Central Law Journal

November 20, 1926

PICKETING BY LABOR UNION UNLAWFUL IN ABSENCE OF STRIKE

The New York Law Journal for October 27, 1926, published the opinion rendered by the Appellate Division of the Circuit Court of New York in the case of Daitch and Company v. Cohen, which holds that picketing, although peaceable is legally unjustified in the absence of a strike. In this case it appeared that the plaintiff, a private corporation, had never conducted a union shop. It had no employees who were members of the defendant Labor Union. Defendant, for forty-five days picketed plaintiff's shops, the pickets carrying signs, with the purpose of either forcing plaintiff to employ union men or to ruin its business. The Court issued an injunction declaring that, "there being no strike there is no legal justification for the acts of the defendant."

We make further use of a note prepared by the New York Law Journal concerning this subject.

While

In the case of a strike on the part of employees, by the weight of authority. they are entitled to picket, provided, however, (1) that the picketing is orderly and peaceable, and (2) that the number of pickets is reasonable and does not constitute a nuisance or menace. there is some authority which holds that all picketing tends to incite disorder and riots, and therefore is unlawful per se, as has been said, the weight of authority does not go to that extent. The opinion of Mr. Chief Justice Taft in American Steel Foundries v. Tri-City Central Trades Council (237 U. S., 184), though recognizing the right to picket in connec

tion with a strike, points out that there must be a limitation upon the number and nature of pickets employed, and limited the number of pickets to one representative for each point of ingress and egress (see also Berg Auto Trunk & Specialty Co., Inc., v. Wiener, 200 N. Y. Supp., 745, per Benedict, J.). That picketing is unlawful where coercion, intimidation and physical violence were employed was enunciated by the Court of Appeals in Auburn Draying Co. v. Wardell (227 N. Y., 1). See also Altman v. Schlesinger (204 App. Div., 513, per Clarke, P. J.). In the case of Reed Co. v. Whiteman (238 N. Y., 545, memo., modifying 206 App. Div., 672) the picketing was limited to two in number at any one time, and the injunction issued by the Appellate Division, which in effect restrained all picketing, was declared to be "too broad."

On the other hand, where there is no strike at all in the premises of the complainant, and its employees are satisfied and the defendant union is merely acting for purposes of its own in order to arouse discontent, picketing is unlawful and the interference with plaintiff's business by it or by similar means is illegal (Stuyvesant Lunch & Bakery Corp'n v. Reiner, 110 Misc., 357, per Greenbaum, J., aff'd without opinion, 192 App. Div., 951; Arnheim v. Hillman, 198 App. Div., 88; Skolny v. Hillman, 114 Misc., 571, a'ffd 198 App. Div., 941).

In the recent case of Bolivian Panama Hat Co. v. Finkelstein (215 N. Y. Supp., 399) it was held, in a well-considered opinion written at Special Term, New York County, that a labor union may not interfere with a private business for its own purposes where there is no strike, either by picketing or by any other similar coercive measures.

The last cited case was approved editorially in the New York Law Journal on August 17, 1926, and its point of view was adopted at Special Term of the Su

preme Court, New York County, in the case of The Tailored Woman v. Sigman (supra; see also Cushman's Sons, Inc., v. Amalgamated Food Workers' Bakers, Local 164, et al., 127 Misc. Rep., 152, 215 N. Y. Supp., 401).

It seems clear to us that it is a cardinal and fundamental principle of law that an employer may conduct his own business as he sees fit, so long as he does not infringe upon the rights of others. If, therefore, he determines that his own interests will best be served by the employment of non-union laborers the law should and will protect him equally with those who operate union shops (Yablonowitz v. Korn, 205 App. Div., 440, 199 N. Y. Supp., 769). The Supreme Court of the United States, in the case of Hitchman Coal & Coke Co. v. Mitchell (245 U. S., 229) stated at page 257-and the language is quoted with approval by the learned Appellate Division in the case under discussion-as follows:

"Another fundamental error in defendant's position consists in the assumption that all measures that may be resorted to are lawful if they are 'peaceable'-that is, if they stop short of physical violence or coercion through fear of it. In our opinion any violation of plaintiff's legal rights contrived by defendants for the purpose of inflicting damage or having that as its necessary effect is as plainly inhibited by the law as if it involved a breach of the peace.

