Philadelphia v. Penna. Hospital

• Decision Date: 07 April 1890
• Citation: 134 Pa. 171
• Parties: CITY OF PHILADELPHIA v. PENNA. HOSPITAL.
• Court: Pennsylvania Supreme Court

Page 171

134 Pa. 171

CITY OF PHILADELPHIA v. PENNA. HOSPITAL.

Supreme Court of Pennsylvania.

Argued March 25, 1890

Decided April 7, 1890.

Before PAXSON, C. J., GREEN, CLARK, McCOLLUM and MITCHELL, JJ.

APPEALS BY DEFENDANT FROM THE COURT OF COMMON PLEAS NO. 3 OF PHILADELPHIA COUNTY.

Nos. 115, 116, 117, 118 July Term 1889, Sup., Ct.; court below, Nos. 273, 274, 275, 276 September Term 1888, C. P. No. 3.

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COPYRIGHT MATERIAL OMITTED

Mr. A. Sydney Biddle, for the appellant.

1. The acts of March 19, 1816, P. L. 240; March 19, 1845, P. L. 187, and April 18, 1853, P. L. (1854) 834, constitute separate and independent contracts between the state and the defendant, exempting the latter from taxation; and, having been accepted by the corporation, and acted on both by it and by charitable donors to it, no subsequent legislation, constitutional or otherwise, can impair the obligation of the contracts. The successive statutes passed in relation to this corporation, viz., the acts of May 11, 1751, 1 Sm. L. 208; April 11, 1793, 3 Sm. L. 117, and April 4, 1805, P. L. 263, and the later acts already mentioned, show that, although managed as a private institution, it is in a true sense a branch of the state government, chartered to perform a public service in relief of the state. In the performance of this service, it furnishes a consideration ample for the corresponding benefit of exemption from taxation.

2. A contract relieving a corporation from taxation is binding on the sovereignty making it: State Bank of Ohio v. Kroup, 16 How. 369. This has been followed by many other cases. The principle is supported by the reasoning of the opinions of this court in Wagner Free Institute's App., 116 Pa. 555; s. c. 132 Pa. 612. It will be observed that the act of 1853 provides that the property of the corporation shall be "and remain" free from taxation so long as the income and property are used for the relief of the sick and insane poor, "any law to the contrary notwithstanding." The last words clearly refer to any future law. The contract was, that the property should remain free, the exemption continuing so long as the charter requirements are fulfilled. Every donor who has given money since the passage of the acts of 1845 and 1853, may properly claim that this contract was a part of the consideration of his gift.

Mr. E. Spencer Miller, Assistant City Solicitor, (with him Mr. Charles F. Warwick, City Solicitor), for the appellee:

1. Decisions of the federal court of last resort have established that a state may contract to exempt a subject from taxation. The only question left is whether the legislation, in the particular case, evinces so palpably an intention to make a contract of this extraordinary character, as to leave no doubt in any reasonable mind. The acts of March 19, 1816, P. L. 240, and March 19, 1845, P. L. 187, may at once be dismissed from consideration. Passing the point that the former of these private acts is not averred in the affidavit, it is enough to say that the act of 1816 applies only to property directly occupied for hospital purposes, and the latter act only to property owned at its date. The affidavit avers neither of these things of this property.

2. Therefore the act of 1853, alone, is to be considered, and its language contains nothing inconsistent with the more natural interpretation of a simple allowance of the exemption, without any contractual limitation of the taxing power. The phrase, "any law to the contrary notwithstanding," is a time-honored form of expression, indicating a purpose to repeal or limit existing statutes. But the rule, ex nudo pacto, etc., is an impassable barrier in the defendant's path. And the uses of the property cannot furnish a consideration. If they were obligatory before 1853, they could not be such, and if not obligatory before the act of that year was passed, they are not so now. Nor is there any indication that the exemption was conferred with reference to any subsequent gifts to the hospital; and, besides, the so-called consideration, claimed to have arisen thus, does not move from the corporation, but from a stranger to the alleged contract.

PER CURIAM:

It was conceded upon...