Hoskins v. Commissioner of Internal Revenue, 7934.

• Decision Date: 03 July 1936
• Docket Number: No. 7934.,7934.
• Citation: 84 F.2d 627
• Parties: HOSKINS et ux. v. COMMISSIONER OF INTERNAL REVENUE.
• Court: U.S. Court of Appeals — Fifth Circuit

84 F.2d 627 (1936)

HOSKINS et ux. v. COMMISSIONER OF INTERNAL REVENUE.

No. 7934.

Circuit Court of Appeals, Fifth Circuit.

July 3, 1936.

William R. Watkins, of Fort Worth, Tex., for petitioners.

John MacC. Hudson and Sewall Key, Sp. Assts. to Atty. Gen., Robert H. Jackson, Asst. Atty. Gen., and Carroll Walker, Sp. Atty., Bureau of Internal Revenue, of Washington, D. C., for respondent.

Before FOSTER, SIBLEY, and WALKER, Circuit Judges.

FOSTER, Circuit Judge.

Petitioners, husband and wife, residents of Texas, made returns of community income for the year 1932, listing the salary of the wife as superintendent of cafeterias for the Fort Worth public schools as exempt. The Commissioner denied the exemption and determined a deficiency of $105. On petition to the Board of Tax Appeals the decision of the Commissioner was affirmed. 32 B.T.A. 682. This appeal followed.

The facts are not in dispute. The Fort Worth Independent School District is a political subdivision of Texas, created by act of the Legislature. By the act creating it (Special Laws 39th Leg., 1925, c. 230, p. 674), in addition to the usual authority to establish and control public free schools within the district, it is given the right to enforce rules and regulations that might be necessary to properly safeguard the health of the pupils and teachers. The board provided for the operation of the 48 cafeterias in the schools, appointed Mrs. Hoskins as director of these cafeterias, and fixed her salary at $3,400 per annum. The cafeteria system has about 138 other employees. Food is sold at cost, including overhead expenses, to only the pupils and teachers. The public is not permitted to patronize the cafeterias. The receipts for 1932 were approximately $200,000. This fund is kept separate, and Mrs. Hoskins' compensation and that of the other employees is paid out of it. Under the rules of the board, the children are given a recess of 30 minutes for lunch. A pupil may bring his lunch or may get it at the school cafeteria, or, if he lives within a sufficiently short distance from the school, may go home for it, but he may not go off the school grounds at recess to buy it. A balanced diet is served in the cafeteria. Mrs. Hoskins devotes an average of about 12 hours daily to the performance of her duties and, apparently, is not engaged in any other remunerative activity. There is undisputed evidence in the record which tends to show there has been great development of the cafeteria system in the public schools of the United States; that the cafeteria system in the Fort Worth public schools is one of the best; and that the cafeteria system is considered by prominent educators to be an expansion of the educational curriculum to include instruction in dietetics, social customs, and health and hygiene.

It may not now be disputed that it is the duty of a state to provide means for the education of the children of the state and in doing so the state is performing a governmental function. 56 C.J. 177, § 29, "Schools and School...