Justia › US Law › US Case Law › US Supreme Court › Volume 480 › FCC v. Florida Power Corp.
Federal Communications Commission v. Florida Power Corp.
The Pole Attachments Act (Act) empowers the Federal Communications Commission (FCC), in the absence of parallel state regulation, to determine "just and reasonable" rates that utility companies may charge cable television systems for using utility poles as the physical medium for stringing television cable (47 U.S.C. § 224(b)(1)). The Act, in effect, also provides a range of reasonableness within which the FCC may set rates when it indicates that a minimum reasonable rate is equivalent to the marginal cost of providing pole attachments, while the maximum reasonable rate is determined by computing the fully allocated cost of the construction and operation of each pole to which cable is attached (47 U.S.C. § 224(d)(1)). Upon the complaints of three cable operators alleging that the yearly per-pole attachment rentals charged them by appellee Florida Power Corporation -- $7.15, $6.24, and $5.50, respectively -- were unreasonable, the FCC's Common Carrier Bureau issued orders reforming each of the pole attachment agreements to provide for yearly rents of $1.79 per pole. These orders were upheld by the FCC, which rejected appellee's constitutional arguments under the Takings and Due Process Clauses. However, on review, the Court of Appeals held that the Act violated the Fifth Amendment. The court first concluded that the Act authorized a permanent physical occupation of property, constituting a per se taking for which compensation must be paid under Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419. The court then struck down the Act under the Fifth Amendment on the ground that its authorization to the FCC to make initial rate determinations under prescribed standards usurped an exclusively judicial function.
1. The Act does not authorize a taking of property within the meaning of the Fifth Amendment. Pp. 480 U. S. 250-254.
by the FCC, requires utility companies to give cable companies space on utility poles or prohibits utility companies from refusing to enter into attachment agreements. Since the Act clearly contemplates voluntary commercial leases, rather than forced governmental licensing, it merely regulates the economic relations of utility company landlords and cable company tenants, which regulation is not a per se taking under Loretto. Pp. 480 U. S. 250-253.
(b) The FCC order did not effect a taking under traditional Fifth Amendment standards, which permit governmental regulation of rates chargeable on the use of private property devoted to public purposes so long as the rates set are not confiscatory. Here, the rate imposed was calculated according to the Act's maximum rate formula, which is not confiscatory since it provides for the recovery of fully allocated costs, including the actual cost of capital. Pp. 480 U. S. 253-254.
2. Because the Act does not authorize a taking under the Fifth Amendment, it is unnecessary to review the Court of Appeals' holding that the Act is unconstitutional. P. 480 U. S. 254.
MARSHALL, J., delivered the opinion for a unanimous Court. POWELL, J., filed a concurring opinion, in which O'CONNOR, J., joined, post, p. 480 U. S. 254.
These cases present consolidated appeals from a single decision of the United States Court of Appeals for the Eleventh Circuit holding that 47 U.S.C. § 224 (the Pole Attachments Act) effects an unconstitutional taking of property without just compensation.
The Pole Attachments Act, 92 Stat. 35, as amended, 47 U.S.C. § 224, was enacted by Congress as a solution to a perceived danger of anticompetitive practices by utilities in connection with cable television service. Cable television operators, in order to deliver television signals to their subscribers, must have a physical carrier for the cable; in most instances, underground installation of the necessary cables is impossible or impracticable. Utility company poles provide, under such circumstances, virtually the only practical physical medium for the installation of television cables. Over the past 30 years, utility companies throughout the country have entered into arrangements for the leasing of space on poles to operators of cable television systems. These contracts have generally provided for the payment by the cable companies of a yearly rent for space on each pole to which cables were attached, the fixed costs of making modifications to the poles and of physical installation of cables being borne by the cable operators. In many States, the rates charged by the utility companies for these attachments have not been subject to regulation.
"regulate the rates, terms, and conditions for pole attachments to provide that such rates, terms, and conditions are just and reasonable. . . ."
"a rate is just and reasonable if it assures a utility the recovery of not less than the additional costs of providing pole attachments, nor more than an amount determined by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way."
Common Carrier Bureau issued a memorandum opinion and order finding in favor of Teleprompter and Acton, reforming the agreements to provide in both cases for yearly rents of $1.79 per pole, and ordering refunds of excess rents paid after the filing of the complaints. [Footnote 3] Florida Power filed an application for review by the FCC; during the pendency of this application, Cox filed a complaint seeking revision of the rent charge under its 1963 agreement, which was at that time set at $5.50 per pole. The Common Carrier Bureau ordered reformation of Cox's agreement to provide for rent of $1.79 per pole. In September, 1984, the FCC, in a single order, approved the orders of the Common Carrier Bureau in all three cases. The Commission rejected constitutional arguments raised by Florida Power under the Takings and Due Process Clauses, and upheld the rate calculations made by the Bureau.
Florida Power then sought review of the FCC's decision in the United States Court of Appeals for the Eleventh Circuit. [Footnote 4] Neither Florida Power nor any of the intervenors argued before the Eleventh Circuit that the Pole Attachments Act was unconstitutional. [Footnote 5] The Court of Appeals nonetheless held in a per curiam opinion that the Pole Attachments Act violated the Fifth Amendment. 772 F.2d 1537 (1985).
The court first concluded that the Act effected a taking of property because it authorized a permanent physical occupation of property under our decision in Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982). 772 F.2d at 1544. The court then struck down the Act under the Fifth Amendment because it authorizes the FCC to make the initial determination of the amount of compensation to be paid under legislatively prescribed standards. "By prescribing a binding rule' in regard to the ascertainment of just compensation," the court stated, "Congress has usurped what has long been held an exclusive judicial function." Id. at 1546.
The FCC and intervenor cable operators noticed separate appeals from this decision. We noted probable jurisdiction and consolidated the cases for argument and decision, 476 U.S. 1156 (1986). We now reverse.
The Court of Appeals found at the outset that the Pole Attachments Act authorizes a permanent physical occupation of property, which, under the rule we adopted in Loretto, is per se a taking for which compensation must be paid. 772 F.2d at 1543-1544. We disagree with this premise, for we find that Loretto has no application to the facts of this litigation.
landlords in return for the statutory compulsory access to property. Id. at 458 U. S. 424-425. We found that our prior decisions interpreting the Takings Clause, along with the purposes of the Clause itself, compelled the conclusion that "a permanent physical occupation authorized by government is a taking without regard to the public interests that it may serve." Id. at 458 U. S. 426. We reversed the holding of the New York Court of Appeals that the challenged statute did not take property within the meaning of the Fifth Amendment, and remanded for consideration of the issue whether just compensation had been paid.
state regulation, to review the rents charged by public utility landlords who have voluntarily entered into leases with cable company tenants renting space on utility poles. As we observed in Loretto, statutes regulating the economic relations of landlords and tenants are not per se takings. Id. at 458 U. S. 440; see Bowles v. Willingham, 321 U. S. 503, 321 U. S. 517-518 (1944); Block v. Hirsh, 256 U. S. 135, 256 U. S. 157 (1921); see also Fresh Pond Shopping Center, Inc. v. Callahan, 464 U. S. 875 (1983) (dismissing challenge to rent control ordinance under Loretto for want of substantial federal question).
"So long as these regulations do not require the landlord to suffer the physical occupation of a portion of his building by a third party, they will be analyzed under the multifactor inquiry generally applicable to nonpossessory governmental activity."
Loretto, supra, at 458 U. S. 440 (emphasis added).
"[P]roperty law has long protected an owner's expectation that he will be relatively undisturbed at least in the possession of his property. To require, as well, that the owner permit another to exercise complete dominion literally adds insult to injury. Furthermore, such an occupation is qualitatively more severe than a regulation of the use of property, even a regulation that imposes affirmative duties on the owner, since the owner may have no control over the timing, extent, or nature of the invasion."
between a commercial lessee and an interloper with a government license. We conclude that the Court of Appeals erred in applying the per se rule of Loretto to the Pole Attachments Act.
"may, consistently with the Constitution, limit stringently the return recovered on investment, for investors' interests provide only one of the variables in the constitutional calculus of reasonableness."
Id. at 390 U. S. 769. So long as the rates set are not confiscatory, the Fifth Amendment does not bar their imposition. St. Joseph Stock Yards Co. v. United States, 298 U. S. 38, 298 U. S. 53 (1936); see Permian Basin, supra, at 390 U. S. 770.
"by multiplying the percentage of the total usable space, or the percentage of the total duct or conduit capacity, which is occupied by the pole attachment by the sum of the operating expenses and actual capital costs of the utility attributable to the entire pole, duct, conduit, or right-of-way."
47 U.S.C. § 224(d)(1). The minimum measure is thus equivalent to the marginal cost of attachments, while the statutory maximum measure is determined by the fully allocated cost of the construction and operation of the pole to which cable is attached.
The FCC has evidently interpreted the statute to provide that, when it reduces the contract rate for pole attachments, it may only reduce to the maximum rate allowed under the statute. Tr. of Oral Arg. 10. The rate imposed by the Commission in this case was calculated according to the statutory formula for the determination of fully allocated cost. App. to Juris. Statement of FCC 23a. Appellees have not contended, nor could it seriously be argued, that a rate providing for the recovery of fully allocated cost, including the actual cost of capital, is confiscatory. [Footnote 7] Accordingly, we hold that the the FCC regulatory order challenged below does not effect a taking of property under the Fifth Amendment.
* Together with No. 85-1660, Group W Cable. Inc., et al. v. Florida Power Corp. et al., also on appeal from the same court.
The Commission had previously investigated allegations of overcharging by utilities, but had concluded that it had no jurisdiction because pole attachments were not "communications by wire or radio" under the Communications Act, 48 Stat. 1064, as amended, 47 U.S.C. § 151. See California Water & Telephone Co., 64 F.C.C.2d 753, 758 (1977).
Florida Power's agreements with Cox and Acton were for a minimum term of one year, thereafter terminable by either party on six months' notice. The agreement with Teleprompter provided for a minimum term of 5 1/2 years, terminable thereafter on six months' notice.
