court. The exception, and only exception, to this requirement, is where it is claimed specifically that the Board of Elections has been guilty of fraud or bad faith.

As we examine the petition of the appellant, we find nothing to indicate that he had availed himself of his right to protest in writing, to the Board, nor do we find any specific allegation of fraud or bad faith on the part of the Board, or of any of its members. These are necessary allegations in a petition of this character.

The Common Pleas Court had no jurisdiction in this case to enter into the political field and usurp the duties and powers given to another department of government. The Board of Elections has determined the qualifications of this candidate Such qualifications cannot be successfully challenged by inadequate and bare accusations in a petition in court. The accusations must have legal substance. There are none here.

The court properly sustained the motion to dismiss and its judgment will be affirmed.

Judgment affirmed.

HURD, PJ, SKEEL, J, concur.


author: By BAUMANN, J.

text:
    STATE, ex rel. CENTRAL OUTDOOR ADVERTISING COMPANY, INC., Relator, v. LEONHARD, Bldg. Comm., City of Fairview Park, Ohio, et, Respondent.
    Common Pleas Court, Cuyahoga County.
    No. 631102.
    Decided January 12, 1953.

      Edward C. Stanton, Rudolph A. D’Amico, Cleveland, for relator.
    Leonard S. Frost, Cleveland, for respondents.
   OPINION

By BAUMANN, J.

This is an action in mandamus. The relator, an important operator in the field of outdoor advertising, seeks to compel the municipal authorities of the City of Fairview Park to permit the erection of a billboard facing State Route 10 which passes through that city.

The effective zoning ordinance of the City limits the erection of billboards to the retail business district. The board proposed is in that territory. It is further provided by ordinance that no billboard (with minor exceptions) shall be erected within this district until the consent of Council has been obtained. Violation is a criminal offense.

The relator leased ground in the City, and then sought the consent of Council. The refusal of this body is the basis for the instant action.

The relator makes two claims. First, it is contended that the ordinance in its present form is unconstitutional and ineffective. Second, it is argued that even if it be admitted that the ordinance is good, the refusal of Council to issue a permit for the board proposed at this location suggested is an abuse of discretion. The city officials have vigorously opposed both claims.

The subject of outdoor and especially highway advertising has been litigated so extensively that many of the basic legal questions may be considered settled. But the right of the municipal legislative body to retain the final decision in each case is one of first impressions in Ohio.

Let us review fundamental principles. Outdoor Advertising is recognized as a legitimate business. As such the rignt to use property for that purpose is an incident to ownership. Sec. 3180-19 GC. The deprivation or limitation of that right will not be permitted without legal justification.

A municipality is a creature of statute. Its rights include only such as are conferred. So far as billboards are concerned, the statute confers the power to ‘regulate’ their erection.

This power to regulate implies a continued existence of the matter to be regulated. To regulate means to adjust, order or govern by rule, method or established mode, to direct or manage according to certain standards. 36 W & P 687 and cases cited. In the ordinance adopted by the defendant city there is no such rule, no such method and no such established mode. It must follow that the ordinance is not regulatory but an inhibition against a legitimate use of property.

Reverting to the proposition that a municipality is a statutory creature, we find that the legislative body of an Ohio city takes action by ordinance or resolution. Such action in most instances is reviewable by the electorate by referendum. In all instances the courts retain the power to determine whether the legislation is within the purview of the authority granted, and, if it is, whether it is reasonable exercise of that authority, and not a gross abuse of discretion.

The method adopted in this community gives the courts nothing to examine. We could not quarrel with a reasonable regulation affecting all persons equally. But as was said in Schloss Poster Advertising Co., Inc. v. City of Rock Hill, et al., 190 S. C. 92, S. E. (2nd) in passing upon a similar ordinance:

“The danger is that it makes possible arbitrary discrimination and abuses in its execution, depending upon no conditions or qualifications whatever, other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested. * * * Ordinances which thus invest a city council with discretion which is purely arbitrary, and which may be exercised in the interest of the favored few, are unreasonable and invalid. The ordinance should have established a rule by which its impartial enforcement could be secured.”

Holding as we do that the retention of unregulated authority by the city council is invalid, it is unnecessary to pass upon the question of the unreasonableness of Council’s permit refusal. Although not unduly impressed with the City’s claims or prospective peril, our finding for the plaintiff is predicated solely upon the invalidity of the ordinance.


text:
    PAYNE CORPORATION, Bankrupt, In re.
    United States District Court, Northern District of Ohio, Eastern Division.
    No. 69781.
    Decided November 5, 1953.
    Morris R. Blane, Cleveland, for trustee, Henry B. Johnson.
    Vincent Pornes, Cleveland, for the State of Ohio.
   OPINION

By FRIEBOLIN, Referee in Bankruptcy.

The question to be determined, in a sentence, is: Is the sales tax statute of Ohio applicable to a sale at public auction of the property of the estate by the trustee in a strict (liquidation) bankruptcy proceeding, pursuant to the order of the Bankruptcy Court?

The Ohio Tax Commission claims that the state statute is applicable and accordingly, by the public sale by the trustee of a truck, the tax upon the amount of the sale must be paid. The trustee claims that the statute does not apply.

