author: Miller, P. J.,

text:
    McCreery’s Estate.

      Bobbin B. Wolf, for accountant; Horace F. Baker, for claimant.
    Jan. 9, 1929.
   Miller, P. J.,

The question is as to the ownership of three bonds found among the securities in the safe-deposit box jointly held by the claimant and her mother, the decedent.

The parties interested are the claimant, Emilie McCreery, her brother, J. Rodgers McCreery, executor of decedent’s will, and a sister, Eliza L. Strong, all sui juris.

They have submitted statements sworn to, which they request shall be taken as their testimony touching the matter in controversy, from which statements the court is asked to find the fact as to the title to or ownership of the bonds in question.

From these statements the following facts are found:

On or about May 6, 1921, the claimant, Emilie McCreery, purchased two $1000 Gulf Oil Corporation 7 per cent, bonds and one Aluminum Company bond, for which she paid by her check drawn on her own separate account in the Real Estate Savings and Trust Company. These were purchased through the Mellon National Bank and delivered to her. Later, on or about Dee. 8, 1922, the claimant exchanged the said two Gulf Oil Corporation bonds through the Mellon National Bank for two $1000 Gulf Oil Corporation bonds bearing 5 per cent., and respectively numbered 21348 and 21349. On Jan. 30, 1925, she purchased through the Mellon National Bank one $1000 Gulf Oil Corporation 5 per cent, bond and paid for the same out of her own funds, by her own‘check drawn on said Real Estate Savings and Trust Company. This bond was also delivered to the claimant and is numbered 3482. During the time of the purchases by the claimant of the three Gulf Oil Corporation bonds above referred to the decedent had purchased for her own account certain other Gulf Oil Corporation and other bonds, and paid for the same out of her own separate checking account in the Real Estate Savings and Trust Company.

The claimant and her mother, the decedent, resided together for upwards of twenty years in their then well-known residence, No. 940 North Lincoln Avenue, North Side. The claimant assisted her mother in many ways during this long period in the management and care of her business and property, both real estate and investment securities, and acted for . her in many instances. The total amount of the decedent’s estate is in the neighborhood of $300,000; as stated in a brief, claimant’s separate estate was about $20,000.

The claimant and the decedent, as co-lessees, had a joint safe-deposit box for years prior to the decedent’s death, which box was in the Real Estate Savings and Trust Company of Allegheny, and in which were deposited the securities owned by each of them, and being the same box which held the securities of the decedent at her death, including the three bonds referred to; these three bonds were in the packet of securities held by the decedent. After the death of the decedent, this box was opened and the securities therein taken possession of by the executor, and contained, inter alia, seven $1000 Gulf Oil Corporation bonds, the three bonds claimed by the daughter being a part of the said seven bonds.

During the entire period of this joint residence and joint ownership of said safe-deposit box, the claimant, acting as decedent’s bookkeeper, kept the latter’s records and accounts, was interested in the decedent’s financial dealings, and had access to her securities as deposited in said joint box.

In the decedent’s income tax returns for 1925 and 1926, the said seven Gulf Oil Corporation bonds were included as owned by the decedent, the list being furnished to the brother by the claimant, and upon which the tax paid by the decedent was calculated.

In the lifetime of the decedent, to wit, in the winter of 1926 and 1927, she furnished her son with an inventory of her securities, showing her ownership of the seven Gulf Oil Corporation bonds, including the bonds here in question. This list was prepared by the decedent with the assistance of her daughter, Mrs. Strong, and is in the handwriting of the latter.

After the death of the decedent, the executor, accompanied by a trust officer of the Peoples Savings and Trust Company, in the presence of the claimant, opened the box in question, which box contain^ several packages of papers and securities, and when the same was opened, the claimant designated and claimed one package as hers, and removed it from the box without examination by any one, and at the time she stated that the other packages belonged to her mother. The claimant did not at that time make claim for the three bonds in question as they were called off by the trust officer, and compared the list so called off with the list retained by her.

The coupons of the said Gulf Oil Corporation bonds, during the period here in question, were paid on ownership certificates of the decedent, and the coupons on the said three bonds were not paid to the claimant nor collected by her. A month or so after these securities had been allocated and the ones then claimed by the claimant delivered to her and the rest to the respondent as executor, the claimant made known her title to and ownership of the three bonds in question, alleging that they were in the mother’s package by mistake and error; that, owing to the deposit of these securities in the various packages in the deposit box, and the handling of these securities by her for herself and for her mother and by her mother personally, the identification of these three bonds was not recalled by her at the time of the division, and that later she discovered that the said three bonds which she claims as her own were in the package of securities held by the decedent and so delivered to the executor.

A memorandum, Exhibit A, shows that in 1922 claimant’s list of securities contained, inter alia, two Gulf Oil Corporation bonds No. 21348 and No. 21349. This memorandum has recently been found; no transfer, assignment, exchange or gift from the claimant to her mother is shown or alleged.

There is no question of jurisdiction raised; it must be apparent, under the fact of possession or custody in the fiduciary, that the law is that the court in which the jurisdiction lies is here to determine the ownership or title to an asset in dispute; when the estate or property is claimed by another and is in the possession of the claimant, or when the asset is in the hands of a third party and is not actually or impliedly in the control of the fiduciary,' then the jurisdiction is in the Common Pleas; otherwise, it is in the Orphans’ Court: Cutler’s Estate, 225 Pa. 167; Williams’s Estate, 236 Pa. 259; Myers’s Estate, 238 Pa. 195.

