Lynch v. Owen J. Roberts School Dist.

Decision Date01 July 1968
Citation244 A.2d 1,430 Pa. 461
PartiesE. Raymond LYNCH v. OWEN J. ROBERTS SCHOOL DISTRICT, Appellant. Robert ANWYL v. OWEN J. ROBERTS SCHOOL DISTRICT and Marita Dunn, Tax Collector, Appellants. William E. PARKE and Helen Wade Parke v. OWEN J. ROBERTS SCHOOL DISTRICT and Marita Dunn, Tax Collector, Appellants.
CourtPennsylvania Supreme Court

Fred T. Cadmus, III, West Chester, Miles Warner Philadelphia, John E. Good, West Chester, for appellants.

Lawrence Sager, Pottstown, for appellee Robert Anwyl.

A Thomas Parke, III, West Chester, for appellees William E. and Helen Wade Parke.

Arthur A. Moorshead, Moorshead & Niccolo, Devon, for appellee E Raymond Lynch.



ROBERTS Justice.

These three appeals, consolidated by the court below, arise from three complaints in equity seeking to enjoin appellant, a third class school district, from collecting occupation taxes assessed and levied by it against appellees, three attorneys-at-law, and an employee of a carpet manufacturing company. The chancellor found in favor of the taxpayers, granted the injunction, and, following dismissal of its exceptions by the court en banc, the school district took these appeals.

The undisputed facts reveal that in 1965 appellant, acting under authority of the so-called 'Tax Anything Act,' Act of June 25, 1947, P.L. 1145, § 1 et seq., as amended, 53 P.S. § 6851 et seq., by resolution enacted an occupation tax pursuant to which the occupations were valued by the school district's tax director. Appellees were taxed, and paid the requested amounts. In 1966, the tax was reenacted without substantial change under authority of the new 'tax anything' act, known as the 'Local Tax Enabling Act,' Act of December 31, 1965, P.L. 1257, § 1 et seq., 53 P.S. 31, 1965, P.L. 1257, § 1 et seq., 53 P.S. refused to pay any occupation tax under this new school district enactment. When appellant attached appellees' wages to compel payment, appellees sought relief in equity.

In the court below appellees launched several attacks upon the occupation tax. They argued (1) that the tax was violative of the Uniformity Clause of the Pennsylvania Constitution, Article IX, sec. 1, P.S. in that it valued a specific occupation at varying rates depending on age, sex, experience, and days per week spent at work; [2] (2) that the tax was unconstitutional as being an unlawful delegation of legislative power to an administrator; (3) that the tax was actually a disguised income tax and as such violative of certain state statutes; and (4) that the tax violated state law because it permitted the school district tax director, rather than the chief county assessor, to place a value for tax purposes upon occupations themselves. In dismissing appellant's exceptions to the chancellor's decree nisi, the court below specifically held that the occupation tax violated the uniformity clause and that the valuation of occupations could not be made by the school district tax director. We agree with the latter conclusion and so affirm the decree below without reaching appellees' other contentions. [3]

Before turning to a discussion of this valuation issue, however, we must first consider appellant's argument that the court below lacked jurisdiction over the subject matter of the suit. The school district points to a section of the 1947 Tax Anything Act, section 3 (53 P.S. § 6853), and to a corresponding section of the 1965 act, section 6 (53 P.S. § 6906), both of which establish a statutory appeal route for challenging this occupation tax. The district argues, therefore, that equity is without jurisdiction to enjoin the enforcement of a tax not challenged at law under the applicable statute. While we agree with the general proposition that equity will not entertain an action where plaintiff has an adequate statutory remedy at law, we also acknowledge the presence of an exception to that doctrine, existing where a taxing statute is made the subject of a Constitutional challenge.