The facts are not in dispute. In this strict bankruptcy proceeding, the trustee, pursuant to the order of this court, sold a truck belonging to bankrupt’s estate at public sale for cash. The sale was confirmed by the court. The trustee did not collect the sales tax as required of vendors under the statute. The vendee, having had the title assigned to him by the trustee as provided in Sec. 70g of the Bankruptcy Act, applied to the county clerk for a new certificate of title as provided in §4505.06 R. C. (formerly §6290-5 GC). It was refused by the clerk upon the request of the Tax Commissioner because of the failure of the trustee to collect and pay the sales tax. Thereupon, the trustee filed an application for a writ of assistance in completing his transfer of title to the purchaser and for an order upon the Tax Department and the clerk of courts to show cause why a certificate of title to the trustee should not be issued without payment of the tax.

The answer is not without difficulty for reasons later appearing. It seems to me that the problem may be most clearly considered under the following heads:.

1. Does the Ohio Statute by its terms or necessary implication, cover a liquidation sale by a trustee in bankruptcy pursuant to order of the Bankruptcy Court?

2. If it does include a tax upon a sale by the trustee in a liquidation proceeding as distinguished from a sale in the course of conducting the bankrupt’s business, is it valid in this respect in view of the paramount provisions of the Bankruptcy Act as enacted by Congress?

If the tax is invalid as to such sales, it would seem to follow that neither the trustee nor his purchaser would be liable.

The Ohio Sales Tax Act (§5739.01 et seq. R. C., formerly §5576-2 et seq. GC), is rather long. It differs in some respects from similar statutes in other states which have been considered in the reported cases. For that reason the authority of the reported cases is difficult of appraisal. All of the statutes, however, are fundamentally directed to collecting a tax upon retail sales of personal property made within the state. As to what persons are to be held liable: seller or purchaser, or both; the kind of sale and of what property and how collection is to be enforced and against whom, the various statutes differ. For this reason the cases and their holdings differ in some particulars.

Before proceeding to consideration of the applicability of the Ohio Statute to sales by a trustee in a liquidation bankruptcy proceeding, it will be helpful to mention a section of the U. S. Code enacted in 1934 which, in my judgment, helps to explain and probably to distinguish some of the cases.

Remembering always that in the case at bar, the tax is claimed to be applicable to a public sale by a trustee in a liquidating bankrupt proceeding, 28 U. S. C. A. Sec. 960 provides, in substance, that officers and agents who, pursuant to the order of a Federal Court conduct the business of a debtor, shall be liable for Federal and State taxes for which the debtor would be liable in the conduct of such business. This section was enacted because of conflicting decisions upon the subject.

It follows that if the Ohio Statute can be held to include trustees in bankruptcy, then sales by them while conducting bankrupt’s business would be subject to the tax by reason of this Congressional enactment (1934) even as the Bankruptcy Act is a Congressional enactment of a preceding date (1898).

Does the Ohio Statute include sales by a trustee in bankruptcy regardless of whether the sale was in the conduct of bankrupt’s business or a liquidation sale?

Parenthetically it may be said that there is no contention by the Tax Commission that this sale was made by the trustee in the conduct of bankrupt’s business. It was a sale at retail and what is described as a “casual and isolated sale by a vendor — of a motor vehicle,” as provided in §5739.02(7) R. C., which is a sale not exempted from the tax.

The Tax Commission contends that a trustee in bankruptcy is included among the “persons” affected by the Statute. The applicable section, §5739.02 R. C. reads:

“Persons includes individuals, firms, partnerships, joint stock companies, corporations and combinations of individuals of any form.”
“Vendor means the person by whom the transfer effected or license given by a sale is or is to be made or given . . .”

The Tax Commission contends that a “trustee in bankruptcy is a ‘person’ within the meaning of the above definition.” (Commissioner’s brief p. 3) It relies chiefly upon People ex rel v. Graves decided in 1936 by the Appellate Division of the New York Supreme Court, 291 N. Y. S. 354. This case is not in point because the statute involved defined the word “person” as including “any individual, association, executor, administrator, receiver, trustee, or other fiduciary." This obviously is much more inclusive than the Ohio Statute. More to the point, the tax was levied upon sales by a trustee in bankruptcy conducting the bankrupt's business in a composition proceeding, not a liquidation sale. Since the trustee in bankruptcy was found to be included in the definition, the tax in this case would in any event be valid under 28 U. S. C. A. Sec. 960.

It is worthy of note that in this Graves case, as in others where a sales tax was upheld upon a bankruptcy receiver or trustee conducting the bankrupt’s business, the court’s reasoning was based upon an intent of the legislature not to relieve receivers and trustees from the tax which would give them an advantage over others engaged in like occupations and business at retail.

The Tax Commission cites one other case: Bird and Jex Co. v. Anderson Motor Co. (1937) 92 Utah 493. This was a case involving a sales tax upon sales by a state court receiver, not a case in bankruptcy. Another case involving a state court receiver might have been cited.