There is no question of veracity between the parties; it is not denied that the claimant, out of her own funds, paid for and became the owner of the three bonds in question, and there is no evidence that she parted with the title or ownership thereof by gift, contract or otherwise to her mother or to any one else.

We then have the question of the fact of claimant’s purchase of the bonds, delivery to her, and payment out of her own funds, coupled with no sale or gift or transfer to any one else, against the inference sought to be established that, because these bonds were found in the mother’s package in the joint box, coupled with payments of coupons to and taxes paid by the mother, and apparent acquiescence when the securities were allocated as between the claimant and the executor, the absolute ownership and title must be found in the mother.

The fact of payment and delivery to the claimant, coupled with the fact of no sale, assignment or gift by her to her mother, must prevail over any inference of sale, gift or transfer. The mistake the claimant made, in not having these bonds in her own package, is easily understood; she had access to all her own bonds and securities, as well as those of her mother; this access to the joint box was frequently for the purpose of collecting coupons or interest or other necessities; she was sometimes alone, otherwise with her mother, and sometimes the mother was alone, when such access was had; the return of various securities, whether her own or her mother’s, to the box was more important than their separation; as these bonds were not registered, the Gulf Oil Corporation could not know who possessed the coupons for collection, and the fact that her own bonds were included in furnishing a basis for tax returns cannot destroy her ownership, in view of her representing her mother in the management of the mother’s affairs.

It is manifest that this claimant and her mother lived in close, personal intimacy; they did not deal with each other at arm’s length; access to this box by both, or either of them, judging from the fact that many valuable papers and securities were there, may have been very frequent; they made many changes of investments; they may have agreed that claimant’s coupons might be collected by the mother in settlement of minor personal dealings between themselves; but the fact remains that these bonds were purchased by claimant with her own money, are in existence now, and no evidence is shown that she ever, directly or by inference, gave or assigned them to her mother.

Nothing but competent evidence of gift, sale or other muniment of title in the mother can deprive the claimant of her right, and these bonds must be decreed to her.

It may be that the claimant was negligent in not more closely keeping track of her securities in the arrangement thereof in the packets contained in the common box; yet such negligence, if any, does not close the doors for relief, if the position of the other party has not been changed in consequence thereof: Bispham’s Equity, 293, citing Greenfield’s Estate, 14 Pa. 489; Pennsylvania R. R. Co. v. Shay, 82 Pa. 198. It is not suggested nor intimated that the rights of the other parties have been injured by this mistake.

Decree.

And now, Jan. 9, 1929, this matter came on to be heard upon agreed statements in the nature of testimony, which are accepted as facts, and, upon due consideration thereof, it is ordered, adjudged and decreed that the three bonds in question of the Gulf Oil Corporation, No. 21398, 21349 and 3482, shall be delivered to the claimant.

From William J. Aiken, Pittsburgh, Pa.


source: Caselaw Access Project

author: Chase, P. J.,

license: Public Domain

text:
    Zolack v. Bulah Shaft Coal Company.

      Peter P. Jurchak, for claimant; D. Edward Chaplin, contra.
    May 23, 1929.
   Chase, P. J.,

This is an appeal by, and on behalf of, the claimant, the appellant, from the decision and order of the Workmen’s Compensation Board rendered Dec. 31, 1928, in which decision the claimant’s petition for reinstatement was dismissed.

The facts pertaining to the determination of this issue are as follows: The claimant having been injured, agreement for payment of compensation was approved on Feb. 19, 1927. On May 24, 1927, a petition for termination of compensation was filed by the defendant. On June 20, 1927, the referee made an order modifying the agreement of Feb. 19, 1927. On Jan. 7, 1928, a petition for a review was filed by the claimant. On Feb. 28, 1928, an order of the referee was made dismissing the petition for review. On May 4, 1928, the Compensation Board, in an opinion filed by Morrison, Commissioner, affirmed the disallowance. On Sept. 7, 1928, the claimant filed a petition for reinstatement. On Oct. 4, 1928, the referee dismissed the petition for reinstatement. On Dec. 31, 1928, the board affirmed the referee in the dismissal of said petition, from which order of the board this appeal is taken.

In dismissing this petition, the board bases their conclusion entirely upon section 413, article IV of the Workmen’s Compensation Act of June 2, 1915, P. L. 736, as amended April 13, 1927, the board holding that, due to the provision of the Act of 1927, the petition having been filed more than a year after the last payment of compensation and more than one year after the approval of amendments to section 413, the petition must be dismissed.

In considering this appeal, that is the only issue raised. There is possibly some irregularity in the failure of the claimant to appeal from the dismissal or the findings in the petition to review filed by the claimant. However, neither the claimant nor the defendant in this case has raised that question on this appeal, the sole question being whether or not the act, as amended in 1927, applies under the facts of this issue, and, as above stated, the board, in sustaining the referee in its opinion, bases the dismissal of the petition upon the sole proposition that the Act of 1927, in so far as presentation of petitions for reinstatement, etc., applies to this case.

As the court views this question, it does not become important to determine whether it was the intention under this act that the same should be retroactive or not. It is a principle of law, requiring no citations, that an act of assembly cannot become retroactive if it affects a contractual relation, and if it was attempted to make even a purely procedural act retroactive which would affect a contractual relation in existence, the same would not be constitutional.

