Wilson et ux. v. Philadelphia School District et al., Appellants.
Supreme Court of Pennsylvania
November 16, 1937
225 Pa. 225
Joseph Sharfsin, with him A. L. Shapiro and Abraham Wernick, for appellees.
N. R. Criss, Solicitor for School District of Pittsburgh, amicus curiae.
OPINION BY MR. CHIEF JUSTICE KEPHART, November 16, 1937:
Appellees seek to enjoin appellants from levying and collecting, or attempting to levy and collect, taxes for school purposes in the School District of Philadelphia County for the year 1938 and subsequent years. Nine reasons were assigned for holding the taxing sections of the School Code and its amendments unconstitutional. The preliminary objections to the bill were that it was too late to raise the constitutionality of the School Code, as amended, and that the present bill was barred by the principle of stare decisis as the constitutional objections had been adversely decided in Minsinger v. Rau, 236 Pa. 327.
The court below dismissed eight of appellees’ nine reasons as having been decided by Minsinger v. Rau, supra, and rested its decision on the invalidity of the legislative delegation of the power to fix the tax rate. It held that the Act of March 12, 1929, P. L. 20, amending the School Code of May 18, 1911, P. L. 309, was such a departure from that act with reference to taxing power that a
The questions presented in this appeal have a much wider scope than those presented to the court below. We consider the theory of delegation of legislative power generally, and specifically the delegation of the taxing power. In conjunction therewith we consider the right of the legislature to delegate to any appointive commission the power to levy taxes. If it be found the Act of 1929 was a lawful grant of power, our inquiry need go no further, but if we should find that the act was an unlawful delegation of power, or such delegation was in violation of
It is a well settled maxim that under our theory of the separation of powers of government, legislative, judicial and executive, the powers of each branch must be preserved to it; the legislature cannot delegate its powers to enact laws directly or indirectly to any other body or governmental agency: O‘Neil v. Am. Fire Ins. Co., 166 Pa. 72. As stated by Chief Justice GIBSON early in our history, in Case of the Borough of West Philadelphia, 5 W. & S. 281, 283: “Under a well-balanced constitution, the legislature can no more delegate its proper function than can the judiciary. It is on the preservation of the lines which separate the cardinal branches of the government, that the liberties of the citizen depend . . .”
This principle, though not expressly written in our Constitution, embodies its basic strength if it is to endure as our fundamental law. It has been so considered
That the power to tax is peculiarly a power of the legislature (Sharpless v. Mayor of Phila., 21 Pa. 147) has never been questioned in this country and has frequently been asserted by our courts: City of Erie v. Reed‘s Executors, 113 Pa. 468; Butler‘s Appeal, 73 Pa. 448; Balto. & Phila. Steamboat Co.‘s Appeal, 302 Pa. 364; P. R. R. Co. v. Pittsburgh, 104 Pa. 522; Gray, Limitations of the Taxing Power (1906), 271-272. The taxing power, one of the highest prerogatives, if not the highest, of the legislature, must be exercised through representatives chosen by the people. It is clearly within the interdiction of this principle of constitutional government against delegation. True, in this state, and in many others, the power to tax has been delegated to and exercised by smaller units of state government, such as municipal bodies chosen by the people. See Sharpless v. Philadelphia, supra. For, while the principle of non-delegation of taxing power is the general rule, delegation to municipal authorities has been recognized as lawful: Butler‘s Appeal and City of Erie v. Reed, supra; Durach‘s Appeal, 62 Pa. 491; 1 Cooley, Constitutional Limitations (8th ed.), 235, 389; 4 Dillon, Municipal Corporations (5th ed.), sections 1375-1376. This is an exception to the general rule, but such delegation is kept within defined lines, with supervisory control always vested in elective bodies. There are reasons for this exception, at least in this state. Justice SHARSWOOD in Durach‘s Appeal, supra, at pp. 493, 494, said: “Mu-
There is another historical reason which supports the right of the legislature to entrust local taxation to municipal governments. Local governmental units, in many instances, antedated federal or state governments and before their inception levied taxes. In this state this is particularly true. Our earliest taxes were levied by the townships under the laws of the Duke of York for poor relief and governmental expenses. Under the proprietary government the county was the taxing unit. When the legislature authorized cities, townships, boroughs and counties to levy taxes, it merely carried on a system that had been historically in existence.
