text:
    BUILDING SERVICE EMPLOYEES UNION, et al. v. GAZZAM.
    United States Supreme Court.
    No. 449.
    Decided May 8, 1950.

      Daniel D. Carmell, Walter F. Dodd, Chicago, 111., for petitioner.
    Alfred J. Schweppe, Seattle, Wash., for respondent.
    Mr. JUSTICE MINTON delivered the opinion of the Court.
   OPINION

It is the public policy of the state of Washington that employers shall not coerce their employees’ choice of representatives for purposes of collective bargaining. Do the first and Fourteenth Amendments to the Federal Constitution permit, the state, in reliance on this policy, to enjoin peaceful picketing carried on for the purpose of compelling an employer to sign a contract with a labor union which coerces his employees’ choice of bargaining representative?

The state answered in the affirmative. An injunction was. issued in narrow terms enjoining petitioners “from endeavoring to compel plaintiff to coerce his employees to join the defendant union or to designate defendant union as their representative for collective bargaining, by picketing the hotel premises of plaintiff * * *.” The Supreme Court of Washington affirmed, 207 P. 2d 699, and we granted certiorari. 338 U. S. 903, 70 S. Ct. 308.

At the time of controversy, respondent employed about fifteen persons at Enetai Inn, a small hotel which he operates in Bremerton, Washington. Just prior to May 1, 1946, representatives of the petitioner union called upon respondent about organizing his employees and asked him to sign a contract with the union which would require his employees to join the union. None of the employees was a member of any union active in the area. Respondent replied that that was a matter for the employees to decide. He gave the union and its representatives permission freely to visit and solicit his employees for membership while he was absent on a brief trip to Los Angeles. Upon his return, the union representatives again approached him about signing a contract. The representatives admitted that they had not secured any members, among the employees, and respondent again replied that it was a matter for the employees. On May 2, 1946, respondent, was advised that the union proposed to have the Enetai Inn placed on the “We Do Not Patronize” list, and a meeting for the purpose of attempting to reach a settlement was suggested. At the meeting held a few days later respondent was represented by his attorney. The union still insisted that respondent sign the contract, and respondent through his attorney still declined to sign on the ground that that would require him to coerce his employees to join a union, contrary to state law.

The union asked for and was granted a meeting with respondent’s employees at which the union representatives might present their case. Six representatives of organized labor attended this meeting, held on May 10, 1946. Eleven of the employees attended. One was a bellboy whose work the union apparently did not wish to have covered. Respondent was again represented by his attorney. The union representatives were given complete and unhampered opportunity to present their arguments for unionization to the employees. No statement was made by anyone on behalf of respondent or the employees. After the union representatives had completed their presentation, all withdrew except the employees who then took a vote as to whether they wished to join the union. Of the eleven voting, nine voted against joining, one was undecided, and the bellboy, whose membership the union did not desire, voted to join. The result was immediately reported to the union representatives and to respondent’s attorney. Several days later respondent was notified that his hotel had been placed on the “We Do Not Patronize” list and pickets began walking in front of his hotel bearing a sign reading: “Enetai Inn — Unfair to Organized Labor.” The picketing was carried on by a single picket at a time .and was intermittent and peaceful.

With the exception of refusing to sign the contract requiring his employees to join the union, respondent had complied with all of the requests and demands of the union. That single refusal was what caused the union to brand respondent’s place of business as unfair. After the picketing started, respondent’s attorney agreed to talk to respondent again to see if he would consider signing the contract. After •consulting with respondent, the attorney wrote the union’s attorney that respondent was willing to negotiate further with the union but would not sign the type of contract that !had been tendered him. The union then offered a contract which provided that present employees should not be required to join the union as a condition of continued employment, but that any employees hired in the future would be required to join within fifteen days or be discharged. The new contract also provided that the union should be the bargaining representative for both union and non-union employees. The second contract was just the first contract in slow motion. Respondent refused to sign it for the same reason he had -refused to sign the previously tendered contract.

The peaceful picketing continued, and on June 29, 1946, respondent filed this suit for an injunction and damages. On the first hearing the trial court granted petitioners’ motion for a nonsuit and dismissed the complaint. The Supreme Court of Washington reversed on appeal. 29 Wash. 2d 488, 188 P. 2d 97. Upon remand the trial court on September 20, 1948, entered judgment for respondent for damages for the “wrongful picketing” in the sum of $500 and permanently enjoined petitioners in the previously quoted language. This judgment the Supreme Court of Washington affirmed on July 1, 1949, by a divided court. 207 P. 2d 699.

The state of Washington has what is sometimes referred to as a “Little Norris-LaGuardia Act,” which provides that no injunction shall issue in a “labor dispute,” as defined in the Act, except in conformity with the provisions of the Act; nor shall any injunction issue contrary to the public policy declared in the Act. No “labor dispute” as determined by the law of Washington was held to exist in this case. There was no injunction against picketing generally. It was held that the objective of the picketing was violative of the public policy against employer coercion of employers’ choice of bargaining representative, and that the picketing should be enjoined on that narrow ground.

Does the injunction, limited as it is to restraining petitioners, from picketing respondent’s hotel for the purpose of compelling him to coerce his employees’ choice of bargaining representative, constitute an abridgement of the right of free speech under the First and Fourteenth Amendments?

This court has said that picketing is in part an exercise of the right of free speech guaranteed by the Federal Constitution. Cafeteria Employees Union, Local 302 v. Angelos, 320 U. S. 293, 64 S. Ct. 126, 88 L. Ed, 58; Bakery & Pastry Drivers & Helpers Local 802 of International Brotherhood of Teamsters v. Wohl, 315 U. S. 769, 62 S. Ct. 816, 86 L. Ed. 1178; American Federation of Labor v. Swing, 312 U. S. 321, 61 S. Ct. 568, 85 L. Ed. 855; Carlson v. People of State of California, 310 U. S. 106, 60 S. Ct. 746, 84 L. Ed. 1104; Thornhill v. State of Alabama, 310 U. S. 88, 60 S. Ct. 736, 84 L. Ed. 1093; Senn v. Tile Layers Protective Union, Local No. 5, 301 U. S. 468, 57 S. Ct. 857, 81 L. Ed. 1229. But since picketing is more than speech and establishes a locus in quo that has far more potential for inducing action or nonaction than the message the pickets convey, this court has not hesitated to uphold a state’s restraint of acts and conduct which are an abuse of the right to picket rather than a means of peaceful and truthful publicity. Thus in Milk Wagon Drivers Union of Chicago, Local 753 v. Meadowmoor Dairies, 312 U. S. 287, 61 S. Ct. 552, 85 L. Ed. 836, 132 A. L. R. 1200, the picketing in issue, considered in isolation, was peaceful, but had been found to be enmeshed with and set in such a background of violence that it was a part of a pattern of violence. This court held that peaceful picketing under such circumstances might properly be enjoined by the state.

In Hotel & Restaurant Employees’ International Alliance, Local No. 122 v. Wisconsin Employment Relations Board, 315 U. S. 437, 62 S. Ct. 706, 86 L. Ed. 946, this court upheld the right of Wisconsin through its Employment Relations Board to issue a cease and desist order against violence in picketing and boycotting by the union involved. Carpenters & Joiners Union of America, Local No. 213 v. Ritter’s Cafe, 315 U. S. 722, 62 S. Ct. 807, 86 L. Ed. 1143, upheld a decree enjoining the union from picketing a cafe having no business connection with the place where the industrial dispute centered. And in Giboney v. Empire Storage & Ice Co., 336 U. S. 490, 69 S. Ct. 684, the court sustained a decree enjoining picketing which was peaceful and informative but was carried on for the purpose of coercing the employer to violate the antitrust law of Missouri.

The public policy of any state is to be found in its constitution, acts of the legislature, and decisions of its courts. “Primarily it is for the lawmakers to determine the public policy of the state.” Twin City Pipe Line Company v. Harding Glass Company, 283 U. S. 353, 357, 51 S. Ct. 476, 478, 75 L. Ed. 1112, 83 A. L. R. 1168.

The state of Washington has by legislative enactment declared its public policy on the subject of organization of workers for bargaining purposes. The pertinent part of this statute is set forth in the margin. The meaning and effect of this declaration of policy is found in its application by the highest court of the state to the concrete facts of the instant case. Under the so-enunciated public policy of Washington, it is clear that workers shall be free to join or not to join a union, and that they shall be free from the coercion, interference, or restraint of employers of labor in the designation of their representatives for collective bargaining. Picketing of an employer to compel him to coerce his employees’ choice of a bargaining representative is an attempt to induce a transgression of this policy, and the state here restrained the advocates of such transgression from further action with like aim. To judge the wisdom of such policy is not for us; ours is but to determine whether a restraint of picketing in reliance on the policy is an unwarranted encroachment upon rights protected from state abridgement by the Fourteenth Amendment.

Petitioners insist that the Swing ease, supra, is controlling. We think not. In that case this court struck down the state’s restraint of picketing based solely on the absence of an employer-employee relationship. An adequate basis for the instant decree is the unlawful objective of the picketing, namely, coercion by the employer of the employee’s selection of a bargaining representative. Peaceful picketing for any lawful purpose is not prohibited by the decree under review. The state has not here, as in Swing, relied on the absence of an employer-employee relationship. Thus the state has not, as was the case there, excluded “workingmen from peacefully exercising the right of free communication by drawing the circle of economic competition between employers and workers so small as to contain only an employer and those directly employed by him.” 312 U. S. at page 326, 61 S. Ct. at page 570, 85 L. Ed. 855.

