City of Philadelphia v. Bullion
| Decision Date | 08 February 1977 |
| Citation | 368 A.2d 1375,28 Pa.Cmwlth. 485 |
| Parties | CITY OF PHILADELPHIA v. John E. BULLION, Appellant. |
| Court | Pennsylvania Commonwealth Court |
Argued April 6, 1976. [Copyrighted Material Omitted]
Douglas P. Coopersmith, Kenneth E. Aaron Astor & Weiss, Philadelphia, for appellant.
Stewart M. Weintraub, Albert J. Persichetti Philadelphia, for appellee.
Before BOWMAN, President Judge, and CRUMLISH, Jr., KRAMER, WILKINSON, MENCER, ROGERS and BLATT, JJ.
This is an appeal by John Bullion (appellant) from an order overruling his preliminary objections raising questions on whether the Philadelphia County Court of Common Pleas lacks jurisdiction over his person. [1] We affirm.
At all times during these proceedings the appellant has been resident of the State of New Jersey. During the years 1971 through 1973 inclusive, appellant was employed as a civilian engineer technician by the United States Navy at the Naval Air Engineering Center located at the United States Naval Base on League Island. The City of Philadelphia (appellee) alleges that appellant earned during these years various sums of money which are subject to its wage tax. [2] The City further alleges that appellant has failed to pay the tax or to file tax returns for the years in question.
Appellee served appellant pursuant to the Pennsylvania long-arm statute. [3] Appellant, contending such service was improper, filed preliminary objections based upon the court's jurisdiction over his person. His objections were overruled by the lower court and appellant appealed. [4]
Appellant's contention that use of the long-arm statute was improper in this instance to obtain in personam jurisdiction is based upon the following three arguments: (1) the Commonwealth of Pennsylvania does not have legislative jurisdiction to require appellant to designate the Department of State as his agent for service of process as provided for in the Pennsylvania is long-arm statute; (2) appellant was not an individual 'doing business' in Pennsylvania under the terms and intent of the statute; and (3) personal jurisdiction obtained by long-arm statute over a nonresident employed within a Federal enclave violates the Due Process Clause of the United States Constitution.
Appellant's contention that the Commonwealth has no legislative jurisdiction to obligate him to designate the Department of State as his agent for receipt of process is without merit. When Pennsylvania ceded League Island to the United States, it also ceded exclusive legislative jurisdiction over the area to the Federal Government. [5] The Commonwealth, however, reserved concurrent jurisdiction for service of civil and criminal process within the Federal enclave. [6] Such reservations have been upheld in order 'to prevent these lands from becoming a sanctuary for fugitives from justice for acts done within the acknowledged jurisdiction of the state.' Fort Leavenworth Railroad Co. v. Lowe, 114 U.S. 525, 5 S.Ct. 995, 29 L.Ed. 264 (1885). This language has been construed as authorizing states 'to execute civil and criminal process for acts done within the state on the lands ceded to the Federal Government.' In re Thompson, 157 F.Supp. 93 (E.D.Pa.1957), Aff'd, sub nom. United States ex rel. Thompson v. Lennox, 258 F.2d 320 (3d Cir. 1958), Cert. denied, 358 U.S. 931, 79 S.Ct. 317, 3 L.Ed.2d 303 (1959). Though insufficient by itself, this reservation of power combined with the power the Federal Government receded to Pennsylvania by the Buck Act [7] permitting states and local authorities to tax personal income within Federal enclaves, gives the Commonwealth the legislative jurisdiction necessary to deem the Department of State as appellant's agent for service of process.
The Buck Act provides pertinently:
(a) No person shall be relieved from liability for any income tax levied by any State, or by any duly constituted taxing authority therein, having jurisdiction to levy such a tax, by reason of his residing within a Federal area or receiving income from transactions occurring or services performed in such area; and Such State or taxing authority shall have full jurisdiction and power to levy and collect such tax in any Federal area within such State to the same extent and with the same effect as though such area was not a Federal area. 4 U.S.C. § 106. (Emphasis added.)
