Ebervale Coal Co. v. Commonwealth

Mr. Justice Mercur delivered the opinion of the court, The plaintiff in error is a corporation liable to taxation, under the several Acts of 24th April 1874, Pamph. L. 68, and of 20th March 1877, Pamph. L. 6. The act first named required the company to make report to the auditor-general, annually, in the month of November, stating the' amount of capital paid in, the date, amount and rate per centum of each and every dividend declared by it during the year, ending with the first Monday of said month; and provided it should be subject to and pay a tax annually, at the rate of one-half mill upon its capital stock for each one per cent, of dividend made or declared by the company; and in case no dividend was made or declared by it, upon either its commón or preferred stock, then three mills upon a true valuation of its capital stock, on which no dividend was made or declared. * Thus, this act imposed a tax of one-half mill upon the capital stock, for each one per cent, of dividend declared. Regardless of the size of the dividend, the one-half mill tax was imposed on the capital stock. The Act of 20th March 1877 changed the former act in several respects. It provides, inter alia, when less than six per cent, dividend on the par value of the stock is declared, there shall be imposed a tax of three mills only on each dollar of valuation of stock. It further declares, “ this act shall go into effect immediately,” and it repeals all those parts of the Act of 24th April 1874 inconsistent therewith, saving, reserving and excepting unto the Commonwealth, “the right to collect any taxes accrued or accruing” thereunder. This Act of 1877 also required the company to'make report to the auditor-general in the month of November. On the 13th November 1877 it reported, that on the 1st of March 1877, it had declared a dividend of five per cent, on its capital stock of $500,000. It reported no subsequent dividend. The dividend reported was declared while the whole Act of 24th April 1874 was in full force. It was, then, made under and subject to all of its provisions. It must be presumed to have been earned before it was declared. No reason can be given for not subjecting the company to a tax, consequent on that dividend. Although the act did not require immediate notice to the Commonwealth that this dividend had been made, yet the liability of the company to subsequently pay a tax based thereon existed. The learned judge therefore held the company liable to the tax of one54 half mill on its capital stock, valued at $500,000, for each one per cent, of the dividend made the 1st of March 1877, under the Act of 1874. This tax was, therefore, $1250. To this tax no serious objection is made. The capital stock was afterwards, under the Act of 1877, valued at $120,000, and a pro rata tax, on the part of the year from the passage of the act to the first Monday of November 1877, laid thereon. It amounted to $283.57. This tax is the great subject of complaint. In case the company had made another dividend, under the Act of 1874, prior to the first Monday of November 1877, it was required to make report thereof, and an increased tax would have been laid on the capital stock of the company. Before any such additional dividend was earned or made, the Act of 20th March 1877 took effect and from its date relieved the company from future taxation, under the Act of 1874. So much only of the Act of 1874 was retained as was necessary for the collection of the tax accrued or accruing under it; but from the day of the enactment of the statute of 1877, a different rate óf taxation was established. The dividend of the 1st of March 1877 had not then been reported. The accounting officers of the Commonwealth had no information that it had been made. The object of the act was to establish a line of separation between the two statutes. To declare that all taxes accrued or accruing at that date, from the corporation, should be collected under the laws then in force; but all accruing thereafter should be subject to another law. It is complained that this view of the act imposes double taxation, within the year. If this be the case, yet it is clearly within legislative power to so enact: Saving Fund v. Yard, 9 Barr 359; West Chester Gas Co. v. County of Chester, 6 Casey 232; Pittsburgh, Ft. Wayne and Chicago Railway Co. v. Commonwealth, 16 P. F. Smith 73. What then did the Act of 1877 intend ? When it was passed the legislature could not foresee whether the company would be liable to further taxation, under the Act of 1874, by reason of any dividend being thereafter made within the year. To clearly relieve the company from such contingent liability, immediate effect was given to the Act of 1877, in express terms. This immediate effect undoubtedly negatives the idea that its operation was to be postponed until the end of the year named in the Act of 1874. The manifest design was to relieve the company from taxation, under the Act of 1874, consequent on future profits or future valuation, and in all respects to subject it to the Act of 1877. In case of a dividend, it imposed on the company a lesser rate of taxation, and gave immediate effect to the law. The fact that by its terms the'company might be subject to taxation for a portion of time which it would have avoided,» under the Act' of 1874, does not impair the effect of the later act, nor postpone the time of its going into operation. Judgment affirmed. [55] An application for a re-argument was subsequently made and refused, the court, Mercur, J., delivering the following opinion, November 10th 1879 : An application is made for a re-argument of this case, by reason of an omission to duly consider the objection made to that portion of the tax imposed under the Act of 1874. It must be admitted that certain language in the opinion might well lead to that inference. Such, however, was not the fact; it did receive a careful consideration. We were clearly of the opinion that the dividend, made and declared on the 1st of March 1877, subjected the company to taxation, under the laws then in force. We did not think the Act of 20th March, either by its letter or its spirit, relieved the company from a liability which had attached by reason of that dividend. This last act expressly saved and reserved out of its repealing clause, unto the Commonwealth, the right to collect any taxes “accrued or accruing” under any laws prior to its passage. If this tax had not fully “accrued” it was clearly “accruing,” although the time for its payment had not then arrived. Be-argument refused.