The Washington statute has not been construed by the Washington courts in this case to prohibit picketing of workers by other workers. The construction of the statute which we are reviewing only prohibits coercion of workers by employers. We cannot agree with petitioners’ reading of this injunction that “whatever types of picketing were to be carried out by the union would be in violation of the decree.” Respondent does not contend that picketing per se has been enjoined but only that picketing which has as its purpose violation of the policy of the state. There is no contention that picketing directed at employees for organization purposes would be violative of .that policy. The decree does not have that effect.

We are of the opinion that Giboney v. Empire Storage & Ice Co., 336 U. S. 490, 69 S. Ct. 684, controls the disposition of this case, and that it therefore must be affirmed. In the Giboney case it is true that the state law which made the objective of the picketing unlawful had criminal sanctions. The Washington statute here has no criminal sanctions. Petitioners seek to distinguish Giboney on that ground. This court there said: “But placards used as an essential and inseparable part of a grave offense against an important public law cannot immunize that unlawful conduct from state control. * * * And it is clear that appellants were doing more than exercising a right of free speech or press. * * * They were exercising -their' economic power together with that of their allies to compel Empire to abide by union rather than by state regulation of trade.” 336 U. S. at pages 502-503, 69 S. Ct. page 690. It is not the presence of criminal sanctions which makes a state policy “important public law.” Much public policy does not readily lend itself to accompanying criminal sanctions. Whether to impose criminal sanctions in connection with a given policy is itself a question of policy.

Here, as in Giboney, the union was using its economic power with that of its allies to compel respondent to abide by union policy rather than by the declared policy of the state. The state policy guarantees workers free choice of representatives for bargaining purposes. If respondent had complied with petitioners’ demands and had signed one of the tendered contracts and lived up to its terms, he would have thereby coerced his employees. The employees would have had no free choice as to whether they wished to organize or what union would be their representative.

The public policy of Washington relied upon by the court below to sustain this injunction is an. important and widely accepted one. The broad purpose of the Act from which this policy flows was to prevent unreasonable judicial interference with legitimate objectives of workers. But abuse by workers or organizations of workers of the declared public policy of such an Act is no more to be condoned than violation of prohibitions against judicial interference with certain activities of workers. We therefore And no unwarranted restraint of picketing here. The injunction granted was tailored to prevent a specific violation of an important state law. The decree was limited to the wrong being perpetrated, namely, “an abusive exercise of the right to picket.” Cafeteria Employees Union, Local 302 v. Angelos, 320 U. S., at page 295, 64 S. Ct. at page 127, 88 L. Ed. 58. The judgment is affirmed.

Affirmed.

Mr. JUSTICE BLACK is of the opinion that this case is controlled by the principles announced in Giboney v. Empire Storage & Ice Co., 336 U. S. 490, 69 S. Ct. 684, and therefore concurs in the court’s judgment.

Mr. JUSTICE DOUGLAS took no part in the consideration or decision of this case.

      . Washington Labor Disputes Act, Rem. Rev. Stat. §7612-1 et seq. Supp. 1940. Certain sections of this Act were held unconstitutional by the Washington Court in Blanchard v. Golden Age Brewing Company, 188 Wash. 396, 63 P. 2d 397.

      . The Washington Supreme Court reviewed its decisions in this field in its first opinion in the instant case. O’Neil v. Building Service Employees International Union No. 6, 9 Wash. 2d. 507, 115 P. 2d 662, 137 A. L. R. 1102, and S. & W. Fine Foods v. Retail Delivery Drivers and Salesmen’s Union, Local No. 353, 11 Wash. 2d 262, 118 P. 2d 962, had treated any peaceful picketing as lawful. American Federation of Labor v. Swing, 312 U. S. 321, 61 S. Ct. 568, 85 L. Ed. 855, was held to be controlling in both cases. But in the instant case, both the O’Neill and S. & W. cases were characterized as wrong in principle and were expressly overruled. The court quoted from Swenson v. Seattle Central Labor Council, 27 Wash, 2d 193, 206, 177 P. 2d 873, 880, 170 A. L. R. 1082, where it was said that peaceful picketing is an exercise of the right of free speech which loses the protection of constitutional guaranty where “it steps over the line from persuasion to coercion.”

      . “In the interpretation of this act and in determining the jurisdiction and authority of the courts of the State of Washington, as such jurisdiction and authority are herein defined and limited, the public policy of the State of Washington is hereby declared as follows:
      “Whereas, Under prevailing economic conditions, developed with the aid of governmental authority for owners of property to organize in the corporate and other forms of ownership association, the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment, wherefore, though he should be free to decline to associate with his fellows, it is necessary that he have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from interferences, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of •collective bargaining or other mutual aid or protections; therefore, the following definitions of, and limitations upon, the jurisdiction and authority of the courts of the State of Washington are hereby enacted.” Rem. Rev. Stat. 1940 Supp. §7612-2.


source: Caselaw Access Project

license: Public Domain

text:
    MUENCH v GLANDER, Tax Commissioner.
    Board of Tax Appeals.
    No. 16548.
    Decided December 15, 1949.
    Harry B. Yarnell, Columbus, for appellant.
    W. H. Annat, Asst. Atty. Geni., Columbus, for appellee.
   OPINION

This cause and matter came on to be considered by the Board of Tax Appeals upon an appeal filed herein under date of August 15, 1949, from a final sales tax assessment made against the appellant by the Tax Commissioner under date of July 15, 1949, in the total amount of $1013.14, including penalty, for the audit period January 1, 1945, to December 31, 1948.

The cause was submitted on the notice of appeal, The Tax Commissioner’s transcript and the evidence taken before an examiner of this Board.

The facts herein are not in dispute and may be summarized as follows:

During the audit period appellant operated a retail jewelry store and watch repair business; sales tax was charged and. collected on all retail sales of jewelry, watches, etc., and no question is made concerning these items; no sales tax was charged to the consumer or paid to the vendor for watch repair work even though items of tangible personal property were incorporated into and used as replacement parts in making said watch repairs; that said failure to charge and collect sales tax on watch repair work was due to a misunderstanding of a statement made by an unidentified employee of the Tax Commissioner; that the watch register kept by appellant, and used by the Tax Commissioner as the basis of the assessment, carried no breakdown of the “price” charged the consumer for watch repairs so as to indicate what portion of the consideration was for labor and what portion was for tangible personal property incorporated into the repaired article.

The pertinent portions of the General Code and the rule of the Tax Commissioner hereto applicable for a proper-determination of the validity of the assessment are as follows:

Sec. 5546-1 GC:

“* * * ‘Sale’ and ‘selling’ include all transactions whereby-title or possession, or both, of tangible personal property, is- or is to be transferred, * * * for a consideration in any manner

“ ‘Price’ means the aggregate value in money of any thing or things paid or delivered, * * * by a consumer to a vendor in the consummation and complete performance of a retail sale without any deduction therefrom on account of the cost of the property sold, cost of materials used, labor or service cost, * * * or any other expense whatsoever. ‘Price’ shall not include the consideration received for labor or services used in installing, applying, remodeling or repairing the property sold if the consideration for such services is separately stated from the consideration received for the tangible personal property transferred in the retail sale. * *

Sec. 5546-2 GC:

“For the purpose of providing revenue, * * * etc., an excise-tax is hereby levied on each retail sale made in this state of tangible personal property on and after the first day of January, 1935 * * * as follows: (Here follows the enumeration of the bracket taxes which are computed on the ‘price’ charged.) ”

Tax Commissioner’s Rule No. 73 effective 12-21-’44:

“Repairmen are making sales of all tangible personal property which is transferred by them to their customers in connection with regular repair work. Where the charges for material and labor or service are not separately stated, the tax base for the application of the tax is the full amount charged with no deductions. Where the charge is for material and labor or services are separately stated, the tax shall be computed on the charge for material and no tax shall apply on the labor or service. Repairmen shall purchase tangible personal property to be sold under a certificate of resale and not pay any tax at the time of purchase. Repairmen are consumers of all articles of tangible personal property which are not transferred to their customers and must pay the tax thereon. This rule is applicable to all repairmen, including automobile, shoe, tire and watch repairmen, tire retreaders, as well as those engaged in recapping tires, automobile refinishers and automobile painters.”

The Supreme Court of Ohio, in the case of Wilson v. Glander 151 Oh St, 479, 39 O. O. 298, in a somewhat similar case involving the above Rule No. 73 and §5546-1 and §5546-2 GC, had this to say in the syllabus:

“Where a person sells material to another and in connection therewith furnishes labor or service in applying such material to his customer’s property, the entire transaction shall be considered a sale and subject to tax, unless there is a clear separation, in the making or billing of a charge therefor, of the material furnished and the labor or service performed.” (See, also, Rice v. Evatt, 144 Oh St 483, 30 O. O. 129.)

It appears to the Board of Tax Appeals that appellant herein has made no deliberate attempt to evade the Sales Tax Law, and if we were vested with an equity jurisdiction appellant’s good faith would be given some consideration. However, the Board of Tax Appeals has no equity jurisdiction and, as the Supreme Court of Ohio has said, “is a creature of statute and is limited to the powers with which it is thereby invested.” (Steward v. Evatt, 143 Oh St, 547, 28 O. O. 472.)