Opposed to these decisions there are two decisions in the U. S. Court of Appeals, Second Circuit. The first, In. Re Flat-bush Gum Co. (2CA ’34) 73 F. 2d 283, involved a N. Y. state Sales Tax Act. It defined the word “persons” in words almost identical with that of the Ohio Statute. The court below had held. that a sale by a receiver of bankrupt’s personal property at public auction was not subject to'the tax because a receiver was not included in the definition of “persons” and also, the court doubted the validity of a sales tax imposed upon a sale in liquidation by a bankruptcy receiver. The Court of Appeals affirmed upon the first ground, stating that if the statute in defining the word “persons” had included a receiver in bankruptcy “the rather baffling question” of the validity of a state tax in a bankruptcy sale would be an issue. It does say that the coverage of taxing acts are not to be extended by implication.

In a later case the same Court of Appeals adhered to this ruling and applied it to a receiver who continued the bankrupt’s business. Also it is interesting to note that the Leavey case, upon which the department so heavily relies in a point later discussed, approves these decisions.

In the case of Re Messenger Merchants Lunch Rooms (7CA ’36) 85 F. 2d 1002, the Seventh Circuit Court of Appeals speaking through Judge Lindley, after the enactment of 28 U. S. C. Sec. 960 approved the holdings in Re Flatbush Gum Co. supra, and Re Browning King & (Jo. supra, repeating the frequent statement by the courts that a tax cannot be extended by implication. In the light of these decisions, I am constrained to follow what I believe to be the sounder rule and to conclude that a trustee in bankruptcy in a sale in a liquidation proceeding is not covered by the Ohio Statute. What is later said herein upon the next question, also has some relevance.

However, the Tax Commission calls attention to a rule promulgated by the Tax Commissioner in 1948, prior to the last amendment of the Ohio Sales Tax Act. It provides (See Commissioner’s brief herein p. 7) that:

“All sales made by officers of a court, pursuant to court orders, are casual and isolated sales, with the exception of sales made in connection with the liquidation or the conduct of a regular established place of business . . .”

The contention is made, that this rule (which is not too clear) should be regarded as the law, since the Commission has so regarded it and especially, since the legislature amended the Sales Tax Act thereafter and did not disturb the Rule (Commissioner’s brief herein, p.p. 7 & 8).

As I read the rule, it purports to say that, although the statute does not in its language include receivers and trustees, let alone in a liquidation proceeding, by this rule that part of the statute which excludes liability for a sales tax upon casual and isolated sales except sales of a motor vehicle, shall be construed to include a sale at public auction by a liquidation trustee in bankruptcy pursuant to the order of the Bankruptcy Court in the administration of the Bankruptcy Act.

Conceding that administrative bodies may make rules to carry out the provisions of an act of the legislature, I seriously doubt that, especially in administering a tax statute, such administrative agency can properly and legally extend the statute’s applicability to persons not within the definition of the legislative act. The fact that the legislature amended the Sales Tax Act after the promulgation by the Tax Commissioner of a Rule so radically extending its coverage, is as much an argument against its validity as for it — conceding that the legislature ever heard of it. It would seem more likely that, if the legislature had any intention to adopt such a construction of this Tax Statute, invading as it would, a field in which Congress has enacted a Bankruptcy Act which provided for the sale of the property of bankrupts and for distribution of its proceeds pursuant to such Act, it would have said so in no uncertain terms.

As has already appeared from quotations in cases heretofore cited, there seems to be no case exactly in point.

The Tax Commissioner cites in Re Leavey (2 CA ’36) 85 F. 2d 25, 31 A. B. R. (N. S.) 698. The opinion of the court in this case gives considerable support to the contention of the Commissioner. It was the same court which decided the Flatbush Gum case and the Browning King & Co. case, supra, which it approves but distinguishes. Strangely, the Leavey case has not been cited with approval in any case involving a tax upon a sale by a bankruptcy receiver or trustee. It was distinguished in a recent case involving a California sales tax upon liquidation sales by a trustee.

“In approaching the interpretation of statutes imposing taxes, it should be recognized at the outset that the rule of strict construction should be followed, and that where there is ambiguity or doubt as to legislative intent, the doubt should be resolved in favor of the person upon whom the burden of taxation is sought to be imposed, the language to be employed in a taxation statute should not be extended by implication beyond its clear import.

In the Leavey case, a trustee in a liquidating bankruptcy proceeding had sold the property of the estate at public auction. Payment of a sales tax as provided in a Municipal Sales Tax ordinance, was demanded by the authority, in the Bankruptcy Court. The trustee had not collected the tax. The Court of Appeals in reversing the District Court, with a rather sketchy discussion of the entire tax ordinance, held that the trustee was one of the persons affected since, in the definition of “persons,” estates, Receivers, and Trustees were expressly named.

The court then, proceeding again to avoid the “rather baffling issue,” held that the tax applied to a sale by a liquidating bankruptcy trustee because it was not a tax liability of the vendor (trustee), but of the consumer, and the vendor (trustee) was merely a collector.

The court proceeded on the fact, admitted by the parties, that this was a retail sale within the definition of the ordinance. (It was clear, that the word “trustee” was included in the definition.) Although the tax was on the sale by the trustee, “the rather baffling issue” was not reached, said the court, because the “Sales tax is not imposed upon the vendor (the trustee)” for, according to section thereof it is to be paid by the purchaser to the vendors:

“* * * for and on account of the city of New York and the vendor shall be liable for the collection * * * and the vendor shall have the same right in respect to collecting the tax from the purchaser as in respect to non-payment of the tax by the purchaser as if the tax were a part of the purchase price.”