The rate ordered by the Commission was in both instances substantially lower than the rate which the cable operators had asked the Commission to adopt. The cable operators, after review of information provided by Florida Power, had requested the imposition of annual rents of approximately $2.20 per pole.
Appellants in No. 86-1660, Group W Cable, Inc., National Cable Television Association, Inc., and Cox Cablevision Corporation, intervened before the Court of Appeals supporting the FCC. Tampa Electric Company, Alabama Power Company, Arizona Public Service Company, and Mississippi Power and Light Company, appellees in both cases, intervened before the Court of Appeals in support of Florida Power.
Florida Power's opening brief in the Court of Appeals stated that its petition for review of the Commission's order did not "involve a facial attack on the constitutionality of a legislative act." See Brief for Petitioner in No. 84-3683 (CA11), p. 35.
"[t]he hard reality of the matter is that, if Florida Power desires to exclude the cable companies, for whatever reason, they are powerless to do so . . . because, in previous cases where utilities have ordered cable companies to disconnect, the FCC has routinely intervened by issuing temporary stays which prevent the exclusion of the cable companies."
772 F.2d 1537, 1543 (1985). According to the Solicitor General, the FCC "has not yet taken a position" on whether utilities may terminate attachment contracts for nonretaliatory reasons. Tr. of Oral Arg. 7. The language of the Act provides no explicit authority to the FCC to require pole access for cable operators, and the legislative history strongly suggests that Congress intended no such authorization. See, e.g., S.Rep. No. 95-580, p. 16 (1977) (The Act "does not vest within a CATV system operator a right to access to a utility pole, nor does the bill, as reported, require a power company to dedicate a portion of its pole plant to communications use"). We do not decide today what the application of Loretto v. Teleprompter Manhattan CATV Corp., 458 U. S. 419 (1982), would be if the FCC in a future case required utilities, over objection, to enter into, renew, or refrain from terminating pole attachment agreements.
In view of the Commission's interpretation of the statute, and use of the fully allocated cost measure in this case, we have no occasion to consider the constitutionality of the minimum rate allowable under the statute.
Our disposition of the takings question makes it unnecessary to review on the merits the Court of Appeals' holding that Congress may not establish standards under which the initial determination of compensation will be made by an administrative authority subject to final judicial review.
"may, consistently with the Constitution, limit stringently the return recovered on investment, for investors' interests provide only one of the variables in the constitutional calculus of reasonableness,"
id. at 390 U. S. 769.
"the return to the equity owner should be commensurate with returns on investments in other enterprises having corresponding risks."
Id. at 320 U. S. 603.
relevant statute, the action of the regulatory commission, and a complex of other factors. The rates before us clearly comport with the Constitution. In my view, no purpose is served by selecting for quotation a single sentence that, standing alone, is meaningless at best.


§ 235-1 Finding and policy.
§ 235-3 Limitations of actions.
§ 235-4 Resolution of disputes and procedures for complaints, investigation and declaration; Agricultural Reconciliation Committee.
§ 235-5 Right to farm notice and real estate transfer disclosure.
It is the declared policy of Charles County to preserve, protect and encourage the cultivation of its agricultural land for the production of food and other agricultural products. It is the purpose of this chapter to reduce the loss of County agricultural resources by limiting the circumstances under which agricultural and forestry operations may be deemed to constitute a nuisance, trespass or other interference with the reasonable use and enjoyment of adjacent land, including but not limited to smoke, odors, dust, noise, chemicals or vibration, provided that nothing in this chapter shall in any way restrict or impede the authority of the state and of the County to protect public health, safety and welfare.
It is in the public's general interest to promote a clearer understanding between agricultural, forestry operations (including raising and or harvesting of trees) and nonagricultural residential neighbors concerning the normal inconveniences of agricultural operations which follow generally accepted agricultural and forestry practices and do not danger public health or safety.
This chapter is not intended to and shall not be construed in any way as modifying or abridging local, state or federal laws relating to health, safety, zoning, licensing requirements, environmental standards (including those standards which relate to air and water quality) and the like.
An additional purpose of this chapter is to promote a good neighbor policy by advising purchasers and users of property adjacent to or near agricultural or forestry operations of the inherent potential problems associated with such purchase or use. These potential problems include, but are not limited to, noise, odors, dust, chemicals, smoke, vibration (factors or items that are a direct result of mechanical, human or animal activities that are associated with agriculture and forestry production) and hours of operation that may accompany agricultural operations throughout the year. It is intended that a mandatory disclosure statement be made available so that purchasers and users of real property will better understand the impact of living near agricultural or forestry operations and be prepared to accept attendant conditions as the natural result of living in or near rural areas.
However, this chapter shall be effective regardless of § 235-5 herein (Right to farm notice and real estate transfer disclosure).
Pertains to those normal activities associated with agricultural or forestry production that are performed during various times of the year. The operator, owner or is/her designee needs to perform any normal agricultural or forestry activities in a manner that shows common courtesy and will have minimal impact on the surrounding property owners. The daily activities shall be performed in a manner that will have minimal impact on the environment as well as human health.
All other land that has been used as an agricultural or forestry (raising and harvesting trees on site as an agricultural product with the use of sound forest management practices) operation continuously for one year (single growing season).
Includes, but is not limited to, all matters set forth in the definition of "agricultural operation" in § 5-403, Courts and Judicial Proceedings, Annotated Code of Maryland, as amended from time to time; the production of all matters, encompassed within the definition of "farm product" in § 10-601(c), Agriculture, Annotated Code of Maryland, as amended from time to time; the cultivation and tillage of the soil; composting, production, harvesting and processing of agricultural crops; raising poultry; production of eggs; production of milk and dairy products; production of livestock, including pasturage; production of bees and their products; production of fish; production of fruit, vegetables and other horticultural crops; production of aquatic plants; aquiculture; production of timber and commercial agricultural procedures performed as incident to or in conjunction with such operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market; usage of land in furtherance of educational and social goals (including, but not limited to, 4-H clubs and Future Farmers of America), agro-tourism and alternative agricultural enterprises; and the like.
A flying vehicle that is used to perform a variety of duties related to agricultural and forestry production that include: seeding, spraying, dusting and control of forest fires.
Includes, but is not limited to, the propagation, raising, cultivation and production of all products derived from the practice of forestry on site, as encompassed within the definition of "forestry," as set forth in § 7-101(c), Business Occupations and Professions, Annotated Code of Maryland, as amended from time to time.
Those methods used in connection with agricultural or forestry operations which do not violate applicable federal, state or local laws or the public health, safety and welfare and which are generally accepted agricultural or forestry practices in the agriculture or forestry industry. Generally accepted agricultural or forestry practices include those practices which are recognized as best management practices and those methods which are recommended by various governmental agencies, bureaus and departments, such as the Charles County Cooperative Extension Service of the University of Maryland (CES), Charles County Soil Conservation District (SCD), Farm Service Agency (FSA), Natural Resource Conservation Service (NRCS) and the Charles County Forestry Department.
Organic or inorganic materials that are added to the soil that help to improve soil tilth, soil permeability, soil water-holding capacity and soil organic matter. Soil amendments may include, but are not limited to: sewage sludge (biosolids), animal wastes, leaves, grass cuttings, compost, etc. These materials must be used and applied in a manner that is consistent with best management practices and nutrient management planning.
The noise, sound or linear motion that results when agricultural or forestry equipment is performing normal seasonal activities. These include: cultivation, plowing, discing, planting, spraying, irrigating, harvesting, crop driers, hauling and transporting of agricultural and forestry products and other activities associated with normal agricultural activities, including the harvesting of trees.
A private action may not be sustained with respect to an agricultural or forestry operation conducted on agricultural land if the uses associated with said operation are consistent with the Charles County Code and Zoning Ordinance.
The agricultural or forestry operation is conducted substantially in accordance with generally accepted agricultural or forestry practices.
Notwithstanding any provision of this section, no action alleging that an agricultural operation or forestry operation has interfered with the reasonable use or enjoyment of real property or personal well-being shall be maintained if the plaintiff has not sought and obtained a final judgment from the Agricultural Reconciliation Committee, as defined in § 235-4 herein.
Nuisances which affect public health.
Complaints. A person may complain to the Charles County Health Department to declare that a nuisance exists which affects public health.
Investigations. The Health Officer shall investigate all complaints of nuisances received against an agricultural or forestry operation. When a previous complaint involving the same condition resulted in a determination by the Health Officer that a nuisance condition did not exist, the Health Officer may determine not to investigate such a complaint. The Charles County Health Department may initiate investigations without citizen complaint.
After the Health Officer has completed the investigation, the Health Officer will report the findings to the Agricultural Reconciliation Committee, to aid in their nuisance determination.
Resolution of disputes regarding agricultural and forestry operations.
Should any controversy arise regarding an interference with the use or enjoyment of property resulting from agricultural or forestry operations conducted on agricultural land, the parties to that controversy shall submit the controversy to the Agricultural Reconciliation Committee as set forth below.
The Charles County Agricultural Reconciliation Committee shall arbitrate and mediate disputes involving agricultural or forestry operations conducted on agricultural lands and issue opinions on whether such agricultural or forestry operations are conducted in a manner consistent with generally accepted agricultural or forestry management practices.
The Agricultural Reconciliation Committee shall be composed of five persons, all Charles County residents, who are appointed by the County Commissioners of Charles County. One member shall be recommended by the Agricultural Advisory Committee, one member shall be recommended by the Charles County Farm Bureau and three members shall be chosen at large by the Commissioners representing the entire County. Members of the Committee shall serve at the pleasure of the County Commissioners for two full four-year terms. Members shall have the option to be considered for reappointment, and the term limit of each member will be based on County policy unless the County Commissioners of Charles County decide otherwise.
The Agricultural Reconciliation Committee will conduct its proceedings in an informal manner, and the rules of evidence shall not apply. In each case before it, the Agricultural Reconciliation Committee shall issue orders settling or otherwise resolving controversies arising out of agricultural or forestry operations, including but not limited to the invasion of property and personal rights.