However, in this case the court cannot agree with the conclusion reached by the learned Compensation Board that the Act of 1927 applies to injuries occurring prior to the passage of the legislation under discussion. The appellate courts have frequently said that the relation between an employer and an employee under the Workmen’s Compensation Act is a contractual relation, and while the Act of 1927 is procedural, nevertheless it so affects the vested rights of the injured in this case that the particular procedure cannot apply to injuries occurring prior to the passage of the act. The contractual relation as between the employer and employee, as the court understands it, under the Compensation Act, is governed entirely in its interpretation by statutes, and the rights under the statutes accrue and are determined at the time of an injury which the employer becomes liable for under the Workmen’s Compensation Law. Due to the very nature of the subject which the legislation attempts to regulate and govern, it is frequently impossible to determine the extent of the liability of an employer under his contract to an injured employee at the time of the injury, and all the legislation can do is to create the machinery which states that the liability shall be not exceeding a certain amount and the extent of the liability must be determined by the facts as to the extent of the injury demonstrated at various periods of time, which, in the instant case, under the law as existing at the time of the injury, was over a period of 500 weeks. That is, the law provided at the time of the injury that the claimant could come before the Compensation Board any time within 500 weeks and have his case reopened, and the act provided for compensation under facts which demonstrated a permanent disability at any time within the period for which compensation was payable for a permanent injury for which the injured would be entitled to compensation.

Therefore, the contract between the employer and employee in this case on the date of the injury was that in case of permanent injury the claimant was entitled to compensation for a period of 500 weeks; that in case there was an injury which the facts did not demonstrate or did not disclose was permanent in its nature, so soon as the conditions warranted it, compensation should cease and be reduced to comply with the extent of injury as found by the facts. And, further, that if, subsequently to a modification or ceasing of the disability under the injury, it appeared that the injury developed a disability, partial in its nature or permanent, within 500 weeks from the date of the injury, the claimant was entitled to compensation.

At the time of the injury complained of, that was the contractual relation between the employer and the employee, and the parties to the contract had a right to rely that their interest was determined at that time by the law as it then was written and that was the completed contract and their rights became a property right vested in each of the parties to the agreement.

If the Act of 1927 were to be given application to injuries, as in this ease, occurring prior to its passage, it would have this effect, that although at the time of the injury the employer was bound under the law to pay to the claimant compensation at a stipulated amount weekly as found by the facts, and under the contract, if the disability apparently had ceased as a result of the injury, the employer had a right to have an order made relieving him from compensation, which right was subject, however, to the vested right of the claimant, if there was a reoccurrence from the injury suffered at any time within the 500 weeks, to claim compensation from the time of the reoccurrence if the reoccurrence was within the 500 weeks [such rights would be barred by the limitation in the act].

If this Act of 1927 had application herein under these facts, we would have the situation of changing the contract which was in effect at the time of the injury complained of, of striking down the rights, as demonstrated by this case which we are dealing with, of receiving any compensation for a reoccurrence after two years or 102 weeks. The defendant was injured on Jan. 20, 1927. This order, from which the appeal for reinstatement which was dismissed, was made by the referee on Oct. 4, 1928, less than two years after the injury occurred, which would have the effect, as I understand it, of entirely disbarring the claimant from further claims or presenting facts in showing that he was entitled to further compensation, in the teeth of the contractual right, which became absolute at the time of the injury, to recover for any disability as a result of the injury herein complained of for almost a period of three years after the dismissal of this application.

It must be admitted, in answer to the question whether or not, prior to the Act of 1927, if this petition under consideration was presented, the Compensation Board would determine whether or not there was an existing disability for which compensation should be allowed, and if the facts justified a conclusion that there was a disability, compensation under the law would have been paid. If that was the law governing the rights of the parties at the time of the injury when those rights as between the employer and employee became vested and absolute, does not this act, if it was construed to apply to the facts herein in issue, take away rights of the claimant established as a result of the contract created by the contracting parties and the law itself?

Under the facts in this case and the law as viewed by this court, we are constrained to reach the conclusion that the Act of 1927, in so far as injuries are concerned occurring prior thereto, has no application and an attempt to apply the act to such conditions would be unconstitutional as attempting and aifecting the rights of an existing contract.

Now, May 23, 1929, the judgment of dismissal of reinstatement of petition by the board is hereby reversed and the board is directed to proceed in accordance with the findings of the court. The costs to follow the judgment of this court. Exceptions noted and bill sealed to the appellee.

Prom John M. Urey, Clearfield, Pa.


author: Wickersham, J.,

text:
    Commonwealth v. Bell Telephone Company.

      Thomas J. Baldrige, Attorney-General, and John Robert Jones, Deputy Attorney-General, for plaintiff.

      Beidleman <& Hull, for defendant.
    March 18, 1929.
   Wickersham, J.,

By agreement of counsel this case was submitted to the court without a jury under the provisions of the Act of 1874. The learned Attorney-General and counsel for the defendant have agreed upon the following stipulation of

Facts.

1. The Bell Telephone Company of Philadelphia is a corporation incorporated under the laws of Pennsylvania on Sept. 18, 1879, under the Act of April 29, 1874, P. L. 73, for the purpose of constructing, maintaining and operating a line or lines of telegraph, and all such other business as may be authorized by said act of assembly and its supplements relating to the use of electricity. The name of The Bell Telephone Company of Philadelphia was changed to The Bell Telephone Company of Pennsylvania on Dec. 21, 1907. The said company was engaged in the telephone business in the State of Pennsylvania during the six months’ period ending June 30, 1923.