There is no such historical basis to support conferring the taxing power on a school district. Our common school system was not adopted in this state as it exists today until many years after the Revolution, though the Constitutions of 1776, 1790 and 1838, and the laws recognized its vitally important part in our existence. After Thaddeus Stevens’ and Governor Wolf‘s famous
It is no doubt true in this state that the legislature has conferred upon school districts the power to levy and collect taxes for school purposes, and this has been upheld without reference to any definite restrictions placed thereon: Blair v. Boggs Twp. School Dist., 31 Pa. 274; Wharton v. School Directors, supra; Mellor v. City of Pittsburgh, 201 Pa. 397; Duff v. Perry Twp. School Dist., supra. Laws have been enacted for school districts to levy taxes for purposes other than public education: Weister v. Hade, 52 Pa. 474; Keasy v. Bricker, 60 Pa. 9; West Donegal Township v. Oldweiler, 55 Pa. 257. In none of these instances was the constitutional question of improper delegation of the taxing power raised; moreover, in all of them the directors of the school districts involved were elected by the people and it is now too late to question the power of elective school boards to levy a tax. The first case that considered the question of delegation of taxing power was that of Minsinger v. Rau, supra. Prior to this decision, it had been taken for granted that the legislature could empower the school district to levy taxes for educational purposes.
Before discussing this case it is well to review a little of the history of the Philadelphia School District. The Act of March 3, 1818, P. L. 124, provided for the appointment of the first school controllers. It was followed by many acts, the Act of January 23, 1821, P. L. 13; the Act of February 2, 1854, P. L. 21, and the Act of March 15, 1870, P. L. 437, changing the name of the board to the Board of Public Education. While the School District of Philadelphia was governed by appointive officers from the time of its original creation until 1854, the taxes for the school district were levied and collected by
With this background and precedent, the Act of 1911 reorganized the public school system; it constituted Philadelphia a school district of the first class, provided for the appointment of a Board of Public Education of fifteen members by the judges of the courts of common pleas (the first boards had been appointed by city councils and county commissioners), and by Section 524 empowered the board to levy an annual tax of not less than five and not more than six mills per dollar of assessed valuation for school purposes. The Act of June 21, 1919, P. L. 555, changed the maximum limit to eight mills and the minimum to six, with an additional half mill for funding of bonded indebtedness. The Acts of April 28, 1921, P. L. 328, and March 12, 1929, P. L. 20, which followed, will be later discussed. In Minsinger v. Rau, supra, the delegation of taxing power under the Act of 1911 was challenged. We there held that the legislature had the power to designate agencies for the maintenance of the common school system, and had the power to confer on them the right to collect a tax. The opinion of the court in considering the question of delegation to an appointive board, stated that as the legislature had fixed the maximum limit, there was no unlawful delegation of taxing power to an unrepresentative body. In a later case we said that was a legislative act. See Duff v. Perry Twp. School Dist., supra, involving an elective board of the third district. It was contended, however, that a discretion existed in the board to choose between five and six mills. This was the first case to consider the limitation upon the legislature in regard to delegating the power of taxation, and it was argued that it was a dangerous practice to confer upon a board, which the people have no power to choose, or over which their power is remote and indirect, the authority to tax. But in the Act of 1911 there was no real delegation of
Other jurisdictions hold that the legislative power to tax cannot be conferred upon a merely appointive body: State ex rel. Howe v. Mayor of City of Des Moines, 103 Iowa 76, 72 N. W. 639; Vallelly v. Board of Park Commissioners, 16 N. D. 25, 111 N. W. 615; Parks v. Wyandotte County, 61 Fed. 436; Inhabitants of Twp. of Bernards v. Allen, 61 N. J. L. 228, 39 A. 716; Schultes v. Eberly, 82 Ala. 242, 2 S. 345; 1 Cooley on Taxation (3rd ed.), p. 99. These decisions seem to be based on the fact that the tax-levying authorities were nonelective bodies, that they were appointed without the consent of the people and, as pointed out, if such bodies may tax for
It is contended, however, that the provisions of the Acts of 1921 and 1929 did not constitute a delegation of power because the legislature fixed a limit on the tax levy. This contention is not borne out by consideration of the component elements which form the basis for the determination of the annual school tax. Section 1 of the Act of 1929 provides:
“In all school districts of the first class, the school taxes for the following fiscal year shall be levied annually, by the Board of School Directors thereof, on or after the second Monday of November and before the first Monday of December following.
“The Board of School Directors thereof shall annually levy a tax on each dollar of the total assessment of all property assessed and certified for taxation in said district, which said tax shall be ascertained, determined, and fixed by adding together the following:
“(a) An amount which, with all moneys received from the Commonwealth applicable thereto, shall be sufficient to pay the minimum salaries and increments of the teaching and supervisory staff thereof as fixed and provided by law and to pay the contributions of said district to the teachers’ retirement system.
“(b) An amount sufficient to pay the interest on, and retire the principal of, the indebtedness of said district at maturity.
