Bourguignon Building Association v. Commonwealth

• Decision Date: 06 June 1881
• Citation: 98 Pa. 54
• Parties: Bourguignon Building Association <I>versus</I> Commonwealth.
• Court: Pennsylvania Supreme Court

98 Pa. 54

Bourguignon Building Association versus Commonwealth.

Supreme Court of Pennsylvania.

May 16, 1881.

June 6, 1881.

May 16th 1881.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY, STERRETT, and GREEN, JJ.

ERROR to the Court of Common Pleas of Dauphin county: Of May Term 1881, No. 151.

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J. W. M. Newlin and M. H. Stutzbach (J. P. Klinges with them), for the plaintiffs in error.—(1.) The Act of April 10th 1879 is an express declaration of the legislative intention that building associations shall be exempt from taxation. The general Revenue Act of June 7th 1879, approved within a month of the April Act, contains only the usual general words used in all bills taxing corporations, and does not name building associations. Though approved on different dates, during the same legislative session, the two acts were in fact passing through the formal stages of enactment simultaneously, and, we contend, they must be read together. They can be, and therefore should be, construed harmoniously, so that both may stand. Building associations are expressly named and exempted in the April Act — they are not expressly named and taxed in the June Act. There is therefore no expressed inconsistency. On general principles a subsequent general statute does not repeal a prior special statute: Kilgore v. Commonwealth, 9 W. N. C. 184; Brown v. Commissioners, 9 Harris 37; M`Farland v. State Bank, 4 Ark. 410; Ottawa v. La Salle, 12 Ill. 339; Shinn v. Commonwealth, 3 Grant Cas. 205; Bounty Accounts, 20 P. F. S. 96; Williams v. Pritchard, 4 T. R. 2.

The general and permanent legislative intent is shown by the fact that by all the tax laws passed prior to the Act of April 10th 1879 (see section 4 of Act of May 1st 1868; section 5 of Act of April 29th 1874, P. L. 70; and section 1 of Act of March 20th 1877, P. L. 6), building associations were in express terms exempted from taxation; and there was, therefore, at the time of the passage of the Act of April 10th 1879, no law in force imposing a tax upon the capital stock of these associations from which they could then be exempted. There would, therefore, be no purpose in said exemption clause if it related only to laws then in force imposing taxes, for there were none for this purpose. There must, therefore, have been some other purpose to be attained for inserting this exemption clause; and this purpose, we claim, was to exempt them from all taxes to be imposed by the Acts then before the legislature (such as the Revenue Act of June 1879, then in process of enactment), in which these associations were not called specially by their well-known name. While limited partnerships, insurance companies, transportation companies, mining companies and all other stock corporations are named by their proper names in the Act of June 7th 1879, as subjects of taxation, in no part of said act are building associations included by name, which we think the Legislature would have done (considering the fact that they had just passed a law exempting them) if they had intended to include them in said act. It does not seem possible that it could have been the intention of the legislature to enact a law imposing a tax on the capital stock of these associations, when almost in the same breath they had enacted and declared that they should not be subject to any law imposing such tax on capital stock.

This exemption is not merely from the operation of the acts specially named, but also from taxation "by any other act." This clearly meant subsequent general legislation. Had it been the intention to tax these associations by the Act of June 7th 1879, the legislature, no doubt, would have said so in clear terms; since the fact that they had been exempt from the payment of a tax by the Act of April 10th 1879, was fresh in their mind.

Unless acts passed at the same session of the legislature, on the same subject, are read together, it may easily happen that the governor may affix his signature to two bills in the inverse order of the date of their final passage by the legislative houses, and thus by accident or design reverse the true legislative intent.

(2.) But even if the June Act repeals the April Act, we contend that building associations fall within the terms "savings institutions," which are exempted by the provisions of the June Act. The popular term "building associations" is a misnomer. "savings institutions" would be a more appropriate name, In the various acts relating to them they are termed "mutual savings fund or building and loan associations." — Act of April 12th 1859, preamble; Act of April 10th 1879. The savings character of the association, in the view of the legislature, is further indicated by the second section of the Act of April 12th 1859, and the thirty-seventh section of the Act of April 29th 1874, limiting the periodical payment on stock to a sum not exceeding $2 per share.