2. On Aug. 11, 1923, the above-named defendant filed in the office of the Auditor General of the Commonwealth of Pennsylvania, under the provisions of section 23 of the Act of June 1, 1889, P. L. 420, its gross receipts report for the six months’ period ending June 30, 1923, wherein was reported “Gross receipts within the State from all sources, $19,796,411.84. On Aug. 22, 1923, the Auditor General made a settlement of gross receipts tax thereon, which was approved by the State Treasurer Aug. 23,1923, imposing a gross receipts tax upon the total receipts in the amount of $19,715,050.25, with the resultant tax in the amount of $157,720.40. Subsequent thereto, resettlement of the said tax was made by the Auditor General Feb. 25, 1924, and approved by the State Treasurer Feb. 26, 1924, wherein a gross receipts tax was imposed upon the gross receipts in the amount of $19,715,049.25, with the resultant tax in the amount of $157,720.39. From this resettlement the instant appeal was taken.

3. Included within the said report was the item “From Directory Advertising, $542,834.62,” and the item “From charges for material furnished and for work done by the reporting company’s employees, the answer hereto including all receipts from custom work, or for installation of reporting company’s own equipment or service, $157,978.27.” These two items of gross receipts, totaling $700,812.89, were included within the said amount of $19,715,049.25. To the taxation of these two items of receipts objection is made on the part of the defendant, the defendant contending that said receipts are not receipts subject to taxation under the provisions of the said section 23 of the said Act of June 1, 1889.

4. The defendant, upon Oct. 19, 1923, paid into the State Treasury the sum of $152,113.90, being the tax imposed under the provisions of section 23 of the said Act of June 1, 1889, upon the total amount of gross receipts as set forth in said report, to wit:

Prom transmission and delivery of telephone or telegraph messages from points within the State to points within the State — the amount set down in answer hereto including receipts from tolls, charges, for use of instruments and extensions in connection with exchange service, charges for private branch exchanges, and termination charges; and in case of mutual or rural companies, it includes all payments required of stockholders or subscribers to meet the cost of maintenance of service...........$18,742,174.09
Prom removal charges............................. 42,545.50
Prom charges to mutual or rural companies for exchange service................................ 57,414.37
Prom rental of wires.............................. 172,103.40
Total.......................................$19,014,237.36

The defendant denies liability for tax upon the gross receipts in the said amount of $700,812.89, with the resultant tax of $5606.50.

5. The said amount of receipts reported, to wit, $542,834.62, “Prom Directory Advertising,” is money received by the defendant during the period of time covered by the report from advertising inserted in its directories; $541,384.12 of the said $542,834.62 was received from subscribers to telephone service of the defendant; the remaining $1450.50 was received from advertisers who were not such subscribers. Approximately 100 advertisers were not subscribers to telephone service. The total number of subscribers to telephone service was approximately 545,000, of whom approximately 18,000 were advertisers in its directories. A copy of the directory issued by the defendant company in the City of Philadelphia in the fall of 1925, which is typical of the directories issued for the Cities of Philadelphia, Pittsburgh and Erie during the period covered by the gross receipts report for the six months’ period ending June 30, 1923, attached hereto and made a part hereof, is marked Exhibit “A;” a copy of the directory issued by the defendant company in the Borough of Coudersport in the fall of 1925, which is typical of the directories issued by the defendant company for all other places throughout the State of Pennsylvania during the period covered by the said gross receipts report, also attached hereto and made a part hereof, is marked Exhibit “B.” The said receipts from such directory advertising include the amounts received from:

(a) Advertising in directory..........................$461,389.69
(b) Charged extra listing in the classified section of directory ..................................... 73,337.89
(c) Sale of company’s own directories................. 8,107.04
Total $542,834.62

By the phrase “Advertising in Directory,” identified above as “a,” is meant:

(1) Margins on alphabetical section listing pages, to wit: Space of Guy A. Willey Motor Co., on white page No. 397 of Exhibit “A,” Space of Hotel Bloss, on white page No. 9 of Exhibit “B.”

(2) Insert page, to wit: “Abbotmaid” ice cream advertisement between the alphabetical (first group of white pages) and classified (yellow pages) sections of Exhibit “A.” Only one insert page appeared, and such insert page appeared in the Pittsburgh directory.

(3) All classes of display space in the classified sections, to wit: Advertisements of Burns & Speakman, F. E. Decker, etc., on yellow page No. 1 of Exhibit “A;” advertisements of Geo. E. Owens, etc., on yellow page No. 1 of Exhibit “B.”

(4) All classes of display space following the last listing page of the alphabetical section, to wit: Advertisements of Taubert’s Hardware on white page No. 48, and of S. Mette & Co. on white page No. 51, etc., of Exhibit “B.”

(5) All advertising spaces on the inside front cover, inside back cover, back cover and bolt or backbone of Exhibits “A” and “B.”

By the phrase “Charged extra listings in the classified sections of the directory, identified above as “b,” is meant:

The bold type listing of Amsterdam Bros, under the heading of “Abdominal Supporter Mfgrs.” on yellow page No. 1 of Exhibit “A;” the display listing of Smith & Smith under the heading of “Stationery and Wall Paper,” on yellow page viii of Exhibit “B.”

By the phrase “Sale of company’s own directories,” identified above as “c,” is meant the sum paid for directories published by the company which are sold to parties who wish to purchase them.

Defendant admits the necessity for telephone business of that portion of the directories in evidence consisting of the white pages containing an alphabetical arrangement of subscribers’ names and their telephone numbers, excluding such advertising matter as appears thereon.

