1. Equity will enjoin a criminal prosecution that illegally threatens irreparable injury to property, where the plaintiff has no adequate remedy at law. In the instant case the criminal proceedings were not directed against the plaintiff, but against his alleged employees, and the plaintiff had no adequate remedy at law.
2. Certificates of exemption granted to a World War veteran, authorizing him to conduct the business of operating "slot" or coin-operated machines without the payment of any license, do not exempt the proprietors of places of business, in which the veteran displays his machines for operation under an agreement whereby he pays the proprietors one half of the gross receipts, from the payment of a license tax on each machine so operated, the tax being specifically levied against the proprietors of the places of business.
No. 14296. NOVEMBER 12, 1942.
Walter E. Braddy filed a petition for injunction against the City of Macon, alleging as follows: He is a disabled World War veteran, and as such holds certificates of exemption issued by the ordinary of Bibb County and the State revenue commissioner, authorizing him to conduct the business of "slot machines" in any county or municipality of the State during 1942, without paying any license tax therefor. Copies of these certificates are attached to the petition. The petitioner's business consists of operating slot or coin-operated music and marble amusement machines. He places his machines in various business establishments, where they will be available to the public. "For the use of the space occupied by each such machine and for the proprietor's services in supervising the playing thereof and protecting and preserving the machine, petitioner pays to each proprietor of every such establishment one-half the gross receipts of each machine." The machines are kept locked, and no one but the petitioner has a key thereto. He services each machine and keeps it in repair. "Periodically, petitioner goes to each of said places, opens each machine, takes out the money, pays to the proprietor of the place his agreed share of the receipts, and takes the balance himself; the amounts paid to each such persons being paid and received as aforesaid for the use of the space occupied by each such machine and for the proprietor's services in supervising the use and playing thereof and protecting and preserving it." The defendant passed an ordinance on December
16, 1941, levying license taxes for 1942 on persons conducting various businesses, including the kind of business operated by the petitioner. The material portions of the ordinance are as follows: "Coin-operated machines, meaning pianos, victrolas, music-boxes, machines for the vending or sale of gum or candy, or any other merchandise, or for amusement, the operation of which machine or contrivance necessitates the use of coins or discs. This license to be against the proprietor of the premises or place of business in which said machine or contrivance is located or operated or displayed for operation. [Then follows a schedule of the license fees to be paid for each machine, the fee for the type of machines operated by petitioner being $14.50.] It shall be unlawful for any machine of the kind or description set out herein to be operated or displayed for operation without first having displayed thereon the tag, label, or insignia issued by the license inspector; and upon the failure of any person or persons to so display said tag, label, or insignia, the owner and/or operator of said machine, the owner or person in charge of the premises upon which the machine is operated or displayed for operation, either or all, shall be subject to appearance before the recorder's court of the City of Macon, and upon conviction shall be punished as prescribed by the act creating said court, and the acts amendatory thereof."
The City of Macon, acting through its license inspector and police officers, is seeking to force each person in whose place of business the petitioner has placed a machine to pay the license fee provided for by the above ordinance, and it has threatened to institute criminal proceedings and issue executions against each proprietor for failure to pay the license fee. Several prosecutions have already begun, and others are threatened. The ordinance under which the defendant is proceeding constitutes an attempt to tax petitioner's business, notwithstanding he and his business are exempt under the laws of Georgia by virtue of his being a disabled war veteran. The tax levied by the ordinance is illegal, arbitrary, and excessive, and the persons against whom it is sought to be levied have notified petitioner that they can not and will not pay it, and that he must withdraw them from their places of business. For the same reason he is unable to secure other places in which to display his machines. He has invested all his savings in said machines, and has been conducting a profitable business; but if the
defendant is allowed to continue attempting to enforce the license fee against the said proprietors, his business will be destroyed. The ordinance constitutes a subterfuge by which it is sought to levy a tax upon petitioner who is by law exempt therefrom, and as such is null and void. He has no adequate remedy at law. He prays that the defendant and its officers and agents be enjoined (1) from interfering with the operation of his business; (2) from seeking to collect the tax from petitioner or from any of the persons in whose places of business he has placed his machines; (3) from instituting any proceeding, civil or criminal, against him or the proprietors of the places in which his machines are located; and (4) from prosecuting further the criminal proceedings already instituted. The court sustained a general demurrer to the petition, and the plaintiff excepted.
