D. C. O'NEIL, FRANK LUKE and THAD M. MOORE, as Members of the State Tax Commission of the State of Arizona, Appellants,
FRANK GOLDENETZ, Doing Business Under the Firm Name and Style of GOLDENETZ PRINTING COMPANY, Appellee
APPEAL from a judgment of the Superior Court of the County of Maricopa. M. T. Phelps, Judge. Judgment affirmed.
Mr. Joe Conway, Attorney General of Arizona, and Mr. W. E. Polley, his Assistant, for Appellants.
Mr. John M. Levy and Mr. K. Donald Wren, for Appellee.
[53 Ariz. 53] LOCKWOOD, J.
This is an appeal by the State Tax Commission, hereinafter called defendant, from a judgment in favor of Frank Goldenetz, hereinafter called plaintiff. The facts of the case are not seriously in dispute, and may be stated as follows, the real question being the legal inferences to be drawn therefrom.
In 1935 the legislature, at its regular session, adopted chapter 79 which reads, so far as material, as follows:
"Section 1. Horse-racing and dog-racing meets; application for permit; fee. Horse-racing and dog-racing meets may be held in this state only in the manner provided herein. Any person, co-partnership, [53 Ariz. 54] association, or corporation desiring to hold a horse-racing or dog-racing meet shall make application for a permit therefor to the state tax commission....
"Sec. 2. Granting application; license fee. If the commission, after investigation, shall find that the reputation of the applicant for honesty, integrity, and fair dealing is good, and that the plan submitted for such meeting is not objectionable, it may grant the application....
"Sec. 5. Parimutuel machines; revenue. The use of parimutuel machines at racing meets held as herein provided is hereby authorized, under rules and regulations to be prescribed by the commission. The commission shall receive 4 per cent. of all moneys received from parimutuel sales, for the privilege of conducting such machines and the owner and/or operator of such machines shall receive 9%....
"Sec. 6. Receipts to be paid state treasurer. All moneys collected by the commission under the provisions of this act shall be transmitted to the state treasurer, by a bonded certified public accountant or a bonded public accountant certified by the state, who shall place the same in the general fund."
In pursuance of this act the defendant granted to certain racing interests a right to conduct horse racing at Phoenix during January, 1938, and the state fair commission entered into an agreement with these interests permitting them to use the race-track at the state fair grounds for that purpose. The fair commission apparently considered it necessary that some organization be set up to look after the commission's interest in the meet, and selected one Steve Brody as a member of what was called the racing commission, his salary being paid by the state fair commission, although he also had a commission as inspector without salary from the tax commission, apparently for the purpose of allowing him some authority at the meet. Thereafter the defendant, in executive session, adopted a set of rules and regulations for it. These rules covered not only the operation of parimutuel machines [53 Ariz. 55] but the conduct of horse racing in general at all meets authorized by the defendant. Shortly before the meet was to start, the fair commission asked the tax commission to have a number of copies of the rules printed for use at the meet, but was told by the chairman of the tax commission that the latter had no funds with which to have the rules printed, and that if the fair commission desired them it would have to bear the expense itself. In some manner, not apparent from the record, Brody secured a copy of these rules and regulations, and submitted them to plaintiff, requesting him to have them printed. A proof was made which was submitted to Brody, to Frank Brophy, a member of the fair commission, and to Joseph M. Peggs, the director of the state income tax division of the defendant. The proof was checked against the original rules and regulations in the minutes of the defendant by two of the employees of the income tax division, under the direction of Peggs, who then O. K.'d the proof, and returned it to plaintiff, whereupon they were printed, and twenty-five copies delivered by plaintiff to Peggs, and the other seventy-five copies sent to the fair commission. All copies left after the meet were eventually returned to the defendant and stored by it. Thereafter plaintiff prepared a claim for the value of the printing, and took it to the fair commission, but was told that he would have to submit it to the tax commission, as it was the body which should pay the bill.
He did this, and the claim was rejected, whereupon this suit was brought. The trial court, after hearing the evidence, rendered judgment in favor of plaintiff, apparently on the theory that while the original order had been made by an employee of the fair commission, yet the conduct of the tax commission was such that it was ...