6. The amount of receipts above named, to wit, $157,978.27, “from charges for material furnished, and for work done by reporting company’s employees; the answer hereto including all receipts from custom work or for installation of reporting company’s own equipment or service,” includes receipts upon which no claim for tax is made in the amount of $52,484.95, leaving a balance in receipts in the amount of $105,493.32, upon which the Commonwealth claims tax and upon which the defendant denies liability for tax, and consists of the following receipts, to wit:

(1) The amount received by the defendant company for:

(a) Standard telephone material installed in addition to the material required for standard installations.

(b) The time and expenses of employees in installing additional material.

(c) For repairs and rearrangement of the company’s plant and equipment.

By “plant and equipment” is meant the poles, wires, cables, conduits, etc., which the telephone company ordinarily uses for the purpose of conducting a telephone business.

By “repairs” is meant the reconstruction of any damage done to plant and equipment owned by the telephone company or owned by the subscribers.

By “rearrangement” is meant any change in the original installation of the plant and equipment of the company or the subscriber, such as moving a switching device from one desk to another. Such work and material are furnished only upon request of, and for the use and convenience of, the subscriber — *$24,745.10.

The defendant charged each subscriber a fixed sum for installing what is known as standard telephone installations. The said amount of $24,745.10 is charged in excess of the charge made for such standard installations and consists of a charge made for standard telephone materials installed in addition to the material required for the standard installations, together with a charge for the time and expenses of employees in installing such additional material required for the additional installation, and includes, also, a charge for the repairs and rearrangement of the plant and equipment of the company for the subscriber, such work and material being furnished upon the request and for the use and convenience of the subscriber. This excess charge is collected from the subscribers. By the word “material” is meant telephone materials, such as wires, cables, poles, conduits, etc. The material so installed, as aforesaid, is used in connection with the furnishing of telephone service to such subscribers. Of the said $24,745.10, $8228.69 was received for material and $16,516.41 represented labor expense.

(2) The amount received by the defendant company for special material furnished in connection with installations of special character and the time and expenses of employees in installing the material, such work and material being furnished upon the request and for the use and convenience of the subscriber, in the amount of $409.58.

The expression “special material,” as used in this paragraph, means telephone materials which are not used for standard installations, such as silk cords, gongs, mouldings, etc. The said “special material” is used in connection with the furnishing of telephone service to such subscribers. Of the said $409.58, $49.31 was received for material and $360.27 represented labor expense.

(3) The amount received by the defendant company for repairs, rearrangement of telephone or telegraph plant and equipment owned by others (excepting wire-using companies), such work being done for their use and convenience, $3280.55.

The repairs and rearrangements referred to consist of the furnishing, placing and erecting poles, repairs to the telephone cables, repairing of telephone circuits, refinishing of switch-boards and furnishing the necessary material for such repairs, refinishing and rearrangements. All of said repairs and rearrangements are upon or of their own private equipment and are connected with defendant’s telephone service. Of the said $3280.55, $1069.80 was received for material and $2210.75 represented labor expense.

By the phrase “wire-using companies” is meant all companies which are in business for the purpose of transmitting light, power, messages, codes, etc., over wires, cables, etc.

(4) The amount received by the defendant company for material and the time and expense of employees in constructing, repairing and rearranging telephone or telegraph plant of other wire-using companies for their use and convenience, $34,219.38.

The constructing, repairing and rearranging of the telephone or telegraph plant of other wire-using companies consists of the repairing of equipment, rearranging of wires, replacing of poles, repairing of conduit line, enlarging and moving manholes, constructing conduits and manholes, stringing wires, etc., and furnishing the material necessary therefor, the receipts for which were $32,218.64, and the balance of the said $34,219.38, namely, $2000.74, are receipts from the sale of Morse equipment and the labor in connection therewith. The phrase “wire-using companies” has the same meaning as that set forth in paragraph (3), supra. The said “other wire-using companies” herein referred to are connected directly or indirectly with the defendant’s plant, and the plants of the said “other wire-using companies” are used by the defendant in the furnishing of its telephone service. , Of the said $34,219.38, $6901.51 was received for material and $27,317.87 represented labor expense.

(5) The amount received by the defendant company from other wire-using companies, $17,169.52.

Included herein were receipts from the sale of material, which material was of the same character as that set forth in paragraph (1), and by the word “material” is meant telephone materials, such as wires, cables, poles, attachments, batteries, etc., the receipts from which were $16,648.57, and the balance of the said $17,169.52, namely, $520.95, were receipts from the sale of materials of the following character, viz., linoleum, furniture, chairs and Morse equipment. The phrase “wire-using companies” has the same meaning as that set forth in paragraph (3), supra.

(6) Material, etc., salvaged on telephone lines, equipment, etc., which defendant disposed of, $3676.08. These were amounts received from the sale of old material. Included herein were receipts from the sale of telephone material, which material was of the same character as that set forth in paragraph (1), such as poles, wires, cross-arms, etc., amounting to $1922.93, and the balance of the said $3676.08, namely, $1753.15, were receipts from the sale of materials of the following character, viz., boiler, safe, furniture, vacuum cleaner, gas engines, oil stoves, lockers, etc.

(7) The amount received by the defendant company and the time and expenses of employees installing its equipment used in conjunction with broadcasting equipment owned by others, $13,602. The defendant company owns only the equipment installed by it. The said amount of $13,602 was paid to the defendant for the time and expense of employees for installing and removing equipment owned by the defendant and used in connection with broadcasting equipment owned by others, and includes, also, the estimated depreciation on the said equipment of the defendant, and is divided as follows: Cost of installing and removing defendant's equipment, $8812.68; depreciation on defendant’s equipment, $4789.32.