If the Agricultural Reconciliation Committee or a court finds that the conduct of a party in bringing or maintaining an action in connection with an agricultural or forestry operation conducted on agricultural land was in bad faith or without substantial justification, the Reconciliation Committee or court may require that party to pay to the owner of the agricultural operation or forestry operation (or any other party opponent) the costs of the proceeding and the reasonable expenses, including reasonable attorney's fees, incurred by that party in defending against the action.
Upon all transfer of real property, the transferor shall provide the purchaser or lessee with a statement advising the purchaser or lessee of the existence of this Right to Farm Ordinance, which shall be in the form set forth in Appendix A.
In addition, because of the County's desire to maintain a good neighbor relationship between the agricultural industry and the citizens, and the County's desire to provide this information to County real property owners, the Charles County Treasurer shall mail a copy of the "Right to Farm Notice" to all owners of real property in Charles County with the annual tax bill, beginning in fiscal year 2002, in the form set forth in Appendix B.
Penalty for violation. Any person who violates any provision of this section is guilty of an infraction punishable by a civil penalty not exceeding $100. Failure to comply with any provision of this right to farm notice and real estate transfer disclosure section shall not prevent the recording of any document, or the title to real property or any mortgage or deed of trust made in good faith or for value, and it shall not affect the application of this chapter.


text:
G.R. No. 178564, January 15, 2014 - INC. SHIPMANAGEMENT, INC., CAPTAIN SIGFREDO E. MONTERROYO AND/OR INTERORIENT NAVIGATION LIMITED, Petitioners, v. ALEXANDER L. MORADAS, Respondent.
INC. SHIPMANAGEMENT, INC., CAPTAIN SIGFREDO E. MONTERROYO AND/OR INTERORIENT NAVIGATION LIMITED, Petitioners, v. ALEXANDER L. MORADAS, Respondent.
Assailed in this petition for review on Certiorari1 are the Decision2 dated October 31, 2006 and Resolution3 dated June 25, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 84769 which granted respondent Alexander L. Moradas's (respondent) claim to permanent total disability benefits in the amount of US 60,000.00, or its peso equivalent, and attorney's fees.
Claiming that the burns rendered him permanently incapable of working again as a seaman, respondent demanded10 for the payment of his full disability benefits under Section 20 (B) in relation to Sections 30 and 30-A of the Philippine Overseas Employment Agency (POEA) Standard Employment Contract (POEA-SEC), in the amount of US$60,000.00, which petitioners refused to heed.11 Thus, respondent filed a complaint against petitioners for the same, seeking as well moral and exemplary damages, including attorney’s fees.
Respondent filed a motion for reconsideration but the same was denied in a Resolution36 dated March 31, 2004. Dissatisfied, he filed a petition for certiorari before the CA.
On October 31, 2006, the CA rendered the assailed Decision,37 holding that grave abuse of discretion tainted the NLRC ruling.
Aggrieved, petitioners moved for reconsideration which was, however, denied in a Resolution44 dated June 25, 2007. Hence, this petition.
The essential issue in this case is whether or not the CA erred in finding that the NLRC gravely abused its discretion when it denied respondent’s claim for disability benefits.
At the outset, the Court deems it proper to elucidate on the framework in which the review of this case had been conducted, in conjunction with the applicable governing rules to analyze its substantive merits.
In the foregoing light, the Court observes that respondent executed his contract of employment on July 17, 2000,47 incorporating therein the terms and conditions of the 2000 POEA-SEC which took effect on June 25, 2000. However, since the implementation of the provisions of the foregoing 2000 POEA-SEC was temporarily suspended48 by the Court on September 11, 2000, particularly Section 20, paragraphs (A), (B), and (D) thereof, and was lifted only on June 5, 2002, through POEA Memorandum Circular No. 2, series of 2002,49 the determination of respondent’s entitlement to the disability benefits should be resolved under the provisions of the 1996 POEA-SEC as it was, effectively, the governing circular at the time respondent’s employment contract was executed.
D. No compensation shall be payable in respect of any injury, incapacity, disability or death of the seafarer resulting from his willful or criminal act, provided however, that the employer can prove that such injury, incapacity, disability or death is directly attributable to seafarer.
Accordingly, we do not re-examine conflicting evidence, re-evaluate the credibility of witnesses, or substitute the findings of fact of the NLRC, an administrative body that has expertise in its specialized field. Nor do we substitute our "own judgment for that of the tribunal in determining where the weight of evidence lies or what evidence is credible." The factual findings of the NLRC, when affirmed by the CA, are generally conclusive on this Court.
In view of which POEA Memorandum Circular No. 11, series of 2000, issued on 12 September 2000 enforcing the Temporary restraining Order issued by the Supreme Court in a Resolution dated 11 September 2000, on the implementation of the abovementioned provision is hereby Rescinded.
The evident conflict between the NLRC’s and CA’s factual findings as shown in the records of this case prompts the Court to sift through their respective factual determinations if only to determine if the NLRC committed grave abuse of discretion in reaching its disposition, keeping in mind that the latter’s assessment should only meet the threshold of substantial evidence.
First, records bear out circumstances which all lead to the reasonable conclusion that respondent was responsible for the flooding and burning incidents.
Records show that the LA and NLRC gave credence to the corroborating testimonies of the crewmen pointing to respondent as the person who deliberately caused the flooding incident. In particular, respondent was seen alone in the vicinity of the portside seachest which cover was found to have been intentionally removed and thereby caused the flooding. He was also seen disappearing up to the boiler deck just when the bilge level alarm sounded with patches of water left on the floor plates and on the stairways. Respondent neither denied nor proffered any explanation on the foregoing claims especially when all of his fellow engine room staff, except him, responded to the alarm and helped pump out the water in the engine room.53 As to the burning, respondent failed to successfully controvert Gile’s claim that he saw the former go to the paint room, soak his hands in a can full of thinner and proceed to the incinerator door where he was set ablaze. In fact, respondent’s burnt overalls conform to the aforesaid claim as it had green paint on the arms and body and smelled strongly of thinner, while the open paint tin can that was found in the vicinity contained solvent which had the same green color found on the overalls.
Second, respondent’s version that the burning was caused by an accident is hardly supported by the evidence on record.
Respondent debunked Gile’s claim by merely asserting in his Answer and Rejoinder before the POEA that the latter could not have been in the room at the time he got burned as he was not the first person to rescue him and concluded that he could not have soaked his hands in a can full of thinner considering the extent of damage caused to his hands.55 This argument is riddled with serious flaws: Gile could have been the second man in, and still personally know the matters he has alleged. Also, that respondent soaked his hands in thinner is not denied by the fact that the greatest damage was not caused to it since the fire could have started at some part of his body considering that his overalls also had flammable chemicals. Reason also dictates that he could have extinguished the fire on his hands sooner than the other parts of his body. In any event, the medical records of respondent, particularly the report56 issued by the Prince of Wales Hospital Burns Surgery, show that he suffered from "deep burn area" that was distributed over his left upper limb, right hand, left flank and both thighs.57 To assert that respondent’s hands should have suffered the greatest damage is plainly argumentative and records are bereft of showing as to the exact degree of burn suffered for each part.
To add, Bejada’s statement that respondent’s burnt overalls had patches of green paint on the arms and body and strongly smelled of thinner conforms with Gile’s claim that he soaked his hands in a can of thinner before approaching the incinerator (thinner may be found in a paint room). Such fact further fortifies petitioners’ assertion that his injury was self-inflicted as a prudent man would not dispose of garbage in the incinerator under such condition.
And if only to placate other doubts, the CA’s finding that "some chemicals splashed [on respondent’s] body"58 should not automatically mean that the "splashing" was caused by pure accident. It is equally reasonable to conclude that the "splashing"–as may be inferred from both the LA’s and NLRC"s findings–was a by-product of respondent’s botched sabotage attempt.
Third, petitioners’ theory that respondent’s burns were self-inflicted gains credence through the existence of motive.
At this juncture, the Court finds it important to examine the existence of motive in this case since no one actually saw what transpired in the incinerator room. To this end, the confluence of the circumstances antecedent to the burning should be examined in conjunction with the existing accounts of the crew members. That said, both the LA and the NLRC made a factual finding that prior to the burning incident, respondent was caught pilfering the vessel’s supplies for which he was told that he was to be relieved from his duties. This adequately supports the reasonable conclusion that respondent may have harbored a grudge against the captain and the chief steward who denied giving him the questioned items. At the very least, it was natural for him to brood over feelings of resentment considering his impending dismissal. These incidents shore up the theory that he was motivated to commit an act of sabotage which, however, backfired into his own burning.
In this relation, the Court observes that a definitive pronouncement on respondent’s mental unfitness need not be reached since the totality of the above-stated circumstances already figures into the rational inference that respondent’s burning was not a product of an impaired mental disposition but rather an incident which sprung from his own volition. Mental impairment connotes the lack of control over one’s action. If the actor is conscious of what he is doing, as respondent was in this case by sabotaging the ship, then a finding of mental unfitness is not needed. Differing from the CA s take on the matter, it is not contrary to human experience or logic for a spurned man to resort to tactics of desperation, however ludicrous or extreme those tactics may be, or however untoward or unfortunate its consequences may turn out, as in this case.
All told, petitioners having established through substantial evidence that respondent s injury was self-inflicted and, hence, not compensable pursuant to Section 20 (D) of the 1996 POEA-SEC, no grave abuse of discretion can be imputed against the NLRC in upholding the dismissal by the LA of his complaint for disability benefits. It is well-settled that an act of a court or tribunal can only be considered to be tainted with grave abuse of discretion when such act is done in a capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction.60 For the reasons herein detailed, the Court finds these qualities of capriciousness or whimsicality wanting in the case at bar and thus, holds that the CA erred in ruling that grave abuse of discretion exists. WHEREFORE, the petition is GRANTED. The Decision dated October 31, 2006 and Resolution dated June 25, 2007 of the Court of Appeals in CA-G.R. SP No. 84769 are REVERSED and SET ASIDE. Accordingly, the Decision dated January 30, 2004 of the National Labor Relation Commission dismissing respondent Alexander L. Moradas s complaint for permanent total disability benefits and other money claims is hereby REINSTATED.
