Bourguignon Building Ass'n v. Commonwealth

Mr. Justice Green delivered the opinion of the court, The fourth section of the “Act to provide revenue by taxation,” approved June 7th 1879, provides as follows : “That every company or association whatever, now or hereafter incorporated by or under any law of this commonwealth, or now or hereafter incorporated by any other state or territory of the United States, or foreign government, and doing business in this commonwealth, or having capital employed in this commonwealth in the name of any other company, association or associations, person or persons, or in any other manner, except foreign insurance companies, banks and savings institutions, shall be subject to, and pay into the treasury of the commonwealth, annually, a tax to be computed as follows,” &c., &c. The facts of this case are brought before us by a case stated, in which it is agreed that the appellant “ is a building association incorporated in 1878, under the Act of April 29th 1874, with a nominal capital of $1,000,000, divided into shares of $200 each.” It is also agreed that “ up to first Monday of November 1879, $50,113.45 (of capital) had. been paid in,” and “This money is loaned out to members on mortgage security.” By the terms of the case stated it appears, therefore, that the appellant is an association incorporated by a law of this commonwealth, having a paid-up capital of $50,113.45, on the first Monday of .November 1879. Apparently, the language of the Revenue Act of June 7th 1879 subjects the appellant to the payment of a tax upon its capital stock. It is contended, however,.that it is not liable to such a tax, upon two grounds: 1st, because building associations are exempted from the tax claimed, by virtue of the Act of April 10th 1879, relating to mutual savings fund, building and loan associations; and, 2d, because the Act of June 7th 1879 does not, when properly construed, impose a tax upon building associations. As it is undoubted that the Act of April 10th, 1879 does exempt from taxation all building associations, which prior to, and at that time, were subject to taxation by existing 1 iws, the contentions of the parties to this litigation are presented by the case stated in the two following questions: First. Are the provisions of the Act of April 10th 1879, exempting the appellants from taxation, repealed by the General Revenue Act of June 7th 1879 % [62] Second. If repealed, does the Act of June 7th 1879 impose a tax upon the capital stock of building associations ? The court below having decided both these questions against the appellant, and sustained the settlement made by the auditor-general and state treasurer, the association has brought the case'liere for review by writ of error. As to the first question, the language of the 8th section of the Act of April 10th 1879 is as follows : . “The bonus or tax due to the commonwealth upon the capital stock of corporations, as provided for by Act of first of May one thousand eight hundred and sixty-eight, or by any other act, shall not apply to, or be due from, mutual savings fund, or building and loan associations.” The effect of this provision undoubtedly was to exempt mutual savings fund and building and Joan associations from the payment of the bonus or tax imposed upon them by the Act of May 1st 1868, or by any other act in force on April 10th 1879, but that was its whole effect. Neither this section nor any other of the Act of April 10th 1879 assumed to surrender the right of the commonwealth to impose any taxes she might choose to impose in the future; not the slightest attempt is made to prohibit subsequent legislation in hostility with that of the Act in question. Hence it cannot be doubted, that on any day after the 10th day of April 1879, it was within the authority of the commonwealth, acting through the law-making power, to re-impose any taxes which were removed by the legislation of that date. While it may be argued with some force that it would be inconsistent for the same legislature to remove a tax by one Act, and re-establish it by another of subsequent date, yet that is but an argument of inconsistency at the best. It would be very proper to be addressed to the legislative body as a reason for not passing the subsequent act, but it is absolutely of no force when addressed to a court which is bound to construe and enforce plain legislative words. Were the subject an open one it would be enough to suggest that in the interval between the dates of the two acts, there may have occurred such a change in the financial affairs of the Commonwealth, or in the opinions of the members of the legislative body, respecting those affairs, as to induce them to re-impose taxes which they had by the earlier act removed. •In view of these considerations, it is evident that if the act of June 7th 1879 imposes the tax in question, it is scarcely essential to the discussion, to determine whether it is a repeal of the Act of April 10th preceding. But if it were material, the question is not difficult of solution. The 18th section of the Act of June 7thprovides, “that this shall go into effect immediately, and that all laws or parts of laws inconsistent herewith, or which are hereby substantially re-enacted be, and the same are hereby [63] repealed.” The 8th section of the Act of April 10th is certainly and necessarily.inconsistent with the 4th section of the Act of Juno 10th, if the latter imposes a tax which the former removes, and hence the question is not one of implied, but express repeal. In the case of Commonwealth v. Fayette Co. R. R. Co., 5 P. F. S. on p. 455, we said, “ The act of April 12th 1859 expressly repeals any existing law inconsistent with the provision as to taxation, and as the defendants are conceded to he within the words of the act, the limitation of taxation in their 5th section is clearly altered or repealed.” In the case of The Union Improvement