Commonwealth v. Westinghouse Air-Brake Company
| Decision Date | 03 July 1915 |
| Docket Number | 9,12 |
| Citation | 251 Pa. 12,95 A. 807 |
| Parties | Commonwealth, Appellant, v. Westinghouse Air-Brake Company |
| Court | Pennsylvania Supreme Court |
Argued May 24, 1915
Appeals, Nos. 9 and 12, May T., 1915, by Commonwealth, from judgment of C.P. Dauphin Co., Commonwealth Docket, 1909, No 561, on submission to court without a jury, in case of Commonwealth of Pennsylvania v. Westinghouse Air-Brake Company. Affirmed.
Appeal from settlement of capital stock tax by auditor general and state treasurer. Before KUNKEL, P.J.
The opinion of the Supreme Court states the facts.
The Commonwealth claimed $21,353.08.
The case was tried without a jury under the provisions of the Act of April 22, 1874, P.L. 109. The court directed judgment to be entered for the Commonwealth for $6,856.34. The Commonwealth and Westinghouse Air-Brake Company appealed.
Errors assigned were in dismissing various exceptions to the findings of the trial judge.
Judgment affirmed and both appeals dismissed.
Wm. M. Hargest, Deputy Attorney General, with him Francis Shunk Brown, Attorney General, for the Commonwealth.
W. S. Snyder, with him A. C. Stamm, C. B. Miller and J. T. Olmsted, for Westinghouse Air-Brake Company.
Before BROWN, C.J., MESTREZAT, POTTER, ELKIN, STEWART, MOSCHZISKER and FRAZER, JJ.
These are cross appeals from the same judgment. The case was tried in the court below without a jury under the Act of April 22 1874, P.L. 109, and hence the facts found must be accepted as conclusively established for the purpose of review. The Commonwealth contends that some items were improperly deducted from the valuation of the capital stock, while the defendant company urges that the court erred in not allowing further deductions. The case presents some interesting questions which to be understood must be explained. The defendant company is a domestic corporation having the right to make and sell air-brakes manufactured under the Westinghouse patents which it has the power to take and hold. It has never undertaken to do any other kind of business and was so engaged during the tax year in question. The valuation of the capital stock issued and outstanding was fixed at $5,870,617.64, from which total amount certain deductions were asked and some allowed. Neither side seems to be satisfied with the conclusion reached and hence these appeals. The deductions asked for are based upon two grounds: (1) That certain property of the defendant company is permanently located outside the territorial limits of the State and hence beyond the jurisdiction of our taxing authorities; and, (2) that the defendant being a manufacturing corporation is entitled to an exemption from taxation upon so much of its capital stock as is actually and exclusively employed in manufacturing in this State. Both propositions are sound in principle and are sustained by precedent and authority. The difficulty is not with the law but with the facts. Some confusion has arisen in the consideration of these questions by regarding deductions for property permanently located outside our jurisdiction as an exemption allowed to manufacturing corporations in our State. Deductions for property permanently located outside of Pennsylvania cannot be regarded as an exemption within the meaning of the Act of June 1, 1889, P.L. 420, and its supplements. Deductions of this character do not depend upon express legislative authority, while exemptions to manufacturing corporations are based entirely upon the declared statutory policy of the State. Again, deductions for property permanently located outside the State are not limited to manufacturing corporations but are allowed to all kinds of corporations having property thus located. No state has the power to tax tangible property permanently located beyond its jurisdiction, no matter under what guise it may undertake to do this thing. The power of the legislature to impose a tax is limited to persons, property and business within the jurisdiction of the State: Com. v. Standard Oil Co., 101 Pa. 119. Where the valuation of capital stock includes tangible property, which is beyond the jurisdiction of the State, it is to that extent at least the taking of property without due process of law, and therefore in violation of the Fourteenth Amendment to the Federal Constitution: Delaware, Lackawanna & Western R.R. Co. v. Pennsylvania, 198 U.S. 341. It is proper to remark in this connection that what has been said applies primarily to tangible personal property and real estate permanently located beyond the jurisdiction of the State. As to such property so located proper deductions should...
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Washburn Wire Co. v. Bliss
...case of double taxation which the court held was prohibited by the peculiar provisions of the Constitution of Utah. In Commonwealth v. Westinghouse Air Brake Co., supra, it appears that a capital stock tax was imposed under a Pennsylvania statute (Laws Pa. 1889, p. 420, No. 332, and its sup......