. Consequently, upon a consideration of. the facts as presented, and of the law applicable thereto, this board can grant no relief to the appellant and must affirm the Tax Commissioner’s assessment, which is hereby done.


author: Per CURIAM.

text:
    GOMORY v. CANTOR-SHAW CO. et al.
    Ohio Appeals, Ninth District, Summit County.
    Decided October 11, 1928.
    Commins, Brouse, Englebeck & McDowell, Bruce W. Bierce, Akron, for plaintiff and intervening defendants.
    Slabaugh, Seiberling, Huber & Guinther, Harris & Holub, Akron, for defendant Cantor-Shaw Co.
   OPINION

Per CURIAM.

This is an action in which it is sought to enjoin the defendant The Cantor-Shaw Co. from constructing a business building upon a lot in a certain allotment, in violation of the restrictions contained in the deeds for said lot.

While there were some intervening defendants, who sought the same relief as prayed for by the plaintiff, we will, in disposing of the case, refer to the parties as if there were no others except the plaintiff and the original defendant.

At the hearing for a temporary injunction, the defendant urged as a defense a prior adjudication in a suit between certain lot owners and the former owners of the defendant’s property, and upon full consideration it was determined by a judge of the Court of Appeals from another district that said suit was not brought in good faith and constituted no defense to this action. With that conclusion we are in full accord.

The evidence in this case discloses that the lot in question is within a large allotment, consisting of more than 550 lots; that the allotter adopted a uniform scheme of restrictions; that all but eight of the lots were restricted to residence purposes, and the eight which were set aside in the plan for business purposes were especially restricted as to the buildings to be erected for business purposes; that all of the deeds given by the original allotter contained these uniform restrictions and expressly provided that the restrictions were for the benefit of all of the lot owners in said allotment.

It further appears that there has been no violations of said restrictions of any character or description in the allotment, except the one now being made by the defendants; that the building being erected by the defendants is a violation of the restrictions as to the purposes for which the lot may be used and as to the set-back lines specified in the restrictions, and that the claim of the defendant principally urged at the trial of this case, by which it attempts to justify its violation of the restrictions, is that there has been such a change in the immediate neighborhood as to justify a court of equity in refusing to enforce the restrictions within said allotment.

While it may be that development and change in the character and use of property near to but without an allotment may be such as to justify a court of equity in refusing to enforce restrictions within an allotment, we find from the evidence in this case that the changes without the allotment and adjacent thereto, are not of such a substantial character and extent as to justify a court of equity in refusing to enforce the restrictions within the allotment, which were created in the manner, and have been so uniformly observed, as shown by the evidence in this case.

A decree may be drawn in favor of the plaintiff, enjoining the defendant from the use of said premises in the manner ■contemplated by it, and ordering the removal of the building now partly erected on said lot.

WASHBURN, PJ, and FUNK, and PARDEE, JJ, concur in judgment.


author: By PECK, J.

text:
    REUTER v. HAMILTON.
    Common Pleas Court, Hamilton County.
    No. A-118504.
    Decided February 6, 1950.
    Edward Strasser, Cincinnati, for plaintiff.
    David L. Shannon, Cincinnati, for defendant.
   OPINION

By PECK, J.

This matter is before- this court on the defendant’s demurrer to the plaintiff’s amended petition. The amended petition alleges, in essence, that the parties entered into a contract under the terms of which the defendant agreed that upon the occurrence of certain conditions he would transfer an Ohio State Liquor Permit to the plaintiff, that such conditions had come into existence, and that the defendant had refused to make such transfer; the relief sought is specific performance. The grounds of the demurrer upon which the defendant primarily relies are that no cause of action in favor of plaintiff against defendant is alleged, and that this court has no jurisdiction of the subject of the action. The matter was orally argued by counsel for the defendant, and both sides have submitted written memoranda. In that connection it might be mentioned that in the plaintiff’s memorandum is set forth what appears to be the complete contract between the parties. That contract is not before the court and has not been taken into consideration; in fact, it has not even been read.

The basic claim of the defendant is that such a Liquor License is a privilege which is granted by a state agency (the Board of Liquor Control), and that the granting of such a privilege is exclusively within the jurisdiction of that agency; and that this privilege is not a contract or property right. Authorities are cited to support this contention, and it cannot be seriously contended that these authorities do not settle the points for which they stand. The question is as to their applicability to the present situation.

Since the demurrer admits for its own purpose the facts well pleaded, it is here assumed that circumstances have come into existence under which the defendant has contracted to do an act. That act, the petition alleges, is to transfer a Liquor Permit. That he cannot do, it being within the sole power of the Board of Liquor Control to substitute one permit holder for another. Thus, considered from a narrow and technical approach, it becomes apparent that the parties entered into a contract under which the defendant contracted to do an act which he does not nave the power to do. The court is therefore presented with a problem of contract interpretation and must determine the intent of the parties.

It therefore becomes pertinent for the court to consider the intention of the parties in entering this contract. Did the parties, by the use of the word “transfer” literally mean that the defendant would himself make the transfer, or did they intend that he should do such acts as were required to be done by him to cause such a transfer to be made?

If the language of a contract is susceptible of two constructions, one of which will render it valid and give effect to the obligation of the parties, and the other will render it invalid and ineffectual, the former construction must be adopted. (Stewart v. Herron, 77 Oh St, 130; Cleveland & P. R. Co., v. Kelly, 5 Oh St., 180; Happ v. Ins. Co., 85 Oh St, 473.) See also National Bank v. Ins. Co., 83 Oh St, 309, in which it was held that in the construction of a contract, courts should give effect, if possible, to every provision there contained, and if one construction of a doubtful condition written in a contract would make that condition meaningless, and it is possible to give it another construction that would give it meaning and purpose, then the latter construction must obtain.

In the present case, to hold the parties to the strict, technical interpretation of the language used would enable the defendant to entirely avoid his contractual obligation. What will be developed if this cause is tried on its merits we are not free to conjecture, but at least at this stage of the proceedings the narrow interpretation of the portion of the contract contended for by the defendant will not be adopted.

The demurrer will be overruled and the defendant given twenty days in which to plead.


author: By THE COURT.

text:
    STROHM, d. b. a. RAILROAD RESTAURANT, Appellant, v. BOARD OF LIQUOR CONTROL et, Appellees.
    Ohio Appeals, Second District, Franklin County.
    No. 4333.
    Decided March 10, 1950.

      Gregory C. Karas, Dayton, Joseph J. Poorman, Columbus, for appellant.
    Hon. Herbert S. Duffy, Atty. Geni., Charles T. Kaps, Asst. Atty. Geni., Columbus, for appellees.
   OPINION

By THE COURT.

This is an appeal from the judgment of the Common Pleas Court of Franklin County, Ohio, affirming the Ohio Board of Liquor Control, which sustained the action of the Department of Liquor Control rejecting the application of appellant for renewal of D-l and D-2 permits and an application for C-2 permit.

The appellant is the owner of a restaurant and tavern in the village of Tipp City, Miami County, Ohio, which he purchased on July 23, 1947. The former owner operated under D-l and D-2 permits, which were transferred to appellant at the time of purchase. The appellant operated said business under D-l and D-2 permits until June, 1948, when he applied for a renewal of the D-l and D-2 permits and for a C-2 permit.

It is stated in appellant’s brief, which is not disputed, that the Chief of the Permit Division of the Department of Liquor Control, on or about July 17, 1948, in a written communication sent to the appellant, stated that the application was rejected for the following reasons:

1. Objection of the Mayor, Chief of Police and Village Council.

2. Objection of the Health Department.

3. Your place of business is considered a nuisance.

Not recommended by the Examiner.

An appeal was taken to the Board of Liquor Control which, after hearing, sustained and affirmed the Department in rejecting the application, but stated no ground for the affirmance.

Before the Board held a hearing it appears that the authorities of the Village withdrew their objection on condition that appellant move his business to another location, stating that the only objection was in regard to the location of the business. Also, the objection of the Department of Health was withdrawn for the reason that the conditions which gave rise to the objection were corrected. Thereupon, the Board of Liquor Control granted appellant permission to operate said business under D-l and D-2 permits pending final determination of the appeal.

The Examiner’s refusal to recommend the issuance of the permits was based on objection of the Health Department and the objection to the location of the business. The first objection was eliminated.

It cannot be successfully contended, in view of the record in this case, that the place of business was a nuisance as that term is defined in §6212-1 GC.

The evidence at the hearing sufficiently eliminated all objections theretofore raised except the objection on the ground of the location of the business.

At the hearing before the Board the appellant, the Mayor of the Village, the Village Marshal, President of the Village Council, the Examiner for the Department of Liquor Control, and several residents of'the Village testified.

The record shows that a tavern, or bar, has been operated at that location for many years. The restaurant, known as The Railroad Restaurant, is located along the main lines of The Baltimore and Ohio Railroad. Near the restaurant is a railroad yard where patrons of the business have been permitted to park their automobiles. Only two residences are situated in the same block, other structures include a grocery, bus terminal, Baltimore and Ohio Freight House, and The American Railway Express office. The restaurant is not located near the principal business district of the village; neither can it be said to be located in a residential area. The evidence shows that the business is located more than five hundred feet from the nearest school ground. Employees of the Baltimore and Ohio Railroad Company constantly move about in the area near the restaurant.