Lyman D. Gilbert, deputy attorney-general (Henry W. Palmer, attorney-general, with him), for the Commonwealth.— This is a pure question of legislative intention, as expressed by the formal words of the Act of June 7th 1879, in connection with the provisions of former acts. Building associations are clearly included in the enacting clause of the act, and are not within the clause exempting "foreign insurance companies, banks and savings institutions."

The Act of May 1st 1868, is the first general codification of tax law. That act draws a distinction between "savings institutions" and "building associations," and shows (1) that where the legislature did not intend to tax building associations, they expressly exempted them by name; (2) that the legislature in that act treated "foreign insurance companies, banks and savings institutions" as a class, just as they do in the Act of June 7th 1879. The next general tax act was the Act of April 24th 1874, in which the same distinction was continued, both classes — "savings institutions" and "building associations" — being expressly exempted by name. So in the next general tax law, of March 20th 1877, "building associations" and "savings institutions" were distinguished, and both exempted by name. The inference from this prior legislation is irresistible that "banks and savings institutions" conveyed to the legislative mind a different meaning than that indicated by "building associations."

Now when we come to the tax law of June 7th 1879, and find that the former class (banks and savings institutions) are again expressly exempted, but that "building associations" by their identifying name are omitted from the exempting clause, the inference is equally strong that the legislature intended that such associations should cease to be exempt, and should fall under the taxing clause, within the general terms "every company or association whatever," etc. And the equity of the change is plain. "Foreign insurance companies, banks and savings institutions" are all taxable under another section of the same act, or under other acts, while "building associations" are not. It is more than doubtful if the exemption of such corporations would be constitutional under Art. IX. § 1 of the constitution.

No canon of construction warrants the argument, insisted on by the other side, that an act of the legislature is to be affected by another act passed on a prior day of the same session. On the contrary, this court has held that they cannot inquire into circumstances attending the passage of a bill, but must construe the act just as they find it.

But further, we contend that the tax from which building associations were exempted by the Act of April 10th 1879, was not a similar tax to that imposed by the Act of June 7th 1879, — which is an annual tax on capital stock — but was, as expressly stated, "the bonus or tax due to the Commonwealth upon the capital stock of corporations, as provided for by Act of May 1st 1868, or by any other act:" i.e., it was the "bonus" or tax imposed on the creation of a corporation under the Act of 1868, as the price of its birth. That is wholly different from the annual tax on capital stock, imposed by the 8th section of the Act of 1868. It follows therefore, that the Act of April 1879, operated on an entirely different subject; and (whether that is so or not) it cannot control the operation of the later Act of June 1879.

Mr. Justice GREEN delivered the opinion of the court, June 6th 1881.

The fourth section of the "Act to provide revenue by taxation," approved June 7th 1879, provides as follows: "That every company or association whatever, now or hereafter incorporated by or under any law of this commonwealth, or now or hereafter incorporated by any other state or territory of the United States, or foreign government, and doing business in this commonwealth, or having capital employed in this commonwealth in the name of any other company, association or associations, person or persons, or in any other manner, except foreign insurance companies, banks and savings institutions, shall be subject to, and pay into the treasury of the commonwealth, annually, a tax to be computed as follows," &c., &c. The facts of this case are brought before us by a case stated, in which it is agreed that the appellant "is a building association incorporated in 1878, under the Act of April 29th 1874, with a nominal capital of $1,000,000, divided into shares of $200 each." It is also agreed that "up to first Monday of November 1879, $50,113.45 (of capital) had been paid in," and "This money is loaned out to members on mortgage security."

By the terms of the case stated it appears, therefore, that the appellant is an association incorporated by a law of this commonwealth, having a paid-up capital of $50,113.45, on the first Monday of November 1879.

Apparently, the language of the Revenue Act of June 7th 1879 subjects the appellant to the payment of a tax upon its capital stock. It is...