Borough of Sewickley v. Sholes

• Decision Date: 03 January 1888
• Docket Number: 27
• Citation: 12 A. 302,118 Pa. 165
• Parties: SEWICKLEY BOROUGH v. T. M. SHOLES
• Court: Pennsylvania Supreme Court

12 A. 302

118 Pa. 165

SEWICKLEY BOROUGH v. T. M. SHOLES

No. 27

Supreme Court of Pennsylvania

January 3, 1888

Argued October 24, 1887

APPEAL fro THE COURT OF COMMON PLEAS NO. 2. OF ALLEGHENY COUNTY.

No. 27 October Term 1887, Sup. Ct.; court below, No. 237 April Term 1886, C.P. in equity.

The borough of Sewickley is the owner in fee of about eighty-seven acres of land in Aleppo township, on which is erected a water-works, owned and operated by "The Commissioners of Sewickley Water Works," incorporated by the act of February 21, 1873, P.L. 147, and which is used exclusively for the supply of water to the inhabitants of said borough and vicinity. The company has no capital stock and pays no taxes either to the township or to the county. The water-rents received from the water supplied, less the operating expenses, are paid into the borough treasury, and are then appropriated exclusively to the interest on the bonds of the company and to a sinking fund for their final payment, for which purpose the said income is insufficient. In 1886, the said township assessed taxes upon a part of said land, which did not embrace the water-works proper, but was a part from which a revenue accrued to the company from the sale of crops growing thereon; and to enforce the payment of said taxes a levy was made upon and a sale advertised of certain personal property belonging to the water-works and necessary for their operation.

A bill in equity was filed by the said borough to enjoin T. M Sholes, the tax-collector of said township from proceeding with the levy upon and sale of said property, and a preliminary injunction ordered. The cause coming on for hearing on bill, answer and a statement of facts agreed upon showing the foregoing, the court, EWING, P.J., filed the following opinion and decree:

The plaintiff admits that sufficient personal property has been levied upon to pay the taxes. Counsel for plaintiff, in open court, say that they desire a decision in the case regardless of the character of the property levied upon. That if the assessment is legal the borough will pay it.

The pleading and facts show that an income and revenue is derived from the said water-works. This brings the case precisely within the rulings of the Supreme Court in the recent case of The County of Erie v. City of Erie, decided in 113 Pa. 368 in October of the present year. The decision is against the claim of exemption by the plaintiff.

And now 23d of December, 1886, after argument and upon consideration it is ordered, adjudged and decreed, that the bill of complainant is hereby dismissed at the costs of complainant.

Thereupon the plaintiff took this appeal, specifying that

1. The court erred in holding that plaintiff derives an annual income or revenue from its water-works similar to the case of The County of Erie v. The Commissioners, 113 Pa 368.

2. The court erred in not holding the proviso to the act of May 14, 1874, to be unconstitutional.

3. The court erred in holding that from the statement of facts submitted the law was with defendant, and in dismissing plaintiff's bill.

Judgment reversed.

Mr. F. C. Osburn, for the plaintiff in error:

1. In The County of Erie v. The Commissioners etc., 113 Pa. 368, the ruling is based entirely on the fact that the water-works property yielded an annual income or revenue to the municipality. It is true that the admitted surplus in that case was used entirely for enlarging the works, but this application was a matter within the discretion of the municipality. In the present case, the income is applied only to the bonds of the company, and is entirely insufficient for that purpose. But the constitutionality of the proviso of the act of May 14, 1874, P.L. 158, was not raised in the case referred to.

2. The common law recognizes the principle that a government will not tax herself, nor will she allow a subdivision of herself to tax another subdivision: California v. Doe, 36 Cal. 220; Louisville v. Commonwealth, 1 Duv. 295. It is conceded that there is no direct statute prior nor since the constitution of 1874, under which such property can be taxed. The authority to tax in any given instance is never presumed, but must be affirmatively shown: Erie County v. Erie City, 113 Pa. 368; Rochester v. Rush, 80 N.Y. 302. Not only so, but the presumption as to municipalities would be that they were not included among the objects or subjects of a statute authorizing taxation: Dill. Mun. Corp., § 773; Cooley Taxation, 130; Poor Directors v. School Directors, 42 Pa. 21. A municipality does not lose its identity by engaging in the business of furnishing water to its inhabitants: Lehigh Water Co.'s App., 102 Pa. 515.

3. Article III., §§ 1, 3 and 7, and article IX., §§ 1 and 2, contain all the requirements stated in the constitution upon the subject of legislation and taxation applying in the present case, and it is clear by these provisions, first, that all taxation shall be by general laws; second, that all exemption shall be by general laws. The constitution itself has severed the two subjects and requires that they be legislated upon separately; wherefore the act of May 14, 1874, must stand or fall as a general law-taxing property, or as a general law exempting property from taxation.

4. The title of the act referred to is, "An act to exempt from taxation public property used for public purposes," etc. Article III., § 3, provides that "no bill except general appropriation bills shall be passed containing more than one subject, which shall be clearly expressed in its title." These requirements are mandatory: Phoenixville Road, 109 Pa. 44. But one subject is embraced in the title to the act: exemption. The proviso contains another: taxation. Granting that the purpose of the proviso was to declare what property should not be exempt from taxation: Consolidated Gas Co. v. Chester County, 97 Pa. 476, yet there is a wide distinction between this proposition and a proposition incorporating into the act provisions imposing taxation. To hold that the act taxes anything must be to make its subject taxation. A law passed to exempt property and a law passed to tax property, cannot be understood as referring to one and the same thing: See remarks of Mr. Justice TRUNKEY in Venango County v. Railroad Co., 2 Leg. Ch. 300.

5. The test to be applied to warrant the proposition that the subject of this act is taxation, would be that its title gave fair and reasonable notice that such was its purpose: Union P.R. Co.'s App., 81* Pa. 91; Mauch Chunk R. Co. v. McGee, 81 Pa. 434; Allegheny Co. Home's App., 77 Pa. 80; Commonwealth v. Green, 58 Pa. 234; Dorsey's App., 72 Pa. 195. But not only must the subject be embraced, but it must be clearly expressed, in the title: Airy Street, 113 Pa. 287; Rogers v. Improvement Co., 109 Pa. 107; Phoenixville Road, 109 Pa. 44; Buckalew Const., 69; Union Tp. v. Rader, 39 N.J. 509.

No argument was made on behalf of the appellee.

Before GORDON, C.J., PAXSON, STERRETT, GREEN and WILLIAMS, JJ.; TRUNKEY and CLARK, JJ., absent.

OPINION

JUSTICE GREEN:

When the case of The County of Erie v. The Commissioners of...