2 Id. at 94-118. Penned by then Presiding Justice Ruben T. Reyes (now retired Associate Justice of the Supreme Court), with Associate Justices Juan Q. Enriquez, Jr. and Vicente S. E. Veloso, concurring.
4 Id. at 95. See also Contract of Employment dated July 17, 2000; id. at 165.
13 Id. at 234. Erroneously stated as "October 10, 2001" in the records.
14 Id. at 238. See also the statement dated December 7, 2000 signed by Captain Wirth; id. at 264-269. Based on the aforesaid statement, on October 10, 2000, while the vessel was docked in Hong Kong, Captain Wirth conducted a routine security inspection when he came across a large parcel which belonged to respondent lying on the crew passageway. Upon inspection, the box contained a television set, a day bed cover, several towels and some provisions, all belonging to the vessel. When asked why he was stealing the foregoing articles, respondent claimed that they were given to him as a present by the chief steward. However, when Captain Wirth asked the latter, he denied giving respondent the same. As a result, Captain Wirth informed respondent that his actions warranted his immediate dismissal.
16 Id. at 322-323. See Affidavit of Janito Subebe dated August 24, 2001. See also id. at 234.
17 Id. at 318-319. See Affidavit of Edgardo Israel dated August 27, 2001. See also id. at 234.
19 Id. at 320-321. See Sinumpaang Salaysay of Gile dated January 22, 2001.
20 Id. at 270-272. See Statement of Chief Officer Bejada dated December 7, 2000.
21 Id. at 318-319. See Affidavit of Edgardo Israel dated August 27, 2001.
28 Id. at 160-163. See Affidavit-Complaint dated February 21, 2001.
29 Id. at 400-408. Docketed as NLRC NCR OFW Case No. (M) 01-07-1316-00. Penned by LA Fe Superiaso-Cellan.
33 Id. at 485-492. Docketed as NLRC NCR CA No. 035689-03. Penned by Presiding Commissioner Lourdes C. Javier, with Commissioners Ernesto C. Verceles and Tito F. Genilo, concurring.
42 Id. at 110-115 and 117.
45 Dimagan v. Dacworks United, Incorporated, G.R. No. 191053, November 28, 2011, 661 SCRA 438, 445-446.
46 Magsaysay Maritime Corp. v. NLRC (Second Division), G.R. No. 186180, March 22, 2010, 616 SCRA 362, 372-373.
"MARINO, Inc. v. Laguesma," enjoining certain amendments introduced by the 2000 POEA-SEC. (See POEA Memorandum Circular No. 11, series of 2000 and POEA Memorandum Circular No. 2, series of 2002. See also Coastal Safeway Marine Services, Inc. v. Delgado, G.R. No. 168210, June 17, 2008, 554 SCRA 590).
50 Cootauco v. MMS Phil. Maritime Services, Inc., G.R. No. 184722, March 15, 2010, 615 SCRA 529, 544.
51 G.R. No. 172086, December 3, 2012, 686 SCRA 676.
53 Rollo, p. 275. Statement of 2nd Engineer Alexander Pynikov dated December 7, 2000.
58 See CA Decision, rollo, p. 109.
59 See Progress Homes v. NLRC, 336 Phil. 265, 270 (1997).

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Before the Court is Defendant United States of America's Motion to Dismiss. (ECF No. 8.) Plaintiff, Saida E. Mamedova, brought a wrongful levy action, pursuant to 26 U.S.C. § 7426(a)(1), against Defendant after the Internal Revenue Service (“IRS”) placed a levy on her property for unpaid taxes. For the reasons set forth below, Defendant's motion is GRANTED.
On May 2, 2011 and June 18, 2012, the IRS made income tax assessments for unpaid taxes against Plaintiff and her husband, Vadym Huzenko, for the 2009 and 2010 tax years in the amounts of $234, 651.75 and $32, 124.02, respectively. (Am. Compl. 1; Account Tr. Ex. A, ECF No. 8-2; Account Tr. Ex. B, ECF No. 8-2.) Plaintiff requested Innocent Spouse Relief from the IRS for the 2009 tax year, which was denied on July 21, 2014. She petitioned the United States Tax Court (“Tax Court”) for a redetermination on October 21, 2014. (Pet. 1 Ex. B, ECF No. 12-2.) On December 7, 2015, the Tax Court denied Plaintiff's petition (the “Decision”). Mamedova v. Comm'r, No. 25022-14, slip op. at 1 (T.C. Dec. 7, 2015); (Tax Court Decision Ex. C, ECF No. 12-3). The Decision stated that “[p]ursuant to the agreement of the parties in this case, it is ORDERED AND DECIDED: That [Plaintiff] is not entitled to relief under I.R.C. § 6015(f) with respect to her income tax liability for the taxable year 2009.” Mamedova, No. 25022-14 at 1-2.
With the 2009 and 2010 taxes still unpaid, the IRS issued Plaintiff and her husband a Notice of Federal Tax Lien Filing on March 28, 2017. (Am. Compl. Ex. B.) On April 17, 2017, the IRS issued a levy against Plaintiff and her husband for unpaid taxes for the years 2009 and 2010 on their property located at Florida Community Bank in Immokalee, Florida. (Am. Compl. Ex. A.) Seeking relief from the levy, Plaintiff brought this wrongful levy action pursuant to 26 U.S.C. § 7426(a)(1).
“Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit.” F.D.I.C. v. Meyer, 510 U.S. 471, 475 (1994) (citing Loeffler v. Frank, 486 U.S. 549, 554 (1988); Fed. Hous. Admin. v. Burr, 309 U.S. 242, 244 (1940)). “Sovereign immunity is jurisdictional in nature. Indeed, the ‘terms of [the United States'] consent to be sued in any court define that court's jurisdiction to entertain the suit.'” Id. (alteration in original) (quoting United States v. Sherwood, 312 U.S. 584, 586 (1941)). “It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction.” Id. (quoting United States v. Mitchell, 463 U.S. 206, 212 (1983)). “Waivers of the Government's sovereign immunity, to be effective, must be ‘unequivocally expressed.'” United States v. Nordic Vill. Inc., 503 U.S. 30, 33 (1992) (quoting Irwin v. Dep't of Veterans Affairs, 498 U.S. 89, 95 (1990)). “[T]he Government's consent to be sued ‘must be “construed strictly in favor of the sovereign, ” and not “enlarge[d] . . . beyond what the language requires[.]”'” Id. at 34 (second alteration and omission in original) (citations omitted).
Plaintiff's wrongful levy claim is brought pursuant to 26 U.S.C. § 7426(a)(1). Section 7426(a)(1) states: “[i]f a levy has been made on property . . . any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.” (Emphasis added.) The IRS assessed and issued a levy against Plaintiff for unpaid taxes for the 2009 and 2010 tax years, as evidenced by Plaintiff's name appearing alongside her husband's name on the IRS account transcripts for the 2009 and 2010 tax years. (Account Tr. Ex. A; Account Tr. Ex. B.) Thus, Plaintiff is undoubtedly “the person against whom is assessed the tax out of which such levy arose” and outside the statutory waiver. See 26 U.S.C. § 7426(a)(1); see also Komlo v. United States, 657 F. App'x 85, 88 (3d Cir. 2016) (affirming district court's dismissal on the basis of sovereign immunity for plaintiff's wrongful levy claim where plaintiff “lack[ed] recourse under the statute because [plaintiff] [was] the ‘person against whom' the IRS ‘assessed the tax' giving rise to the levy at issue”) (quoting § 7426(a)).
Plaintiff argues that she is not the person against whom the tax is assessed as she reached an agreement with the IRS that she did not jointly file tax returns with her husband in 2009 and 2010, and she argues that she did not otherwise have any income in those years. (Mem. in Supp. of the Pl.'s Resp. to the United States Mot. To Dismiss 1, ECF No. 10.) Plaintiff cites only the Decision of the Tax Court on Plaintiff's petition to receive Innocent Spouse Relief for the 2009 tax year as evidence of this agreement. (Id.) While the Decision states that Plaintiff and the IRS reached an agreement, the Decision does not state the substance of the agreement. See Mamedova, No. 25022-14 at 1-2.
However, the agreement noted in the Decision is beside the point because, even accepting Plaintiff's argument about her agreement with the IRS as true, Plaintiff is attempting to show that the tax assessment against her is invalid, which is impermissible under § 7426. See Shannon v. United States, 521 F.2d 56, 59 (9th Cir. 1975) (“one who sues under [section] 7426 cannot challenge the validity of the assessment”). In § 7426 actions, the tax assessment is “conclusively presumed to be valid.” See 26 U.S.C. § 7426(c) (“For purposes of an adjudication under this section, the assessment of tax upon which the interest or lien of the United States is based shall be conclusively presumed to be valid.”). Thus, § 7426(c) prohibits Plaintiff from challenging the validity of the tax assessment made against her and requires the Court to accept the tax assessments as valid. See Shannon, 521 F.2d at 59 n.9 (“once the assessment is made, the individual assessed is barred from challenging the validity of the assessment”); see also Komlo, 657 F. App'x at 88 (rejecting plaintiff's argument that plaintiff was not a person assessed a tax by the IRS by allegedly paying outstanding deficiencies after an assessment was entered against the plaintiff because “in the adjudication of a wrongful levy claim, the underlying assessment ‘shall be conclusively presumed to be valid'” (citing 26 U.S.C. § 7426(c))). Therefore, the Court has to accept the tax assessments made against Plaintiff as presumptively valid pursuant to § 7426(c).


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Smith v. TFI Family Services, Inc.
Ellis v. Chase Bank USA, N.A.
Parker v. Delmar Gardens of Lenexa, Inc.
Transport Funding, LLC v. HVH Transportation, Inc.
Donaldson vs. United States Department of Treasury, et al.
Robertson v. Asplundh Tree Expert Co.
MW Builders, Inc. v. Fire Protection Group, Inc.
Mann v. Con-Way Freight, Inc.
Wall v. Canon Solutions America, Inc.
Hanks v. Spirit Aerosystems, Inc.
Christmon v. B&B Airparts, Inc.
Potts v. Saint Luke's South Hospital, Inc.
Developers Surety and Indemnity Company v. Carothers Construction, Inc.
