Universal Film Exchanges, Inc. v. Board of Finance and Revenue

• Decision Date: 13 November 1962
• Citation: Universal Film Exchanges, Inc. v. Board of Finance and Revenue, 409 Pa. 180, 185 A.2d 542 (Pa. 1962)
• Parties: UNIVERSAL FILM EXCHANGES, INC.; Allied Artists Distributing Corp.; RKO General, Inc. (Formerly known as RKO Teleradio Picture Inc.); Paramount Film Distributing Corporation; Twentieth Century-Fox Film Corp.; United Artists Corp.; Columbia Pictures Corp.; Loew's, Inc., Appellants, v. BOARD OF FINANCE AND REVENUE of the Commonwealth of Pennsylvania.
• Court: Pennsylvania Supreme Court

Page 542

185 A.2d 542

409 Pa. 180

UNIVERSAL FILM EXCHANGES, INC.; Allied Artists Distributing Corp.; RKO General, Inc. (Formerly known as RKO Teleradio Picture Inc.); Paramount Film Distributing CorporationTwentieth Century-Fox Film Corp.; United Artists Corp.Columbia Pictures Corp.; Loew's, Inc., Appellants, v.BOARD OF FINANCE AND REVENUE of the Commonwealth of Pennsylvania.

Supreme Court of Pennsylvania.

Nov. 13, 1962.

Philip M. Hammett, Samuel D. Slade, Arlin M. Adams, Wm. A. Schnader, Schnader, Harrison, Segal & Lewis, Philadelphia, for appellants.

George W. Keitel, Edward T. Baker, Deputy Attys.Gen., David Stahl, Atty. Gen., Harrisburg, for appellee.

Before BELL, C. J., and MUSMANNO, JONES, COHEN, EAGEN and O'BRIEN, JJ.

BELL, Chief Justice.

These eight appeals seek review of Orders of the Board of Finance and Revenue denying refunds of motion picture censor license fees paid by them between 1915 and 1953.Appellee moved to quash and this motion was orally argued together with the appeals on the merits.

The present appellants have for many years been major distributors of motion pictures in the Commonwealth of Pennsylvania and elsewhere.Appellants continuously paid to the Pennsylvania State Board of Censors annual license fees of $2.00 for each film, under the Motion Picture Censorship Act from its effective date in 1915 until March, 1956, when--as required by Burstyn, Inc. v. Wilson, 343 U.S. 495, 72 S.Ct. 777, 96 L.Ed. 1908--that Act was declared unconstitutional by this Court in Hallmark Productions, Inc. v. Carroll, 384 Pa. 348, 121 A.2d 584(1956).

The First Amended Petitions for refund were presented to the Board of Finance and Revenue at a hearing on July 2, 1959.These petitions covered only the amount of license fees paid within five years from the date of the filing of Appellants' original refund petitions, to wit, $337,436.25.The Board on July 8, 1959, ordered refunds, in the nature of credits, to each of these eight appellants in the exact amounts claimed.

Appellants, four and one-half months after this Court's decision in Box Office Pictures, Inc. v. Board of Finance and Revenue, 402 Pa. 511, 166 A.2d 656, filed with the Board the (present)Second Amended Petitions for refund of license fees which were paid by them more than five years prior to the filing of appellants' original refund petitions.These claims totaled $4,637,258.14 and upwards for the period between 1915 and 1953.In these present amended petitions, appellants averred for the first time that the license fees were paid 'under duress and compulsion'.This averment was obviously made in an attempt to bring their claims within certain language of this Court contained in the Box Office Picturescase, supra.No answers were filed by the Board to appellants' present petitions.A hearing was held by the Board on these petitions on September 26, 1961, but no testimony was taken.On October 9, 1961, the Board entered the following Orders (as of October 3, 1961):

'After full consideration the Prayer of this Petition is refused.'The present appeals were taken from these Orders.

Section 503(e) of the Fiscal Code of April 9, 1929, P.L. 343, as amended, 72 P.S. § 503(e) provides: 'The action of the Board on all petitions filed under this section shall be final.'These appeals are therefore in the nature of narrow certiorari.

'If an appeal is prohibited by an Act, or the decision of the Agency is stated to be final or conclusive, the law is well settled that an appeal will lie to the Courts in the nature of a narrow certiorari and this Court will review only (1) the question of jurisdiction; (2) the regularity of the proceedings before the Agency; (3) questions of excess in exercise of powers; and (4) constitutional questions: Cf.DeVito v. Civil Service Commission, 404 Pa. 354, 172 A.2d 161(and cases cited therein);Dauphin Deposit Trust Company v. Myers, 401 Pa. 230, 164 A.2d 86.'Keystone Raceway Corp. v. State Harness Racing Commission, 405 Pa. 1, 173 A.2d 97.

Appellants contend that the five year Statute of Limitations in Section 503(a)(4)¹ of the Fiscal Code of 1929, supra, is unconstitutional when applied to bar recovery of license fees exacted by the Commonwealth for many years under the duress and compulsion of an unconstitutional act, viz. the Motion Picture Censorship Act.They thus raise a constitutional question and consequently appellee's motion to quash the appeal is denied.