Again the Court said:

“In any event, the fact that he (the trustee) only collected the purchase price and did not require the purchaser to pay the tax was a matter of his personal choice.”

Again the court said:

“A tax on a sale by a trustee under an order of court for purposes of liquidation if payable directly and primarily by him would doubtless be a burden on a governmental instrumentality, for a judicial sale in liquidation of a bankrupt estate would in a peculiar sense involve the exercise of a federal function. Indeed without the exercise of such a function and the power thus to dispose of assets administration in bankruptcy would hardly be practicable. A tax on the vendee in connection with the sale in liquidation of a bankrupt’s estate is at least in a formal sense quite different from a tax in which the vendor is primarily liable.

In any event the court sustained the validity of the tax not only because “trustee” was expressly included as a “person” covered by the sales tax ordinance, but also because the vendor (trustee) was not primarily liable for the tax — although by his sale pursuant to the Bankruptcy Act, he did become liable.

It seems to me that in California State Board v. Goggin, Trustee (9CA ’51) 191 F. 2d 726; affirming 92 F. Supp. 636 cert, denied 342 U. S. 903, the court comes closer to the realities, the real issue, involved in this class of cases although the Calif. Sales Tax Statute varies in some respects from that of Ohio also from that of New York in the cases heretofore mentioned.

In this case the receiver in bankruptcy had conducted the business (in a Chapter XI proceeding), made retail sales and paid sales taxes thereon. As trustee he conducted the business until March 22, 1946, and paid the sales tax. On March 29, by order of the court, he sold the assets of the bankrupt at retail by public auction: five trucks belonging to bankrupt. He did not add a sales tax, did not report them and refused to pay them.

The trustee petitioned for an order to enjoin the State Board from enforcing the assessment of the tax. The referee issued the injunction and the District Court affirmed. (92 F. Supp. 636.)

First, the Court of Appeals held that the statute which provides that no District Court shall enjoin any suit to enjoin collection of any state tax where there is an efficient remedy in the state court (28 U. S. C. A. Sec.-1341) did not abridge the power, specifically granted to the Bankruptcy Court to enter any judgment necessary to enforce the provisions of the Bankruptcy Act. (Sec. 2a [15] of the Act.) The process of dealing with state tax assessments, the court said, is one essential to the administration of a bankrupt estate.

The next question was: Does the California Sales Tax apply to liquidation sales made by a trustee in bankruptcy pursuant to court order? (p. 729.)

Referring to the Sales Tax Statute, the court noted that since its prior decision, the legislature had enlarged the definition of “persons” to whom the statute applied, by adding the words “trustee” and “the United States.”

In the statute the word “retailer” was defined, among others, as every person engaged in the business of making sales at retail of personal property. (This was held to inciude casual and incidental sales.) The contention was that the amendments imposed the tax upon liquidation sales made by a trustee in bankruptcy. Apparently, it was contended (p. 729) that liability was fixed by 28 U. S. C. A. Sec. 960, formerly Sec. 124a.

The court emphasizes that the question is not whether the tax applies to a trustee in bankruptcy (in any instance) but whether it applies to sales made by him in the liquidation of the bankrupt’s estate. (Emphasis by the court.)

The court then refers to the construction oí the statute by the state court, to the effect that the tax measure is an excise tax for the privilege of conducting a retail business measured by the gross receipts from sales. It continues:

“More tenable is the construction that the California tax, as indicated by the California, courts is geared to the federal statute which is general in nature, making officers appointed by the United States courts liable for state taxes if they conduct any business. A harmonious application of the federal and state laws here involved leads us to the conclusion that in making the sale of the assets of the bankrupt estate pursuant to court order for the purpose of liquidation, the trustee was not subject to the California sales tax.”

Again this paragraph:

“It would be unwise to foster conflict where Congress has manifested a desire for harmony. Any such conflict would necessarily entail an application of the fundamental doctrine that laws enacted pursuant to power delegated to the United States Congress under the Constitution are the supreme law of the land, and state laws inconsistent therewith are to that extent invalid. Our conclusion, however, adheres * * * but also to the doctrine that where problems in the sphere of dual sovereignty are involved, legislation should receive a construction which permits both to function with a minimum of interference with the other.”

While the majority seems to hesitate to state a firm conclusion on “the rather baffling issue,” Judge Fee in a concurring opinion boldly states that the Bankruptcy Law passed by Congress is paramount; that Congress has thus given the Bankruptcy Court plenary powers by way of liquidation of assets; that a tax on a liquidating sale, whatever form is taken, is a tax on the process of the court in. liquidating assets in accordance with the constitution.

He continues:

“In another aspect it may be considered as a license fee required of federal officers to make liquidation. In either event, it is void. A tax may be levied upon specific property in the hands of a trustee. Swartz v. Hammer 194 U. S. 441. But no state is empowered to levy taxes upon the process of the courts of the United States or to impede the officers of the court in an essential judicial function.”