In addition to the said sum of $13,602, the defendant received a sum of money for the use of its equipment, which said sum was reported to and taxed by the State under the item found upon the gross receipts report form: “From transmission and delivery of telephone or telegraph messages,” etc.

(8) The amount received by the defendant company from the sale of material, not including material furnished in connection with installation or to other wire-using companies, $6971.43.

The phrase “wire-using companies” has the same meaning as that set forth in paragraph (3), supra.

By the term “material” is meant telephone material, such as wires, cables, poles, attachments, batteries, etc.

(9) Miscellaneous, $1419.68.

These are receipts from the sale of scrap and junk, such as waste paper, barrels, etc.

7. The Commonwealth claims tax upon the said amount of receipts set forth in paragraph 5, supra, to wit, $542,834.62, and the amount of receipts set forth in paragraph 6, supra, to wit, $105,493.32, totaling $648,327.94, the amount of which tax is $5186.62, with interest thereon from sixty days from date of the approval of the original settlement by the State Treasurer, to wit, Aug. 23, 1923, together with the Attorney-General’s commission and costs, which liability defendant denies.

Discussion.

This is an appeal from the tax settlement of the tax on gross receipts of the defendant by the Auditor General and State Treasurer, under the provisions of section 23 of the Act of June 1, 1889, P. L. 420, 432, for the six months’ period ending June 30, 1923. The appellant admitted tax upon certain of its receipts and denied liability for the tax as to others. It was from the resettlement of tax approved by the State Treasurer Feb. 28, 1924, that the instant appeal was taken solely with reference to certain of the receipts.

It is contended by the appellant that its receipts from directory advertising, amounting to $542,834.62, and those from charges for material furnished and work done by the appellant’s employees, amounting to $105,493.32, are not taxable. The Commonwealth claims a tax upon these two items totaling $648,327.94, contending that it is entitled to said tax under a fair construction of section 23 of the said Act of 1889. The pertinent language of this section of said act reads, inter aim,, as follows: “. . . Every telephone or telegraph company incorporated under the laws of this or any other state or of the United States and doing business in this "Commonwealth . . . shall pay to the State Treasurer a tax of eight mills upon the dollar upon the gross receipts of said corporation, . . . received . . . from telegraph and telephone . . . business done wholly within this State, . . . and for the purpose of ascertaining the amount of the same, it shall be the duty of the Treasurer ... to transmit to the Auditor General a statement ... of the amount of gross receipts . . . derived from all sources, and of gross receipts from business done wholly within the State during the preceding six months. . . .”

It will be noted that the defendant shall pay a tax of 8 mills upon the gross receipts of said corporation received from telegraph and telephone business. There are many definitions of the term “business,” but we think the one controlling us is that contained in the opinion of Mr. Justice Brown in Com. v. Brush Electric Light Co., 204 Pa. 252, in which it is stated: “. . . The tax is not to be paid upon the gross receipts from electric lighting, but upon the gross receipts from the business of the company. ... It is taxed on what it does. The statute imposes the tax not upon a portion of its receipts — those derived from a particular commodity it supplies to the public — but upon all of its receipts from its general business conducted under its franchises.”

In order to carry on the telephone business of the appellant company, it is necessary that it furnish to its subscribers a directory, fully described in the stipulation of facts above stated. This directory is a necessity. The appellant chose to prepare such directory as it saw fit and made it a source of receipts, which it fostered by direct advertising, urging its subscribers to advertise therein, urging others to use the telephone and to advertise in the directory, pointing out the advantages to be derived not only from the use of the telephone, but also from advertising in such directory, giving the telephone numbers of subscribers and the telephone numbers of advertising subscribers, thus linking the use of the telephone appliances to the directory and to the subscribers and the advertisers. By so doing it swelled'the volume of its business and increased its revenues. Having made said advertisements a source of receipts, it cannot now be permitted to enjoy the benefits of its acts and at the same time absolve itself from the consequences of such acts in the conduct, furtherance and enlargement of the business in which it was created to engage.

In order to sustain its contention that the receipts derived from advertisements in its telephone directories are not subject to the gross receipts tax provided in section 23 of the Act of 1889, appellant relies upon Com. v. Harrisburg Light and Power Co., 262 Pa. 238. It appears from the facts set forth in this case that the defendant was incorporated and engaged in supplying to the public light, heat and power by means of electricity. It was also' engaged in carrying on the steam heating business, having purchased the property and franchises of the Harrisburg Steam Heat and Power Company. It was held that it was only liable for tax on such of its receipts as were derived from the business which it was authorized to transact, as an electric light company, and was not liable for the tax on its receipts derived from the sale of steam and merchandise. We quote from the opinion of President Judge Kunkel, found on page 241, as follows: “. . . It would seem, therefore, from the limitation in the statute and from the interpretation put upon it in that case, that the phrase ‘the business of electric light companies’ means the business which such companies are authorized by their charter to conduct; that is, producing electricity and selling it to customers for the generation of light, heat or power. We are not at liberty to extend the statute to the business which they do by virtue of other franchises, those which they have purchased and which authorize a business different from that conducted under their franchises as electric light companies.”

It does not require any argument to demonstrate that the ruling in the case from which we have quoted does not apply to the facts in the instant case. The appellant company in the instant case has not purchased the franchises of an entirely different corporation, but is exercising its franchise under its charter as a telephone company; and, as we have already shown, and as is admitted, the telephone directory is an essential and necessary part of that business. It could have prepared a directory without advertisements, but it chose to swell the gross receipts by the use of this advertising medium, and, therefore, we cannot sustain the contention that this case is ruled by Com. v. Harrisburg Light and Power Co.

