But these differences in phraseology, and the others just referred to, must not be too literally contradistinguished. In neither of the cases cited was the adjective used as an exclusive or rigid delimitation. For present purposes, however, we shall inquire whether the activity here in question constitutes an essential governmental function within the proper meaning of that term; and in that view decide the case."
The court further stated (300 U.S. pages 372, 373, 57 S. Ct. 495, 501): "And to say that, because the city makes a charge for furnishing water to private consumers, it follows that the operation of the water works is corporate and not governmental, is to beg the question. What the city is engaged in doing in that respect is rather rendering a service than selling a commodity. If that service be governmental, it does not become private because a charge is made for it, or a profit realized. * * * The state or the city may exact a tuition charge for instruction in the public schools."
The court further stated (300 U.S. page 371, 57 S. Ct. 495, 500):
"It may be, as it is suggested, that private corporations would be able and willing to undertake to provide a supply of water for all purposes; but if the state and city of New York be of opinion, as they evidently are, that the service should not be intrusted to private hands, but should be rendered by the city itself as an appropriate means of discharging its duty to protect the health, safety, and lives of its inhabitants, we do not doubt that it may do so in the exercise of its essential governmental functions. * * *
"Governmental functions are not to be regarded as nonexistent because they are held in abeyance, or because they lie dormant, for a time. If they be by their nature governmental, they are none the less so because the use of them has had a recent beginning."
The reasoning of the Brush Case is applicable to the present case. The education of the children of a state is an essential governmental function. The furnishing of cafeterias which promotes the physical, moral, and educational welfare of the student body is an essential part thereof. This was the judgment of the Commonwealth of Pennsylvania and the School District of the City of Pittsburgh.
Hoskins et ux. v. Commissioner, 5 Cir., 84 F.2d 627, 628, is a case in which the facts and the questions involved are substantially the same as in this case. Mrs. Hoskins was superintendent of cafeterias for the Fort Worth Public Schools. The Commissioner assessed the income received by her from said office. The court, in an opinion by Foster, C.J., stated:
"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. * * *
"Undoubtedly Mrs. Hoskins was an employee of the school district and not an independent contractor. It was within the discretion of the school board to determine what was essential in the operation of the schools. The cafeteria system as operated by the school board could not reasonably be considered a private enterprise, equivalent to a public cafeteria operated for profit. That its receipts were kept separate did not make it a separate entity and was no more than a matter of bookkeeping, for convenience in determining whether it showed a loss or broke even as intended. The cafeterias no doubt tended to improve the health of the pupils. Surely this was a result within the province of the school board to accomplish. Perhaps the introduction of a balanced meal gave some instruction in dietetics. To that extent, at least, it was educational.
"We consider that the operation of the cafeteria system was a proper exercise of a governmental function by the school district and that Mrs. Hoskins is a public employee of a political subdivision of the state of Texas engaged in performing governmental functions."
I conclude that the salary of plaintiff, as general manager of cafeterias in the public schools of the City of Pittsburgh from 1925 to 1935, inclusive, was not taxable income under the federal income tax laws.
Defendant contends that the School District of the City of Pittsburgh was without power to establish and operate cafeterias in its public high schools prior to May 19, 1931; that there was no legislative authority therefor. As stated above, cafeterias had been established and maintained in the Pittsburgh High Schools since 1911 or 1912; in the City of Philadelphia prior to that date. There is no evidence that their power to do so had ever been questioned. The School District of the City of Pittsburgh had been given power prior to May 19, 1931, and as early, at least, as 1911, to establish, equip, furnish, and maintain elementary public schools, high schools, etc.This power was broad enough to include the establishing, equipping, and maintaining of cafeterias in the public high schools -- cafeterias being essential to the physical, moral, and educational welfare of the students attending such schools.
Let an order for judgment be prepared in accordance with the findings of fact, conclusions of law, and this opinion.
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