“(c) An amount sufficient to pay all other expenses and requirements of said school district, which amount . . . for the tax year one thousand nine hundred and thirty-two and thereafter . . . shall be equivalent to not less than three, nor more than three and one-half mills on the dollar of the total assessment of all property assessed and certified for taxation therein.”
The amount of tax to be levied under subsection (a) is variable. Although the salaries of teachers and members of the staff are fixed by law, the law does not fix the num-
The other subsections, (b) and (c), contain definite restrictions with the exception possibly of the former, where the amount may be variable, although there is a maximum limit. But so long as the factor provided by subsection (a) is left entirely to the discretion of the school board, the entire rate equation is variable without limitation. The legislature has not under such circumstances enacted a rate, but has empowered the school board to fix it. Such was not true in the Minsinger case, and it is our considered judgment that here there is in fact an unconstitutional delegation of taxing power to an appointive board.
Delegation to a fact-finding body of the power to do something that is in itself circumscribed, after facts are found, is not the delegation of a legislative function. But where the delegation to a fact-finding body empowers it to create the conditions which constitute the fact, this is legislative. Here the determinative fact, the most material element entering into the tax, may be
This matter brings forward the question of school taxes generally throughout the State. Many criticisms have been voiced by large groups of taxpayers in Philadelphia, and elsewhere throughout the State, against the increasing burden of taxes for educational purposes. The feeling has been expressed that school officials, in attempting expensive innovations, erecting elaborate and ornate buildings, and in other ways, have departed from their fundamental duty to maintain an economical and adequate system of schools, with a sufficient number of well-paid teachers. It is charged that school boards have acted at times without considering the great burden the taxpayers must assume in paying for these palatial structures. While these matters are purely questions of policy over which this court has no control, we cannot help but notice the growing discontent springing from these criticisms. Costly edifices built at the tremendous expense of many, many millions, under a plan or scheme over which school directors or members of boards have little or no voice, are not productive of an efficient, well-paid teaching staff, nor do they advance one iota either the education or the educational advantages of the children. Less expensive and less burdensome structures, well built, will accomplish the same results, and taxpayers will not be made to suffer so much. In places where the boards are elective, liable to be called to account at the polls, the school directors are subject at least to some restraining influence in the expenditure of public funds, which does not exist where the school directors are appointed.
At this point it is urged that our decision in American Baseball Club of Phila. v. Phila., 312 Pa. 311, is important. The appointment of the officers to guard a baseball park cannot be considered on the same plane as the determination of a teaching policy or system and the necessary persons to accomplish the result. The selection
Moreover, the license fee in the American Baseball Club case was not a tax within the constitutional meaning. It was not a levy upon all property owners for public purposes, but merely a charge imposed upon certain individuals for special services rendered them by the police force. Its purpose was not to provide a source of revenue to meet future expenses, but merely to compensate the city for work actually performed. It was an exercise of the police power. Such fees are not strictly taxes. See Arronson v. Phila., 16 D. & C. 427, where Mr. Justice STERN, then judge of the court of common pleas, said of a similar license fee: “Such a charge is not regarded as in any sense a revenue-producing measure or as the imposition of a tax. It is merely making the person who causes the expense pay for it.” See also Point Bridge Co. v. Pittsburgh Rys. Co., 240 Pa. 105, 115; Kittanning Borough v. Natural Gas Co., 26 Pa. Superior Ct. 355; Atlantic & Pacific Tel. Co. v. Phila., 190 U. S. 160.
Another objection to the Act of 1929 is that it is unconstitutional because of
As stated by Mr. Justice LINN in Tranter v. Allegheny County Authority, 316 Pa. 65, the main purpose of
The doctrine of equitable estoppel is urged as precluding an attack on the constitutionality of the act. The Act of 1929 is almost identical with the Act of 1921 in so far as taxation is concerned; in all these years no one has voiced an objection to its constitutionality. We have not been able to discover any case which holds that laches will bar an attack upon the constitutionality of a statute as to its future operation, especially where the legislation involves a fundamental question going to the very roots of our representative form of government and concerning one of its highest prerogatives. To so hold would establish a dangerous precedent, the evil effect of which might reach far beyond present expectations. While dictum in McGuire v. Phila. (No. 1), 245 Pa. 287, 293, involving the borrowing capacity of municipalities, indicates delay might bar a constitutional challenge of a statute, the cases cited therein in support of this proposition go no further than to establish that, where a statute has been in force for many years without any question as to its constitutionality being raised and engagements have been entered into on the strength of its validity, the court will not undertake the drastic measure of wiping it off the statute books unless it is convinced beyond all peradventure of doubt that it violates a provision of the fundamental law. Justice MITCHELL in Com. v. Gilligan, 195 Pa. 504, 511, expressly declares that laches will not ipso facto operate to prevent the court from declaring an act void in violation of the constitution. See Page v. Carr, 232 Pa. 371, 376. In the instant case, it has been shown beyond all doubt that the statutory provision delegating the taxing power to a nonelective school board, of which the control of the people is remote and indirect, violates one of the most fundamental principles of our constitution, and this court must perform its duty, in spite of the delay.
