City of Philadelphia v. Ridge Ave Ry. Co.

• Decision Date: 25 May 1891
• Docket Number: 96
• Citation: 142 Pa. 484,21 A. 982
• Parties: PHILADELPHIA v. RIDGE AVE. RY. CO
• Court: Pennsylvania Supreme Court

21 A. 982

142 Pa. 484

PHILADELPHIA v. RIDGE AVE. RY. CO

No. 96

Supreme Court of Pennsylvania

May 25, 1891

Argued March 26, 1891

APPEAL BY DEFENDANT FROM THE COURT OF COMMON PLEAS NO. 2 OF PHILADELPHIA COUNTY.

No. 96 January Term 1891, Sup. Ct.; court below, No. 20 December Term 1889, C.P. No. 2.

On November 21, 1889, the city of Philadelphia brought assumpsit against the Ridge Avenue Passenger-Railway Company. Subsequently, a case stated was filed by the plaintiff and defendant, as follows:

The Girard College Passenger-Railway Company was incorporated by the act of April 15, 1858, P.L. 300, with an authorized capital of ten thousand shares of the par value of fifty dollars each. The act required the company to "annually pay into the treasury of the city of Philadelphia, for the use of said city, whenever the dividends shall exceed six per centum per annum on the capital stock, the sum of six per centum on the said dividends thus declared." The Ridge Avenue & Manayunk Passenger-Railway Company was incorporated by the act of March 28, 1859, P.L. 264, with an authorized capital stock of five thousand shares of the par value of fifty dollars each. The act required the company to "annually pay into the treasury of the city of Philadelphia, for the use of said city, whenever the dividends shall exceed six per centum per annum on the capital stock, the sum of six per centum on the said dividends thus declared." These two roads subsequently merged and consolidated and were thereafter known as the Ridge Avenue Passenger-Railway Company.

An act of assembly, entitled "An Act relating to the Ridge Avenue Passenger-Railway Company," was approved March 8 1872, P.L. 264. The third and eighth sections of that act are as follows:

"§ 3. That dividends of so much of the profits of the said company, as shall appear advisable to the directors, shall be declared by the said directors, at such time or times as they may deem expedient, and be paid at the office of the said company at such times as the said directors may designate but the sum divided shall in no case exceed the amount of the net profits of the said company, so that the capital stock shall not be impaired thereby; Provided always, that the said company shall annually pay into the treasury of the city of Philadelphia, for the use of the said city, a tax of six per centum upon so much of any dividend declared which may exceed six per centum upon their said capital stock; and if the said directors shall make any dividend impairing the capital stock of the said company, the directors consenting thereto shall be liable, in their individual capacities, to the said company for the amount so divided, and each director present when such dividend shall be declared, shall be considered as consenting thereto, . . . ."

"§ 8. All provisions in the charters of the two companies so consolidated as above recited, not included in this act, are hereby repealed: . . . ."

The city of Philadelphia brought an action against the said Ridge Avenue Passenger-Railway Company in the Court of Common Pleas No. 3 of Philadelphia, for taxes on dividends. Judgment having been entered therein, it was removed to the Supreme Court by writ of error of July Term 1882, No. 210. On said writ of error judgment was entered against the defendant for a tax computed on the amount of dividends in excess of six per cent on the amount of capital stock paid in, the Supreme Court finding and adjudging as follows:

"We are of opinion, therefore, that the Ridge Avenue Passenger-Railway Company, by the terms and meaning of this statute, is liable to pay annually into the treasury of the city of Philadelphia, for the use of the said city, a tax of six per centum upon so much of any annual dividend declared which may exceed six per centum upon the capital stock paid in."

This suit and the judgment therein were for tax on the dividends declared in and prior to the year 1879. The record and the report of this case and decision thereof in 102 Pa. 190, are made part of this case stated.

The city, in 1884, repaired a part of the street occupied by the tracks of the Ridge Avenue Passenger-Railway Company, and in November, 1887, sued to recover the money paid therefor. The case was argued in June, 1888, on a motion for judgment for want of a sufficient affidavit of defence, and on the argument the city asserted that said act was unconstitutional, and on November 8, 1888, the Court of Common Pleas No. 2, entered judgment for the city of Philadelphia. On writ of error, this judgment was sustained by the Supreme Court: Ridge Ave. Ry. Co. v. Philadelphia, 124 Pa. 219. The record and the report of this case and the decision are made part of this case stated.

