375 Pa. 431 | Pa. | 1953
Opinion by
This proceeding in equity presently involves the question of the proper apportionment of assets and liabilities between plaintiff, the Borough of Pleasant Hills, and defendant, the Township of Jefferson. (The latter has since been erected into the Borough of Jefferson but will still be referred to herein as the township.) The borough was created out of the township and incorporated on April 1,1947.
The original complaint, in addition to a prayer for such apportionment, sought an injunction restraining the township commissioners from constructing water mains or otherwise expending the moneys procured by the township from the sale of a certain issue of bonds. The court below granted the injunction and at the same time appointed an assessor to prepare an accounting of the township’s assets and liabilities as an aid in the proper disposition of the case. The township appealed to this court and we reversed the decree enjoining the defendants and remanded the record to the court below for further proceedings in connection with the apportionment prayed for: Pleasant Hills Borough v. Jefferson Township, 359 Pa. 509, 59 A. 2d 697. Thereafter the assessor submitted a report containing a list of the assets and liabilities to be adjusted and valuations thereof, and fixing the relative percentages of the assessments as between the borough and the township for the year 1947 as the basis of the adjustment as prescribed by section 703 of the Act of May 4, 1927, P. L. 519. The percentage thus fixed was approximately 47% for the township and 53% for the borough. Exceptions were filed to the report of the assessor by both parties, considerable testimony was taken, and the chancellor filed an adjudication which was subsequently sustained in all respects by the court
The first of the questions in dispute arises from the fact that shortly before the incorporation of the borough the township had sold a bond issue of $325,-000, the gross proceeds of which, with premium and adjusted interest, amounted to $326,076.56. The purpose of the issue was the purchase of existing water lines, the construction of additional ones, and the procuring and maintaining of a supply of water for the residents of the township. Out of the proceeds which the township had in bank it paid the sum of $10,045.75 for maps, plans and specifications for the construction of the lines, and a few days after the incorporation of the borough, namely, on April 7, 1947, the township commissioners awarded the principal contracts for the work of construction; the contracts were executed on April 24, 1947. The court held that the liability of the township on these bonds as of April 1, 1947 (that being the time of the incorporation of the borough and therefore, under sections 701 and 702 of the 1927 Act, the date governing the apportionment of the assets and liabilities of the township) was not the sum of $325,000, the principal of the bond issue, but only the difference between that amount and the amount of the cash proceeds then in bank, namely $316,030.81.
In our opinion this holding was erroneous. The proceeds of the bond issue were not available to the township for any purpose other than that originally proclaimed by it: Wilds v. McKeesport City School District, 336 Pa. 275, 278, 9 A. 2d 338, 339; Pleasant Hills Borough v. Jefferson Township, 359 Pa. 509, 515,
The township contended that its governmental control over the borough was preserved to the first Monday of January of the year 1948 by virtue of the amendment to section 211 of the 1927 Act by the Act of August 6, 1941, P. L. 881, and it claims that it rendered governmental service to the borough until that time, for which it should be compensated. The testimony, however, disclosed that elective officers of the borough, whom we declared in our former opinion in these proceedings (359 Pa. 509, 512, 513, 59 A. 2d 697, 699,) to be de facto officers, actually assumed office on August 15, 1947, and thereafter it was the borough employes,
The record is remanded to the court below to take further testimony as herein indicated and to make a final adjudication not inconsistent with this opinion; each party to bear its own costs on this appeal.
Section 213 of the Act of June 25, 1941, P. L. 159, provides that “The proceeds of the sale of general obligation bonds shall be used for the purpose or purposes specified in the ordinance authorizing said bonds,” subject to an exception not here pertinent.
While the Act of June 25, 1941, P. L. 159, relating to the borrowing of money by certain political subdivisions and the sale of general obligation bonds, does not control the present question, it furnishes at least a persuasive analogy. It provides, section 202, that “The net debt of a municipality shall be the net debt determined as follows: Prom the gross liabilities of the municipality, which shall be the total amount of the following items: (1) the principal of all bonds authorized or outstanding for whatever pur
Section 705 of the 1927 Act provides that “The court may make all needful orders for the collection and payment, by the township or borough, of the share of the indebtedness apportioned to it, and may order the officers of the township or borough to collect, by special taxation, an amount sufficient to pay the share either in one year or by annual instalments.”