I have read both the Ohio and the California statutes. While there is a considerable difference between their various provisions, fundamentally they have the same purpose in that they provide for an excise tax (not a tax on property); a tax on sales including casual sales at retail.

It is evident that the court in the Goggin case found that the tax vyas not merely on the consumer with the vendor merely the collector ■ (as in the Leavey case) , But the court gives no weight to that. It indulges in no exercise in semantics in attempting to find that the vendor or consumer is primarily liable — as in the Leavey case — as a ground for denying applicability to a trustee in bankruptcy. The court goes beyond that and construes the state Sales Tax in a way that will gear it to the federal statutes enacted by Congress: not only 28 ü. S. C. A. Sec. 960 but the Bankruptcy as well.

Following the reasoning of this decision, I am constrained to conclude that, if I am wrong in my previous conclusion (that a bankruptcy trustee is not included in the “persons" whose sales are subject to the tax), the Ohio Sales Tax statute is invalid in respect to liquidation sales by such trustee of a bankrupt’s personal property, as contrasted with such sales while conducting the bankrupt’s business.

3. The Commissioner relies heavily upon the decision in Leavey, supra in which the New York City Ordinance was held to apply to a bankruptcy trustee because it was a tax upon the consumer (vendee) and not upon the vendor (trustee). He contends that the Ohio Tax is on the consumer and the vendor a mere collector. In his brief (p. 11) he says:

“It should be pointed out that in the instant case the trustee does not even have the responsibility of collecting the tax since this is the duty of the clerk of courts. The purchaser and not the vendor is liable for the tax and his liability is the same as for any other purchase he makes in this state."

A reading of the entire Ohio Sales Act will show that the vendor’s liability is hardly so casual. In fact, it is evident that the Commissioner looks chiefly to the vendor in the payment of the tax.

A considerable number of sections rather clearly disclose that the vendor is liable, certainly as much liable as the consumer. The vendor is not secondarily liable, if by that is meant that the consumer must first be looked to for payment. The vendor is liable whether he collects the tax or not. In fact, the vendor is liable in some instances where the consumer is not.

We have the statement of the Supreme Court of Ohio that by the enactment of §5546-13 GC (now §5739.10 R. C.), a tax levy of 3% upon vendors was provided in the Ohio Sales Tax Act. State ex rel v. Evatt (’44) 144 Oh St 65, 39 O. O. 4. By this enactment, payment of the tax by the vendor was made doubly certain; he could reduce his liability by credits of receipts from consumers.

If the consumer fails to pay the tax, the Commission must first issue assessment against the vendor. Sec. 5739.13 R. C.

Below we have briefly listed most of the pertinent section of the Ohio Sales Act.

4. It would seem that the fact that in the case before us the tax is attempted to be collected by the clerk of courts, does not save it from invalidity; it is merely an indirect method of collecting a tax on a sale made by a liquidating trustee in bankruptcy. If such tax is invalid because it is a tax on a liquidation sale rather than upon a sale where the trustee is conducting the bankrupt’s business (28 U. S. C. A. Sec. 960), it should not be permitted to be enforced by any indirect method. In effect, by §4505.06 R. C. — the clerk is made the enforcing officer of the tax instead of the commissioner. Thereby the vendor (trustee) is prevented from giving a clear title to property which he has sold by way of a sale upon which no tax may be levied.

It should follow that, if the liquidating trustee in bankruptcy is held to be not a vendor in respect to such sale (whether because not included in the definition or because not included in 28 U. S. C. A. Sec. 960) the tax cannot be rightfully collected by any indirect method.

For the reasons stated I conclude:

1. That by reason of omission of a trustee in (liquidating) bankruptcy in the definition of “persons” in the Ohio Sales Act, this act does not apply to sales by the trustee pursuant to the order of the Bankruptcy Court for the purpose of liquidation as distinguished from sales in the conduct of bankrupt’s business.

2. If, contrary to the above conclusion, it should be found that such sales are within the provision of the Sales Tax Statute, I conclude that such statute, in this respect, is invalid for the reason that it interferes with the administration of the Bankruptcy Act by the Bankruptcy Court and is contrary to the purpose of Congress, as evidenced by 28 Ü. S. C. A. Sec. 960, to restrict the validity of states taxes, payable by trustee for their actions during the administration, to sales made by the trustee while conducting the bankrupt’s business

An order will be entered enjoining the Tax Commissioner and the Clerk of Courts from collecting the tax here in question.

An exception will be noted on behalf of the parties aggrieved.

      . Sec. 70g. “The title to property of a bankrupt’s estate which has been sold, as herein provided, shall be conveyed to the purchaser by the trustee.”

      . Code Sec. 4505.06 unnumbered paragraph 3: “The clerk, except as provided in this section, shall refuse to issue a certificate of title unless prepaid tax receipts required by section 5739.03 are presented . . .”

      . Having read many cases on the subject, I can agree with what the 8th Circuit Court of Appeals said in Kansas City v. Johnson (1934) 70 F. 2d 360 in which an equity receiver in Federal Court was' appointed for the purpose of carrying on the debtor’s business of selling gasoline. The court said, in holding that a tax on the sale of gasoline was valid, that the pertinent cases made many fine distinctions and presented subtle arguments; that in some cases it was held that the tax was to be paid by the consumer and collected by the distributor; in others they provide that the tax shall be paid by the distributor; these are distinctions without a difference because in all cases the tax must ultimately be paid by the consumer. The purpose of such statutes is to tax the gasoline handled and sold within the particular states.