The mayor, marshal and president of the Village Council, and several of the nearby residents who object to the issuance of the permits testified that they could not and did not complain about the manner in which appellant conducted the business, but based their objection on the ground that in the area near appellant’s place of business occasionally there would be found persons in an intoxicated condition, persons who would engage in profanity, and occasionally men would be seen using the railroad premises for toilet. The evidence is not at all clear that these persons were patrons of the appellant except in several instances. There was evidence presented to the effect that on several occasions intoxicated persons were seen coming out of appellant’s place of business. On the evidence it may reasonably be inferred that liquor was sold to intoxicated persons contrary to provisions of §6064-22 GC. In our opinion the evidence constitutes sufficient cause to reject the application for renewal.

The record shows that the objectors would readily approve the issuance of the permits if appellant conducted his business at another location. Also, the conclusion may reasonably be drawn from the evidence that the village officials found it difficult to properly police the area and that their inability to do so gave rise to most of the complaints. In Department of Liquor Control has authority to reject an brief, the record presents the question as to whether the application for renewal on such grounds.

It is significant that the Board itself failed to state any reason for' the rejection of the application. The Board sustained and affirmed the action of the Department in rejecting the application. It may be assumed that the Board sustained and affirmed the action of the Department on the grounds stated by the Department. However, the grounds on which the Department rejected the application have been eliminated except the objection as to location. On the record presented the rejection by the Board could not have been based on any ground other than location.

It is not claimed that the appellant failed to comply with any statutory requirement or recommendation of the Department. Apparently, the Board has not promulgated any rule or regulation governing this matter. Whether the application should be granted or rejected falls within the field of the discretionary powers conferred on the Director of the Department and the Board. The power conferred is not absolute since the action of the Department is subject to review. The action of the Department will be upheld unless an abuse of discretion is shown. We are required to determine whether the record shows an abuse of discretion.

From the standpoint of law enforcement, decency and order in the community the location of a tavern may be a controlling factor in determining whether a permit shall be issued or renewed. In the case at bar the Department had a right to and did consider environmental factors in arriving at its decision. The Department found that the conduct of appellant’s business in that part of the village was not only inadvisable but undesirable from the viewpoint of law enforcement and police protection. In our opinion the factual situation presented constituted sufficient cause for rejection of the application. The Department did not abuse its discretion in rejecting the application on the ground of location of the business.

The judgment of the Common Pleas Court of Franklin County, Ohio, affirming the action of the Ohio Board of Liquor Control, is hereby affirmed.

MILLER, PJ, HORNBECK and WISEMAN, JJ, concur.


text:
    CAPPELL, Appellant, v. GLANDER, Appellee.
    Board of Tax Appeals.
    No. 16464.
    Decided December 8, 1949.
    Victor Jacobs, Dayton, for appellant.
    W. H. Annat, Asst. Atty. Geni., Columbus, for appellee.
   OPINION

This is an appeal by Carl L. Cappell, filed herein under date of July 29, 1949, from final assessment orders and final assessment certificates of the Tax Commissioner on and with respect to personal property of the appellant for the tax years 1934 to 1948, inclusive.

Said matter was heard and submitted on the transcript of proceedings before the Tax Commissioner, the evidence and briefs of counsel.

There are two matters for consideration by this Board. The first is: Is the furniture used in renting furnished apartments used in business and, therefore, subject to a personal property tax? Second: Did the Tax Commissioner exceed his authority in making final tax assessments on July 5, 1949, for the years 1934 to 1946, both inclusive, on property that the appellant had failed to return for taxation?

The appellant contends that the items assessed by the Tax Commissioner are furniture used as a part of furnished apartments, the rental for said furnished apartments being fixed and charged as rental for the occupancy of an apartment and not as tangible personal property used in the course of business. As to this the evidence shows that in 1935 the appellant rented apartments for $30.00 per month each and made a separate charge of $10.00 per month for the furniture therein. Thereafter someone told him he would be compelled to pay a sales tax if he made a separate charge for the furniture and for the apartment. Thereafter, to avoid payment of this tax, he did not make a separate charge for the furniture from the apartment. However, if an unfurnished apartment was remodeled or furnished he increased the rent therefor and this applied to all of the apartments in question.

The Board is of the opinion, and does so find, that the furniture in question was used in business and, therefore, subject to the personal property tax.

As to the second question in dispute (that is, whether the Tax Commissioner exceeded his authority in making a final tax assessment on July 5, 1949, on property of the appellant, for the years 1934 to 1946, inclusive, that the appellant had failed to return for taxation), the appellant contends that the authority of the Tax Commissioner in making the assessment under §5395 GC, in the year 1949 was limited by §5377 GC, which provides:

“Each preliminary assessment certificate, and if amended such preliminary assessment certificate as last amended shall become final on the second Monday of August of the second year after the certification of the preliminary assessment certificate. * *

This would be true if the appellant had listed the above items of furniture in his return of taxable property and the Tax Commissioner had made a preliminary assessment and no appeal had been taken and no final assessment certificate had been issued or the taxpayer had waived such time limit, but in this case the appellant failed to list the furniture, in any of his returns, for taxation in the years 1934 to 1946, inclusive. Therefore, the Tax Commissioner had the authority to make said assessment under the provisions of §5394 GCf which reads, in part, as follows:

“The decision of the commissioner upon such application for review or redetermination shall be final with respect tO' the assessment of all taxable property listed in the return of the taxpayer and shall constitute to that extent the final determination of the commissioner with respect to such assessment; but nothing herein shall be so construed, nor shall the final judgment of the board of tax appeals or any court to which such final determination may be appealed be deemed to preclude a subsequent assessment in the manner authorized by law of any taxable property which such taxpayer failed to list in such return or which the assessor has not theretofore assessed.”

It will be seen by this section that the Tax Commissioner is not precluded from making a subsequent assessment, in the manner authorized by law, of any taxable property which a taxpayer fails to list in a return or which has not theretofore been assessed; and the only limitation to his authority in this chapter is found in §5377 GC, which does not apply to property not listed by the taxpayer.

The Board, therefore, finds that the furniture of the appellant was used in business and is, therefore, subject to personal property tax and that the Tax Commissioner had authority to make an assessment on said property not listed by the taxpayer.

The finding of the Tax Commissioner in making the assessment against the appellant for the years 1934 to 1946, inclusive, is, therefore, sustained.


author: By HORNBECK, J. ' By THE COURT.

text:
    STATE, Plaintiff-Appellee, v. BUTLER et, Defendants-Appellants.
    Ohio Appeals, Second District, Franklin County.
    Nos. 4342, 4343, 4344.
    Decided November 15, 1949.
    Ralph J. Bartlett, Pros. Atty., George T. Tarbutton, Asst. Pros. Atty., Columbus, for plaintiff-appellee.
    Ray E. Hughes, H. Alfred Glascor, Columbus, for defendants-appellants, William W. Butler and Charles C. McCurry.
    John M. Scott, Columbus, for defendant-appellant, William G. Noble.
   OPINION

By HORNBECK, J. '

The defendants were indicted separately, tried jointly, convicted and sentenced on a verdict of guilt on two counts of the indictments against them. The charges were burglary and larceny, and forcible entrance into a vault. Each defendant appeals and in a joint brief filed in their behalf fourteen errors are assigned.

We shall not attempt to consider these errors categorically but will be content to discuss the more material questions raised.

The convictions in this case are as to certain material elements of the offenses charged based upon circumstantial evidence and it is urged that the Court did not fully and properly charge the jury on that subject in its application to the facts developed.

The Court carefully instructed the jury as to the presumption of innocence with which the defendants were clothed, read to its members the definition of reasonable doubt taken from the Code, and upon the, subject of circumstantial evidence said:

“Now evidence may be either direct or circumstantial or both. If a witness testifies from his personal knowledge as to the commission of an act, that is called direct or positive evidence, or if he testifies directly to something that he has seen or heard, that is called direct evidence, provided the evidence is material to be proven in the case. But it is not always possible to ascertain the truth in a case by evidence of this character, that is, by direct or positive evidence. Hence, the law permits the introduction of what is called in the law circumstantial evidence. And by circumstantial evidence is meant the proof of certain facts and circumstances in a given case from which a jury may reasonably and logically and directly infer other connected facts and circumstances which usually and reasonably follow, according to the common experiences of mankind. I charge you that in making inferences from facts you may not make an inference upon an inference, but you may draw any direct inferences which logically flow from the proof of the facts. • The credibility of the witness detailing the circumstantial evidence, or the weight of such circumstances, if the jury finds that they occurred, are to be determined solely by you. But, in order to warrant a conviction of a criminal offense upon circumstantial evidence, or by any evidence, it is necessary that the evidence should be so clear and convincing as to exclude every reasonable doubt; and in order to warrant a conviction upon circumstantial evidence alone, the facts and circumstances must be such as to exclude every other reasonable hypothesis, but the single one of the defendant’s guilt.”

To this language of the charge no exception was noted, nor was any request made to charge otherwise.

The language of the charge follows the cases and particularly Carter v State, 4 Oh Ap 193. In our judgment it is a clear, concise and complete charge on circumstantial evidence with application to the facts as developed in this case and fully protects all of the rights of the defendants both as to the quantum and the nature of circumstantial evidence required to support a conviction.

What we say concerning the correctness of this particular part of the general charge may be given application to the charge in its entirety. We find no failure to protect the rights of the defendants in any part of the general charge, nor can we find that the Court prejudiced the cause of defendants in failing to give the special charge requested by defendants.