1. This case does not fall within the rule that equity will not enjoin a criminal prosecution. The plaintiff seeks to enjoin the collection of an alleged illegal tax, on the ground that its enforcement will destroy his business. The criminal prosecutions involved are not directed against the petitioner, but against the persons in whose establishments he has placed his machines. In these circumstances the petitioner has no adequate remedy at law, and equity has jurisdiction of the case. Great Atlantic Pacific Tea Co. v. Columbus, 189 Ga. 458
(6 S.E.2d 320); City of Albany v. Lippitt, 191 Ga. 756
(13 S.E.2d 807).
2. Counsel for the plaintiff admits that the city had the power to levy a license tax against either the owner or the exhibitor of the machines, or against both, but contends that the exhibitor or owner of the place of business in which the machines are located is merely an employee of the plaintiff, and as such is entitled to the same exemption as the employer. It has been held that the servants and employees of a disabled or indigent veteran are also protected by the certificate under which the veteran operates his business, and that they can not be called upon to pay for any license covered by the exemption granted to the veteran. Hartfield v. Columbus, 109 Ga. 112
(34 S.E. 288). To sustain the plaintiff's contention it must appear both that the proprietors of the places of
business in which the plaintiff has placed his machines are employees or servants of the plaintiff, and that the license tax is in effect one against the business of the plaintiff. Numerous cases have been cited for the purpose of showing that the plaintiff and the proprietors are not partners. Sankey v.Columbus Iron Works, 44 Ga. 228; Thornton v. McDonald,108 Ga. 3 (2) (33 S.E. 680); Thornton v. George, 108 Ga. 9
(33 S.E. 633); Padgett v. Ford, 117 Ga. 508 (2) (43 S.E. 1002); Dawson National Bank v. Ward, 120 Ga. 861
(48 S.E. 313); Butts v. DeBeaugrine, 28 Ga. App. 269
(110 S.E. 926); Allgood v. Feckoury, 36 Ga. App. 42 (135 S.E. 314). It is clear from the cases cited that no partnership relation exists between the plaintiff and these proprietors or exhibitors, because of the fact that the latter share only in the gross receipts, and do not share in any losses of the business. Under the facts as alleged, the duties of the proprietors consist of furnishing the space in which to place the machines, supervising the use and playing of the machines, and protecting and preserving them. For these services the proprietors receive one half of the gross receipts from the machines. It also appears that the other half of the gross receipts from the machines constitutes the sole income of the plaintiff's business; for he does not own any of the establishments in which his machines are made available to the public. In a limited sense the owners of these establishments are employees or servants of the plaintiff, in that they supervise the use of the plaintiff's machines; but in a broader sense they are in the business of operating "slot" machines themselves. It is the owner of the business establishment who makes the machines available to the public and provides the place of business for their operation. The city in the ordinance under attack saw fit to make the owner of the establishment responsible for the payment of the license tax levied against each machine operated in his business. No distinction is made between machines owned by this person and machines owned by some other person. Counsel for the plaintiff admits that the city had the power to levy the license tax in this manner, but contends that it should not apply to persons who exhibit machines belonging to indigent or disabled veterans under an agreement whereby the exhibitors get only a stated portion of the receipts from the machines. We can not agree to this contention. If a license tax against an exhibitor is proper, why should any distinction
be made because he exhibits machines belonging to a veteran? He is in the business of exhibiting slot machines, and the ownership of the machines does not change the character of that business. "One can not transact a business and be relieved of tax by showing he is the agent of another." Underwriters Salvage Co.
v. Atlanta, 174 Ga. 678, 682 (163 S.E. 893). See Morgan v.State, 140 Ga. 202, 205 (78 S.E. 807). The tax may incidentally affect the plaintiff's business, in that it makes it less desirable to the proprietor of a business establishment to have one of the machines in his establishment, and might deter a proprietor from allowing a machine to be installed in his place of business; yet it is not a tax of which the plaintiff can complain. The Code, § 84-2011, authorizing disabled or indigent veterans to peddle or conduct a business without paying license for the privilege of so doing, declares, "that the privileges hereby granted shall not be transferred to or used by any other person." We think the quoted provision of the section would be violated if we gave it a construction which would exempt the exhibitors of the plaintiff's machines from the payment of a license tax levied against them. To exempt them from the payment of the tax would be to allow third persons to use the veteran's exemption in conducting their business.
It should be clearly understood that this opinion does not mean that a municipality can in any manner make the veteran pay a license for the conduct of his business. If in the instant case the veteran owned the establishment exhibiting the machine and was himself the "exhibitor," he would be exempt. This exemption can not be used, however, by a third person to avoid a tax properly levied against that third person. It follows that the court did not err in sustaining the demurrer and dismissing the action.
Judgment affirmed. All the Justices concur.