'The teaching of our case law is that, where the controversy involves a challenge to the constitutional validity of a taxing statute or ordinance, such a controversy falls within the general class of cases wherein equity does have jurisdiction and competency to act. (Citations omitted.)' Studio Theaters, Inc. v. City of Washington, 418 Pa. 73, 79, 209 A.2d 802, 805 (1965). See also, Philadelphia Life Ins. Co. v. Commonwealth, 410 Pa. 571, 190 A.2d 111 (1963); Young Men's Christian Assoc. of City of Reading v. City of Reading, 402 Pa. 592, 167 A.2d 469 (1961) (dictum); cf. Blue Cross Appeal, 416 Pa. 574, 209 A.2d 799 (1965). Moreover, that this rule applies even in cases where there is a Specific statutory remedy at law is shown clearly by Studio Theaters, a case involving the very statute at issue today, the Tax Anything Act of 1947. Finally, we note that the equity court, having once obtained jurisdiction because of the presence of a constitutional challenge to a taxing statute, may also dispose, as did the lower court here, of non-constitutional challenges as well. This procedure was followed in Plymouth Lanes, Inc. v. Plymouth Twp., 82 Montg.Cty.Law Rep. 281 (C.P.1963) where the chancellor passed on taxpayer's constitutonal And non-constitutional arguments, concluding simply that '(e) quity has jurisdiction of the parties, the subject matter, and this cause of action'. Id. at 287. The case was affirmed by this Court as to the chancellor's findings on the constitutional as well as non-constitutional issues. See Plymouth Lanes, Inc. v. School Dist. of Plymouth Twp., 415 Pa. 206, 202 A.2d 811 (1964). Since it is undisputed that the present case involves, inter alia, a constitutional challenge to the district's occupation tax, we agree with appellees that the court below had jurisdiction.

Turning now to a discussion of the merits of this appeal, we are confronted with the following issue: Under the relevant taxing statutes, may the school district value the various occupations to be taxed, or must this valuation be performed only by the county assessor? The controversy centers about the proper meaning to attach to the word 'assess,' for the language of various legislative pronouncements gives the power to 'assess' at one point to the county assessor, yet at another to the local taxing body, in this case the school district.

In order to better appreciate the following discussion, we shall first set out the crucial language of the three statutes here involved. 1. In 1943, the Legislature declared: 'It shall be the duty of the chief assessor (i.e., county assessor) to assess, rate and value all subjects and objects of local taxation, * * *' Act of May 21, 1943, P.L. 571, § 602, as amended, 72 P.S. § 5453.602(a). 2. In 1947, the Tax Anything Act was passed with this provision: 'The duly constituted authorities of * * * school districts of the third class * * * may * * * levy, assess and collect or provide for the levying, assessment and collection of * * * taxes * * * on * * * occupations * * *.' Act of June 25, 1947, P.L. 1145, § 1, as amended, 53 P.S. § 6851. 3. Finally, in 1965, the Tax Anything Act of 1947 was given a new face, and a new title, 'Local Tax Enabling Act,' although the language germane to this discussion was left unchanged. Act of December 31, 1965, P.L. 1257, § 2, 53 P.S. § 6902 (Supp.1967).

Although our semantic discussion must center about the word 'assess.' we note initially that the controversy really involves the 'valuation' of property (more precisely occupations), i.e., given the fact that a certain item is a proper subject for taxation, how much is that item worth? We must decide whom the Legislature directed to place a value on an occupation for purposes of taxing this occupation. Little help is received from examining the dictionary definition of the word 'assess,' except to note that the word is defined by Webster's International Dictionary to mean, inter alia, either the valuation of property for purposes of taxation or the determination of the actual amount of tax owing on that property. This latter task, a ministerial computation whereby the taxing authority couples the value of the property or occupation to be taxed with the percentage or millage of the tax itself to determine the exact amount due from the taxpayer, is not here at issue, since all the parties concede that this function May be performed by the school district.

The parties lock horns however on the valuation aspect of the word 'assess,' the district claiming that 'assess' as used in the Tax Anything Act means to place a value on property, the taxpayers arguing that it means only to compute the amount of tax owing on that property. Taxpayers, of course, claim that the Valuation of the property can be done only by the county assessor. We agree with the taxpayers that the word 'assess' as used in both the Fourth to Eighth Class County Assessment Law of 1943 (taxpayers live in Chester County which is a fourth class county) and the Tax Anything Acts of 1947 and 1965 means merely to compute the amount of tax due and does not include the task of valuing the objects of taxation.

If we examine the language of the County Assessment Law, it appears that the county assessor shall 'assess, rate and value' the Subjects of taxation, i.e., he must, in the present case value the Occupation. On the other hand, the school district is empowered by the Tax Anything Act to 'levy, assess and collect' Taxes. It can therefore be easily seen that if 'assess' as used in the Tax Anything Act meant 'value' rather than 'compute' the language would be nonsensical, for one cannot 'value' a tax. One can only 'levy' a tax, 'compute' a tax, and 'collect' a...

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