      . 28 U. S. C. A. Sec. 960, formerly Sec. 124a: “Any officers and agents conducting any business under authority of a United States Court shall be subject to all federal, state and local taxes applicable to such business to the same extent as if it was conducted by an individual or corporation.”

      . 24 A. L. R. 2d 1219. And see Kansas City v. Johnson (8CA ’34) 70 F. 2d 860, decided prior to 28 U. S. C. A. Sec. 960. The definition of “persons” whose sales were subject to the sales tax was held broad enough to include a federal (equity) receiver who carried on the debtor’s gasoline business although receivers were not' expressly mentioned in the definition.

      . For some reason, not apparent, the court devotes • much of its opinion in criticizing the decision in Flatbush Gum Co. — later herein discussed — although in the latter case the statute did not include a trustee in terms and the trustee did not conduct bankrupt’s business: two critical facts in the decision. The Commission in its brief (pp. 4 & 5) has entirely overlooked and failed to note these two vital differences in the two cases.

      . In this case, the trustee had paid the tax and the purchaser who had paid the trustee, sued for a refund.
      In the ease of In re Leavey (2 CA ’36) 85 F. 2d 425, cited by the Commission on another point, a trustee in bankruptcy was held to be included in “the definition of persons.”

      . The court said further: “A privilege tax such as this, is eventually passed on to the consumer and is reflected in the selling price. If a trustee who continues the business of the bankrupt estate is immune from the tax, he may sell his merchandise at the same price as his competitior and retain the tax or undersell * Jfe * >y

      . In this ease the word “persons” was defined to include “estates or trustee.” But the state court receiver had apparently sold in course of business and the court held that the tax was “imposed on all sales at retail, upon all sales made to a purchaser. The Tax is imposed upon the sale, the transaction, and not upon the seller as such.”

      . White v. Moore (’35) 46 Ariz. 48. (state court receiver held included but not of a bank.) Archer v. Arnovitz (’37) 92 Utah 549. (a state court liquidating receiver who operated the business.)

      . “Persons” to include “Individuals, co-partnerships, societies, associations, joint stock companies, corporations, and any combinations of individuals.” N. Y. Consolidated Laws Ch. 60 Sec. 390.

      . Re Flatbush Gum Co., (D. C. N. Y. 1934) 6 F. Supp. 909 holding that the persons covered cannot be enlarged by implication to include the trustee in bankruptcy; and it doubted the validity of a state sales tax imposed upon a sale in liquidation by a bankruptcy receiver.

      . Re Browning King & Co. (2CA 1935) 79 F. 2d 983; reported as so holding, by Judge Lindley in Re Messengers Merchants Lunch Rooms (7CA ’36) 8.5 F. 2d 1002.

      . Re Leavey (2CA ’36) 85 F. 2d. In this case the Second Circuit, construed an ordinance in which “Persons” was defined as. including “estates, executors, administrators, receivers, trustees, or any other person acting in a fiduciary capacity; it affirmed its prior decisions referred to above which refused to extend the class of “persons” covered by the statute by implication.

      . The statute includes as “persons” affected: individuals, partnerships, and corporations.” The court also cited Reinecke v. Gardner 277 U. S. 239 (Excess profits tax) and U. S. v. Whitredge 231 U. S. 144 (receiver operating business).

      . The Supreme Court of Ohio in McNeil, assignee v. Haggerty (1894) 51 O. S. 255, held that a statute requiring a trustee holding property in trust, to list the same for taxation, does not include an assignee of an insolvent whose estate is being settled in the Probate Court and under its orders, (p. 266) A later case, French v. Bole (1901) 64 O. S. 323, turns on the fact that the assignee operated the business as a going concern with a view to returning it to the debtor, (p. 340)
      Upon the general rule, see also State ex rel v. Evatt (’44) 144 O. S. 65, 29 O. O. 4, a sales tax case, in which the court said (p. 101):

      . It was merely cited with approval but no discussion, in Re Bedford v. Bank (’39) 104 Col. 311, involving the right of a state to collect from a National Bank, a service tax on a safety deposit box, a business held to be separate from and not connected with its banking.

      . Re West Coast Cabinet Works (D. C. Cal. 1950) 92 F. Suppl. 638, 649 affirmed in Calif. State Board v. Goggin (9CA ’51) 191 F. 2d 726; cert. den. — The District Court gives an extensive review of all relevant cases. With respect to the Leavey case it says that the Court of Appeals had held the Municipal Tax imposed on the consumer, and the vendor merely the collector; that the reasoning was based upon that premise.

      . N. Y. Local Laws 1934, p. 166, No. 25 Sec. 2; also found in New York City Charter Administrative Code. Annotated. E. 41-220, et seq.

      . See ante, Note 11.

      . See Note 15; distinguished on this ground in Re West Coast Cabinet Works, 92 F. Supp. 636, 649; affd. 191 F. 2d 726.