We find no support for the claims that the verdict was rendered under influence of passion and prejudice, or that the prosecuting attorney was chargeable with misconduct in argument to the jury. In one instance he stepped beyond the bounds of propriety but the trial judge promptly admonished the jury to disregard the objectionable statement. The development in the testimony of the witness, Tom Sawyer, Sergeant of Police, respecting former incarceration of Noble and McCurry in a penitentiary was unfortunate and especially so in view of the fact that counsel for defendants had taken early precaution to avoid the testimony reaching the ears of the jury. However, the trial judge promptly took all measures within his power to remove the effect of the objectionable language from the consideration of the jury and the prosecutor acceded graciously to this ruling. We assume that the jury observed the admonition of the court and therefore hold that the statement and the occurrences incident thereto were not prejudicial to defendants and would not require a reversal of the judgments.

The court committed no error in refusing separate trials to the defendants or in the admission of any of the evidence offered and received on behalf of the State of Ohio and in overruling the motions of defendants to strike out questions and answers pertaining to purported conversations by plaintiff’s witnesses with defendants Noble and McCurry.

There are two questions in this case of substance:

(1) Are the verdficts and judgments of guilt supported by any evidence as to all the material elements of the offenses charged,

or

(2) Are they against the manifest weight of the evidence?

We do not propose to restate all of the' probative facts

developed because counsel for the parties have done so at full length in their briefs. If the evidence was sufficient to carry the question to the jury as to the guilt of the defendants as to each count of the indictment then we would say that it follows that it was sufficient to support the convictions on all counts.

There are certain outstanding facts and circumstances in this case which in our judgment afford proof on every material element of the crimes charged. The most difficult question arising is whether or not there is sufficient proof as to the offenses of burglary and larceny in the particular that the breaking and entering was done in the night season. We will discuss this along with other aspects of the evidence.

It is established beyond any doubt that there was a breaking and entering of the building at 343 North Fourth Street, and a vault in the building and a larcenous taking of property therefrom. It also appeared that the property stolen was morphine and the amount and value thereof were fixed. Likewise, it is undisputed that there was a breaking of the locks on the front door to the building, the gate to the bottom of the stairway leading to the second floor, on the door to the rear elevator, and the hasp on the lock of the compartment in which the morphine was kept, as is the breaking or cutting through of the vault between the janitor’s closet and the vault.

That the three defendants were together in Bruceton, Tennessee, in a 1948 Hudson Commodore Club coupe with Venetian blinds in the rear, and that they purchased a wheel for the car and a fire extinguisher is testified by two witnesses who made positive identification of all of the defendants. At the time of the purchase Butler did most of the talking but McCurry paid the bill. This Hudson automobile, bearing license No. 1382, with the added license number either 7 or 1, probably the latter, is traced to a parking lot on Front Street some seven blocks south of the building where the crimes were committed at 343 North Fourth Street, later at the Haft Motel at 9 or 9:30 on the night of December 24, 1948, and, finally, to Hawesville, Kentucky, where it was abandoned on the night of December 25th at about 12 o’clock midnight. McCurry is also identified as being with the Hudson automobile in Tennessee, at the Haft Motel and at Hawesville, Kentucky. The driver and at least one other person, neither identified, were with the Hudson at the parking lot on Front and Town Streets. McCurry admitted to Sgt. Sawyer that he was at the parking lot in Columbus on the 24th of December and the parking ticket for the Hudson from this lot was found in .a pocket of the jacket in the vault following the discovery •on December 26th of the breaking and entering of the vault.

The superintendent of a grocery store occupying the first floor of the building at 343 North Fourth Street left the building at 4:30 P. M. on December 24, at which time it was not locked. The manager of the Mutual Drug Company on the second floor was at its place of business for some two hours on the afternoon of December 24 and left about 5 P. M., at which time everything was intact. Whether he locked the building does not appear but it was not locked •earlier than the time of his departure.

Defendants Noble and McCurry were identified as being at the front door of the building at 343 North Fourth Street. Although McCurry and Noble were not identified at the Haft Motel, the three who registered there were in a Hudson automobile testified to be a 1949 model and it further appeared that there was no material difference in the appearance of the 1948 and 1949 Hudson car. McCurry is partially recognized as being the one of three persons at the Haft Motel who registered and he registered under an assumed name, as is •established by a handwriting expert witness. The other two names were not those of the other defendants but may also have been assumed names. The service station proprietor who identified Butler and Noble, and placed them at the door of the Mutual Drug Company, also identified them as having come to his place of business and having placed a long distance telephone call to Dallas, Texas, at which time they requested matches of him and he gave to them a packet of matches carrying his name and an advertisement for his station. A book of matches identical with that which had been given to Butler or Noble was in a pocket in a jacket found in the vault from which the morphine was taken.

The motive for the taking of the morphine is established, in so far as the defendant Noble is concerned, by his statement to Sgt. Sawyer to the effect that with a $60.00 a day morphine habit he had to be a thief and the further proof' that he was an addict appears from the necessity of administering morphine to him every two or three hours in the-waking hours during the whole of his trip from Louisiana to Columbus.

There is significance in the proof that at the time the-Hudson was wrecked in Kentucky there was found in it punches, chisels and other tools, a paper bag in which there were two chisels, which bag and chisels were shown to have-come from the F. & R. Lazarus & Company, Columbus, Ohio, and at the scene of the crimes there was found a bolt cutter with a Lazarus tag on it and identifying the department, from which it came. The articles found in the car and at-the scene of the crimes could have been the same as represented by the itemization upon a cash register throwout or sales slip found in the pocket of the jacket. There was also-found in the jacket in the vault sales tax stamps of the amount, of 27c which approximated, at least, the amount of sales tax on the total purchase shown by the slip. In the Hudson when wrecked were also found shirts, the initials upon one-of which corresponded with those of William Noble.

Was the jury justified in concluding that the breaking and entering was done in the night season?

Found in the debris where the wall was cut through were-two flashlights. This is not conclusive that they were used in the night season because it may have been dark even in the-daytime in the janitor’s closet and in the vault, but they afforded the defendants the means to operate at night, if necessary. The offenses were committed either after 5 o’clock in the evening of the 24th when Butler and Noble left the-service station adjoining the Mutual Drug building and before 9 or 9:30 that night when they arrived at the Haft Motel, or after they left the motel which may have been at any time-after 9:30 of the night of the 24th and prior to 9 o’clock Christmas morning when the maid found they were gone and the-time when the Hudson left Columbus to reach Hawesville, Kentucky, a distance of some 300 miles, by 12 o’clock midnight, of the 25th. These periods of time included several hours of daylight. The front door of the building of the Mutual' Drug Company was not locked until some time after 5 P. M. on the 24th and it must have been locked when entered because the lock on the door was broken. The probability of being observed had they worked in the daytime at the front, of the building would naturally deter defendants from so-operating. They not only had to effectuate an entrance, carry on their activities in the building, which must have taken considerable time, but they had to assure their departure from the scene of the crimes without being observed and appre.hended. The jury had the right to apply to the determination of the time when the breaking and entering was committed the common experience of mankind. It was within their province to conclude that the defendants worked under ■cover of darkness and the facts developed and circumstances ■surrounding the commission of the offenses were such that it ■could logically conclude that they did so operate.

Decided January 9, 1950.

The links of the chain of circumstantial evidence taken alone may not be conclusive of the guilt of the defendants, ■but taken together they make a case which cannot be reconciled upon the hypothesis of innocence. See Haley v State of Texas, 3 A. L. R. 779. For a late case as to inference that may properly be drawn from circumstantial evidence, we refer to State v. Nevius, 147 Oh St 263. Finally the jury had the right to consider the fact that no one of the defendants took the stand to explain away any of the incriminating developments against him.

We find no prejudice to the rights of the defendants in the trial of this case in any of the particulars assigned. The judgment will be affirmed.

MILLER, -PJ, and WISEMAN, J, concur.

ON APPLICATION FOR REHEARING

Nos. 4342, 4343, 4344.

OPINION

By THE COURT.

Our rules now make no provision for an application for .rehearing and it is only in rare instances that we entertain ■■such applications.

Under our former Rule XI the application should be filed within ten days after the decision. The application here was filed forty days after the decision.

Finally, there is nothing of consequence presented in the application which we did riot fully consider heretofore.

The application will not be entertained.

MILLER, PJ, HORNBECK and WISEMAN, JJ, concur.


author: By THE COURT:

text:
    ELSEN et, Plaintiffs-Appellees, v. HUGHES et, Defendants-Appellants.
    Ohio Appeals, First District, Hamilton County.
    No. 7103.
    Decided June 20, 1949.
    Hoover, Beall, Whitman & Eichel, Cincinnati, for plaintiffappellees.
    Vest & Vest, Walton, Ky., Barnhorn & Barnhorn, Cincinnati, for appellants.
   OPINION

By THE COURT:

This is an appeal on law from a judgment quieting .the plaintiffs’ title to certain real estate and removing the cloud thereon, resulting from the assertion of title thereto by defendants.

The judgment is affirmed for the following reasons:

(1) The plaintiffs and their predecessors in title have been in open uninterrupted possession of this real estate under color and claim of absolute title in fee simple for more than forty years and, as a result, whatever title the defendants might otherwise have had is barred by the statute of limitations.