While labor should and will be encouraged, yet in the absence of a strike, picketing, the carrying of signs and the distribution of circulars of the character alleged in proceedings of this nature must be deemed unlawful as an improper interference with the legal rights of another, and therefore "as plainly inhibited by the law as if it involved a breach of the peace" (Hitchman Coal & Coke Co. v. Mitchell, supra), since, obviously, acts of this nature are indulged in "simply for the purpose of intimidating and coercing plaintiff to hire union men" (Yablonowitz v. Korn, supra).

NOTES OF IMPORTANT DECISIONS CAUSE NOT REMOVABLE AFTER FINAL DEFAULT JUDGMENT IN STATE COURT.The case of State ex rel. v. Kelley, 286 S. W. 724, decided by the Springfield Court of Appeals (Missouri), holds that under federal statute requiring petition for removal of cause to be filed before trial, where default judgment which was final under state procedure was entered in state court before petition for removal was filed in federal court, cause was not removable, regardless of federal court's order for its removal, and, after setting aside of default judgment by state court, it was still pending therein, preventing issuance of writ of prohibition to prevent state court's trying

cause.

In this respect the Court said:

In

"In this case there can be no question but the order of removal made by the federal court on February 19, 1926, was void for the reason that the case was clearly not removable at that time. The federal statute requires the petition for removal to be filed before trial, and the federal courts hold that a default is a trial within the terms of the statute. If the petition is not filed before the trial of the case in the state court, the case is not removable. this case a default judgment, which, under our procedure was, in this case, a final judgment, was entered in the state court February 18th, one day before the petition for removal was filed in the federal court. It is clear that, had the petition filed in the federal court disclosed that fact, the federal court would not have issued an order of removal. The fact which would show that the case was not removable, to wit, the default judgment in the state court, was apparent on the record of that court, and we see no reason why the state court could not take cognizance of its own record and determine from it that the case was not removable and hence that the order of removal of the federal court, evidently made without knowledge of the fact that a default judgment had already been entered of record in the state court was void.

"It is not a question of the state court over. ruling or going contrary to the action or judg ment of the federal court, but is merely the state court acting on information furnished by the record of the case which was not before the federal court, and which did not require the exercise of judgment or discretion to determine its effect. If it did require the exercise of judgment, the state court could not override the judgment of the federal court, but, when it is apparent from the record of the state court that the case is not removable, the state court can ignore the void order of re

moval made by the federal court and may proceed in the case as if no order of removal had been made by that court. To our minds the power in a state court to pass upon the question of the sufficiency of a petition to state facts to show that a case is removable would logically carry with it the power to inspect its own record, and, when it is apparent from a mere inspection of that record that the cause is not then removable because forbidden by the plain terms of the statute, that court would not lose jurisdiction by a party filing therein a petition for removal and bond that were regular on their face. The state court, having jurisdiction to pass on the sufficiency of the petition, must necessarily have the power to inspect its own record and determine from it whether the petition had been filed in time and if, as in this case, it is apparent from the record of the court that the case is not removable because the petition was not filed before trial, the state court could disregard the petition, although sufficient on its face, and proceed with the cause.

"On the same principle, the state court could ignore an order of removal made by the federal court when an inspection of its own record shows that the case was not removable when the order of removal was issued by the federal court, for it would then be apparent that the order of removal of the federal court was made without any knowledge of the fact that a trial of the case had already been had in the state court, and the order of removal was for that reason void. We think the reasoning of the United States Supreme Court in Stone V. South Carolina, 117 U. S. 430, 6 S. Ct. 799. 29 L. Ed. 962; supports this view, and we hold that the order of removal made by the federal court on February 19, 1926, was void and did not take away from the state court the power and jurisdiction to set aside a default judgment during the term at which it was entered. We think the order of the court setting aside the default judgment made on February 23, 1926, and during the same term at which it was entered, was within its jurisdiction, and the cause is now pending for trial in that court.

If

There is another view of this case from which the same result must be reached. we accept relators' position as correct and hold that the state court was ousted of all jurisdiction by the order of removal made by the federal court on February 19, 1926, because the state court could not pass upon the validity of that order, then we would also be compelled to hold that the state court could not pass on the question as to whether the first petition, filed February 8th, was filed in time. That petition

and bond were in due form, and, if the rule that the mere filing of a petition ousts the jurisdiction of the state court and places it in the federal court applied in this case, then the jurisdiction of the state court was arrested on February 8th, when the first petition for removal was filed, and relator would be compelled to go to the federal court and get the case remanded to the state court before the If state court could take any other steps. jurisdiction was lodged absolutely in the federal court by the filing of the petition, then only the federal court could pass on the question as to whether the petition was filed in time. If that were true, then the state circuit court did not have jurisdiction to enter judg ment by default, and the judgment it did enter on February 18th, and which is made the basis of this proceeding, is void, and the case is still pending in that court for trial."

