Breslow v. School Dist. of Baldwin Tp.

• Decision Date: 28 June 1962
• Citation: 182 A.2d 501,408 Pa. 121
• Parties: Ira M. BRESLOW, Thomas W. McGrew and G. Edward McLellan, Plaintiffs, v. SCHOOL DISTRICT OF the TOWNSHIP OF BALDWIN, a Body Corporate, Defendant.
• Court: Pennsylvania Supreme Court

Page 501

182 A.2d 501

408 Pa. 121

Ira M. BRESLOW, Thomas W. McGrew and G. Edward McLellan, Plaintiffs, v. SCHOOL DISTRICT OF the TOWNSHIP OF BALDWIN, a Body Corporate, Defendant.

Supreme Court of Pennsylvania.

June 28, 1962.

Sidney M. Ruffin, John E. Perry, Burgwin, Ruffin, Perry & Pohl, Pittsburgh, for plaintiffs.

Edward R. Lawrence, Paul, Lawrence & Rock, Pittsburgh, for defendant.

George F. Baer Appel, Townsend, Elliott & Munson, Benjamin R. Townsend, James J. Prendergast, Philadelphia, for Local Government Conference, intervenor.

Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN and O'BRIEN, JJ.

BELL, Chief Justice.

Was the amendatory Act of 1961 defining 'assessed value' as market value, in determining an increase of debt of a school district, constitutional?

Plaintiffs, who are residents and taxpayers of the School District of Baldwin Township, Allegheny County, filed a complaint in this Court seeking to enjoin the defendant School District, a corporation, from issuing and selling a proposed $2,500,000 issue of general obligation bonds of the Baldwin Township School District.

This Court assumed original jurisdiction in this case under the provisions of Article V, Section 3, of the Pennsylvania Constitution, P.S. which pertinently provide: 'The jurisdiction of the Supreme Court shall extend over the State, and the judges * * * shall have original jurisdiction in cases of injunction where a corporation is a party defendant, * * *.' Such jurisdiction extends to corporations municipal in nature. Hyam v. Upper Montgomery Joint Authority, 399 Pa. 446, 160 A.2d 539 and cases cited therein.

The relevant facts which are not in dispute are as follows:

On January 10, 1962, defendant's board of directors, without the consent of the electorate, adopted a resolution authorizing the issue and sale of $2,500,000 principal amount of general obligation bonds of the defendant school district and set May 9, 1962, as the date for the receipt of bids for said bonds. This resolution was adopted pursuant to §§ 201 and 203 of the Municipal Borrowing Law of June 25, 1941, P.L. 159, 53 P.S. §§ 6201 and 6203, which pertinently provide as follows:

'Section 201. Limitation on municipal debt 'Whenever the net debt of any municipality ¹ shall be equal to * * * seven per centum, in the case of all other municipalities (except school districts of the first class which shall be limited to two per centum), of the assessed valuation, ² it shall be unlawful to increase the same by borrowing money (except in the case of issuing evidences of debt in anticipation of current revenues), and any such increase shall be void, and any general obligation bonds issued to evidence such increase of debt shall be of no binding force upon such municipality. * * *'

'Section 203. Increase of debt by issuance of general obligation bonds by corporate authorities and with the assent of electors

'(a) Any municipality may incur debt or increase its debt by the issue of general obligation bonds by vote of the corporate authorities thereof without the assent of the electors to an amount in the aggregate not exceeding two per centum of the assessed valuation. * * *'

The words 'assessed valuation' as used in the Municipal Borrowing Law, supra, are defined in § 102(h), as amended by § 1 of the Act of July 28, 1961, P.L. 917, 53 P.S. § 6102(h), to mean 'market value'.

'(h) 'Assessed valuation', the market valuation of all property at such rates and prices for which the same would separately bona fide sell taxable in the municipality for the purposes of the municipality, as last determined by the board, bureau or persons charged by law with the duty of determining the valuation of such property for tax purposes, or in any municipality in which the board, bureau or persons charged by law with the duty of determining the value of such property for tax purposes does not fix the markey valuation of property, such market valuation shall be the market valuation fixed and certified by the State Tax Equalization Board.'

The assessed value of the taxable property within the school district determined by persons charged by law with the duty of determining the valuation of such property for tax purposes was $93,243,741, two per cent of which is $1,864,874.

However, when defendant's board of directors adopted the resolution authorizing the $2,500,000 bond issue, the market valuation of taxable property in defendant school district was certified by the State Tax Equalization Board to be $168,572,600, two per cent of which is $3,371,452. The proposed bond issue was thus well within the limitation of two per cent of the market valuation of property within the school district, as fixed and certified by the State Equalization Board, but beyond the value fixed by the tax assessing authorities. The question here involved is which is the proper test, in the light of the Constitution and the amendatory Act of 1961.

Plaintiffs contend that the definition of market value placed upon the term 'assessed valuation' in and by the Municipal Borrowing Law, as amended in the Act of 1961, supra, violates Article IX, Section 8, of the Pennsylvania Constitution. Section 8 pertinently provides:

'The debt of any county, city, borough, township, school district, or other municipality or incorporated district, except as provided herein, and in section fifteen of this article, shall never exceed seven (7) per centum upon the assessed value of the taxable property therein, nor shall any such county, municipality or district incur any debt, or increase its indebtedness to an amount exceeding two (2) per centum upon such assessed valuation of property, without the consent of the electors thereof at a public election in such manner as shall be provided by law.'

If the amendatory Act of 1961 is valid, the proposed issue is valid. The Act is presumed to be valid and constitutional, and plaintiffs have the burden of proving that it clearly and plainly violates the Constitution. Cali v. Philadelphia, 406 Pa. 290, 177 A.2d 824; Prichard v. Willistown Township School District, 394 Pa. 489, 147 A.2d 380; Dauphin Deposit Trust Company v. Myers, 388 Pa. 444, 130 A.2d 686; Allentown School District Mercantile Tax Case, 370 Pa. 161, 166, 87 A.2d 480; Evans v. West Norriton Township Municipal Authority, 370 Pa. 150, 87 A.2d 474.

We turn then to the Constitution. Where in the Constitution 'the words are plain * * * [they] must be given their common or popular meaning, for in that sense the voters are assumed to have understood them when they adopted the constitution. Busser v. Snyder, 282 Pa. 440, 449, 128 A. 80, 37 A.L.R. 1515.' Lighton v. Abington Township, 336 Pa. 345, 354-355, 9 A.2d 609. See to the same effect Peoples Bridge Co. of Harrisburg v. Shroyer, Secretary of Highways, 355 Pa. 599, 607, 50 A.2d 499; Collins v. Kephart, 271 Pa. 428, 441, 117 A. 440; Long v. Cheltenham Township, 269 Pa. 472, 475, 112 A. 545; Com. ex rel. Lafean v. Snyder, 261 Pa. 57, 63, 104 A. 494.

It is a matter of common knowledge that in nearly every township, county and city in Pennsylvania, property is assessed for tax purposes lower than its market value. The assessed value of taxable property for tax purposes usually varies between 15 and 70 per cent of its actual market value. To the people and voters of Pennsylvania, the words 'assessed value' have a plain common popular meaning. They are almost...