(2) It is conceded that Hester P. Waterhouse was-the owner of the title to this real estate at the time of her death. The plaintiffs assert title by mesne conveyances from one of her daughters. After the death of Mary P. Waterhouse, a paper writing purporting to be her last will was admitted to probate. Thereafter, an action was duly filed to contest the paper writing as her will, and, in due course in that proceeding a judgment was entered declaring the paper writing not to be her last will. In this paper writing, Hester P. Waterhouse purported to give to each of her three daughters a one-eighth share of her estate, but placed such shares in the hands of a trustee to pay the net income to the daughters during the life of the respective husband of each daughter, and should any daughter survive her husband, her one-eighth should be her absolute property. If any daughter should not survive her husband and leave no issue, the daughter was given power to dispose by will of one-eighth part and the other seven parts should go to her surviving brothers and sisters and their issue per stirpes. The appellants are grandchildren of Hester P. Waterhouse, and if the said paper writing is, as to them, her last will, then such will would have conferred title upon the named trustee in trust for the daughters during the lives of their respective husbands, and then in trust for these appellants during their minority, and until they reached twenty-one years of age.

The defendants herein were not named as defendants in the action to contest the will. At that time they were under twenty-one years of age. The trustee named in the paper writing qualified as trustee of two shares and the court appointed a trustee of the other shares and both trustees were parties to the will contest.

The contention of the appellants is that the failure to join them as defendants in the will contest renders the judgment setting aside the will null and void and that by-reason thereof, they now take under said probated will,, notwithstanding the judgment declaring it not to be the lase, will.

The contention of the appellees is that the trustees, who-were parties to the will contest, were the owners of the legal title of the shares of which the daughters were the immediate-beneficiaries, and the appellants the remote and contingent, beneficiaries, and that said trustee was the only necessary-party to represent said interest in the will contest, and that, it was not necessary to join the beneficiaries, immediate or remote, of such trust.

It is expressly provided by §11244 GC, that a trustee of am express trust may bring an action without joining with him the person for whose benefit it is prosecuted. We find no statutory provision as to defending actions involving a trust estate, but it seems to us that the reason for the rule authorizing the trustee to prosecute an action applies with equal force to defending actions. And that seems to be the-rule in the absence of any statute.

In 1 Perry on Trusts (7th Ed.) at 567 and 568, the author-says:

“It is the duty of the trustee to defend and protect the-title to the trust estate; and, as the legal'title is in him, he-alone can sue and be sued in a court of law; the cestui quetrust, the absolute owner of the estate in equity, is regarded. in law as a stranger. The rule is carried to the extent that the grantee of the trustee can alone maintain an action; upon the legal title, although the conveyance to him was a breach of the trust. To protect himself, the trustee must, defend the title if he is sued.”

While it may be that the appellants might have been proper-parties to the will contest, they were not necessary parties,, and their absence did not prevent the court from entertaining the will contest. The judgment setting aside the will was. within the jurisdiction of the court and cannot be collaterally attacked. It may be, also, that the trustee did not properly defend the action. The remedy of the cestui que trustants for any such dereliction would be against the trustee, and not by attacking the title of transferees, taking title in reliance upon the validity of the judgment.

ROSS, PJ, HILDEBRANT & MATTHEWS, JJ, concur.


text:
    CENTRAL OHIO COOPERATIVE MILK PRODUCERS, INC., Appellant, v. GLANDER, Appellee.
    Board of Tax Appeals
    No. 16127.
    Decided November 25, 1949.
    Willis H. Liggett, Columbus, for appellant.
    Herbert S. Duffy, Atty. Geni., W. H. Annat, Asst. Atty. Geni., •Columbus, for appellee.
   OPINION

This is an appeal from a final order of the Tax Commissioner under date of April 5, 1949, denying an application for •.review and correction and confirming a certification theretofore made respecting the appellant corporation’s franchise tax assessment for the tax year 1948. The cause now comes on for final disposition upon the notice of appeal, the Commissioner’s transcript, the record made before an attorney examiner and briefs of counsel.

Appellant taxpayer is a domestic cooperative association incorporated under favor of §§10186-1 to 10186-30 GC, inclusive. It came into existence on Decembér 6, 1938. The gist of the present complaint is displayed by the appellant’s notice of appeal, from which we quote:

(1) “The provisions of §5493 et seq, GC, insofar as it is intended to include corporations not for profit thereunder for franchise tax purposes are discriminatory, unconstitutional and void and Appellant is not liable for said tax.

(2) “The true value of the stock of the Appellant, were it subject to said franchise tax, has been incorrectly determined by an inclusion therein of the following:

(a) $14,927.97 Bad Debt Cont.

(b) $18,050.45 Undistributed refunds for prior years.”

We shall delay the recitation of operative facts relating to the second claimed error until the first has been disposed of as it is purely a question of law. In the order complained of, the Tax Commissioner states that he is without power or authority to consider or question the constitutionality of an act of the legislature. This Board is subject to the same inhibition. It has no such authority. It, however, does have the right to consider if appellant has been discriminated against and if the Commissioner’s order is void as being contrary to existing law.

By the terms of its charter and in accordance with the provision of §10186-1 GC appellant is an association not for profit. This noted section reads in part:

“* * *. Associations organized hereunder shall be deemed ‘non-profit,’ inasmuch as they are not organized to make profit for themselves, as such, or for their members, as such, but only for their members as producers.”

When it sought and obtained corporate existence, it, of course, tacitly agreed to accept the statutory burdens cast upon it as well as enjoyment of the benefits accruing to it under the Act which countenanced its being. It also was required to abide by any change, modification or amendment of the statutes embraced within the Act — §§10186-1 to 10186-30 GC, inclusive, which made its existence possible. Under the provisions of §10186-29 GC appellant gained a preferential status which ordinary corporations organized for profit or not for profit did not then and do not now possess. This section provided that:

“Each association organized hereunder shall pay into the state treasury an annual fee of ten ($10) dollars only, in lieu of all franchise or license or corporation or taxes or charge upon reserves held by it for members.”

This section was a part of the original Act. The General Assembly (122 O. L. 161) (163) saw fit to withdraw this favor from such associations and to that end repealed the section, the effective date thereof being September 4, 1947. Sec. 10186-20 GC, under the title of Exemptions, provided, in part, that:

“Any provisions of law which are in conflict with this act (§§10186-1 to 10186-30 GC) shall be construed as not applying, to the associations herein provided for.”

It was then clear that franchise taxes might not be assessed against appellant and like associations in a sum greater than ten dollars as provided in §10186-29 GC. The Act, however, contained another section, that is, §10186-28 GC, which provides that:

“The provisions of the general corporation laws of this state and all powers and rights thereunder, shall apply to the association organized hereunder, except where such provisions are in conflict with or inconsistent with the express provisions of this act.”

It, therefore, becomes equally clear that as of September 4, 1947, when the legislature repealed §10186-29 GC, cooperative associations organized and existing under this Act became amenable to general corporation laws, which is to say that §§5498, 5498-1 and 5495-2 GC became operative. We quote their applicable provisions:

Sec. 5498 GC:

“* * *. For the purpose of this act (Excise and Franchise Taxes on Corporations — §5485 et seq GC), the value of the issued and outstanding shares of stock of any such corporation shall be deemed to be the total value, as shown by the books of the company, of its capital, surplus, whether earned or unearned, undivided profits, and reserves, but exclusive of (a) proper and reasonable reserves for depreciation, and depletion as determined by the tax commission (tax commissioner), (b) taxes due and payable during the year for which such report was made, (c) the item of good will as set up in the annual report of the corporation when said annual report is accompanied by certified balance sheet showing such item of good will carried as an asset on the books of the company, * * *(d) such further amount as upon' satisfactory proof furnished by the corporation, the tax commission may find to represent the amount, if any, by which, the value of the assets (other than good will) of the corporation as carried on its books exceeds the fair value thereof. * *

Sec. 5498-1 GC:

“The phrase ‘issued and outstanding shares of stock’ as used in §5498 GC shall apply to corporations not for profit and shall include but shall not be limited to mean membership certificates and other instruments evidencing ownership of an interest in such corporation not for profit.”

Sec. 5495-2 GC:

“Annually; * * *, each corporation, incorporated under the laws of this state for profit and each corporation not for profit organized under §§10185 and 10186 GC and §§10186-1 and 10186-30 GC, both inclusive, * * *, shall make a report in writing to the tax commissioner in such form as the tax commissioner may prescribe. * * •

It will be noted that the effective date of this section (§5495-2 GC, September 4, 1947) is the same as that of the repeal of §10186-29. GC hereinbefore set forth. A review of these statutes clearly indicates that cooperative associations are now subject to the payment of franchise taxes just the same as all general corporations. It is the judgment of the Board of Tax Appeals that appellant has not been discriminated against and that the Tax Commissioner was fully empowered by statute to assess the taxpayer for franchise taxes in accordance with general law. It is the observation of the Board, but not its holding, that it is unable to conceive of the unconstitutionality of the statutes questioned from any viewpoint.

