SPECIAL CASES

Attention is called to a few of the cases involving important questions in which the Attorney General's Department was concerned.

Provident Life & Trust Company vs. Blakely D. McCaughn, et al.

This was a bill in equity filed by the Provident Life & Trust Company to restrain the assessment of a tax upon $59,999,086.39 of the assets of that company. The Provident Life & Trust Company operates in the dual capacity of a trust and insurance company, and under the provisions of its charter "all the net profits to be derived from the business of life insurance after deducting the expenses of the company shall be divided pro rata among the holders of policies of such life insurance, equitably and ratably as the directors of said company shall and may from time to time ascertain, determine and report the same for division." The $59,999,086.39 are insurance assets of which $8,070,812.81 were undivided profits.

The Act of Assembly of June 7, 1911, (P. L. 673), introduced a provision into the law taxing personal property, which provided that only those corporations, limited partnerships, joint stock associations, which are liable to capital stock tax, should be exempt from the payment of any further tax on mortgages, bonds and other securities owned by them, where the "whole body of stockholders or members as such have the entire equitable interest in remainder," in such mortgages, bonds and securities. The Assessors and Board of Revision of Taxes for the city and county of Philadelphia, demanded a return of the insurance assets of the Provident Life & Trust Company of Philadelphia, for the purpose of taxing the same, and a bill in equity was filed by the company, enjoining them from levying such tax.

The Court of Common Pleas No. 2 of Philadelphia decided against the Commonwealth, upon the ground that such insurance assets are securities "in which the whole body of stockholders or members as such have the equitable interest in remainder" and are therefore not taxable.

Upon appeal, the Supreme Court unanimously reversed the Court of Common Pleas No. 2 of Philadelphia County, (245 Pa., 370), dismissed the bill and sustained the contention of the Commonwealth.

When this case was decided two years' taxes had accrued, and for those two years alone, $566,734.55 has been added to the revenues of the State.

Commonwealth vs. Equitable Life Assurance Association of the United States.

The Supreme Court of Pennsylvania reversed the Court of Common Pleas of Dauphin County and sustained the contention of the Commonwealth. (239 Pa., 288.) It involves the question whether the State has the power to impose tax on premiums of foreign insurance companies received from residents of the State but paid to agents outside the State or to the home office of the company, that is to say, whether as to such payments the company is doing business in Pennsylvania. An appeal, however, has been taken to the Supreme Court of the United States.

Commonwealth vs. Joseph Patsone.

This case involves the constitutionality of the Act of May 8, 1909, P. L. 466, which prohibits unnaturalized foreign born residents from owning or being in possession of, a shot gun or rifle.

The defendant was convicted in the Court of Quarter Sessions of Allegheny County, and appealed to the Superior Court, alleging that the act was unconstitutional. The Superior Court, sustained its constitutionality (44 Pa. Super. Ct. 128) and the Supreme Court affirmed the Superior Court (231 Pa., 46).

This case not only involved important questions of the exercise of the police power of the State, but also involved the interpretation of rights of person and of property of Italians under the treaty between the United States and the Kingdom of Italy. An appeal was taken to the Supreme Court of the United States and that Court sustained the Supreme Court of Pennsylvania and the contention of the Commonwealth. (The case is reported in 232 U. S., 138.)

Commonwealth, ex rel., vs. Hyneman, et al.

This case was an amicable action of quo warranto brought directly in the Supreme Court of Pennsylvania at Philadelphia, to test the constitutionality of the Act of March 29, 1913, P. L. 20, providing additional judges in the courts of common pleas of Philadelphia County. Similar cases were brought against each of the other judges, viz: Thomas D. Finletter, Wm. M. Stewart, Jr., Joseph P. McCullen, D. Webster Dougherty.

This Act of Assembly provided for the appointment of an additional judge in each of the five courts of Philadelphia County. It was attacked upon the ground that when three or more judges were appointed, a new court must be organized, as provided by the constitution. The Supreme Court, by a divided court, declared the act unconstitutional. (242 Pa., 244.)

Pennsylvania Railroad Company, Appellant, vs. Nathaniel Ewing, et al., Constituting State Railroad Commission.

At the time the last report was made by me to the Legislature, this case was pending in the Supreme Court of Pennsylvania. It was an attack upon the constitutionality of the Act of June 19, 1911, P. L. 1053, which is known as the "Full Crew Law." This attack was in a concerted effort by a bill in equity instituted in the Dauphin County Court by the Pennsylvania Railroad Company, the Philadelphia and Reading Railway Company, the Delaware, Lackawanna and Western Railroad Company, The Delaware and Hudson Company, and the Lehigh Valley Railroad Company.

The Dauphin County Court sustained the constitutionality of the Act in every particular. The case was argued in the Supreme Court of Pennsylvania October 27, 1912, and a re-argument was ordered by the Court, which was held May 5, 1913.

The Supreme Court sustained the Court of Common Pleas of Dauphin County and the Constitutionality of the law. The case was reported in 241 Pa., 581.

Commonwealth vs. Thomas W. McComb.