Rowan v. Sunflower Electric Power Corporation, et al.
Cavlovic v. J.C. Penney Corporation, Inc.
Young, et al. vs. Son, et al.
McDonald v. Wichita, Kansas, City of, et al.
Pralle v. Walmart Stores, Inc.
Energy Intelligence Group, Inc. et al v. CHS McPherson Refinery, Inc.
Terry J. Clark v Time Inc., et al.
Blair et al v. Transam Trucking, Inc.
Netstandard Inc. v. Citrix Systems, Inc.
Petrie et al v. Pension Advisors, Inc.
Carter v. Spirit Aerosystems, Inc.
UPU Industries, Inc. v. Total Petrochemicals & Refining USA, Inc.
Endecott v. Commercial Floorworks, Inc.
Williams et al vs. Nex-Tech Wireless, L.L.C.
Callahan v. Bledsoe, et al.
Anderson v. Par Electrical Contractors, Inc.
McFeeters v. Brand Plumbing, Inc.
Parks v. Wells Fargo Bank, N.A.
Cooper Clinic, P.A. v. Pulse Systems, Inc.
Houck v. Corrections Corporation of America, Inc.
Eric D. Keller v. Bank of America, N.A.
George v. Chex Systems, Inc.
Herington v. Wichita, City of, et al.

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Motorcyclist was severely injured when he crashed into a vehicle that made a sudden stop in front of him (Torchia v. Westgate Cleaning and Laundry, Los Angeles County Superior Court, Plaintiff attorney: Rahul Ravipudi).
Parent of premature infant who underwent brain surgery alleged that he did not consent to the pain medication used, which he deemed a medical battery (Campen v. Louy, Los Angeles County Superior Court, Defense attorney: Raymond R. Moore).
Pizza delivery driver crossed into oncoming traffic and struck a vehicle, whose occupants sustained catastrophic injuries (Novak v. Pizza Hut Inc., San Diego County Superior Court, Plaintiff attorneys: John H. Gomez and John P. Fiske).
Developer of vertical broiler was victim of misappropriation of trade secrets and fraud by competitor (Quantum Cooking Concepts v. LV Associates, Los Angeles County Superior Court, Plaintiff attorney: Luan K. Phan).
Patient with lesion on forehead alleged physician's delay in diagnosis of lymphoma resulted in the necessity for more aggressive treatment (Confidential v. Confidential, Orange County Superior Court, Plaintiff attorney: Daniel M. Hodes).
Market patron alleged she sustained injury when she slipped and fell on beer that leaked while being stocked on store shelves (Saenz v. Northgate Gonzalez LLC, Los Angeles County Superior Court, Defense attorney: John J. Higgins).
Collision near a highway construction site left the driver of a vehicle a quadriplegic (Smith v. City of Palmdale, Los Angeles County Superior Court, Plaintiff attorney: Donald G. Liddy).
Forty-year-old driver was severely injured when he struck a vehicle that suddenly pulled out in front of him from a parked position (Confidential v. Confidential, Los Angeles County Superior Court, Plaintiff attorney: Ronald M. Papell).
Seventy-eight-year-old woman was struck by a van as she walked through the parking lot of a small shopping center (Marquez v. Guardado, Alameda County Superior Court, Defense attorney: Robert M. Maltz).
Sixteen-year-old passenger was injured when the vehicle in which he was riding crashed as a result of the driver engaging in a dangerous traffic game with another driver (Johnston v. Flores, Orange County Superior Court, Plaintiff attorney: Michael Louis Kelly).
Wife was killed and husband injured when their motorcycle struck a vehicle that made a left turn in front of them (Buzenus v. Confidential, Riverside County Superior Court, Plaintiff attorney: John M. Feder).
Editor's Note: California Bar Journal publishes this abbreviated summary of important trials in California provided by Trials Digest. To report your case results, go to west.thomson.com/trialsdigest/form.aspx or call 415-344-3952.

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18:15 The Lord your God will raise up for you a prophet like me from among you – from your fellow Israelites; 10 you must listen to him. 18:16 This accords with what happened at Horeb in the day of the assembly. You asked the Lord your God: “Please do not make us hear the voice of the Lord our 11 God any more or see this great fire any more lest we die.” 18:17 The Lord then said to me, “What they have said is good. 18:18 I will raise up a prophet like you for them from among their fellow Israelites. I will put my words in his mouth and he will speak to them whatever I command. 18:19 I will personally hold responsible 12 anyone who then pays no attention to the words that prophet 13 speaks in my name.
1 tn Heb “or dreamer of dreams.” See note on this expression in v. 1.
2 tn Heb “the Lord your God.” The pronoun has been used in the translation for stylistic reasons to avoid redundancy.
3 tn Heb “all your heart and soul” (so NRSV, CEV, NLT); or “heart and being” (NCV “your whole being”). See note on the word “being” in Deut 6:5.
4 tn Heb “or dreamer of dreams.” See note on this expression in v. 1.
5 tn Heb “your midst” (so NAB, NRSV). The severity of the judgment here (i.e., capital punishment) is because of the severity of the sin, namely, high treason against the Great King. Idolatry is a violation of the first two commandments (Deut 5:6-10) as well as the spirit and intent of the Shema (Deut 6:4-5).
6 tn Heb “your brother, the son of your mother.” In a polygamous society it was not rare to have half brothers and sisters by way of a common father and different mothers.
8 tn Heb “fathers” (also in v. 17).
9 tn Heb “which you have not known, you or your fathers.” (cf. KJV, ASV; on “fathers” cf. v. 18).
10 tc The MT expands here on the usual formula by adding “from among you” (cf. Deut 17:15; 18:18; Smr; a number of Greek texts). The expansion seems to be for the purpose of emphasis, i.e., the prophet to come must be not just from Israel but an Israelite by blood.
tn “from your brothers,” but not referring to actual siblings. Cf. NAB “from among your own kinsmen”; NASB “from your countrymen”; NRSV “from among your own people.” A similar phrase occurs in v. 17.
13 tn Heb “he”; the referent (the prophet mentioned in v. 18) has been specified in the translation for clarity.
14 tn Or “commanded” (so KJV, NAB, NIV, NRSV).
16 tn Heb “know the word which the Lord has not spoken.” The issue here is not understanding the meaning of the message, but distinguishing a genuine prophetic word from a false one.
17 tn Heb “the Lord’s.” See note on the word “his” in v. 5.
20 tn Heb “the Lord has.” See note on the word “his” in v. 5.


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Agency, Powers of Attorney, co-agency and strict construction By Michael J. Maslanka Real Estate Law, July 2017 Transactional attorneys and estate planning attorneys need to be aware of not only the language of the court in In Re Estate of Thomas F. Shelton, but in the Illinois Co-Agency statute.
Keep litigious proclivities out of real estate transactions By Colleen L. Sahlas Real Estate Law, July 2017 A litigator’s strategies may be effective in litigation, but in a residential real estate deal they can backfire, be destructive, and even jeopardize your client’s contractual rights.
Book review: Getting Started as a Real Estate Attorney, by Joseph R. Fortunato By Leonard F. Amari Young Lawyers Division, June 2017 This 130-page volume contains “everything-one-could-possibly-want-to-know” about practicing in the real estate transaction field, written by a recognized authority.
Include trustee’s acceptance language in an instrument conveying real property out of a land trust into a living trust By Colleen L. Sahlas Trusts and Estates, June 2017 When conveying real property out of a land trust to a living trust, don’t rely on the land trust company to prepare an instrument of conveyance that includes a written acceptance by the trustee of a trust to fulfill the new Illinois Statute at 760 ILCS 5/6.5(a).
Real estate tax exemptions in Illinois: A primer By Leonard F. Amari and Vesna Marusic Senior Lawyers, June 2017 Understanding the basics of real estate tax exemptions in Illinois.
Should Illinois real estate brokers “freak out” about Horiike v. Coldwell Banker Residential Brokerage Company et al.? (Is it a dual agency case, a disclosure case or a little bit of both?) By Betsy Urbance Real Estate Law, June 2017 Short answer: No. Read this article to understand the author's reasons.
Avoiding liabilities when working alongside real estate agents By Colleen L. Sahlas Real Estate Law, May 2017 Working relationships between attorneys and agents in real estate can often be positive and valuable. But it’s critical to understand and address the roles between agents and attorneys, define the boundaries, and be wary of potential liabilities that could result from working alongside them.
The costs of condominium documents and disclosures in condo sales By Adam B. Whiteman Real Estate Law, May 2017 There is growing concern among real estate practitioners that management companies view these charges as a gravy train in that most of the information being provided is completely automated. In light of this automated method of delivery, is a $300-$500 fee really “reasonable”?
Drones, federal and Illinois law, surveillance and the Fourth Amendment –Ad coelom et ad inferos? By Elizabeth Austermuehle Real Estate Law, April 2017 This article examines the intersection of property owners’ rights and drone operators’ rights, and highlights some of the wide ranging societal repercussions that may result from increased commercial and governmental drone usage in the coming years.
A tip to ingratiate yourself with real estate purchasing clients By Michael J. Maslanka Real Estate Law, April 2017 In light of Galinas v. The Barry Quadrangle Condominium Association, et al, townhome/condo purchasers should look into buying homeowner's insurance, even though the Association has its own policy.
Ownership of mineral interest: How to avoid probate, taxes and loss of rights By David M. Foreman and George C. Lackey Mineral Law, March 2017 The use of a mineral trust can avoid the issue of multiple ancillary probates in the states where the mineral interests are located.
Your tenant just exercised its option to purchase – where did your cash flow go until closing? By Timothy J. Hammersmith Real Estate Law, March 2017 If you own commercial real estate and your tenant has an option to purchase the leasehold premises as part of the lease, overlooking a few important details in drafting the option provisions can be costly.
Do good fences make good neighbors? By Joel L. Chupack Real Estate Law, February 2017 What does a good neighbor do if they want a fence, but there is a recorded restriction that states “NO FENCE OF ANY KIND SHALL BE COMMENCED, ERECTED OR MAINTAINED IN SAID SUBDIVISION ON ANY RESIDENTIAL LOT”?