EMPLOYEE BLASTING ROCK FOR USE ON RAILROAD NOT ENGAGED IN INTERSTATE COMMERCE.-The Supreme Court of Utah, in Conway v. Southern Pac. Co., 248 Pac. 115, holds that an employee injured while blasting rock from employer's quarry, 10 or 15 miles from where it was used to fill up employer's railroad track, used in interstate commerce, was not engaged in such commerce, within federal Employers' Liability Act (U. S. Comp. St. §§ 8657-8665).

In part, the court said:

"Here the employee was engaged in blasting and breaking down rock from a ledge of rock in a mountain, from the respondent's quarry. After the rock was broken down, it by others was loaded into cars and carried a distance of 10 or 15 miles, as we deduce from the allegations of the complaint, and was there used to fill up and raise the track across the lake. On its facts we think the case comes within the case of Delaware, L. & W. R. R. Co. v. Yurkonis, 238 U. S. 439, 35 Sup. Ct. 902, where the employee was preparing and setting off a charge of dynamite for the purpose of blasting coal in the carrier's colliery or mine, and where the court said:

""The averments of the complaint as to the manner of the receiving of the injury by plaintiff show conclusively that it did not occur in interstate commerce. The mere fact that the coal may be or was intended to be used in the conduct of interstate commerce, after the same was mined and transported, did not make the injury one received by the plaintiff while he was engaged in interstate commerce. The injury happening when plaintiff was preparing to mine coal was not an injury happening in interstate commerce, and the defendant was not then carrying on interstate commerce, facts

essential to recovery under the Employers' Liability Act.'

"This case also directly comes within the case of McLeod v. So. Pac. Co., 299 Fed. 616, where the employee was engaged in mining rock from the carrier's quarry, intended to be used in repairing its line of railway used in interstate commerce. The court said:

"'A fair interpretation of the allegations of plaintiff's petition is that, at the time of the injury to plaintiff, he was engaged in mining rock intended to be used in the repair or improvement of defendant's roadbed. This was not an interstate commerce service, nor SO closely connected with such service as to be a part thereof. It has frequently been held that mining, like manufacturing, is not interstate commerce'-citing numerous cases. "That the rock which plaintiff was engaged in taking from the quarry at the time he was injured was intended for use in repairing the defendant's roadbed, which was being used for interstate commerce, did not make his employment interstate commerce.'

"To the same effect are the cases of Heisler v. Colliery Co., 260 U. S. 245, 43 S. Ct. 83, 67 L. Ed. 237; Oliver Iron Min. Co. v. Lord, 262 U. S. 172, 43 S. Ct. 526, 67 L. Ed. 929; United Mine Workers v. Coronado Coal Co., 259 U. S. 344, 42 S. Ct. 570, 66 L. Ed. 975, 27 A. L. R. 762.

"Thus, under the authorities, and especially under the authority of McLeod v. Sou. Pac. Co., supra, it would seem that the appellant, in blasting and breaking down rock, was engaged in mining, and, if the character of his work shall be regarded as such, then clearly he was not engaged in commerce.

"In the case of Karras v. C. & N. W. Ry. Co., 165 Wis. 578, 162 N. W. 923, L. R. A. 1917E, 677, it was held that the work being done by a railroad employee when injured determines whether he was engaged in interstate commerce within the Employers' Liability Act, and that, where a railroad section repair hand was peeling ties intended for use in defendant's interstate roadbed when injured, he was not engaged in interstate commerce within the federal Employers' Liability Act. To the same effect are the cases of Missouri, K. & T. Ry. Co. v. Watson (Tex. Civ. App.) 195 S. W. 1177, and Sullivan v. C., M. & St. P. Ry. Co., 163 Wis. 583, 158 N. W. 321. the latter case the court said:

In

"Without going into the technic of the matter, we will state our conclusion to be that work of preparing articles for interstate commerce is not a part of such commerce, within the meaning of the federal Employers' Liability Act"-citing a number of cases from the Supreme Court of the United States' "