This case arose in Delaware County. The defendant was charged with violating the provisions of the Act of May 31, 1907, P. L. 329, which prohibits the use of automatic guns for killing game and wild birds. The act was attacked as unconstitutional and as a unreasonable exercise of the police power. The Court of Quarter Sessions of Delaware County declared the act unconstitutional. The Superior Court (39 Pa. Super. Ct., 411) reversed the Court of Quarter Sessions of Delaware County. An appeal was taken to the Supreme Court which sustained the Superior Court (227 Pa. 377), and an appeal is now pending in the Supreme Court of the United States.

Plymouth Coal Company vs. Commonwealth of Pennsylvania.

This case raised the constitutionality of Section 10 of Article III of the Act of June 2, 1891, P. L. 176, known as the "Anthracite Mine Code." The law made it obligatory on owners of adjoining coal properties to leave a pillar of coal in each seam or vein of coal along the line of the adjoining property, of sufficient width to be a sufficient barrier for the safety of the employees in either mine. The Inspector of Mines of the district filed in Luzerne County a bill in equity to restrain the Plymouth Coal Company from mining out the coal necessary for such a barrier pillar. The act was attacked as violating both the State and the Federal constitutions. The Court of Common Pleas of Luzerne County, sustained it. The Supreme Court in turn sustained the Court of Common Pleas of Luzerne County (232 Pa.

141). An appeal was taken to the Supreme Court of the United States and the constitutionality of the law was sustained in every respect. (232 U. S. 531.)

Commonwealth, ex rel. Attorney General, vs. A. W. Powell, Auditor General, and Robert K. Young, State Treasurer.

This litigation involved the constitutionality of Section 10 of the Act of July 7, 1913, P. L. 672, which provides that the moneys derived from registrations and from license fees should be paid into the State Treasury, and are specifically appropriated to the use of the State Highway Department. The Section was attacked as unconstitutional in that it was not a proper appropriation and that it was reversing the method of payment of moneys which had heretofore been established and adopted. After many legal skirmishes the case was finally decided by the Court of Common Pleas of Dauphin County sustaining in every respect the constitutionality of the section. An appeal has been taken by the Auditor General and State Treasurer which is now pending in the Supreme Court.

State Highway Commissioner vs. Chambersbury & Bedford Turnpike Road Co.

This case arose on proceedings to condemn a turnpike road by the State Highway Commissioner, and the Act of May 31, 1911, P. L. 468, which is known as the "Sproul Law" establishing the highway system of the State, was attacked as unconstitutional. The Court of Quarter Sessions of Fulton County sustained the law and the Supreme Court in turn upheld the lower court. (242 Pa. 171.)

Commonwealth vs. C. W. Burtnett.

This case arose in the Court of Quarter Sessions of Dauphin County, upon an indictment for violating the Act of 1901, P. L. 275, and the question was whether it was a violation of law to add water to vinegar in the process of its manufacture. The Court of Common Pleas of Dauphin County sustained the construction of the Act put upon it by the Dairy & Food Department and sustained the conviction of the defendant. An appeal was taken to the Superior Court which has been argued, but not yet decided.

Commonwealth vs. Fidelity and Deposit Co. of Maryland.

This case arose in the Court of Common Pleas of Dauphin County upon an appeal from the settlement of tax on premiums against the defendant, a foreign corporation. It was contended that the Com

monwealth of Pennsylvania could not impose a tax upon the premiums received by the defendant upon bonds given by the United States government officials for the faithful performance of their duties because the tax thereon would be taxing the agencies of the Federal Government. The Court of Common Pleas of Dauphin County sustained the contention of the Commonwealth in its effort to collect the tax and was affirmed by the Supreme Court of Pennsylvania (244 Pa., 67). An appeal, however, has been taken to the Supreme Court of the United States, and has not yet been argued.

Commonwealth vs. Barrett Manufacturing Company.

This case involves the duty imposed by law upon foreign corporations in the collection of tax on loans. In the case of Commonwealth vs. Welsbach Company, the Court of Common Pleas of Dauphin County decided that the treasurer of a foreign corporation who lived in the State was required, when paying interest in the State, to deduct the tax due the Commonwealth from individual residents of Pennsylvania. This case was not appealed.

The Barrett Manufacturing Company pays the interest in the State, but its Treasurer does not live in Pennsylvania and it contended that the State could not impose upon its non-resident treasurer, the duty of deducting the tax, when paying the interest to individual residents of Pennsylvania. The Court of Common Pleas of Dauphin County sustained this contention and was affirmed by the Supreme Court of Pennsylvania. (The case was reported in 246 Pa., 301.)

Commonwealth vs. Lehigh Valley Railroad Company.

This is a very important case construing the taxing statutes of the Commonwealth. It involved the question as to whether the bonds and other obligations of corporations owned by savings institutions having no capital stock, exempted the corporations, issuing the bonds, from the payment of the tax thereon. The Court of Common Pleas of Dauphin County sustained the contention of the Commonwealth, and it was affirmed by the Supreme Court. (244 Pa., 241.) This case resulted largely in increasing the revenues of the Commonwealth.

Tax on Anthracite Coal.

By the Act of June 27, 1913, P. L. 639, a tax of 21 per cent. was imposed upon all anthracite coal mined in Pennsylvania, when prepared for market. Immediately after its passage, a concerted attack was made by the coal operators upon this legislation. A bill in equity was filed by the Peoples Coal Company to prevent the Auditor General from settling the tax, which was heard in the Court of Common Pleas