Appellants, motion picture distributors, were required by the Motion Picture Censorship Act of May 15, 1915, P.L. 534, as amended by the Act of May 8, 1929, P.L. 1655, 4 P.S. § 41 et seq., to remit to the State Board of Censors a fee of two dollars 'for the examination of each film, reel or set of views of one thousand two hundred lineal feet or less,' and two dollars for each duplicate or print thereof.The present actions were brought under Section 503(a), although more properly under Section 503 (a)(4), of the Fiscal Code, supra, which pertinently provides:

's503.Refunds of State taxes, license fees, etc.The Board of Finance and Revenue shall have the power, and its duty shall be, (a) To hear and determine any petition for the refund of * * * license fees * * * paid to the Commonwealth and to which the Commonwealth is not rightfully or equitably entitled * * *.All such petitions for refund must be filed with the board within two years of the payment of which refund is requested, or within two years of the settlement in the case of taxes or bonus, whichever period last expired, except * * * (4) When any tax or other money has been paid to the Commonwealth, under a provision of an act of Assembly subsequently held by final judgment of a court of competent jurisdiction to be unconstitutional ² * * *.In such case, the petition to the board may be filed either prior or subsequent to such final judgment but must be filed within five years of the payment of which a refund is requested * * *.'

Appellants contend, we repeat, that the five year limitation violates the 14th Amendment of the United States Constitution if applied to bar recovery of license fees exacted under duress and compulsion of the unconstitutional Motion Picture Censorship Act of 1915, supra.

If payment of taxes is voluntary, even though the taxing statute is later held unconstitutional, the money paid cannot be recovered in the absence of statutory authorization: Royal McBee Corp. Tax Case, 393 Pa. 477, 143 A.2d 393(1958);Chesebrough v. United States, 192 U.S. 253, 24 S.Ct. 262, 48 L.Ed. 432;Ward v. Board of County Com'rs. of Love County, 253 U.S. 17, 22, 40 S.Ct. 419, 421, 64 L.Ed. 751(1920);Swift Courtney & Beecher Company v. United States, 111 U.S. 22, 24, 4 S.Ct. 244, 245, 28 L.Ed. 341.

In Royal McBee Corp. Tax Case, 393 Pa. p. 480, 143 A.2d p. 395, supra, the Court said:

At common law a voluntary payment of taxes, erroneously made, could not, in the absence of a statute, be recovered: Calvert Distillers Corp. v. Board of Finance & Revenue, 1954, 376, Pa. 476, 479, 103 A.2d 668;Girard Trust Co. v. Philadelphia City and County, 1948, 359 Pa. 319, 325, 59 A.2d 124;Hotel Casey Co. v. Ross, 1942, 343 Pa. 573, 23 A.2d 737;Arrott v. AlleghenyCounty, 1937, 328 Pa. 293, 194 A. 910.'

It follows that since a State need not allow recovery of taxes or other moneys voluntarily but erroneously paid, it can impose reasonable restrictions on any recovery it does allow: Box Office Pictures v. Board of Finance & Revenue, 402 Pa. 511, 166 A.2d 656, supra;Swift Courtney & Beecher Company v. United States, 111 U.S. 22, 24, 31, 4 S.Ct. 244, 245, 248, 28 L.Ed. 341.

However, where taxes or other moneys were paid under duress and compulsion, no statutory authority is required or necessary to enable the payors to recover the amounts paid, because a denial of recovery in such a situation would violate the 14th Amendment to the United States Constitution: Ward v. Board of County Com'rs. of Love County, 253 U.S. 17, 40 S.Ct. 419, 64 L.Ed. 751, supra;Carpenter v. Shaw, 280 U.S. 363, 369, 50 S.Ct. 121, 123, 74 L.Ed. 478;Swift Courtney & Beecher Company v. United States, 111 U.S. 22, 4 S.Ct. 244, 28 L.Ed. 341, supra;Glendale Heights Ownership Association v. Glenolden Borough School District, 393 Pa. 485, 491-492, 143 A.2d 386.

Since appellants cannot bring themselves within the recovery provisions of the Fiscal Codesupra, they have the burden of proving that the payments were made under duress and compulsion: Mahnomen County v. United States, 319 U.S. 474, 477, 63 S.Ct. 1254, 1256, 87 L.Ed. 1527(1943).

Whether duress and compulsion exist is a question that must be determined in the light of the facts and circumstances of each case, and where, as here, the relevant facts are not in dispute the question is one of law for the court to decide.Eslow v. Albron, 153 Mich. 720, 117 N.W. 328, 22 L.R.A.,N.S., 872.Cf.Kaplan v. Kaplan, 404 Pa. 147, 171 A.2d 166;Kalyvas v. Kalyvas, 371 Pa. 371, 89 A.2d 819; Johnson, Admr. v. Angretti, 364 Pa. 602, 73 A.2d 666.

We turn then to a consideration and determination of the relevant facts in the case at bar and what facts amount in law to payments made under duress and compulsion.

The Amended Second Amended Petition of each appellant avers:

'6.Petitioner avers that the aforesaid fees were paid under duress and compulsion because the unconstitutional Motion Picture Censorship Act of 1915

'(a) required the payment of license fees in advance to secure the approval of films by the Pennsylvania State Board of Censors, thereby making such payment an absolute condition precedent to distributing or exhibiting films in the Commonwealth;

'(b) provided for the immediate seizure of films which had not been approved by the Pennsylvania State Board of Censors;

(c) provided for the arrest and summary conviction of persons distributing and exhibiting unapproved films;

'(d) provided for the arrest and summary conviction of the...