251 Pa. 134 | Pa. | 1915
Lead Opinion
Opinion by
By Act of Assembly approved June 27, 1913, P. L. 639, entitled “An Act levying a tax on anthracite coal and providing for the collection and distribution of the same,” every ton of anthracite coal of the weight of 2,240 pounds avoirdupois, prepared for market within the State, is made subject to a State tax of two and one-half per centum of the value thereof, the same to be settled and collected as provided by law for other taxes. By the second section of the act every operator of anthracite mines is required to report to the auditor general in the month of January the number of tons of coal mined by such operator within the calendar year next preceding, and the value thereof prepared for market. Complying with this requirement, but protesting against its liability to make such report or to pay such tax, the appellant company filed with the auditor general on 31 January, 1914, a report showing the anthracite coal mined and prepared by it for market during the period beginning 28th June, 1913, and ending 31st December, 1913. Thereupon, 29th June, 1914, the auditor general settled an account against appellant which was approved by the State treasurer, in which tax to the amount of $7,-
The appeal challenges the constitutionality of the act referred to. One ground on which the challenge rests is that the act violates Section 1, Article IX, of the Constitution, which directs that “all taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax,” inasmuch as it makes artificial and arbitrary distinction and discrimination between anthracite and bituminous coal, subjecting the former to tax for public purposes and not the latter. The fact that the act does make distinction between the two commodities is patent, and the one question we have to deal with is whether the distinction thus made rests upon such substantial difference as makes either variety a proper subject of this particular exclusive legislation. If this question can be answered in the affirmative, it must follow that the act is not open to the objection urged; for while it does subject to taxation but one of the two varieties of coal, if the variety taxed so differs from that not taxed, in respect to matters proper for consideration in the laying of the tax for
In determining whether legislative classification is special and discriminatory regard must be bad to tbe purpose for wbicb tbe legislation is designed. Differences wbicb make classification for some purposes proper, may furnish no reasonable basis for classification for other purposes, it is their relation to tbe end proposed by tbe particular legislation that determines whether classification is warranted. That differences real and substantial exist between anthracite and bituminous coal sucb as amply justify their separate classification for certain purposes, is without question. While both are natural products and tbe chief ’use of each is tbe same — tbe development of beat by combustion — yet they are distinguishable in so many ways, not only in their efficiency, but in respect to conditions under wbicb they are found, conditions under wbicb they are mined, and tbe processes by wbicb they are severally made marketable, that if both were to be subjected in all respects to tbe same legislative requirements, it would result in embarrassing each by imposing upon both regulations and restrictions entirely proper and necessary in tbe case of one but wholly unnecessary and oppressively burdensome upon tbe other. That tbe constitutional restraints and limitations upon legislative power were never intended to work sucb unequal and inequitable results is apparent, and so whenever it has occurred that conditions in respect to one variety of coal and not tbe other, called for specific legislative action with respect to it, tbe legislature has without question or hesitation, for tbe particular pur
Now upon what difference between these two varieties of coal can this discrimination which has for its object the subjection of the anthracite variety to taxation to the exclusion of the bituminous, rest?. That they belong to
And so we recur to the main and only inquiry, what difference is there between anthracite and bituminous coal that makes the one, when prepared for market, a proper subject for taxation, and not the other? Our answer must be, after the most careful consideration of the question, in the light of the findings of the learned judge who heard the case in the court below, and the arguments advanced on the part of the Commonwealth, that we discover none. Not only so, but as one result of our inquiry we find that the classification adopted instead of tending to promote equality in taxation must necessarily have a contrary effect, to the manifest prejudice of the interest subjected to the tax. Take but one illustration. It is a fact found by the learned judge of the court below, not excepted to, that of the total annual tonnage of anthracite coal, amounting to upwards of ninety-one millions of tons, forty per cent, is sold in keen competition with bituminous coal in the fuel market. Here then we have two commodities in active competition, to the extent of nearly the one-half of the total production of one of them, in the open market; one taxed two and a half per cent., ad valorem, on every ton
Another feature of the act to be remarked upon as further illustrating its repugnancy to constitutional provisions is to be found in section 5 of the act which directs that each county shall receive from the State treasurer, for the use of the several cities, boroughs, and townships thereof, one-half of said tax collected;from operators in said county; and that the treasurers thereof shall, within thirty days thereafter, pay over the same to the treasurers of the several cities, boroughs and townships in said county pro rata according to their respective popu
It is important in this connection to recall some of the more significant facts found by the court below. These are: that anthracite coal, the subject of the proposed tax, is found in but nine counties of the State, while bituminous coal is found and mined in twenty-four; that in 1913 the total anthracite tonnage was 91,626,956 tons and the total bituminous tonnage was 173,030,064 tons; that the tax imposed by the act upon the anthracite exclusively would, if enforced, amount to several million dollars annually, and the one-half thereof returned to the counties in trust for the several boroughs, cities, and townships thereof according to population would in some cases give to the municipality more than the entire tax raised therein for municipal purposes, and in a great many cases would approximate the total amount raised for municipal purposes, and would bestow upon many boroughs and townships which do not now and never have contained a pound of coal deposited within their limits large sums of money annually for the conduct of their municipal affairs, or for such municipal expenditures as such municipalities may see fit to make.
