246 Pa. 301 | Pa. | 1914
Opinion by
The court below decided that the defendant corporation was not obliged to collect the State tax due by resident holders of its coupon bonds; the Commonwealth has appealed.
By agreement, the case was tried without a jury. The
On this state of facts, the court below determined that the case of N. Y., L. E. & W. R. R. Co. v. Penna., 153 U. S. 628, and Del. & Hud. Canal Co. v. Penna., 156 U. S.
We have studied these two United States authorities with care, and while they both involve the question of the impairment of contracts existing between the Commonwealth and the respective defendants, yet, independently of this, in each of them, the conclusion is placed upon the ground that section 4 of the Act of 1885, supra, could, under no circumstances, have extraterritorial operation. There, as here, the respective defendants had property and were doing business in Pennsylvania; but in each instance the treasurer was a nonresident, and the money with which the interest on the bonds was paid was kept on deposit out of the State. The only difference in this respect between those cases and the present one, is that in the former the payments of interest were made in New York, directly by the company to the actual bondholders, while here the treasurer sent the money from New York to The Land Title and Trust Co., in Philadelphia, which corporation is expressly designated on the coupons to make payment thereof. We agree with the court below that this arrangement did not bring the defendant company within the operation of the statute.
The fourth section of the Act of 1885, supra, provides, “That hereafter it shall be the duty of the treasurer of each private corporation......doing business in this Commonwealth, upon the payment of any interest upon any......bond,......issued by said corporation to
In Commonwealth v. Lehigh Valley R. R. Co., 186 Pa. 235, 246, referring to the act now before us, we said, “The tax is not in any sense or in any degree a tax on the corporation......, but on the individual citizen of the State who holds the bonds; the corporation is chargeable with it only as a collector, and by reason of default in the duty to collect.” This being the situation, when considering the legislation in question, we must keep in mind the construction placed upon it by the Supreme Court of the United States, and read it accordingly. When the act is so viewed, it is plain that the defendant corporation cannot be charged with the tax upon the theory of a default in duty; for its treasurer is a nonresident, not fixed with any duty to perform. Moreover, when we consider our own construction, in the Lehigh Valley case, supra, in connection with the two United States cases, supra, it is clear that the local taxing officers may insist upon the return of the defendant’s bonds and direct payment of the tax thereon by each individual citizen of the Commonwealth holding the same; and .the proviso in section 6 of the act, to the effect that individuals shall not return corporate obligations “the tax upon which is required by law to be collected......and paid into the state treasury by the corporation,” has no application, for, under the act as construed, the tax upon the defendant company, and others similarly situated, is not “required by law to be collected.......and paid.......by the corporation.” Furthermore, the fact that the written obligations provide that the bonds and the interest thereon shall be paid “free of tax,” does not enter into this case; that is a matter between the respective bondholders and the defendant corporation, and it can in no way affect the rights of the Commonwealth or the obligation of others
The assignments of error are overruled and the judgment is affirmed.