General Assembly v. Gratz

• Decision Date: 19 January 1891
• Docket Number: 356
• Citation: 139 Pa. 497,20 A. 1041
• Parties: GENERAL ASSEMBLY v. SIMON GRATZ ET AL
• Court: Pennsylvania Supreme Court

20 A. 1041

139 Pa. 497

GENERAL ASSEMBLY v. SIMON GRATZ ET AL

No. 356

Supreme Court of Pennsylvania

January 19, 1891

Argued January 12, 1891 [Copyrighted Material Omitted]

APPEAL BY DEFENDANTS FROM THE COURT OF COMMON PLEAS NO. 4 OF PHILADELPHIA COUNTY, SITTING IN EQUITY.

No. 356 January Term 1890, Sup. Ct.; court below, No. 132 December Term 1889, C.P. No. 4, in Equity.

To the number and term stated in the court below, "the trustees of the General Assembly of the Presbyterian Church in the United States of America," filed a bill in equity against Simon Gratz and others, constituting the board of revision of taxes of the city of Philadelphia, and Joseph B Barry and Thomas W. Marchment, assessors of taxes for the eighth ward of said city, averring in substance as follows:

The plaintiff is a corporation, created by the act of March 28, 1799, Law Book VI, 382, 5 Carey & B.L. 408. That act recited, in a preamble:

"Whereas, the ministers and elders forming the General Assembly of the Presbyterian Church in the United States of America, consisting of citizens of the state of Pennsylvania and of others of the United States of America aforesaid, have by their petition represented that by donations, bequests, or otherwise, of charitably-disposed persons, they are possessed of money for benevolent and pious purposes, and the said ministers and elders have reason to expect further contributions for similar uses, but, from the scattered situation of the said ministers and elders, and other causes, the said ministers and elders find it extremely difficult to manage the said funds, in the way best calculated to answer the intention of the donors."

The act then created the corporation plaintiff, giving it power, inter alia, to take and hold real and personal property, previously donated to said General Assembly and held by it or for its use, or thereafter to be donated to said corporation, and the same to hold and dispose of according to the intent of the donors, providing certain regulations for the government of the corporation. By § 10 of said act, as amended by act of March 23, 1864, P.L. (1865) 648, the yearly value of the property authorized to be held by the corporation was limited to $50,000, exclusive of the annual collections and voluntary contributions of churches under the care of said General Assembly. By decree of the Court of Common Pleas No. 4 of Philadelphia county, at No. 422 September Term 1885, certain amendments were made in the regulations for the internal management of the corporation, and another corporation called "The Trustees of the Presbyterian House," created by act of April 21, 1855, P.L. 575, was merged into the plaintiff.

The assessors of taxes, named as defendants in the bill, served on the plaintiff a printed blank, prepared by the auditor general of Pennsylvania, under the act of June 1, 1889, P.L. 420, for a return of personal property for taxation, and demanded that the plaintiff make a return of all personal property, moneys, securities, etc., held by it. The plaintiff does not own, and never has owned any moneys and securities, held for its own use, benefit and advantage, but all moneys and securities held by it are trust moneys, given to it to hold as trustee for various purely public charitable purposes connected with the Presbyterian church; and these have never heretofore been taxed, or attempted to be taxed, under the laws of this commonwealth. The plaintiff made a return to said assessors, adding thereto a statement of the trusts for which said securities and moneys were held, and its averment that none of the same were made taxable by the laws of this commonwealth. The said assessors and board of revision have undertaken or are about to assess the trust funds, so held by the plaintiff, for taxation under said act of 1889.

The moneys and securities held in the corporate name of the plaintiff, are all held by it solely as a trustee for the specific uses stated below; and none of the same are held for the use, benefit or advantage of any persons, but all are held for purely charitable uses of a public nature, or for unknown and indefinite classes of persons who vary every year, whose wants are varying from time to time, and who are the subjects of eleemosynary care. All said moneys have been given since 1799, at various times and in various sums, by many charitably-disposed persons, by gift or will. The trusts upon which they are held, are as follows:

(a) $263,844.88, held for the relief of disabled ministers and the widows and orphans of deceased ministers of the Presbyterian church in the United States of America.