Nor do we think the appellant’s case is strengthened by Com. v. American District Telegraph Co., 44 Pa. C. C. Reps. 543, also reported in 19 Dauphin Co. Reps. 263, upon which its counsel relies. In this case it was held that the part of defendant’s business denominated manual ñre alarm and patrol signal service and combination night alarm and fire alarm service was telegraph business within the act. It was also held that where it employed a watchman to patrol its customer’s premises, it transmitted information by him to its central office by means of electrical appliances and signals; and in the case where the customer employed the watchman, it received information by the same means. The installation of the service was purely auxiliary to the business and necessarily a part of it. The court held that the other items of settlement which were charged with a tax were very indefinite, and rejected because not satisfactorily proven, it being stated by the learned President Judge: “. . . It may be that the thermometer service was telegraph business, but the tax on such business cannot be ascertained, as we have no evidence to distinguish receipts from that service from the receipts which were derived from the other sources mentioned, and which do not seem to have accrued from telegraph business.”

The further contention of the defendant is that the receipts from advertising in the telephone directories have not accrued to it from the transmission of telephone messages, and, therefore, they are not receipts from telephone business. The last quoted case does not support this contention. The statute does not restrict the taxation to receipts from the transmission of telephone messages, but expressly taxes telephone business derived from the complete business of the corporation. Furthermore, the directory is essential to the transaction of telephone business.

We are of the opinion that it is not what a company is called by name but what it does, and from the doing of which it derives income, that subjects the gross amount received from the thing done to taxation. It is the substance that is material; if that is lacking, there can be no liability; if that exists, the name is unimportant: Com. v. New Castle Electric Co. et al., 5 Dauphin Co. Reps. 89.

In Com. v. Brush Electric Light Co., 204 Pa. 249, which case we think is controlling in the instant case, it was said by Mr. Justice Brown, page 242: “. . . The appellant . . . claims exemption from this tax upon certain items in its gross receipts, because they are not derived from electric lighting. They are for electric power furnished to individuals and corporations for manufacturing purposes, and for sales of electric supplies, such as lamps, drop lights, fans, etc. The contention of the appellant is that as it is incorporated as an electric light company, only its gross receipts from electric lighting are taxable. But such are not the words of the statute. They are clear and unambiguous, as they must be, if the Commonwealth is entitled to the taxation imposed. . . . The tax is not to be paid upon the gross receipts from electric lighting, but- upon the gross receipts from the business of the company. For the purpose of enlarging and swelling the volume of its business, it furnishes not only electric light, but electric power to manufacturers and sells electric supplies. Having so extended its business beyond the mere furnishing of light by electricity, the company has largely increased its revenues, and it would be a strained construction of the words of the statute if the gross receipts from its business should be interpreted as meaning only its gross receipts from electric lighting, simply because it is called an electric light company. It is taxed on what it does. . . . Having, under what it regards as its franchises, not questioned by the Commonwealth, enlarged its business by extending the same beyond the mere furnishing of light, and having realized largely increased revenue from so doing, its plea for abatement of the tax claimed by the State is ungracious and cannot avail it in the face of the statute declaring what it shall pay.”

As we have before stated, we think this authority is controlling. We are not here dealing with receipts derived from isolated and unrelated transactions, but receipts derived from a deliberate and carefully planned branch of the telephone business, fostered and encouraged by the appellant as part and parcel of the rendition of its telephone service. We are of the opinion, therefore, that the receipts' derived by the defendant from directory advertising, amounting to $542,834.62, are taxable under the act.

Directing our attention how to the items in the settlement of the Auditor General and State Treasurer for material furnished and work done by the reporting company’s employees, and for the installation of its own équipment or service, amounting to $157,978.27, it is admitted by the Commonwealth that receipts in the amount of $52,484.95 therein included are not claimed to be taxable by the Commonwealth; but the Commonwealth contends that the balance of said item, amounting to $105,493.32, is taxable. Every item of receipts included within the said total of $105,493.32 is derived from transactions directly in the line of business for which the appellant was incorporated. An examination of the stipulation of facts shows how this item is made up; for example, the company received $24,745.10 for standard telephone material installed, in addition to the material required for standard installations, for the time and expense of employees installing the same, and for the repairs and rearrangements of the company plant and equipment; the sum of $3280.55 for repairs, rearrangements of telephone or telegraph plant or equipment owned by others; the sum of $34,219.38 for moving and the time and expense of employees in constructing, repairing and rearranging telephone or telegraph plant or other wire-using companies for their own use and convenience; the sum of $17,169.52 was received from other wire-using companies. These were the receipts from the sale of telephone materials, such as wires, cables, poles,, brackets, insulators, batteries. The sum of $3676.08 was received from the sale of old material.

Also in subdivision (8) of paragraph 6 of the stipulation of facts, receipts amounting to $6971.43 were received by the company from the sale of material. The receipts in subdivision (9) of paragraph 6 of the stipulation of facts, amounting to $419.68, were from the sale of scrap and junk; and the receipts in subdivision (7) of paragraph 6, amounting to $13,602, were received by the defendant company for the time and expense of installing equipment owned by it and used in conjunction with broadcasting equipment owned by others.

