Rockefeller v. O'Brien

Citation224 F. 541
Decision Date13 May 1915
Docket Number274.
PartiesROCKEFELLER v. O'BRIEN, County Treasurer.
CourtUnited States District Courts. 6th Circuit. United States District Court of Northern District of Ohio

Kline Clevenger, Buss & Holliday and Squire, Sanders & Dempsey, all of Cleveland, Ohio, for plaintiff.

Cyrus Locher and Fred W. Green, both of Cleveland, Ohio, for defendant.

CLARKE District Judge.

The controversy in this case involves a great sum of money, but this does not increase the difficulty of a just decision of it. The federal and state courts of the country have been in singular accord in condemning many of the methods by which Mr. Rockefeller has acquired much of his great fortune, but the character of these methods is not involved in this suit for the claim of the county assumes that he is the lawful owner of the $311,000,000 and more invested in 'bonds stocks, joint-stock companies, annuities and otherwise, ' upon which it seeks to collect the tax, the collection of which the bill in the suit prays may be enjoined. The facts of the case which are essential to a decision of it, and which are either admitted or are not seriously disputed, are as follows:

In 1884 the plaintiff, John D. Rockefeller, who theretofore had been a citizen and resident of the city of Cleveland, in the state of Ohio, moved to the city of New York, and established there his permanent home, and has there maintained it ever since. Since that year he has exercised in New York state the rights and privileges of citizenship, including the right to vote at state, county, and municipal elections, and has been regularly taxed by the proper authorities of that city and state upon his personal property, including doubtless the property involved in this suit. The plaintiff for a long time has been the owner of a home in the village of East Cleveland, Cuyahoga county, Ohio, known as Forest Hill.

On or about the 24th day of June, 1913, the plaintiff came from his home in New York to Forest Hill for the purpose of spending the summer season, bringing with him his family, servants and secretary, as had been his custom, with occasional exceptions, for many years. The uncontradicted evidence clearly shows that it was his intention to return to New York, as had been his usual custom, about the month of October; that plans were made for such return, but that the illness of Miss Spellman, a member of his family, and the illness of his wife, led to the deferring of his return to New York from time to time until after the first Monday, the 3d day, of February, 1914, which, under the statute of Ohio then in force, was tax listing day for that year. There can be no doubt upon the testimony introduced that Mr. Rockefeller's coming to East Cleveland was for the purpose of a summer visit, without any intention on his part of giving up his residence in New York, but with the fixed purpose to return to his New York home in the autumn. Neither can it be disputed on the evidence introduced that the occasion of his continuing longer than usual in Cleveland was the sickness of members of his family and his desire to be with them. The evidence is conclusive that Mr. Rockefeller made arrangements more than once between October 1, 1913, and February 1, 1914, to return to New York, but that, acting under advice of his family physician and other physicians called in consultation with him, it was concluded that it would not be prudent, owing to her illness, to remove his wife to New York, and his family physician testifies that it was important to her comfort and the proper treatment of the malady with which she was afflicted that her husband should be with her.

Immediately after February 3, 1914, the tax listing day for that year, notice was served upon the plaintiff that he must make return of all of his property, including 'moneys invested in bonds, stocks, jointstock companies, annuities and otherwise' of which he was the owner on the day preceding the first Monday of February, 1914. The plaintiff failed to make a return in form and substance satisfactory to the deputy state tax commissioners, who thereupon, pursuant to authority vested in them by law, made out and filed the return which they were of opinion the plaintiff should have made, which return included the $310,000,000 item of intangible property which is the subject of controversy in this case. The tax assessed upon the amount of this return was certified to the defendant, the county treasurer, for collection, and in this suit the plaintiff seeks to enjoin such collection upon two grounds, viz.:

First. For the reason, as is claimed, that under the facts proved the plaintiff cannot properly be taxed upon his intangible property under the provisions of sections 5373 and 5374 of the General Code of Ohio under authority of which it is conceded the tax commissioners acted in making the return in dispute.

Second. For the reason that, if the plaintiff were subject to taxation under the terms of sections 5373 and 5374 of the General Code of Ohio, nevertheless the collection of the tax should be enjoined, because the sections are in conflict with the Constitution of the United States and void, because to give them effect would be to deprive the plaintiff of his property without due process of law and to deny to him the equal protection of the laws, thus violating the fifth and fourteenth amendments to the Constitution of the United States.