(b) $34,672.70, held for the work of spreading the gospel of Jesus Christ in the destitute parts of the United States.

(c) $13,829.75, held for the work of spreading the gospel of Jesus Christ among the destitute parts of foreign countries.

(d) $102,316.23, held for the support of professorships and scholarships in the theological seminary of the Presbyterian church at Princeton, New Jersey.

(e) $200, held for the conversion of the Jews to Christianity.

(f) $400, held for the conversion of the Indians of North America to Christianity.

(g) $32,212.12, held for the work of the Presbyterian Board of Publication and Sabbath-School work of said church.

(h) $7,055.93, held for the support in part of a preacher of the gospel to mariners in the port of Philadelphia.

(i) $9,892.02, held for assisting poor Presbyterian churches in the United States, to secure libraries of religious books for the use of the pastors for the time being of their churches.

(j) $9,000, held for assisting in the support in part of the gospel in certain Presbyterian churches in the city of Philadelphia.

(k) $5,020.27, held for mission work in hospitals, alms houses, etc., in Philadelphia and New York.

(l) A fund of $4,903.75 which was given to the plaintiff for the general charitable uses of the said church. It is invested and the net income is devoted to paying the necessary expenses of taking charge of all these trust finds, the residue of said expenses being deducted pro rata from the income of each of the said trusts.

The income from all of the foregoing trusts is applied in accordance therewith.

The bill praying for an injunction and for general relief, the defendants demurred, assigning as causes of demurrer:

1. That the mortgages, etc., held in trust, as in said bill set forth, are made taxable for state purposes by the act of June 1, 1889.

2. That there is no act of assembly or authority of law exempting from taxation the mortgages, etc., so held.

3. That the said bill doth not contain any matter of equity wherein the court can ground any decree, or give to the plaintiffs any relief against these defendants, or any of them.

After argument upon the demurrer, the court, THAYER, P.J., on March 4, 1890, filed the following opinion:

The question raised by the demurrer, in this case, is whether the moneys and securities which it is admitted by the demurrer are held by the plaintiffs as trustees for purely public charitable purposes are taxable under the act of June 1, 1889, for state purposes. The act in question imposes a tax for state purposes of three mills on the dollar on all personal property of the classes therein particularly specified and enumerated, which are "owned, held or possessed by any person, persons, copartnership or unincorporated association or company resident, located or liable to taxation within this commonwealth, or by any joint-stock company or association, limited partnership, bank or corporation whatsoever, formed, erected or incorporated by, under or in pursuance of any law of this commonwealth, or of the United States, or of any other state or government, and liable to taxation within this commonwealth, whether such personal property be owned, held or possessed by such person or persons, copartnership, unincorporated association, company, joint-stock company or association, limited partnership, bank or corporation, in his, her, their or its own right, or as active trustee, agent, attorney-in-fact, or in any other capacity, for the use, benefit or advantage of any other person, persons, copartnership, unincorporated association, company, joint-stock company or association, limited partnership, bank or corporation."

It is clear, that all property within the state, whether real or personal, belonging to the resident therein, is prima facie liable to taxation for the support of the government. By the constitution, § 1, article IX., the general assembly may, by general laws, exempt from taxation public property used for public purposes, actual places of religious worship places of burial not used or held for private or corporate profit, and institutions of purely public charity. The power thus given to the legislature by the constitution, to enact general laws exempting from taxation property of the kinds enumerated in the ninth article, was partially exercised by the legislature by the passage of the act of May 14, 1874, P.L. 158, which exempts the specific kinds of property therein mentioned from taxation for county, city, borough, bounty, road, school and poor purposes. I say partially exercised, for it is obvious that the act of 1874 contains no exemption from taxation for state purposes. The act of 1874 contained a proviso that all property real or personal, other than that in actual use and occupation for the purposes mentioned in the act and from which any income or revenue is derived, shall be subject to taxation for state purposes, except where exempted by law. This proviso was held to be unconstitutional in Sewickley Bor. v. Sholes, 118 Pa. 165, because the title was not sufficiently comprehensive, and disclosed merely a purpose to...