It is likewise true that the efforts of delinquent taxpayers, who have remained silent and have not made known their intention to withhold payment on the
It is recognized that the protection afforded by the constitution against unlawful taxation is in defense of private property, and hence being in protection of a property right may be waived at the option of the property owner: Bidwell v. City of Pittsburgh, 85 Pa. 412. This court there held that the constitutional right against unjust taxation is for the protection of the taxpayer‘s private property; it is stated at p. 418: “He may waive that protection and consent to such action in regard to it as would otherwise be invalid.” In Shepard v. Barron, 194 U.S. 553, it is pointed out at p. 567, that a “course of conduct which renders it unjust and inequitable to others that he [the taxpayer] should be allowed to complain of the illegality” may amount to a waiver; and that some courts have held that “a mere failure to give notice of objections to one who, with the knowledge of the person taxed, as contractor or otherwise, is expending money in reliance upon payment from the taxes, may have the same effect.” While in most cases where a waiver has been found, the conduct of the party has consisted in the invocation of the act which he later seeks to attack and the acceptance of benefits therefrom, nevertheless, mere inaction may constitute a waiver, where the party knows that others are go-
In view of the presumption in favor of the constitutionality of all acts of legislature, the burden rested upon the taxpayers to show that the taxing power exercised by the school board was in violation of the constitution. At the time the now delinquent school taxes were levied, the property owners who became liable for the payment thereof realized that the revenues to be derived from their payment would be counted on to supply the funds necessary to meet the obligations incurred in the administration of the public school system. In order to avail themselves of the right to attack the validity of the tax levies, it was incumbent upon them to make known their intention to resist payment. They could not sit by and permit the school board to rely upon payment of their taxes to its detriment and to the detriment of other taxpayers. To permit a delinquent taxpayer to raise a constitutional objection to the validity of the claim against him, after expenses have been incurred in
The only unconstitutional feature of the statute here considered is the delegation of the power to an appointive commission to levy taxes; it is the only one here dealt with; no other provisions are challenged and as to these the Act will continue effective. In this connection we may say the constitution gives the school board the right and power to create an indebtedness and issue bonds or notes. All its implications must be upheld and enforced.
Appellants stress the fact that if the decision of the court below is allowed to stand, and the taxing power of the school board restricted to the maximum permitted by the Act of June 21, 1919, P. L. 555, supra—not less than 6 nor more than 8 1/2 mills upon each dollar of the assessed value of taxable property—the effect will be to “destroy the public confidence in millions of outstanding school bonds . . . [and] harass and embarrass school boards throughout the Commonwealth in floating new issues as well as in meeting past and current obligations.” They prophesy that this will result “in temporary disruption and paralysis of the common school system to no good purpose” and that the damaging and disrupting effect will be immediate and direct.
The
Had this bill been brought promptly after the adoption of the unconstitutional portions of the Act of 1929, and at a time when the legislature was regularly convened, it would have been unnecessary for this court to invoke its power to modify the decree to provide a means whereby the school district might continue its important functions without disastrous interruption. Under the actual circumstances, however, appellees’ delay has created a situation which could be remedied only by a
The decree appealed from is modified; the defendants, severally and jointly, are restrained from levying a school tax in excess of nine and one-quarter mills on the assessed valuation; leave is granted to levy such tax not to exceed said rate for the years 1938 and 1939; this court will retain the record and jurisdiction of the case for such further action as, on proper application, may be shown to be necessary. Each party shall pay its own costs.
SUPPLEMENTAL OPINION, PER CURIAM, November 29, 1937:
The court having retained the record and jurisdiction of this case for such further action as, on proper application, may be shown to be necessary, and application having been made to supplement the opinion of the court so far as it refers to debt service and the taxes applicable thereto, both parties agreeing that such elaboration is desirable, it is now further stated that nothing in the opinion heretofore filed was intended to or shall be taken or held to cast any doubt upon the power of the School District of the City of Philadelphia to borrow money for its proper corporate purposes, and to issue bonds to secure such indebtedness or in any way to vary the rule of law announced in Hillman Coal & Coke Co. v. Jenner Township, 300 Pa. 108, 150 A. 293, that the debt service charges must be first provided for out of taxes levied each year. This rule is applicable to all bond issues of the Philadelphia School District, present and prospective, provided, however, that the total tax levy shall not exceed the sum of nine and one-quarter mills for all purposes.