Co. v. The Commonwealth, 19 P. F. S. 140, the company was, by the express provision of a supplement to its charter, exempted from taxation on its capital stock and dividends. Yet we held that it was liable to such tax under the general language of the Act of May 1st 1868, inqiosing tax upon all corporations without any words either of special or general repeal. The decision was put solely upon the ground that the Act of 1868 subjected to taxation the capital stock of all corporations, and that therefore it must be intended to repeal even previous acts which gave special exemption. On page 143 it was said, by Williams, J., “ It is true that this company .was exempted from taxation by a special act, but this is wholly immaterial, if it was the intention of the legislature to repeal the exemption by the Act of 1868. If no such repeal wras intended, why did the legislature declare that the stock of all companies whatever, except banks, savings institutions and foreign insurance companies, should be subject to the tax imposed by the act % The exemption -of these three classes of corporations from the operation of the act conclusively shows that the legislature intended to include wdthin its provisions all other corporations whatever, whether they had been previously exempted from taxation or not. If such was not their intention, why were they not included within the saving provisions of the act ?” This language goes much farther than any requirement of the present case demands. In the case just cited, the exemption was by a special act which constituted part of the charter of the company, and, of course, it ivas limited to that particular corporation. In the case at bar, the plaintiff in error is one of a class, and claims the benefit of a general act exempting all building associations. The Act of May 1st 1868, contained no general repealing clause, but did contain a section (the 16th) which repealed a number of acts and parts of acts by precise description, but none of which embraced the exempting Act of April lltli 1862, which applied to the Union Improvement Compauy. Notwithstanding all this it was determined by this court that the moro general language of the [64] Act of 1868, making the capital stock of all corporations liable to taxation, operated as a repeal of the special exemption in question. In the case of Erie Railway Co. v. Commonwealth, 16 P. F. S. on p. 87, the present Chief Justice said: “ There is no principle better established, and it requires no long array of cases to prove it, than that no surrender of the general power of taxation by any legislative act can be implied.” In the present case there is no language in any part of the Act of April 10th 1879, as we have heretofore shown, that purports to surrender in the least degree the general power of taxation possessed by the commonwealth. Under the case last referred to it is heid that such surrender cannot be implied. "We are, therefore, clearly of opinion that the Act of June 7th 1879 was a fresh and independent exercise of the taxing power, unrestrained by any previous surrender or limitation, so far as building associations are concerned, and also that it operated as an express repeal of the Act of April 10th 1879, exempting such associations from taxation. The remaining question submitted by the case stated is: “Does the Act of June 7th 1879 impose a tax upon the capital stock of building associations ?” The express language of the act includes “ every company or association whatever ” . . . “ except foreign insurance companies, banks and savings institutions.” A building association is neither a foreign insurance company nor a bank, and it cannot, without a manifest abuse of terms, be denominated a savings institution. Technically, building associations and savings institutions have not a feature in common. In the practical details of their operation they are totally dissimilar. The latter were well known and in general use long before the former were heard of or had any authorized existence. , If there were the slightest doubt as to whether the legislature regarded savings institutions and bmld/ing associations as the same, it is instantly dispelled by observing the manner'in which they ai’e treated in vaxlous acts. The Act of May 1st 1868 imposed taxation upon “ all companies whatever,” “ except banks and saving institxxtions and foreign insurance companies,” but yet provided in the sanxo section “ that building associations, plank-x-oad, or turnpike companies shall not be liable for any tax to the commonwealth, when such companies make or declare no dividends. ” If “ building associations ” were already exempt from the operation of the 4th section because they were “ savings institxxtions,” the proviso clause of that section, which exempts them when they declare no dividends, would be an absurdity. [65] In the 5th section of the Tax Act of April 24th 1874 occurs the following clause: “ and excepting also banks and savings' institutions, building associations and foreign insurance companies.” If the two classes were the same, of course they would not receive separate designations: Precisely the same independent designation of these two classes of corporations occurs in the excepting clause of section 3 of the General Tax Law of March 20th 1877. When the Act of June 7th 1879 was passed, all companies or associations whatever were subjected to the tax, “ except foreign insurance companies, banks, and savings institutions,” and the conclusion is irresistible, that inasmuch as in the previous Acts upon the same subject building associations were included in the excepting clauses by express mention, they were omitted from the excepting clause of this act because it was so intended. It is unnecessary to pursue tbe discussion. We are of opinion that the learned court below were correct in their conclusions upon both questions submitted, and therefore Tbe judgment is affirmed.