Beard v. Board of Education of North Summit School Dist.

• Decision Date: 10 December 1932
• Docket Number: 5159
• Citation: 81 Utah 51,16 P.2d 900
• Court: Utah Supreme Court
• Parties: BEARD v. BOARD OF EDUCATION OF NORTH SUMMIT SCHOOL DIST. et al

16 P.2d 900

81 Utah 51

BEARD v. BOARD OF EDUCATION OF NORTH SUMMIT SCHOOL DIST. et al

No. 5159

Supreme Court of Utah

December 10, 1932

Appeal from District Court, Third District, Summit County; J. W McKinney, Judge.

Suit by George Beard against the Board of Education of the North Summit School District and others. Judgment for plaintiff and defendants appeal.

REVERSED AND REMANDED, WITH DIRECTIONS.

Badger Rich & Rich, of Salt Lake City, and P. H. Neeley, of Coalville, for appellants.

Homer Holmgren, of Salt Lake City, for respondent.

Wm. H. Leary, of Salt Lake City, amicus curiae.

FOLLAND, J. CHERRY, C. J., and STRAUP, ELIAS HANSEN, and EPHRAIM HANSON, JJ., concur.

OPINION

FOLLAND, J.

This suit was brought by plaintiff, a taxpaying citizen of the North Summit school district and owner of a competing opera house, for an injunction against defendants to perpetually restrain and enjoin them from allowing or permitting the North Summit High School building to be used for the holding therein of public or private dances, shows, dramas, motion picture shows, operas, basket ball games, and other kinds of entertainments not connected with or part of the school curriculum or course of study, and for which an admission charge is made, and from allowing and permitting the transportation equipment of the school district to be used in connection with such entertainments to transport students to and from the same free of charge, and from allowing the school property to be used for commercial purposes in competition with plaintiff's opera house, and from using funds derived from taxation to defray the cost of maintenance, upkeep, lighting, heating, janitor services, and transportation services incident to the holding of such entertainments at the high school building and property.

From a judgment in favor of plaintiff and enjoining the defendants, this appeal is taken. The many assignments of error are directed chiefly to the overruling of the demurrer to the complaint, and to the refusal of the court to make other and different findings, conclusions, and decree. Able, exhaustive, and helpful briefs were submitted by counsel for the respective parties and by William H. Leary, attorney for the University of Utah, as amicus curiae. The University of Utah filed its brief on grounds of interest, because "the activities of the University may be subject to similar attack," and "as the highest branch of the system of public education in this state it is intimately concerned that the cause of education be promoted by the court's decision."