Keeping in mind that the one great purpose of legislative classification is to avoid the inequalities that would necessarily result from subjecting all the members or subjects of a natural class to uniformity of rule, is it not apparent that, whatever the purpose of this act, its certain effect would be not only an unjust and unwarranted discrimination in levying the tax, but a like unjust and unwarranted discrimination in its disbursement? Here we have a tax imposed yielding a revenue twice as large in amount as the State’s requirements, and, for some undisclosed reason, the one-half of the total paid into the state treasury is directed to be paid over to the treasurers of the nine anthracite producing counties to be divided among the several municipalities therein. It is no less difficult to discover a substantial reason for this
The act in question is assailed on still other grounds than those we have discussed. Were we in any doubt as to the correctness of our conclusion that the act is in plain, open and palpable disregard of the constitutional requirement that all taxes shall be uniform upon the same class of subjects, it would be our duty to give like consideration to these other grounds of attack; but with the unconstitutionality of the act already determined on one wholly adequate ground, discussion of the other objections urged is unnecessary.
For the reason stated the judgment of the court below is reversed, and judgment is now entered for the defendant.
Dissenting Opinion
Dissenting Opinion by
It is a fundamental principle of constitutional construction that, in determining whether or not a particular act of the legislature exceeds the powers of that body, every presumption is in favor of the validity of the act, and it will be declared void only where it violates the Constitution clearly and plainly and in such manner as to leave no doubt in the mind of the court. Whether or not the court approves of the wisdom or justice of the legislation is not the question. Protection
These principles are well settled, and have been frequently applied in cases dealing with the question of the power of taxation. Thus in Sharpless v. Mayor of Philadelphia, 21 Pa. 147, it was said by Mr. Chief Justice Black, page 161: “The great powers given to the legislature are liable to be abused. But this is inseparable from the nature of human institutions. The wisdom of man has never conceived of a government with power sufficient to answer its legitimate ends, and at the.same time incapable of mischief. No political system can be made so perfect that its rulers will always hold it to the true course. In the very best a great deal must be trusted to the discretion of those who administer it. In ours, the people have given larger powers to the legislature, and relied, for the faithful execution of them, on the wisdom and honesty of that department, and on the direct accountability of the members to their constituents. There is no shadow of reason for supposing that the mere abuse of power was meant to be corrected by the judiciary. There is nothing more easy than to imagine a thousand tyrannical things which the legislature may do, if its members forget all their duties; disregard utterly the obligations they owe to their constituents, and recklessly determine to trample upon right and justice. But to take away the power from the legislature because they may abuse it, and give to the judges the right of controlling it, would not be advancing a single step.”