Recent decisions in real estate tax cases By Timothy E. Moran and Ciarra J. Schmidt State and Local Taxation, December 2016 Recent cases of interest to practitioners.
The so-called Presumptively Void Transfers Act: Yet another trap for the unwary By Michael J. Rooney Real Estate Law, October 2016 The co-called “Presumptively Void Transfers Act” is allegedly designed to protect the elderly who are feeble in body and/or mind and who are subject to overreaching by a “caregiver.” In this article, the author argues that although that statement of the seeming intent of the Act and the operative section is simple, it is wrong.
Oil and gas law for the non-oil and gas lawyer By John C. Robison Mineral Law, September 2016 An overview for the practitioner who only occasionally encounters real estate with oil and gas issues.
Pouring over water certs and utility prorations By Adam B. Whiteman Real Estate Law, September 2016 Many municipalities require a water meter reading to be scheduled shortly before a closing as a pre-requisite to obtaining transfer stamps. However, City of Chicago water certifications are valid for up to 60 days. This creates a possibility that the water cert might not accurately reflect how much water is actually used prior to the closing.
Read ‘em and weep… in cards. Don’t read ‘em and weep… in law By Michael J. Maslanka Real Estate Law, September 2016 It is well-settled law in our state that a competent adult is charged with knowing and accepting the document he voluntarily signs and that his ignorance of what it says does not avoid its legal effect.
What NOT to include in your attorney modification letters By Colleen L. Sahlas Real Estate Law, August 2016 Modification letters that haven’t been thought through or well written can result in undermining our client’s best interests.
Tax sale purchase deemed fraudulent transfer By Megan G. Heeg Real Estate Law, July 2016 In Smith v. Sipi, LLC, a decision that could have a chilling effect on the Illinois real estate tax buying process, the Seventh Circuit held that a tax buyer was liable to a debtor in bankruptcy for a prior Illinois real estate tax sale on the basis that the tax sale was a fraudulent transfer.
Commercial tenancies: Clearly define every term in a lease agreement By Justin C. Strane Real Estate Law, June 2016 A recent appellate decision, Battaglia v. 736 N. Clark Corp., reminds us to clearly define all terms during commercial lease negotiations.
Commercial tenancies: Clearly define every term in a lease agreement By Justin C. Strane Business Advice and Financial Planning, June 2016 A recent appellate decision, Battaglia v. 736 N. Clark Corp., reminds us to clearly define all terms during commercial lease negotiations.
Germaneness is being ignored in recent association forcible cases By Mark R. Rosenbaum Real Estate Law, June 2016 Under recent caselaw, issues of lien rights appear to possibly now be a proper subject for claims and defenses in forcible court. I believe this is a mistake and that increased application of the concept of germaneness is necessary to correct the situation.
Lenders and contaminated property By Eugene P. Schmittgens, Jr. Business Advice and Financial Planning, May 2016 Establishing proper safeguards and with a property with a viable end-use, contaminated properties can be profitable for all parties.
Limiting percentage of rental units in condominium association may help retain property values By Michael Zink General Practice, Solo, and Small Firm, May 2016 Rental restrictions have become common practice among condominium associations great and small.
Will the real party plaintiff please stand up? Toward a sane foreclosure process: Substitution of party plaintiff, the transfer of interest, and implications on standing By Stephanie Bowman Arsenty Real Estate Law, May 2016 A look at the scenarios in which defendant borrowers are prejudiced by the statute governing substitution of parties and some proposed changes to promote fairness in the foreclosure process.
Caught by recapture By Michael G. Cortina Real Estate Law, April 2016 Not only did the appellate court affirm the decision of the trial court, which found that recapture rights are not a part of real estate and cannot be terminated by foreclosure, it also affirmed the decision to award $179,000 in attorneys’ fees to the appellee as the prevailing party in the litigation.
Revocable living trust, tenancy by the entirety, and a little loss of privacy By Michael J. Maslanka Real Estate Law, April 2016 As a result of Loventhal v. Edelson, bankruptcy attorneys should be sure to list the tenancy by the entirety exemption on Schedule C of the bankruptcy petition, and real estate attorneys should be reminded to have both spouses sign any deed conveying their property to themselves as tenants by the entirety, whether in a trust or otherwise.
Anthony P. Tummelson v. Elizabeth Ann White, 2014 IL App (4th) 150151, December 30th, 2015 By Philip J. Vacco Real Estate Law, March 2016 Would a transfer of funds from one cohabitant to another for the purpose of making mortgage payments, as well as other monthly obligations, be considered a gift or a contribution to the property?
Pick your title: “Just Don’t Do It!” … “Ethical Common Sense” … “Everyone is Tempted” By Michael J. Maslanka Real Estate Law, December 2015 It could easily happen that a transaction must close or is ready to close and a particular signature or notarization is missing. You need that signature and/or notarization. What do you do?

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GABRIEL CAPILI, Petitioner, v. COURT OF APPEALS, ET AL., Respondents.
On December 3, 1993, both accused entered a plea of not guilty to the offense charged with the assistance of counsel. 4 Thereafter, trial ensued.
Christine Diokno testified that at 4:00 P.M. on November 4, 1993, when she went home from her office, she discovered that some of her (sic) items at (sic) her closet and the jewelries (sic) and money at (sic) her mother’s room were taken. Upon call, two Makati police responded and surveyed the room where the robbery took place. The police officer took her statement (Exhs. "F", "F-1" and "F-2") and then investigated the theft case. Police prepared the police report and concluded that Michael Manzo, her former houseboy, committed the offense so a case against Manzo was filed. She described all the properties that were taken as those reflected in the police report because according to her she gave the police a list of the items and is part of her statement (tsn, p. 11, May 11, 1994). Allegedly the value is about 3 Million pesos, some were of 20 years and some were of 30 years vintage, acquired by her parents since their wedding in 1945. Some from abroad, States or Hongkong acquired during trips.
That before the discovery of the incident her mother had the list of all the items by counting them physically because her mother used to check the jewelry every week in her presence. That all is worth three (3) Million Pesos because the jewelries (sic) were sometimes brought to a jeweler for a change or for removal of stones or replacement that is why she considered that all the jewelries (sic) were appraised. She does not know, however, what exactly were brought by her mother. That she was present during the last inventory of the items and the land titles by her mother, presenting the alleged inventory on August 1, 1993 (Exh. "S"), after her father died on July 15, 1993. While her mother was checking them, she was in the room writing the description of the jewelries (sic), the cost and date when bought. That the corresponding value stated came from her mother kept inside the vault.
That on November 2, 1993, she took out all the items because November 9 was her mother’s birthday and would like to select the items she and her mother were going to wear for the occasion then check the jewelries (sic) against the prepared list. The list included the items lost but did not include the box of memorabilia which was taken from her room. She claimed that the records including the receipts from where the list was taken were lost together with the jewelries (sic) that were taken.
He identified the pearl earring with copper (sic) with diamond (Exh. "A"). He likewise identified the old coin 4 pieces of dollars marked as Exhs. "B-1", "B-2", "B-3" and "B-4" ; "B-1", "B-2" dimes, "B-3" and "B-4" quarter cents; pendant with inscription Boy Recto, Exh. "C." He admitted that the statement marked as Exh. "D" and sub-markings is his.
Describing the contents of the bag, he said that there were more or less 20 pieces of rings, some with pearls and some with diamonds and birthstones; more or less 20 pairs of earrings, diamond with pearls; more or less 10 pieces of necklaces of plain gold with pendant with the replica of God and cast with diamond. There were Quartz watches; 3 pieces Bulova watches; 5 pieces of Seiko watches, Raymond Wiel. That per complainant’s information, all of them costs (sic) 3 Million Pesos which he merely gave to the accused without counting them. He however, claims that they will cost only one to two million pesos. Despite which value, he entrusted them to Boy Recto without counting the pieces.
Defense adopted Exhibit "B" as Exhibit "1" and sub-markings, Exhibit "D" as their Exhibit "2" and "2-a" .
That witness explained that only the fancy ones were returned to him.
That the P1,500.00 was given to him near the bus terminal at Sampaloc near UST and when the fancies (sic) were returned, which he came to know as such because he had it appraised in a pawnshop when they arrived from Roxas, Isabela. When the jewelries (sic) were returned contained in the bag, he accepted, opened (sic) for a couple of minutes without counting. That Emilio Benitez glanced on (sic) them because the bus was about leave. Recto gave the instruction that he can come back within two weeks because Boy Recto will pay.
The witness admitted that he is facing a charge of Qualified Theft in Makati pending before a court where he posted his bail. That he is testifying before this Court out of his own volition. He explained that they went to Isabela per instruction of Gabriel Capili that they should lie low because the police were hunting for them and that Emilio Benitez is from Roxas, Isabela.
After more or less two weeks when (sic) they arrived from Isabela, he was requested by Boy Recto (Gabriel Capili) to sign a blank document somewhere at Espana (Document Exh. "3" to "3-A"). He was not, however, forced. That upon arrival from Isabela, they went to the house of the accused then proceeded to wait at a hotel in Sta. Cruz. After three hours of waiting, the accused arrived and gave him P6,000.00 in the presence of Emilio Benitez without receipt. He declared that he himself is not sure whether all the jewelries (sic) inside the bag are (sic) genuine or not.
Having admitted to the police that he is Michael Manzo, he was asked where he brought the jewelries (sic) so he pointed to Boy Recto. He admitted to have signed a blank document, Exhibit "4" and "3", his signature, Exh. "4-1" and Exh. "3-A", but do (sic) not know where the originals were, but later said that the originals are in the hands of the police officers.
