Pittsburgh Rys. Co. v. City of Pittsburg
| Decision Date | 17 April 1905 |
| Docket Number | 12 |
| Parties | Pittsburgh Railways Company v. Pittsburgh, Appellant |
| Court | Pennsylvania Supreme Court |
Argued January 9, 1905 [Copyrighted Material Omitted]
Appeal, No. 12, Oct. T., 1905, by defendants, from decree of C.P. No. 2, Allegheny Co., July T., 1904, No. 153, on bill in equity in case of Pittsburgh Railways Company v. City of Pittsburgh and John F. Steel, treasurer of city of Pittsburg. Affirmed.
Bill in equity to enjoin the collection of a tax.
FRAZER P.J., filed the following opinion:
The purpose of the bill in this case was to restrain defendants from collecting from plaintiff a "license tax" imposed under an ordinance of the city of Pittsburg, approved October 20, 1903, and February 27, 1904. From the bill, answer and proofs we find the following facts:
FINDINGS OF FACT.
1. Plaintiff is a corporation created under the laws of the commonwealth of Pennsylvania for the purpose, among other things, of contracting "with any person or persons, firms, corporations, or any other party howsoever formed, existing or that may hereafter exist in any way; that said parties or any of them may have authority to do, build, construct, maintain or manage any work or works, public or private, which may tend, or be designed to make, increase, facilitate, or develop trade, travel or the transportation and conveyance of freight, live stock, passengers, and any other traffic by land or water from or to any part of the United States, or the territories thereof, and the said company shall also have power and authority to supply or furnish all needful materials, labor, implements, instruments and fixtures of any kind and every kind whatsoever on such terms and conditions as may be agreed upon between the parties respectively, and also to purchase, erect, construct and maintain or conduct in its own name and for its own benefit or otherwise, any such work, public or private as they may by law be authorized to do, including also herein lines for telegraphic communication and to aid, cooperate and unite with any other company, person or firm in so doing" and that by virtue of its charter is now and has been for some time past, under proper authority, operating a system of street railways in the cities of Pittsburg and Allegheny and adjacent boroughs and townships.
2. The city of Pittsburg is a municipal corporation and a city of the second class under the laws of this commonwealth, and Edward J. Frauenheim, the other defendant, is the duly elected and acting treasurer of the co-defendant city.
3. Councils of the city of Pittsburg passed an ordinance entitled "An Ordinance establishing and levying license taxes for general revenue purposes upon street railways, telephone, telegraph, electric light or power, water, gas and heat companies or corporations doing business in the City of Pittsburg regulating the collection of the same and imposing penalties for default in payment," which ordinance was duly approved by the mayor of the city on October 20, 1903. Subsequently, another ordinance entitled "An Ordinance levying taxes and assessing water rents for the fiscal year beginning February 1st, 1904," was passed by the city councils and approved by the mayor of the city on February 27, 1904.
4. Each of the ordinances above referred to contains, inter alia, the following provision: "Upon each and every street railway company or corporation the sum of 25 cents per foot for each lineal foot of track laid, maintained or operated by such Company or corporation within the limits of the City of Pittsburg, exclusive of such track as may be in the yards or buildings of such Company or corporation." The ordinance of October 20, 1903, requires the proper officers of the corporations named therein and made taxable thereunder to submit to the treasurer of the city on or before the first day of February of the year 1904, a report showing "the length of track, wire, or pipe as the case may be, laid, erected, maintained or operated as aforesaid by such company or corporation," and thereupon it is made the duty of the city treasurer to fix the license taxes for the year, basing the same upon the report or reports so returned.
5. In pursuance of the ordinance above referred to, Edward J. Frauenheim as treasurer of the city of Pittsburg, fixed the license tax against the plaintiff for the year 1904 at the sum of $219,265.25, basing the same upon a report made by plaintiff company to him, in which the aggregate length of its tracks within the city of Pittsburg was shown to be 877,061 lineal feet, which tax defendant city has threatened to collect through its proper officers by process of law if not paid at once.
6. Plaintiff's railway tracks are laid in many of the streets of the city of Pittsburg, and also extend into and through the cities of Allegheny and McKeesport, and adjacent boroughs and townships, and are indispensable in carrying on its business, and are used by plaintiff in operating its cars and carrying passengers in conducting the business of street railway company.
7. Plaintiff, as a corporation of this commonwealth, pays tax to the commonwealth of Pennsylvania upon its capital stock and gross receipts in accordance with the general revenue laws of the state, and also, under the Act of 1859, upon its real estate within the city of Pittsburg for city purposes. Its state and local taxes for the year 1903 amounted to $422,325.11.
CONCLUSIONS OF LAW.
The city founds its right to assess and collect the "license tax" provided for in the ordinance of October 20, 1903, and February 27, 1904, on paragraphs 4 and 22 of section 3 of the act of March 7, 1901, entitled "An Act for the government of cities of the second class." These paragraphs read as follows:
In this connection perhaps we had better also quote paragraph one of section three of the same act, which is as follows:
It is well settled that municipal corporations possess no powers except those conferred by law. "They have no inherent jurisdictions to make laws or adopt governmental regulations, nor can they exercise any other powers in that regard than such as are expressly or impliedly derived from their charters or other statutes of the state:" Laramie County v. Albany County, 92 U.S. 307.
While the commonwealth may either tax the corporation or its property, and may delegate that power to a municipality, in the event of a delegation the statute conferring the same should be strictly construed.
The fourth and twenty-second paragraphs of the act, so far as applicable to street railway companies, are identical in language. While paragraph twenty-two is the more comprehensive and includes additional subjects, it is no more definite in its relation to street railway companies than is the fourth paragraph. We can, therefore, consider them as one enactment in applying their provisions to these proceedings.
Does the language of these paragraphs authorize a license or a tax? A license is a "price paid for a privilege."
A tax is "an enforced proportional contribution levied upon persons, property or income for governmental needs." While license fees are not imposed to provide revenue they may be exacted for such purpose, if proper authority exists therefor. If imposed for revenue they must be uniform upon the same class of subjects, and if imposed merely for regulation they must be reasonable: Taylor Boro. v. Tel. Co., 202 Pa. 583, and the cases therein cited.
If the charge in this case is a "license fee," is it reasonable? The reasonableness of the fee rests in the first instance with the city councils, and unless the charge is obviously unreasonable courts will not interfere. In cases of this class the reasonableness of the fee must not be measured by the length or value of the company's track or electric system, nor by the volume of its business. The elements to be considered are the expense incident to the issuing of a license and the probable expense to the municipal authorities in regulating, inspecting and affording police surveillance of the maintenance and operation of the corporation's lines. It being the duty of the municipality to protect its citizens by seeing that the works of quasi public corporations are properly maintained, the license fee usually exacted from such corporations is intended to meet that...
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