The ideal system of taxation, of course, is that which causes the burden to fall upon the citizens in equal and just proportions; but such a system has never yet been devised, and in our complex state of society never will be. Hence it necessarily folloAvs that the mere fact that
The power of the legislature to classify subjects and objects of taxation has always been recognized from earliest times as a necessary incident to the proper and just exercise of the right to tax. This power not only existed
In applying the fundamental principles above enunciated to the case before us, and though recognizing the rule that classification must be reasonable and not arbitrary, I am unable to agree with the majority of the court in holding the Act of 1913 a violation of the uniformity clause. It is admitted there is sufficient distinction between the mining and marketing of bituminous and anthracite coal to warrant their separation into distinct classes with separate legislation governing each: Durkin v. Kingston Coal Co., 171 Pa. 193. This fact alone is a strong circumstance, though perhaps not a conclusive one, that the legislature did not act arbitrarily in adopting this same classification for the purpose of taxation. But other differences exist between the properties and composition of the two kinds of coal, which are recognized by leading writers on geology and coal, and which seem amply sufficient to justify a classification for purposes of taxation without subjecting such act to the charge of arbitrariness or unreasonableness. Thus the various fuels are classed as wood, peat, lignite, bituminous and anthracite. Can it be said that wood and peat, for instance, could not be properly classified by the legislature because they are both fuels? Bituminous coal is found in almost every section of our continent, is black in color, quite soft, and is ready for market as soon as mined. The vein in which it is found rarely exceeds eight feet in thickness. On the other hand, anthracite coal is found only in a few counties in the eastern portion of this State, is lighter in color, quite hard, requires considerable preparation before it is ready for market, and the veins in which it is found are sometimes over one hundred feet in thickness. Anthracite coal
The validity of this classification seems to be fully sustained by the authorities. Bearing in mind that a classification of coal for other purposes has been upheld, the language of Mr. Chief Justice Agnew in Kittanning Coal Co. v. Com., 79 Pa. 100, upholding a tax on coal companies in accordance with the amount of coal mined, becomes pertinent. “It is clear, therefore, that the moment we concede the power to classify, we have disposed of the question of uniformity, for then all that is required by the Constitution is uniformity of taxes among the members of the class. Now the power to classify is not only retained in clear language, but was held by the court to be continued in the case of Roup v. Pittsburgh, 21 Pitts. L. J. 190. This power was possessed under the Constitution of 1790, had been exercised in numerous laws, and existed when the new Constitution was framed and adopted. Thus, real estate had been classified as seated and unseated, and by various kinds, as houses, lands, lots of ground, ground-rents, mills, manufactories, furnaces, ferries, and others. The classification of personal property was equally various, to-wit: slaves, horses, mules, cattle, carriages, watches, bonds, mortgages, stocks, moneys at interest, profits, etc. So trades, professions, callings, and even single men, were taxed by classification. Taxes were laid in various forms, as rates on values, rates on dividends, or profits, and by specific sums on specified articles. These things were well known to the convention of 1873, yet no change was made in the power to classify, but it was recognized by saying that all taxes shall be uniform on the same class of subjects within the territorial limits of the authority levying the tax, by the latter clause, even extending the power to classify by limiting the class to certain bounds.” In Durach’s App., 62 Pa. 491, it was held that a munic
In Commonwealth v. Germania Brewing Co., 145 Pa. 83, a tax distinguishing between corporations manufac
Many other instances might be cited to show the various classifications which have been held proper and which seem to have no more legitimate reasons for their support than the classification in the present case. What argument can be advanced, for instance, which can logically condemn a classification of the two kinds of coal and yet sustain a separate classification of horses and mules, or of mortgages owned by corporations and those owned by individuals, or of mines in proportion to the yearly output?
In view of the difference in the nature, qualities and system of mining anthracite and bituminous coal, and of the fact that classification with respect to mining has already been sustained by this court, I am unable to concur with the majority of the court in holding the adoption of the same classification for purpose of taxation so
If the classification is proper under our State Constitution, the act would not conflict with the fourteenth amendment of the United States Constitution guaranteeing to all equal protection of the laws. In District of Columbia v. Brooke, 214 U. S. 138, it was said in discussing this amendment (page 150) : “We have repeatedly decided — so often that a citation of the cases is unnecessary — that it does not take from the states the power of classification, and also that such classification need not be either logically appropriate or scientifically accurate. The problems which are met in the government of human beings are different from those involved in the examination of the objects of the physical world, and assigning to them their proper associates. A wide range of discretion, therefore, is necessary in legislation to make it practical, and we have often said that the courts cannot be made a refuge from ill-advised, unjust or oppressive laws.”
Neither can I agree with the majority of the court that
Among other authorities sustaining the same principle are: People v. Hawes, 34 Barb. 69; State v. Mudgett, 57 Pac. 351; Holton v. Board of Commissioners of Mecklenburg County, 93 N. C. 430; Kerr v. Perry School Township, 162 Ind. 310. In Kirby v. Shaw, 19 Pa. 258, a special tax added to borough rates over and above the county rate, for the purpose of defraying the expense of erecting a county court house within the Borough of Towanda, was held constitutional, even though the inhabitants of the borough were thus to assume an additional burden over that assumed by other taxpayers of the county. Many illustrations might be given to show the expenditure of public funds in a particular part of the State to the exclusion of other parts. The construction and maintenance of State highways is a notable example. This does not directly benefit taxpayers living far from the location of the highway, and yet they are compelled to help pay for the improvement. So long as the distribution of taxes by the State is for public purposes, and there is nothing in the Act of 1913 to indicate a distribution for any other purpose, the legislative discretion will not be interfered with.
In view of the decision of the majority of the court, no good purpose can be served by discussing the other questions of constitutionality raised in the case.
Mr. Justice Elkin, before his death, read and concurred in this opinion.