Turning now to the second branch of appellant’s complaint, the question comes: Was the reserve of $14,927.97 set up for Bad Debt Contingency improperly included by the Commissioner in determining the value of the taxpayer’s stock? If it is a proper deductible item, it is so because of that portion of §5498 GC hereinbefore quoted and particularly that portion thereof under subdivision (d). We are told by appellant that the title given to this reserve is a misnomer created by the company’s accountant and that it is, in fact,- a fund created for the purpose of protecting producers of milk from any loss due to default of any handler or distributor. The appellant’s contracts with the producers covenant to protect them against any such contingency. It is evidenced that appellant markets the producers’ product among twenty some distributors in the Columbus area; that a four weeks average business runs around $200,000.00 of which appellant makes direct payment thereof of 10% to the producers, the remaining 90% being paid indirectly to the producers through other channels than appellant’s office. Since the corporation’s inception it has sustained but one such loss of $4,000.00 in and about the year 1942. Since then no other instance has arisen and this fund has been gradually accumulated. Appellant argues that, the amount of this fund is so insignificant in comparison with the risk involved that it ought not to enter into the corporation’s net worth. To this appellee makes answer that Exhibit. C (the producer’s contract) provides in part: Section 3 of the Association’s covenants that the guaranty has a condition precedent that unless written notice of nonpayment is given before the 1st of the second month following delivery, and that no such notice had been given and that no liability had or could attach against the Association for the fiscal year of 1948. It is further asserted by appellee that this sum of $14,927.97 is not kept separate and apart, but is commingled with capital structure funds and is so used, as displayed by the corporation return. The evidence further discloses that of the 4c a hundredweight withheld by the Association from the producer’s milk check %c thereof is set aside for this Bad Debt Contingency Fund.

Subsection (d) of §5498 GC places some discretion in the Tax Commissioner for only upon satisfactory proof must he find that the value of corporate assets exceeds the fair value thereof. He found, as shown by the Company report, that accounts receivable amounted to $5,305.51 and that accounts payable amounted to $3,179.05; that no notices were filed by producers to protect the guaranty of any amounts due them; that a separate account was not maintained and the reserve fund was commingled with capital assets, and used as such. He, no doubt, recognized that if this inconsiderable sum was recognized as a proper reserve, it might be augmented to a much greater one and that by reason thereof cooperative associations would secure a benefit and preference above corporations no longer countenanced by present statutory law. In view of these facts we are unable to reach a conclusion that appellee abused his discretion or that appellant was discriminated against.

Was appellant aggrieved by the Tax Commissioner’s order refusing to allow the $18,050.45 (undistributed refunds for prior years) as a deduction from its book value in arriving at its fair value? The Commissioner did allow it current undivided refunds of $3504.91. Appellee found, as the evidence discloses, that the association, through any corporate action, never made any effort to repay these sums to the producers entitled to their just portion thereof, many of whom are now dead or otherwise retired therefrom as members. It also appears that this sum is mixed with other sums and used just the same as its capital assets were used. It is not shown or treated as a trust fund as now claimed. Out of each hundredweight of milk sold by a producer, 4c of the price paid the producer went into appellant’s treasury. Two and a half cents thereof was retained by it for operating expenses. As stated by a company officer, “we” have apparently deducted from the producer’s checks more for expense than was actually needed, and this excess makes up the patronage fund which has been accumulating over a period of about eight years.

Sec. 10186-13 GC provides in part that:

“* * * The association shall limit its dividends .on stock to any amount not greater than eight (8) per cent per annum; and all other net income, less specified reserves which shall be provided for in the by-laws, shall be distributed back to its members on the basis of patronage. * *

It will be noted that this section does not provide when distribution on-the basis of patronage shall be made. Neither is any time specified in the Association’s by-laws. No corporate action has been taken to that end. Sec. 10186 GC authorizes such an association to adopt a plan for distribution. It further states that “* * * profit arising from the business may be divided among stockholders from time to time, as it deems expedient, in proportion to the several amounts of their respective purchases.” Here again the time element is left in abeyance. There can be no question that this sum of $18,050.45 represents corporate income from prior years. It is just as true that it also represents undivided profits to be distributed to producer stockholders according to patronage. Sec. 5498 GC specifically directs that “undivided profits” shall be included in ascertaining the value of shares of stock of any corporation.

The Board deems it well to point out at this time that §10186-4 GC as amended 120 O. L. 331 effective August 27, 1943, under the powers of such Association, provides in part:

“(e) To establish reserves and to invest the funds thereof in bonds or in such other property as may be provided in the by-laws.”

which the appellant has not as yet seen fit to do. We would further call attention to the limitation upon an association’s power contained in subsection (1) of the same section, which reads:

“* * * and in addition, any other rights, powers and privileges granted by the laws of this state to ordinary corporations, except such as are inconsistent with the express provisions of this act; * *

In his order the Tax Commissioner aptly cites from Packel on The Law of the organization and operation of Cooperatives, Section 45 (d), page 151:

“One of the most convenient methods for a cooperative to increase its capitalization is to refrain from declaring patronage refunds. In the case of equal ownership of all the assets of a cooperative, it would undoubtedly be contrary to the principle of patronage refunds to transfer surplus to contributed capital. To refrain merely from declaring patronage refunds, however, avoids that difficulty and permits the money to be used for the purpose of the cooperative. * *

It is the Board’s judgment that this is the course pursued by appellant’s Board of Directors. By retention of patronage refunds beyond what might be considered a reasonable time without objection by stockholder producers, it has temporarily, at least, increased its capital structure. Appellant ought not to complain of that which its course of inaction deliberately brought about. Finding no error in the order complained of, -the same is in all respects affirmed.


text:
    GRAU, Jr. et, v. KRAMER et.
    Common Pleas Court, Hamilton County.
    No. A-119230.
    Decided January 31, 1950.
    Dunham Matthews, Louis A. Peckstein, Cincinnati, for-plaintiffs.
    Ernest W. Stockmeier, Edwin J. Franks, John A. Scanlon,. G. H. Hermerding, Cincinnati, for defendants.
   OPINION

By PECK, J.

The various parties to this action are the owners of adjacent pieces of property. Without going into details which, are here felt to be unnecessary, suffice it to say that the property of the plaintiffs is of a higher elevation than that, of the defendants. The defendants’ properties lie to the south, and are each successively lower in elevation. The properties are on the west side of a road, and all slope somewhat to the east or down toward the road, and in front of the property of the southermost of the defendants a culvert passes under the road and discharges into a field on the other side. With the exception of three of the defendants’ properties all are improved residential ■ sites.

It is rather difficult to briefly restate the prayer of the petition insofar as it pertains to the injunctive relief sought because the relief prayed for is not the same as to all defendants. In essence, the plaintiffs seek a mandatory injunction to cause the defendant to unblock a tile drain line which runs down hill from their property across defendants’ properties and empties into a catch basin from which the flow is through the culvert under the road, and they further seek a perpetual injunction causing defendants to permit said line to remain open.

All but two of the defendants (who were not originally made parties but who were named defendants after their interest in one of the properties was developed during the trial) were represented by counsel. Four of the defendants filed an answer and cross-petition in which they seek in addition to money damages, an injunction restraining the plaintiffs from discharging sewage over their lands.

During the trial it was established that sanitary sewage from the plaintiffs’ house passed to a septic tank located just south of their property and on a strip owned by the defendant Lillian Kramer; that the effluent from this tank went into the tile drain above referred to, through which until recently it passed underground to the catch basin, thence through the culvert under the road. Joe Kramer, husband of the defendant Lillian, testified that his father had formerly owned and occupied the premises now owned by the defendants Becker and that his father also formerly owned the properties now owned by the defendants Kramer and Landwehrs, and that owned by the plaintiffs; that in 1921 he conveyed the land now comprising the latter property to the witness, Joe Kramer; that Joe Kramer erected the house now occupied by the plaintiffs and caused the septic tank above referred to to be built; and that the said tile drain had been used to carry off the effluent from the tank continuously since 1921. The plaintiff Grau testified that the defendant George F. Becker stopped up the drain, that thereafter theré was difficulty with it, but that there had been no trouble with the drain theretofore. The plaintiff further testified that as a result of such stoppage of the drain sewage backed up into his cellar causing an obnoxious condition to exist. Sworn as on cross-examination, one of the defendants testified that she had caused the catch basin at the lower end of the drain line to be filled in with cinders.

The defendants’ testimony tended to show that prior to the blocking of the drain line, the soil above this line, which cut across the front yards of several of their homes, was continually soft and soggy; that noxious odors emanating from the line deprived them of some of the use of their front lawns and porches; and that overflow from the septic tank containing human excrement, contraceptives and other repulsive materials created an obnoxious and unhealthful condition.

With the approval of all of counsel the court made an inspection of the premises in the absence of counsel. This view of the premises was made during the afternoon on December 21, 1949, when the weather was moderately cool. Only the exterior was viewed, no attempt being made to inspect the basement of the plaintiffs’ home, the condition there existing not being felt a determining factor in the case. It is assumed that the condition described by the plaintiffs, and not controverted in any way by the defendants, did in fact exist. So far as the present action is concerned, if the plaintiffs are not legally entitled to relief against these defendants, this condition is their personal problem. The view of the premises disclosed the existence of no offensive odors at that time and no external evidence of the existence of the drain.line under the properties of the defendants.

If any right to the continued use of the drain exists in the plaintiffs it must, of course, be by virtue of an easement. An easement may be created either by grant, express or implid, or by prescription. (We need not here consider easements by implied reservation.) The plaintiffs filed no brief or memorandum, but counsel in oral argument cited numerous authorities. In that argument it was claimed that an easement by prescription had been created, but some of the authorities cited concern themselves with easements created by grant (e. g., Keyler v. Eustis, 13 O. N. P. (N. S.) 601, and Freiden v. Western Bank & Trust Co.; 72 Oh Ap 471, 27 O. O. 419).