It has been settled that this legislation grants appellee the power to 'levy and collect' taxes on income earned by nonresidents employed on League Island. Non-Resident Taxpayers Association v. Municipality of Philadelphia, 341 F.Supp. 1139, 1142 (D.N.J.1971), Aff'd. mem., 406 U.S. 951, 92 S.Ct. 2061, 32 L.Ed.2d 340 (1972); Kiker v. City of Philadelphia, 346 Pa. 624, 633, 31 A.2d 289, 294, Cert. denied, 320 U.S. 741, 64 S.Ct. 41, 88 L.Ed. 439 (1943). More important to resolving the issue before this Court, however, is that the Buck Act grants 'full jurisdiction and power to levy and collect . . . as though such area was not a Federal area.' For purposes of taxation, this language puts League Island within the acknowledged jurisdiction of Pennsylvania. It also grants the Commonwealth the necessary legislative jurisdiction to serve appellant according to the provisions of its long-arm statute. Therefore, not to permit service under the power reserved by the Commonwealth when it ceded this land to the Federal Government is to allow the very result the Supreme Court desired to avoid in Fort Leavenworth, supra.
Moreover, it has been held that this same language extends the legislative jurisdiction of the Commonwealth to insure enforcement of any permitted tax statute or ordinance. See City of Philadelphia v. Konopacki, 27 Pa.Cmwlth. 391, 366 A.2d 608 (1976); Philadelphia v. Cline, 158 Pa.Super. 179, 44 A.2d 610 (1945), Cert. denied, 328 U.S. 848, 66 S.Ct. 1120, 90 L.Ed. 1621 (1946). In order for appellee to enforce its ordinance in a judicial action it must make service of process. The Buck Act's recession of power and jurisdiction therefore grants Pennsylvania permission to enforce its ordinance by serving appellant in the same manner it would serve any other nonresident working in the City of Philadelphia. This includes service by means of the State's long-arm statute. [8]
The Pennsylvania long-arm statute's designation of the Department of State as appellant's agent for service of process does not otherwise intrude upon or limit the exclusive jurisdiction of the United States on League Island. Service in such a manner therefore does not conflict with the general limiting provision of the Buck Act. [9]
Appellant next argues that he does not fit within any of the provisions of the long-arm statute. Section 8304 of the Act, 42 Pa.C.S. § 8304, entitled 'Doing business by individuals,' provides for jurisdiction over individuals who have done business in the Commonwealth.
(A)ny nonresident of this Commonwealth who . . . shall have done any business in this Commonwealth . . . shall be conclusively presumed to have designated the Department of State as his agent for the receipt of service of process . . . if and only if at the time the cause of action accrued or the harm or financial loss occurred, (he) shall have been doing any business within this Commonwealth . . .. Bork v. Mills, 458 Pa. 228, 329 A.2d 247 (1974).
Appellant contends that an employe does not qualify as an 'individual' as intended under the Act. He argues that an employe does not act alone but that his actions are in conjunction with his employer. Alternatively, appellant argues that regardless of whether or not he qualifies as an individual, the services he rendered do not constitute 'doing business' as was defined and meant under the Act. We cannot agree with either contention.
This cause of action arose from appellant's activities of working and earning income within the City of Philadelphia during the years in question. See Kiker, supra. The action of coming into Philadelphia daily to work at an employment was on appellant's behalf as an individual and not on the behalf of his employer. See generally, Miller v. American Telephone & Telegraph Company, D.C., 394 F.Supp. 58, 62 (1975), Aff'd, 530 F.2d 964, (3 Cir. 1976). For this reason appellant should be considered an 'individual' as was meant to be included under the Pennsylvania long-arm statute.
It still must be answered, however, whether appellant's actions of coming into Philadelphia to work as an employe qualifies as 'doing business' within the Commonwealth. Two of the ways in which 'doing business' is defined in the statute under Section 8309 of the Act, 42 Pa.C.S. § 8309 are:
(1) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.
(2) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.
The intent of the statute as conveyed by this language is to reach those people actuated by a profit motive, who act in Pennsylvania for their 'pecuniary benefit.'
Appellant argues that the compensation he received for his services a § an employe cannot be considered a 'pecuniary benefit.' This phrase has been defined as 'such things only as can be valued in money.' [10] In Hays' Estate v. Commissioner of Internal Revenue, 181 F.2d 169, 1971 (5th Cir. 1950), which involved a real estate transaction for Federal estate tax purposes, the court stated: 'A pecuniary benefit means an increase in one's net worth by the receipt of money or property.' The receipt of wages certainly increases one's net worth.
Appellant's reliance on Branch v. Foort, 397 Pa. 99, 152 A.2d 703 (1959) and...
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