The capital stock paid in of the two companies merged into the Ridge Avenue Passenger-Railway Company is and has been $420,000.

Here followed a statement of the dividends declared by the defendant company, and the amount of tax paid thereon to the city, in each year from 1880 to 1888, inclusive, and a statement of the differences in amount between the taxes actually paid and the taxes payable, if counted at the rate of six per cent of the dividends declared, such difference being $1,512 in each of those years except 1884, when it amounted to $2,412. The case stated then continued:

These payments were made upon and in accordance with bills rendered by the city solicitor and made out by a clerk in his office. They were duly entered in his accounts, which have been from time to time properly audited by the controller. Prior to 1889 they were accepted without any claim that the city was entitled to a larger amount; but the tax for 1888 has been accepted with the mutual understanding that the acceptance was not in any sense a waiver of the city's claim to six per centum upon the entire dividends declared.

Upon the foregoing facts, the court shall enter such judgment as is in accordance with law, it being understood and agreed that the cause is to be decided without regard to pleadings, and as if in addition to the general issue all defences which ought to be specially pleaded had been so pleaded. Both parties have the right to appeal to the Supreme Court.

After argument, the court, without opinion filed, entered judgment for the plaintiff for $9,972, whereupon the defendant took this appeal, specifying that the court erred in entering judgment for the plaintiff, and in not entering judgment for the defendant, on the case stated.

The judgment is therefore reversed; and judgment is now entered, on the case stated, in favor of the plaintiff, and against the defendant, for $1,512 and costs.

Mr. J. Howard Gendell and Mr. John G. Johnson, for the appellant:

1. Under no cases decided by this court is it possible to conclude that the title of the act of March 8, 1872, P.L. 264, does not properly embrace the subject matter of taxation upon dividends of the capital stock of the defendant company, unless it be Phoenixville Road, 109 Pa. 44; Rogers v. Improvement Co., 109 Pa. 109, and Ridge Ave. Ry. Co. v. Philadelphia, 124 Pa. 219. Each of those cases illustrated an attempt to accomplish two distinct purposes by an act, the title of which gave notice of only one. The present case, however, presents a very different question. The alteration of the rate of taxation upon the company's dividends affected a matter connected with its affairs disclosed by the title, "An Act relating to the Ridge Avenue Passenger-Railway Company." That the tax was payable to the city of Philadelphia, is immaterial. It was as a part of the machinery for the government of the state, that the city received this tax. If it had been payable to the state, could the validity of the act be denied? If the title of an act, with a reasonable degree of notice, discloses the object of the legislation, it is sufficient: Allegheny Co. Home's App., 77 Pa. 77.

2. In Ridge Ave. Ry. Co. v. Philadelphia, supra, Hare, P.J., calls attention to the fact that the uniform practice in Philadelphia had been to subject passenger-railway companies to the cost of maintaining the paving of streets occupied by them. But the taxation of such companies has not been dealt with according to any uniform practice. But one third of those having special charters are taxable according to the present claim of the city; another third are taxed only upon the excess of their dividends over six per cent, and others pay no tax whatever to the city upon their dividends: Bright. Phila. Dig., 855-869. This exhibits a distinction between the case last cited and the case at bar. And there is a long line of cases sustaining acts whose titles disclosed no more than does that of the act of 1872: Allegheny Co. Home's App., 77 Pa. 77; State Line R. Co.'s App., 77 Pa. 429; Craig v. Presb. Church, 88 Pa. 47; Pottstown Bor., 117 Pa. 547; Sewickley Bor. v. Sholes, 118 Pa. 169; Bittinger's Est., 129 Pa. 344; Millvale Bor. v. Railway Co., 131 Pa. 19.

3. But the question has been adjudicated, and the city is not now at liberty to recover its additional claim. The decision in Philadelphia v. Railway Co., 102 Pa. 190, settled the basis of taxation to be "so much of any annual dividend declared which may exceed six per centum upon the capital stock paid in." It is true, the constitutionality of this provision in the act of 1872 was not directly mooted. But the decision necessarily involved the validity of the statutory provision imposing the tax, and is conclusive thereof: Henderson v. Henderson, 3 Hare 115; Freeman on Judgments, § 178; Duchess of Kingston's Case, 2Sm. L. Cas. 648; Beloit v Morgan, 7 Wall. 619. The doctrine of estoppel by judgment applies wherever the same question is raised, and is not restricted to cases in which the cause of action is the same: ...