In order to be entitled to relief in this court, the plaintiffs must be entitled to relief against every defendant. If they have no right to maintain the drain line across any one parcel it becomes unnecessary to consider their rights as to the other parcels, as equity will not make a vain decree. With this in mind, attention is directed to the property held by the defendants Becker. This parcel was owned by Albert Kramer, who was the ancestor in title of all of the defendants except Emig and Spatz, until he conveyed to the Beckers on June 25, 1943. In 1921 he deeded the parcel now owned by the plaintiffs to his son, and after that conveyance the drain line was constructed. Not only did Albert Kramer consent to the construction of this line, but he also assisted in the construction. The only relationship between the father and son, so far as this record discloses, which can be termed, contractual was the actual deed of conveyance. Neither in that document nor in any other introduced is there any conveyance of an easement, and thus there exists no evidence of the creation of an easement by express grant; no-more is there evidence in the record which would justify the-finding of an implied grant. The construction having been done with the knowledge, consent and even cooperation of' the owner of the servient estate no claim of adverse possession can be made against him. Thus it must be concluded that the original use was permissive, no other conclusion being possible under the evidence.

It is well settled that no length of enjoyment by permission can ripen into an easement (Ry. Co., v. Donovan, 111 Oh St 341, and cases there cited), and it therefore becomes pertinent to inquire whether the character of the use changed at any subsequent time. Here the owner of the original servient estate retained ownership, as has been pointed out, of a portion of the estate until 1943. There is no evidence which would justify finding any change in the character of this, use of the line as permissive, and under the accepted rule that once a condition is found to exist it will be presumed to continue until the contrary is shown, it must be found that at least until June 25, 1943, the use of the line through the-Becker property by plaintiffs’ predecessors in title was permissive. It must therefore follow that no right by easement exists in the plaintiffs to use so much of the- line as passes under the property owned by the defendants Becker.

Inasmuch as the period which has passed since the acquisition of this property by the Beckers is not sufficient to-create a right by prescription it becomes unnecessary to consider the character of the use during that period. Further, for the reasons previously indicated, no determination is made with reference to what right plaintiffs may have acquired with respect to the other parcels.

All of the authorities cited to the Court have been carefully considered. In most of these cases there is a problem created by severance, usually of the dominant estate from the servient. These cases are not felt to be applicable, since we here have no severance problem. While it is true that the dominant estate was formerly a part of the same parcel as most of the parcels constituting the servient estates, the-dominant estate was severed before the drain line was constructed. Thus the fact that it happened to be at one time a part of the same tract is entirely without importance.

The situation presently existing as found both from the evidence and from the view of the property made by the court justify no action on the prayer of the cross-petition for injunctive relief. The submission of this case to the court was expressly limited by statement of counsel at the close of the testimony to a consideration of the two motions for restraining orders. Accordingly no further finding is made at this time, but both motions will be overruled.


author: By PHILLIPS, PJ.

text:
    KREIDER et, Plaintiffs-Apellants, v. CARSON, Defendant-Appellee.
    Ohio Appeals, Seventh District, Mahoning County.
    No. 3287.
    Decided May 6, 1949.
    Harrington, Huxley & Smith, Youngstown, for plaintiffs-appellants.
    Falls, Hazel & Kerr, Youngstown, for defendant-appellee.
   OPINION

By PHILLIPS, PJ.

Appellants Louis S. Kreider and Louis B. Kreider, licensed realtors and partners doing business as Kreider Company, appeal to us on questions of law. Such appeal is from a judgment of the court of common pleas discharging an attachment, affidavit for which they filed in the court of common pleas simultaneously with their petition filed in their action to recover commission on the alleged sale of defendant’s property, and releasing the garnishee from all liability in the case we review, on the ground that the “work and labor,” reference to which is made in plaintiffs’ amended affidavit for attachment and §11819 GC, “must be personal to the laborer and that the plaintiffs are in the position of employers,” and finding for defendant “as to all grounds urged by the plaintiffs as a basis for attachment before judgment.” Such affidavit reads in part as follows:—

* * * is about to remove his property or a part thereof out of the county with intent to defraud his creditors; that said defendant is about to convert his property or part thereof into money for the purpose of placing it beyond the reach of his creditors; that said defendant is about to assign, remove and dispose of his property or part thereof with intent to defraud his creditors.”

The order of the trial judge, from which appellants appealed, was entered after hearing had on “the defendant’s motion to discharge the attachment herein,” on the defendant’s motions (to the affidavit and amended affidavit), plaintiffs’ original affidavit, plaintiffs’ affidavit as amended, defendant’s affidavits (that the allegations in plaintiffs’ affidavits for attachment are untrue and such attachment was obtained wrongfully, and to strike them from the record) the evidence, arguments of counsel and briefs.

The evidence, which the trial judge considered, discloses that salesman Rickert, an employee of appellants, negotiated with defendant concerning and showed real estate belonging to him and attempted to sell it to a purchaser, to whom defendant subsequently sold it without paying plaintiffs their claimed commission on such sale; that defendant held title to no property situated in Mahoning County at such time, and “a number of months prior” to the sale of the property on which plaintiffs claim commission deeded other real estate situated in Mahoning County to Carson Brothers Plumbing and Heating Corporation, a partnership operated by defendant and two brothers as a corporation; and subsequent to the sale of the real estate in question in the case we review joined with his wife in a deed of his residence situated in Youngstown, Ohio, title to which was and had for ten years been held in her name. Counsel for plaintiff argue such act “was an indication to the plaintiffs that either the defendant was preparing to leave the city of Youngstown in an effort to avoid the payment of the real estate commission, or that he was getting all of his property out of the name of either himself or his wife in an effort to prevent the plaintiffs from being able to reach any of it to satisfy any judgment that they might receive for their commission,” and “that he intended to defraud the plaintiffs of their commission.”

As stated- by plaintiffs’ counsel by brief:—

“At the hearing before the common pleas court the plaintiffs attempted to question Mr. Carson concerning his negotiations with the plaintiffs in an effort to show the whole background of the case, all of which would tend to indicate an intent on the part of the defendant to avoid the payment of the real estate commission. The court refused to permit the plaintiffs from going into this in their cross examination of the defendant, stating that this was going into the merits of the case and did not relate to the attachment.”

By assignments of error plaintiffs contend that the trial judge erred to their prejudice “in the admission and rejection of evidence,” and that “the judgment of the court is against the manifest weight of the evidence” and “is contrary to law.”

By brief counsel for appellants say that their appeal “presents two questions- — first, are the efforts of the real estate agent considered as work within the meaning of §11819 GC, and second, is this something which is personal to the person who performs the effort,” and we will endeavor to answer these questions.

Without a detailed recitation of the evidence, the admission and rejection of which the trial judge allowed and refused, we concur in his ruling that such evidence went to the merits of the case we review and did not relate to the attachment; and that he did not err to the prejudice of the plaintiffs in the admission and rejection of evidence as urged by their counsel.

As applicable §11819 GC, provides:—

“In a civil action for the recovery of money, at or after its commencement, the plaintiff may have an attachment against the property of the defendant upon any one of the grounds herein stated:

* * 11. That the claim is for work or labor, or for necessaries.”

We have '-considered a long list of- cases cited to us by counsel for the respective parties in our endeavor to answer correctly the claimed first question presented for our consideration and determination, and arrive at the conclusion that the services rendered by salesman Rickert, an employee of appellants, real estate brokers, were professional services rendered by one dealing with the public in a confidential relationship such as lawyers, physicians, accountants, and other professional men deal with the public, whose services are distinguished from the services of those whose exertions are primarily physical (See Henry v. Mangold, 50 Abs 510), and not included in the definition of work and labor as used in §11819 GC. See Republic Tool & Manufacturing Company v. Lenarz, 17 Oh Ap 500; Fiderius v. Buchan Company, 2 Abs 501; Dorris v. High Grove Park Land Co., 1 Abs 167; Northern Ohio Printing Co. v. Investment Service Inc., 8 Abs 475.

Liberally construing this section of the General Code in plaintiffs’ favor, as we must, considering the evidence with reference to what plaintiffs’ employee did in the attempted sale of defendant’s real estate, interpreting as best we can the court accepted definitions of “work,” “labor,” and “work and labor,” and reading the intention of the legislature in the use of those words as we do, we conclude that the trial judge did not err to plaintiffs’ prejudice in discharging the attachment in the case we review, by holding plaintiffs did not sustain the burden of proof of an actual intent to defraud plaintiffs, by holding that the work and labor, to which reference is made in §11819 GC, is personal to salesman Rickert, the person performing it, and does not inure to the benefit of his employers, the appellants therein; and this notwithstanding the provisions of §8310 GC, “commonly known as the Mechanics Lien Law,” which counsel for plaintiffs urge also is applicable in the case we review. See Ross Construction Co. v. Clements Orr Company, 12 Abs 710.

Attachment is an extra ordinary remedy which cannot be asserted unless the intention to defraud appears, “and the creditor must bring his case within the letter of the law” to get the strong arm of the court to take from the debtor his property before judgment, which in our opinion does not appear in the case we review. In this case we cannot, and accordingly will not, reverse the judgment of the trial court unless its judgment was clearly erroneous, at which conclusion we cannot arrive.

The judgment of the court of common pleas is affirmed, as it is obvious from what we have said that in our opinion such judgment is not against the manifest weight of the evidence nor contrary to law.

NICHOLS, J, BUCKLEY, J, concur in judgment.