The facts shown are these: Plaintiff is a taxpaying citizen of Summit county, Utah, who for twenty-five years has been and now is the owner of a hall called the "opera house," in which are held dances, motion picture shows, theatrical plays, and other entertainments; that the business of the opera house has materially decreased until it is now an unprofitable enterprise; that this condition is claimed to have been caused by the use of the high school building and grounds for similar entertainments. The North Summit High School is located at Coalville, the county seat of Summit county, and is controlled by the board of education of the North Summit school district, a consolidated school district. The school building is a new, commodious, and fire-proof structure, which has, in addition to classrooms, an auditorium with a stage, scenery, and other equipment including a projecting machine for visual education and motion picture displays; a modern gymnasium fully equipped with shower baths and toilets; and an athletic field adjacent to the school building with a cinder path, football field, playground equipment such as swings, teeters, horizontal bars, swinging rings, and trapezes. The building and grounds are fully equipped for school purposes and also for use as a social and community center by the people of the community for social, recreational, and educational purposes. The school authorities have permitted the high school building and grounds to be used for a course of lyceum lectures, musical entertainments, dances, motion picture shows, football and basket ball games, and other entertainments and activities, for many of which an admission fee is charged, and to which the general public has been invited to attend by various schemes of advertising. The school trucks were permitted to be used in transporting the students and sometimes their parents and other members of the public to and from these entertainments and activities without charge. Usually the student body paid the wages of the truck drivers, but the cost of gasoline, oil, repairs, and upkeep was borne by the school district. In connection with the school, there is an organization known as the student body, which is organized by the students for self-government and to carry on social, athletic, and entertainment activities which are termed extracurricular activities. A charge is made for membership in this organization of $ 5 per year for students of the ninth, tenth, eleventh and twelfth grades and of $ 3 per year for those of the seventh and eighth grades. Payment of the fee gives to the student the privileges incident to membership, and, in addition thereto, admission without further charge to certain of the games, dances, lectures, and entertainments conducted by the student body organization. Most of the shows, games, dances, lectures, and entertainments about which plaintiff complains have been conducted by the student body, and some of the dances and entertainments have been conducted by clubs and classes of the school. The money received by the student body from its membership fees and admissions to its entertainments and other activities is kept in a separate fund and expended by the student body officers, under control of the school authorities, and is not mingled with the money in the school treasury. No rental has been charged the student body or the school clubs and class organizations for the use of the building and grounds for these purposes, and the cost of lighting, heating, and janitor service, where these were necessary, has been borne by the school treasury. Any money remaining in the student body fund at the end of the year has been used for some purpose connected with the school, such as the purchase of a piano, moving picture machine, a panatrope, scenery, statuary, and paintings for the use and benefit of the school, and the building of fences and other improvements to the athletic grounds. All these entertainments and athletic contests were held at a time when school was not in session, did not interfere with the regular school work, and did not disturb or interfere with the seating or other furniture or property of the school, and were supervised by the principal or teachers of the school.

The complaint contains two causes of action. The allegations of each are substantially the same except that in the first count plaintiff seeks relief as a taxpaying citizen to restrain an alleged unlawful use of school property, and in the second as the owner of the opera house to restrain the use of the school property in direct and unfair competition with the operation of his opera house.

There are no allegations in the second cause of action which bring the case within the theory of "unfair competition" as known to the law.

"Unfair competition consists in passing off or attempting to pass off, upon the public, the goods or business of one person as and for the goods or business of another." 38 Cyc. 756. See, also, 26 R. C. L. 875.

It is contended by plaintiff that to use a tax-exempt, tax-supported institution to compete with a taxpayer is manifestly unfair and constitutes unfair competition. If the use made of the school building and grounds is lawful, it matters not that such use is competitive with plaintiff's opera house, or that plaintiff's income has been impaired by such competitive use. When free public schools were first established, they competed with and ultimately drove from the field numerous private schools, but those who conducted the private schools could not complain of unfair competition since the state had the right to establish the free school system. Universities and colleges established by the states are in direct competition with privately controlled colleges, but the competition is not unfair nor unlawful because the state has the power to establish its universities and colleges, and to support them by taxation. Municipal waterworks and electric lighting plants may compete with those privately owned, but the competition is neither unfair nor unlawful where the municipal plants are established and operated pursuant to lawful authority. Andrews v. City of South Haven, 187 Mich. 294, 153 N.W. 827, L. R. A. 1916A, 908, Ann. Cas. 1918B, 100; Young v. Board of Trustees, 90 Mont. 576, 4 P.2d 725; Security National Bank v. Bagley, 202 Iowa 701, 210 N.W. 947, 49 A. L. R. 705; Bozeman v. Morrow (Tex. Civ. App.) 34 S.W.2d 654. The intent of a party to draw custom from a competitor is not actionable unless his acts are unlawful. American Automobile Ass'n v. American Automobile Owners Ass'n (Cal. Sup.) 13 P.2d 707.

In Speyer v. School District, 82 Colo. 534 261 P. 859, 57 A. L. R. 203, it was held the complaint stated a cause of action where it alleged that defendant maliciously, and without just cause, and with the express intention of destroying the business operated by plaintiff, made effective a rule that pupils must lunch at the school building, except on written request of parents for them to lunch at home, and were forbidden to trade with plaintiff, and that the purpose of the rule was to force business to the school cafeteria operated by defendants for profit. The court said the...