      . Whether we agree or not with the courts findings, it must be clear that it proceeded on the premise that the vendor (trustee) was a mere collector, and as a mere collector he had the choice— “the personal choice” — whether or not to collect it from the purchaser. As will appear later, the Ohio Sales Tax leaves no such choice. In fact, if he fails to collect it from the purchaser, he is guilty of a punishable offense. RC 5739.29 and 5739.99.

      . See Note 1, supra, where the court referred to the courts’ making many nice distinctions and presenting subtle arguments; that in some cases the tax was held to be paid by the consumer and collected by the distributor (vendor); these are fine distinctions without a difference because in all cases the tax must ultimately be paid by the consumer; the purpose of such statutes is to tax the gasoline handled and sold within the state.

      . State Board v. Hoteler, (9CA ’52) 131 F. 2d 386. In this case, although the state Supreme Court had construed the state statute taking retail sales as including “casual and incidental sales,” the Court of Appeals, referring to 28 U. S. C. A. 960, held that the trustee in a liquidation sale and not carrying on the business, could not be classed as a “retailer.”

      . Cal. Stats. 1945, Ch. 926 Sec. 1: “persons” includes any individual, firm, co-partnership, joint venture, associations, social club, fraternal organizations, corporations, estates, trust, business trust, receiver, trustee, syndicate, the United States, this State, any county, city and county, municipality, district or other political subdivisions of the state or any other group or combination acting as a unit.”

      . The Calif. Act says little about the liability of the vendee. But it makes it unlawful (misdemeanor) for the seller to assume or absorb the tax.

      . Cogen v. Glanders (’51) 156 O. S. 263, 46 O. O. 125, where the vendor is held liable for the tax based upon the price not only of materials furnished (which is taxable) but also upon the value of services rendered in connection with that material.

      . Rev. Code Sec. 5739.02: An excise tax is levied on each retail sale of personal property. Sec. 5739.02 B: The tax does not apply (10) Casual sales by vendor not in business except as to sales of motor vehicles; (11) Sales not within the taxing powers of this state under the constitution of the United States. See. 5739.02: Tax to be paid by consumer to vendor except that the Tax Commissioner may authorize the vendor to prepay the tax and waive the collection of the tax from the consumer. Sec. 5739.02, there is levied upon the privilege of engaging in the business of making retail sales an excise tax of 3% ... . (this places it upon a vendor only.) If the vendor does not have adequate records of receipts the tax commissioner may refuse the vendor’s return and determine the tax upon the basis of test checks, etc. (In this section it is provided that it does not affect any duty of vendor nor the liability of any consumer.) Sec. 5739.12. Semi-annual Return by Vendor. This section requires a return by the vendor showing “the amount due from the vendors to the State for the period covered.’’ Failure by the vendor to file a return, is penalized by payment of $1.00 for each day “as revenue arising from the tax imposed by Sec. 5739.01 to 5739.31” (There is no such liability upon the consumer) See. 5739.13: Liability of Vendor and consumer. If vendor fails to collect or fails to cancel prepaid receipts, he shall be personally liable. If the consumer refuses to pay vendor, he shall be personally liable. “The Commissioner may make an assessment against such vendor or consumer.” “The Commissioner shall first issue assessments against the vendor, unless it is shown that the consumer refused to pay . . . shall not be considered an election of remedies nor a bar to an assessment against the consumer . . .” Sec. 5739.14 Sale of Entire business. Sec. 5739.17. Retail Sales License — not applicable to receivers or trustees in bankruptcy.


text:
    HALL BROS, et, Plaintiffs-Appellants, v. CLEVELAND (City) et, Defendants-Appellees.
    Ohio Appeals, Eighth District, Cuyahoga County.
    No. 22859.
    Decided November 23, 1953.
    James A. Chiara, Cleveland, for plain tiff s-appellants.
    Joseph H. Crowley, Director of Law, Charles W. White, Asst. Director of Law, Cleveland, for defendants-appellees.
   OPINION

Per CURIAM:

This appeal from a judgment of the Common Pleas Court on questions of law involves the validity of an ordinance of the city of Cleveland which by its terms provides that establishments engaged in the slaughtering of live stock for human consumption located outside the city limits, when rendered meat inspection services by the city, shall pay the reasonable costs of such inspection.

The action was commenced by fourteen owners of slaughter establishments located outside the city limits of Cleveland who prayed for an order enjoining the defendant, the city of Cleveland, and two of its officers of the Cleveland Health Department in charge of the administration of the Bureau of Meat and Dairy Inspection from charging and collecting fees for inspectional services “customarily rendered” on the ground that the ordinance of the city of Cleveland which requires such fees is discriminatory as against them, in that they are required to pay costs of inspection over and above that required of like establishments located within the city limits. The case was tried on the issues made by the pleadings and stipulated facts. The trial court found for the defendants and entered judgment accordingly.