SPO3 Ernesto Ramirez testified that as police officer of Station 3, on November 27, 1993 he investigated Michael Manzo who was accused of Qualified Theft at Makati and who admitted to him having committed said offense and pointed to the house of Gabriel Capili at Sampaloc, Manila where he sold the jewelries (sic). Thereafter, he and his companions SPO2 Reyes, SPO3 Salalia and SPO3 Fuentes with Michael Manzo went to the place and saw the wife of Gabriel Capili wearing the pair of earrings, one of the jewelries (sic) stolen. They were allowed by Gabriel Capili to get (sic) inside the residence where Gabriel Capili showed him the signed document of Michael Manzo, Exh. "4" and said he returned the jewelries (sic). It was however, denied by Manzo although he admitted the signature. Gabriel Capili went with them to the police precinct where he (Gabriel Capili) was referred to the investigator and found (sic) from his pockets 4 pieces of coins. Allegedly while the wife was then being investigated, Manzo pointed to the earrings worn by the (sic) wife as part of those stolen properties. The same was taken by the investigator. He pointed to both accused inside the courtroom.
On November 15, Manzo and Emil called him up again asking if it was possible to see him which he positively answered. He went to UST somewhere near Mambusco station where he saw Emil with Michael Manzo about 5 meters from Emil standing talking to someone. He asked Emil if he was able to sell the jewelries (sic) and was answered "not yet." Emil was borrowing P700.00 but he has no such amount, so Emil gave him the jewelries (sic) formerly offered to him, the birthstone and watch allegedly as a gift from Michael Manzo. Emil informed him that he and Michael Manzo together with two others were going to Isabela so he gave the P700.00. After they (Emil and his friend) boarded the bus he went home.
After several days Pat. Ramirez arrived informing him that Michael Manzo sold him jewelries (sic). Invited (sic) he went to the police at the Hidalgo sub-station 3. Michael Manzo was not immediately investigated but Michael Manzo and Emil were incarcerated. After fifteen (15) minutes from the second floor he was brought to the ground floor inside the cell and detained for several days. He alleged that on the same day he was brought in a room at the second floor where he was mauled by Pat. Ramirez (sic) not convinced with what he said about the paper (Exh. "4"), he gave them then brought back to the cell. He told the police that the jewelries (sic) they are looking for are in the possession of Michael Manzo. He further claimed that Michael Manzo talked to a certain Go and pointed to some other buyers who were brought to the precinct. He, however, did not know if they were released. On November 27 when his wife visited him at 7:00 P.M. she was likewise incarcerated because Michael Manzo pointed to the earrings of his wife.
He further declared that prior to his wife’s arrival, policeman and Michael planned that when his wife arrived, Michael will point to her earrings, allegedly because Emil gave P500.00 to the police officer while planning to include his wife. His wife was then brought to the second floor but did not know what happened, thereafter was incarcerated.
That upon inquest, the Fiscal told the police that they should be released but were not and (sic) brought back to the cell. The following morning they were brought to the City Hall. There again, the Fiscal ordered that they be released but were not and (sic) brought back to the cell once more. On the third time when he was brought to the Fiscal, the latter allegedly told him that San Diego altered the testimony that is why they will be incarcerated.
He denied that Manzo signed Exh. "3" without any writing and pointed to the typewritten statement therein as his relaying that the same was thru Michael’s suggestion at the time when they were already quarreling while accusing Manzo to have stolen the properties subject matter of this case and even questioned that there is something wrongly written, the giving as a gift.
That although they did not know the accused Michael Manzo and did not know of any reason why he pointed to him and his wife as buyers of the jewelries (sic) worth 3 Million Pesos, he believed that it was because of the quarrel when he started accusing Manzo of stealing of which he was being blamed.
SPO1 Beinvenido Inot testified that he is a member of the National Police Force of Precinct 1, Olongapo City and that the accused Ferma Capili, wife of Gabriel, is his sister. He was asked by his sister to testify about the pair of earring (sic) that he gave Ferma on June 24, 1990, a U. S. Fancy jewel which was given by her sister from abroad. It has brillantitos which is the same as a base of the glass. The same was confiscated from Ferma by the police.
The accused shall be credited with the full extent of his preventive imprisonment in accordance with Art. 29 of the Revised Penal Code.
Since the claim of P3 Million has not been sufficiently proven but the agreed price between the seller and herein accused is only P50,000.00, the accused is hereby directed to indemnify the complainant Christine Diokno the sum of P50,000.00, less the value of the jewelries (sic) presented in Court, Exhibits "A" "B" and "C" and its sub-markings, to be returned to the owner upon proper receipt and photograph.
The bond posted by the accused for his provisional liberty is hereby cancelled.
The body of the accused is hereby committed to the Director of the Bureau of Corrections, National Penitentiary, Muntinlupa, Metro Manila, through the City Warden of Manila.
Considering that there is no evidence to show complicity and/or that Ferma Capili conspired and confederated with her husband Gabriel Capili, she is hereby acquitted from the offense charged in the Information.
The bond posted by the accused for her provisional liberty is hereby cancelled.
"WHEREFORE, the decision of the trial court dated August 17, 1995 convicting the appellant for violation of P.D. 1612 is hereby AFFIRMED in toto.
The respondent through the Office of the Solicitor General (OSG) counters that on April 25, 1997, it filed a Manifestation/Clarification modifying the recommendation it made in its appellee’s brief to the effect that a remand of the case would unduly delay the disposition of the case. Therefore, to expedite the final resolution of the case, the OSG recommended that as an alternative to a remand that the assessment and findings of the trial court on the value of the subject articles, which is P50,000.00 be adopted and used instead. 11 It is therefore the contention of the OSG that there is no merit in the petitioner’s claim that the OSG agreed to the remand of the case for further reception of evidence to determine the value of the stolen goods inasmuch as this would be prejudicial to the rights of the petitioner. The OSG also opines that the petitioner is not entitled to an acquittal since the value of the stolen property is not determinative of the guilt of the accused and is not an element of the crime but is only determinative of the penalty therefor.
At any rate, the law does not require proof of purchase of the stolen articles by the accused as mere possession thereof is enough to give rise to a presumption of fencing. 16 GABRIEL, who was in possession of at least two of the stolen items, has not rebutted this presumption.
We also disagree with the petitioner that the prosecution failed to prove the value of the stolen items.
Applying the foregoing, the petitioner should be sentenced to suffer the penalty of prision mayor maximum. The fact that the value of the fenced items exceeds P22,000.00 should not, like in cases of estafa, be considered in the initial determination of the indeterminate penalty. 20 In the absence of mitigating and aggravating circumstances, this should be imposed in its medium period which ranges from ten (10) years, eight (8) months and one (1) day to eleven (11) years and four (4) months. Adding the additional two (2) year sentence, one for each P10,000.00 in excess of P22,000.00, the maximum of the indeterminate penalty is anywhere within ten (10) years, eight (8) months and one (1) day of prision mayor to thirteen (13) years and four (4) months of reclusion temporal21 . On the other hand, the minimum of the indeterminate sentence should be anywhere within the range of the penalty next lower which is prision correccional maximum 22 which ranges from four (4) years, two (2) months and one (1) day to six (6) years.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals finding the petitioner, Gabriel Capili guilty beyond reasonable doubt of violating Presidential Decree 1612 otherwise known as the Anti-fencing law is AFFIRMED with the MODIFICATION that the petitioner is hereby sentenced to suffer an indeterminate penalty of four (4) years, two (2) months and one (1) day of prision correccional as minimum to thirteen (13) years and four (4) months of reclusion temporal as maximum.
1.	Twelfth Division composed of the ponente J. Presbiterio J. Velasco, Jr. and the members: J. Consuelo Ynares-Santiago (Chairman) and J. B. A. Adefuin-De La Cruz concurring.
2.	Penned by Judge Romulo A. Lopez.
5.	Court of Appeals Decision, 2-10; Rollo, 25-33.
6.	RTC Decision, Record, 269-270.
7.	Court of Appeals Decision, Rollo, 43.
9.	Petition, 10, Rollo, 18.
11.	Comment, 6; Rollo, 61.
12. § 2a, P.D. 1612; Tan v. People, G.R. No. 134298, August 26, 1999, 6; Dunlao, Sr. v. Court of Appeals, 260 SCRA 788, 792 .
13.	Tan v. People, Supra, 7-8.
14.	TSN, May 11, 1994, 4-18.
15.	TSN, March 3, 1994, 2-8.
17.	People v. Sumalpong, 284 SCRA 464, 488 .
18.	ACT NO. 4103 as amended.
20.	People v. Gabres, 267 SCRA 581, 596 .
21. § 1 of ACT NO. 4103, Supra states that in cases when an additional year is added to the penalty, the penalty shall be termed reclusion temporal as in this case where the maximum penalty exceeds the range of prision mayor.
22.	People v. Javier, 112 SCRA 186, 193 ; People v. Gonzales, 73 PHIL. 549, 550-552 .

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1. A state may tax that part of the property of a carrier engaged in interstate and local business which is permanently located or commonly used within the state, according to its fair value as part of a going concern, measured with reference to the gross receipts from both local and interstate business. P. 261 U. S. 338.
on such property, valued as part of a going concern, nor relatively higher than taxes on other classes of property, does not discriminate against interstate commerce. P. 261 U. S. 339.
3. A state statutory provision that a foreign corporation failing to pay a tax shall be excluded from doing business in the state would be void as applied to interstate commerce. P. 261 U. S. 339.
4. The tax here involved, based on the California Constitution (Art. XIII, § 14, as amended, 1910) and on subsequent statutes, was not intended to reach income from property situated or business done outside of the state. P. 261 U. S. 340.
Error to judgments of the Supreme Court of California affirming judgments for the defendant in actions brought against the state treasurer to recover money paid, under protest as taxes.
protest as state taxes. Each action related to a designated part of the tax for a distinct year, and was brought on the theory that the part designated was invalid because imposed under constitutional and statutory provisions repugnant to the Constitution of the United States. The Treasurer prevailed in the court of first instance and in the supreme court of the state. 185 Cal. 484. The Pullman Company then brought the cases here on writs of error.
"Under the old system, the property and franchises of the corporations above referred to were taxed for both state and local purposes. The amendment creates a new mode of taxing such property and franchises, and appropriates the revenue so raised to state purposes solely. The new method by which taxes are collected exclusively for the state is substituted for the former system, under which the same subjects were taxed for both state and local purposes."
the gross receipts from operation of such companies and each thereof within this state. When such companies are operating partly within and partly without this state, the gross receipts within this state shall be deemed to be all receipts on business beginning and ending within this state, and a proportion, based upon the proportion of the mileage within this state to the entire mileage over which such business is done, of receipts on all business passing through, into, or out of this state."