The disputed part of the return by the deputy state tax commissioners is as follows, viz.:

1. Two automobiles, valued at the sum of . . . $ 8,000

2. 'The amount of all moneys invested in bonds, stocks, joint-stock companies, annuities and otherwise,' value at the sum of . . . 311,040,337

To be more specific, the claim is that the assessments described are both illegal and void for the reason that at the time they were levied the plaintiff was a citizen and bona fide resident of the state of New York, and was not a resident or citizen of the state of Ohio; that the personal property described in the second item was never in the state of Ohio, and that its legal situs at the time said assessment was made was in the state of New York; and that therefore there was no jurisdiction in the taxing authorities of Ohio to return the same for purposes of taxation, as was done, and that the collection of the tax would be a taking of the property of the plaintiff without due process of the law, and would be a denial to the plaintiff of the equal protection of the laws, in violation of the fifth and fourteenth amendments to the Constitution of the United States.

The defendant denies, for want of information, the allegation in the petition that the plaintiff intended to return to New York in the fall of 1913, avers that on the 3d day of February, 1914, he was a bona fide resident of the city of East Cleveland, Cuyahoga county, Ohio, and that the deputy state tax commissioners, pursuant to law, made the return of the plaintiff's property for taxation which is complained of in the bill. It is also averred that upon the 3d day of August, 1914, the plaintiff filed with the auditor of Cuyahoga county, Ohio, his complaint to the district board of complaints for said county, in which he averred that the two automobiles and the moneys invested in bonds, etc., which had been listed for taxation as stated in the bill, were not taxable in Ohio, which complaint was rejected. It is further averred that the plaintiff did not appeal from this decision of the board of complaints within 30 days from its decision, nor at any time, and that therefore said finding of the district board of complaints is still in full force.

This last objection made in the answer, that this action does not properly lie, because the plaintiff did not appeal from the decision of the district board of complaints to the tax commission of Ohio, is not seriously urged. That the suit is properly brought, so that the relief prayed for may be granted if the facts of the case justify it, is very clear under authority of the following decisions, all rendered in cases originating under Ohio law: Cummings v. National Bank, 101 U.S. 153, 25 L.Ed. 903; Grether v. Wright, 75 F. 742, 23 C.C.A. 498; Lander v. Mercantile Nat. Bank, 118 F. 785, 55 C.C.A. 523; McKnight v. Dudley, 148 F. 204, 78 C.C.A. 162.

The really essential controversy in the case is whether the assessment upon $311,040,337 of property of the plaintiff invested in bonds, stocks, joint-stock companies, annuities and otherwise (intangible property) is illegal or valid, and the decision of this question depends wholly upon whether or not the plaintiff on February 3, 1914, was subject to the terms of sections 5373 and 5374 of the General Code of Ohio, when the return for taxation was made, and, if he was subject to them, whether or not they were at the time valid constitutional laws. It is conceded by the defendant that the liability of the plaintiff depends entirely upon his coming within the provisions of these sections and upon their validity, and no claim is made of liability under any other law.

These sections of the General Code were originally the act of the General Assembly of April 14, 1900 (94 O.L. 162), which was carried practically unchanged into the General Code, except that it was divided into two parts or sections. It will contribute to clearness and brevity in the discussion of whether or not this act applied to a man so situated as the evidence and the statement of facts in this opinion show Mr. Rockefeller was situated when the return was made to separate the act into four clauses as follows (section 5373):

(1) 'Any person who shall have had his actual or habitual place of abode in this state for the larger portion of the twelve months next preceding the day before the second Monday of April in each year, shall, for...

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    ... ... etc. Co. v. Copper Co., 91 U.S. 656; Trust Co. v ... Mercer Co., 170 U.S. 583; Upshur v. Mayor, 94 ... Md. 757, 51 A. 953; Rockefeller v. O'Brien, 224 ... F. 541; State v. Earnhardt, 170 N.C. 727; Murphy ... v. Utter, 186 U.S. 95.) The intent of a statute is the ... law ... ...
  • Jewett v. Keystone Driller Co.
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    ...Kennefick-Hammond Co., 80 Ark. 138, 96 S. W. 986,7 L. R. A. (N. S.) 704, 117 Am. St. Rep. 79,10 Ann. Cas. 63. See, also, Rockefeller v. O'Brien (D. C.) 224 F. 541, 552. The cases of Ingram v. Cowles, 150 Mass. 155, 23 N. E. 48, and Bull v. Gowing, 85 N. H. 483,160 N. E. 475, denying the rig......
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    ...97 Mich. 221, 56 N.W. 600. 20 Note 18 supra. 21 Singer Sewing Mach. Co. of New Jersey v. Benedict, 8 Cir., 179 F. 628, 629; Rockefeller v. O'Brien, D.C., 224 F. 541, affirmed 6 Cir., 239 F. 127; Fordson Coal Co. v. Maggard, 6 Cir., 2 F.2d 708; Connecting Gas Co. v. Imes, D.C., 11 F.2d 191; ......
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