The single question presented is whether Sec. 3.3710 of the codified ordinances of the city of Cleveland of 1951 is valid and enforcible. Said ordinance reads as follows:

“Sec. 3.3710. Charge for inspection.
“(a) The reasonable cost of inspection, including time consumed and expenses incurred in traveling by bureau employes outside of the city limits shall be paid by establishments rendered inspection services under this ordinance when such establishments are located outside the city limits of the city of Cleveland. When more than one establishment is included in any inspection trip made by bureau employes outside the city limits, the proper proportion of the traveling expenses of said employes shall be paid by each establishment inspected.
“(b) Establishments located within the city of Cleveland rendered inspectional services other than customarily rendered all meat handling establishments shall also pay the reasonable cost of such services rendered, such reasonable cost to be established by a stated list of charges according to a schedule approved by the official charged with the enforcement of this chapter and kept on file at the offices of the bureau of meat and dairy inspection.”

This ordinance classifies establishments such as plaintiffs own and operate. Such establishments are classified according to whether they are located without or within the city limits. It will be noted that the subject of classification is not residents but “establishments rendered inspection services under this ordinance.”

Sec. 3.3702 of the codified ordinance of the city of Cleveland reads as follows:

“Every establishment in which cattle, sheep, swine or goats are slaughtered for sale or in which carcasses, parts of carcasses, meat, meat products, or meat food products, of. or derived from, cattle, sheep, swine or goats are. wholly or in part, canned, cured, smoked, salted, packed, rendered or otherwise prepared for sale which are capable of being used as food for man, shall have inspection under this chapter.”

Plaintiffs, by way of brief and in oral argument, state that they do not object to pay the costs of getting inspectors to and from their establishments from the city limits of the city of Cleveland, but they do object to paying the costs of inspection services rendered while on their premises, although they concede that they cannot sell their products in the city of Cleveland without such inspection. (Stipulations of fact show that meat packers operating their establishments in Cleveland are required to pay the cost of inspection rendered after regular business hours, i. e. after 5 o’clock p. m. and before 8 o’clock a. m.)

We think the power of the city to enact and enforce such an ordinance has heretofore been established by decisions of our Supreme Court. A case which we consider controlling and decisive is City of Dayton v. Jacobs, 120 Oh St 225. Robinson, J., at page 234-5 of the report states:

“Section 3, Article XVIII, of the Constitution of Ohio, confers upon municipalities ‘all powers of local self-government and to adopt and enforce within their limits such local police * * * regulations as are not in conflict with general laws.’ It is and must be conceded by the defendant in error that the preservation of the public health of the municipality falls within the purview of local police power; that the prevention within the municipality of the sale and offer for sale of unwholesome meat for human consumption tends to preserve the public health, and that an official ante mortem inspection of the carcass of the animal and an official approval or disapproval of such animal and carcass from which the meat intended for such sale is obtained are appropriate means of preventing a sale or exposure for sale of' diseased and unwholesome meat.”

Paragraph 3 of the syllabus is as follows:

“The fact that certain slaughtering establishments in a municipality, by reason of the scope of their business, are entitled to receive and do receive a free inspection service and an approval or disapproval from the federal government and therefore do not require nor receive such service from the municipality, and are not charged any inspection fee by the municipality, does not make the exaction by the municipality of a fee for inspection service from establishments which are not entitled to and do not receive inspection service from the federal government and do require and receive inspection service from the municipality invalid because of discrimination.”

Other cases upholding the power of the city to enact such ordinances are Prudential Cooperative Realty Co. v. City of Youngstown, 118 Oh St 204 and City of Cleveland v. Terrill, 149 Oh St 532.

The plaintiffs place great reliance upon the case of State, ex rel. Hanna v. Spitler, 47 Oh Ap 114; 190 N. E. 584 and the case of Douglas Brunner d. b. a. Brunner Meat Packing et al, v. Rhodes et al, etc., case No. 4730, in the Court of Appeals of Franklin County, Ohio (1953) (95 Oh Ap 259).

We think this latter case must be distinguished for the reason that there the Board of Health and not the City Council passed the regulation complained of. In that case on page 9 of the unreported opinion appears the following significant language in reference to the case of City of Dayton et al, v. Jacobs, supra.

“The legislation under consideration in the Jacobs case was a Municipal ordinance and does not reach nor determine the question here presented, namely, the power of the Board of Health by legislation to exact inspection fees from slaughters.”

In Hanna v. Spitler, supra, a different question was presented as indicated by the statement of Guernsey, J., at page 119 of the report as follows:

“It was stipulated by the parties that the only question for determination by the court is whether the defendants (Board of Health of the City of Findley) have the right to refuse to make inspections at the expense of relator of sources of milk supply not within or adjacent to the boundary lines of Hancock County, Ohio, under the terms and provisions of said revised and amended ordinances.”

It is quite evident that the question there determined does not touch upon the issues in this case.

Plaintiffs cite and quote from numerous authorities which, upon examination, we consider inapplicable to the issues here presented.

We are of the opinion that if plaintiffs choose to locate and maintain their establishments outside of the city, a matter over which the city has no control, but desires to sell their products within the city, they must be bound by an ordinance which provides for the payment of a reasonable fee for inspection services necessarily rendered to enable them to offer their products for sale in the city of Cleveland.

It is our conclusion that the ordinance in question is a valid exercise of the police power under the Home Rule Provisions of the charter of the city of Cleveland and must be upheld

For the reasons stated, the judgment is affirmed. Exceptions noted. Order see journal.

HURD, PJ, KOVACHY, J, SKEEL, J, concur.