"The percentages above mentioned shall be as follows: . . . on all sleeping car, dining car, drawing room car, palace car companies, . . . three percent. . . . Such taxes shall be in lieu of all other taxes and licenses, state, county and municipal, upon the property above enumerated of such companies except as otherwise in this section provided. . . ."
"(e) . . . In the event that the above named revenues are at any time deemed insufficient to meet the annual expenditures of the state, including the above named expenditures for educational purposes, there may be levied, in the manner to be provided by law, a tax, for state purposes, on all the property in the state, including the classes of property enumerated in this section, sufficient to meet the deficiency."
"(f) All the provisions of this section shall be self-executing, and the legislature shall pass all laws necessary to carry this section into effect, and shall provide for a valuation and assessment of the property enumerated in this section. . . . The rates of taxation fixed in this section shall remain in force until changed by the legislature, two-thirds of all the members elected to each of the two houses voting in favor thereof."
companies was increased to four percent in 1913 (c. 6, Laws 1913) and reduced to three and ninety-five hundredths percent in 1915 (c. 2, Laws 1915); secondly, that provision was made for enforcing the tax by either the usual tax sale or a suit in the name of the state (c. 335, §§ 20, 21, 24, Laws 1910-11; c. 6, § 5, Laws 1913); and, thirdly, that there was further provision that, if the tax was not paid within a designated period, the delinquent company, if a domestic corporation, "will forfeit its charter," and if a foreign corporation, "will forfeit its right to do business in this state," and that the transaction of any business in the state on behalf of a company incurring any such forfeiture, except to settle its affairs, should be punished by substantial fines. Laws 1911, c. 335, § 24; Laws 1913, c. 6, § 5, and c. 320, § 9.
The taxes in question were levied under the new system in 1911 and six subsequent years. All were alike save in particulars not material here, so it will be enough to state the facts relating to the tax levied in 1911.
the mileage was in California, $2.00 was deemed the gross receipt for so much of the service as was rendered in that state.
The gross receipts were calculated and reported by the company, and the state officers accepted the calculation. The amount of the tax was computed by applying to the gross receipts the percentage rule prescribed by the amendment to the state constitution. In this way, a tax of $57,159.08 was levied in 1911. Had the gross receipts from intrastate business alone been considered, the tax would have been $28,163.61 -- that is, $28,995.47 less than the actual levy.
The company objected to the consideration of the gross receipts from the interstate business, although they came only from service within the state, and objected to a corresponding part of the tax the $28,995.47. That part was paid under protest, and the first of these actions was brought to recover it -- an admissible course under the state law. Laws 1910-1911, c. 335, § 23; Laws 1913, c. 320, § 7. The other part was paid voluntarily, and is not in controversy.
The company insists that the tax in question and the provisions therefor in the state constitution and statutes are invalid under the commerce clause of the Constitution of the United States because (a) the tax is laid on gross receipts from interstate commerce, and (b) its payment is made a condition to continuing an interstate business within the state, and are invalid under the due process of law clause of the Fourteenth Amendment because the tax is intended to reach income from property situated and business done without the state.
it to the real value of the property in the relation in which the same is used.
The principles to be applied in cases of this class repeatedly have been considered by this Court, and are now settled.
A state can neither tax the act of engaging in interstate commerce nor lay a tax on gross receipts therefrom. In either case, the tax would be a restraint or burden on such commerce, and its imposition and invasion of the power of regulation confided to Congress by the commerce clause of the Constitution. Fargo v. Michigan, 121 U. S. 230; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 217; Meyer v. Wells, Fargo & Co., 223 U. S. 298.
The rule is otherwise with property used in interstate commerce. A state within whose limits such property is permanently located or commonly used may tax it. Cudahy Packing Co. v. Minnesota, 246 U. S. 450, 246 U. S. 453; Wells, Fargo & Co. v. Nevada, 248 U. S. 165, 248 U. S. 167; Union Tank Line Co. v. Wright, 249 U. S. 275, 249 U. S. 282. And, if the property be part of a system and have an augmented value by reason of a connected operation of the whole, it may be taxed according to its value as part of the system, although the other parts be outside the state; in other words, the tax may be made to cover the enhanced value which comes to the property in the state through its organic relation to the system. Fargo v. Hart, 193 U. S. 490, 193 U. S. 499; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 225; United States Express Co. v. Minnesota, 223 U. S. 335, 337 [argument of counsel -- omitted]; Union Tank Line Co. v. Wright, supra.
and interstate commerce as an index or measure of its value -- and if the means do not involve any discrimination against interstate commerce and the tax amounts to no more than what would be legitimate as an ordinary tax upon the property, valued with reference to its use, the tax is not open to attack as restraining or burdening such commerce. Cudahy Packing Co. v. Minnesota, supra; St. Louis Southwestern Ry. Co. v. Arkansas, 235 U. S. 350, 235 U. S. 367; United States Express Co. v. Minnesota, supra; Galveston, Harrisburg & San Antonio Ry. Co. v. Texas, 210 U. S. 227; Union Tank Line Co. v. Wright, supra.
An examination of the tax in question in the light of these principles shows that the chief objection urged against it is not tenable. The provisions under which the tax is imposed call it a property tax, specify the property subjected to it, and declare that it is in lieu of all other taxes on such property. The supreme court of the state holds it is a tax on the property specified. In no material respect does it differ from the tax which was recognized by this Court as a property tax in United States Express Co. v. Minnesota and Cudahy Packing Co. v. Minnesota, above cited. True, it is computed with special regard to the gross receipts, but this, as is fairly shown, is done merely as a means of getting at the full value of the property, considering its nature and use. The tax is not claimed to be in excess of what would be legitimate as an ordinary tax on the property valued as part of a going concern, nor to be relatively higher than the taxes on other kinds of property. There is no ground for thinking that it operates as a discrimination against interstate commerce.
construed by the state court. If it be construed as covering interstate commerce, it is void, for the right to engage in such commerce is not within the state's control. See Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530, 125 U. S. 554; Leloup v. Port of Mobile, 127 U. S. 640, 127 U. S. 645; Postal Telegraph Cable Co. v. Adams, 155 U. S. 688, 155 U. S. 695-696. The state court may construe it as confined to intrastate business. St. Louis Southwestern Ry. Co. v. Arkansas, 235 U. S. 350, 235 U. S. 368-369. In neither event would it affect the validity of the tax before us.
We find nothing in the provisions under which the tax was levied in the decision off the state court, or in the record, which gives any support to the contention that the tax is intended to reach income from property situated or business done without the state.


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How to get Independent counsel hired by your insurance company.
Insurance for Personal Injury Suits in Denton, Collin, Dallas, Tarrant, or Wise Counties.
You have been sued. You have provided your insurance company notice (tendered) the lawsuit, and you received a letter back from the insurance company. Surprisingly, the insurance company has said they are going to provide you a “qualified” or “limited” defense pursuant to a “reservation of rights.” You should contact Kelley Clarke, PLLC immediately if this is you.
We may be able to assist you in forcing your insurance company to hire independent counsel (your own lawyer) to represent you in the lawsuit against you. Independent counsel is not the insurance lawyer that your carrier says you must use. Instead, you (not the insurance company) may have the right to hire your own lawyer and require the insurance company to pay for the lawyer you want (Independent counsel).
If there is any conceivable/possible insurance coverage to defend you in any part of the lawsuit against you, your insurance carrier MUST provide you a defense to every part of the lawsuit. Heyden Newport Chem. Ins. Co. v. Southern Gen’l Ins. Co., 387 S.W.2d 22, 26 (Tex. 1965). This means – If you have been sued in Denton, Dallas, Collin, Tarrant, Wise (or any other county), your insurance carrier needs to receive notification from you that you are going to require them to defend you, even if they issued you a “reservation of rights” letter to you.
The law is clear in Texas, your insurance carrier MUST provide you with a defense, and if your insurance carrier is providing you a “qualified” defense, your insurance carrier can be required to provide you with your own lawyer (not an insurance lawyer appointed by the carrier). The Texas Supreme Court has held that insurance carriers MUST avoid putting their own interests in front of your own on whether to defend you. GuideOne Elite Ins. Co. v. Fielder Rd. Baptist Church, 197 S.W.3d 305, 307, 310-311 (Tex. 2006). The Texas Insurance Code Chapter 542, Prompt Payment of Claims Act also mandates that your carrier pay attention to your interests vs. their own interests.
Not every case requires an insurer to provide you with your own lawyer, so you should contact Kelley Clarke, PLLC to determine if your lawsuit qualifies for independent counsel.
Texas courts routinely allow you (the insured) to choose independent counsel—at the insurer expense—when an insurer offered a defense under a reservation of rights. See Rhodes v. Chicago Ins. Co., 719 F.2d 116, 120 (5th Cir. 1983) (applying Texas law); Britt v. Cambridge Mut. Fire Ins. Co., 717 S.W.2d 476, 481 (Tex. App.—San Antonio 1986, writ ref’d n.r.e. May 6, 1987); Steel Erection Co. v. Travelers Indem. Co., 392 S.W.2d 713, 716 (Tex. Civ. App.—San Antonio 1965, writ ref’d n.r.e. Nov. 3, 1965). The Texas Supreme Court has reaffirmed this basic right. N. County Mut. Ins. Co. v. Davalos, 140 S.W.3d 685 (Tex. 2004).
Provided the lawyer you have chosen is qualified, your insurance company are required to pay that lawyer.
Your independent lawyer will need to communicate directly with your insurance carrier and agree to follow their guidelines for reporting, handling, and discuss the payment arrangements.
Being sued can be one of the most stressful situations you have ever been through. You are being accused of wrongdoing. Your integrity is being called into question. There is no need for you to go through this process alone. At Kelley Clarke, PLLC we understand the stress you are under, and we are proud to be on your civil litigation team to help you through this lawsuit. Please call Kelley Clarke, PLLC if you are sued and you want to determine if you qualify for an independent counsel defense.
Read about how to work well with a Family Law Attorney HERE.

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