CONSTITUTIONAL LIMITATIONS ON DIRECT AND INDIRECT TAXES

BY WALTER E. BARTON®

In a former article we stated that the distinction between direct and indirect taxes as contemplated by the Constitution was not settled satisfactorily by the courts during the first century of our constitutional history. It remained for the Supreme Court to set the question at rest in 1895 in the famous case of Pollock v. Farmers' Loan and Trust Company.2

This case arose under the Act of August 15, 1894, which imposed a tax "upon the gains, profits and income received in the preceding calendar year by every citizen of the United States, whether residing at home or abroad, and every person residing therein, whether said gains, profits or income be derived from any kind of property, rents, interest, dividends or salaries, or from any profession, trade, employment or vocation carried on in the United States, or elsewhere, or from any other source whatever

The constitutionality of the Act was attacked on the ground that it imposed a tax on the income from realty and personalty without apportionment among the several states pursuant to the Constitution.3 It was argued by the plaintiff that a tax on the income from realty or personalty was equivalent to a tax on the realty or personalty itself; that a tax on realty or personalty was a direct tax; and, therefore, that a tax on the income therefrom was a direct tax. It was argued by the government that the tax imposed was an excise or duty and that the Act should be upheld unless the court were willing to hold that

(*) Of_the_Washington, D. C. Bar, Co-Author of Barton & Browning's "Federal Income and Estate Tax Laws, Correlated and Annotated." This article is reprinted from the March number of the National Income Tax Magazine, with their permission and by courtesy of the author.

(1) "Direct and Indirect Taxes as Contemplated by the Constitution," National Income Tax Magazine, October, 1925.

five of its former decisions were erroneous and should be reversed.

In approaching the question, the court reviewed the historical circumstances attending the framing and adoption of the Constitution and adverted to the debates of Congress when the Act of June 5, 1894, was being enacted.

The cases chiefly relied upon by the government, were Hylton v. United States,* Pacific Insurance Company v. Soule, Veazie Bank v. Fenno, Scholey v. Rew,7 and Springer v. United States. In these cases the court had stated per dicta that direct taxes as contemplated by the Constitution included only taxes on land and capitation taxes. In the case of Springer v. United States, supra, the court had held that the tax imposed by the Act of March 3, 1865, "upon the annual gains, profits and income of every person whether derived from any kind of property, rents, interest, dividends or salaries" was an excise or duty and, therefore, constitutional.

One of the preliminary questions for the court to decide in the Pollock case was whether the rule stare decisis applied. Anything that had been said in the earlier cases to the effect that direct taxes included only taxes on real estate and capitation taxes was mere dictum and not binding on the court in the Pollock case.

est from United States bonds. The latter, of course, was income from personalty so was a part of the income in the Pollock

case.

In the Springer case the court had concluded:

"Our conclusions are, that direct taxes, within the meaning of the Constitution, are only capitation taxes, as expressed in that instrument, and taxes on real estate; and that the tax of which the plaintiff in error complains is within the category of an excise or duty."

In referring to this language, the court in the Pollock case stated that while the language used was broad enough to cover the interest from United States bonds as well as the professional earnings, the validity of the tax as to either would have been sufficient to support the deed on which the action of ejectment was predicated.

The court thereupon concluded that in all of the cases from that of Hylton to that of Springer, it had been conceded that taxes on land were direct taxes; that in none of the cases had it been decided that taxes on rents or income derived from land were not direct taxes; and that in none of the cases had the question been discussed as to whether a tax on the income from personalty was equivalent to a tax on the personalty itself. The rule stare decisis, therefore, did not apply.

Was a tax on the income from realty equivalent to a tax on the realty itself?

Court wherein it was held that a tax on the occupation of an importer was equivalent to a tax on imports themselves;11 that a tax on the income from United States securities was equivalent to a tax on the securities themselves; 12 that a tax on the income of an officer was equivalent to a tax on the office itself;13 that a tax on a bill of lading was equivalent to a tax on the articles which it represented;14 that a tax on the interest from bonds was equivalent

(11) Brown v. Maryland, 12 Wheat 419.
(12) Weston v. City Counsel, 2 Pet. 449.
(13) Dobbins v. Commissioner, 16 Pet. 435.
(14) Almy v. California, 24 Howard 169.