At the hearing before the court in banc, counsel for the defendant called the witness Frank O. Malatech. The purpose of calling and examining this witness was stated by counsel for the defendant as follows: “. . . The part of the receipts which were alleged to be taxable here are what the telephone company calls ‘custom work,’ which has been described as sale of material. We disagree with the designation. The stipulation of facts is correct as stated, but we have just one or two questions to ask, which, we think, may tend to qualify but not in any way to contradict any fact that is stated in the stipulation.”

The witness was then examined and his testimony was offered tp prove that most of these services were rendered without profit to the company. This testimony was objected to by counsel for the Commonwealth, and was admitted subject to said objection. We are of the opinion that it was immaterial whether the receipts so derived were profitable to the company. This is a tax on gross receipts and not on profits. It would appear, however, that in some instances “they got more than the expense.” (Notes of testimony, page 7.) Furthermore, on page 8, this witness testified, in answer to the question:

“Q. Now, what do you mean when you say it is not intended for the purpose of enlarging and swelling the volume of the business of the company? (Notes of testimony, page 7.) A. In other words, you take a piece of plant to install a subscriber’s station, that is, plant money expended for the purpose of enlarging the company’s business; we install that station, we get extra business on it, but the items that enter under custom work does not increase in any manner the business of the company. Q. What do you mean, the business of the company? A. Service.”
“The Court: Q. Your business is to give service? A. Correct, sir. Q. Now, when you give service, the better service you give the better business you get, don’t you? A. That is true. Q. Now, if you put on a 20-foot cord instead of a 6-foot cord, because a man wants it, you are pleasing the man? A. Correct, sir. Q. Aren’t you then automatically improving the business of the company? A. I would not say under those conditions.”

It appears from the evidence of the witnesses called that most of the serv- . ices rendered for which charges were made, which go to make up the amount of $105,493.32, were rendered without profit to the company as we have heretofore stated; and it.appears from the testimony quoted that a part of the business of the defendant corporation was to render service, and that the better the service the company gave the better business it would get. As we have before stated, it is immaterial whether this service was rendered at a profit. We are of the opinion, therefore, that every item of receipts included within the said total of $105,493.32 is derived from direct transactions in line with the business of the defendant corporation. We are of the opinion they come within the purpose for which it was incorporated, and, therefore, that the said receipts derived from the sale of materials and appliances are subject to the tax: Com. v. New Castle Electric Co. et al., supra; Com. v. Brush Electric Light Co., supra.

For the reasons above stated, we have reached the following

Conclusions of law.

1. The receipts of the defendant'company, derived from directory advertising, amounting to $542,834.62, are subject to the gross receipts tax provided by section 23 of the Act of June 1, 1889, P. L. 420.

2. The receipts derived by the defendant corporation from the several items, amounting to $105,493.32, are subject to the gross receipts tax provided by the Act of 1889.

3. The costs of these proceedings are to be paid by the defendant:

Amount of tax........................................$5186.62
Interest from Nov. 22, 1923, being sixty days after date of final settlement, to March 18, 1929.................... 1656.28
$6842.90
Attorney-General’s commission of 5 per cent.............. 342.14
Total ........................................$7185.04

And now, March 18, 1929, judgment is hereby directed to be entered in favor of the Commonwealth, as against the Bell Telephone Company, in the sum of $7185.04, unless exceptions be filed within the time limited by law.

From Homer L. Kreider, Harrisburg, Pa.


author: Wagner, Dep. Att’y-Gen.,

text:
    In re Consolidation of State and National Banks.
    July 30, 1929.
   Wagner, Dep. Att’y-Gen.,

We beg to acknowledge receipt of your request to be advised relative to the effect of the consolidation of a bank or trust company, incorporated and organized under the laws of this Commonwealth, with a national hanking association under the provisions of the Act of Congress of Feb. 25, 1927, chap. 91, 44 Stat. at L. 1224, amending the Act of Nov. 7,1918, chap. 209, 40 Stat. at L. 1043, by adding a new section, known as section 3, thereto upon the corporate existence of such bank or trust company.

The Act of Congress under consideration, referred to above, reads as follows:

“Section 3. That any bank incorporated under the laws of any state, or any bank incorporated in the District of Columbia, may be consolidated with a national banking association located in the same county, city, town or village under the charter of such national banking association on such terms and conditions as may be lawfully agreed upon by a majority of the board of directors of each association or bank proposing to consolidate, and which agreement shall be ratified and confirmed by the affirmative vote of the shareholders of each such association or bank owning at least two-thirds of its capital stock outstanding, or by a greater proportion of such capital stock in the case of such state bank if the laws of the state where the same is organized so require, at a meeting to be held on the call of the directors after publishing notice of the time, place and object of the meeting for four consecutive weeks in some newspaper of general circulation published in the place where the said association or bank is situated, and in the legal newspaper for the publication of legal notices or advertisements, if any such paper has been designated by the rules of a court in the county where such association or bank is situated, and if no newspaper is published in the place, then in a paper of general circulation published nearest thereto, unless such notice of meeting is waived in writing by all stockholders of any such association or bank, and after sending such notice to each shareholder of record by registered mail at least ten days prior to said meeting, but any additional notice shall be given to the shareholders of such state bank which may be required by the laws of the state where the same is organized. The capital stock of such consolidated association shall not be less than that required under existing law for the organization of a national banking association in the place in which such consolidated association is located; and all the rights, franchises and interests of such state or district bank so consolidated with a national banking association in and to every species of property, real, personal and mixed, and choses in action thereto belonging, shall be deemed to be transferred to and vested in such national banking association into which it is consolidated without any deed or other transfer, and the said consolidated national banking association shall hold and enjoy the same and all rights of property, franchises and interests, including the right of succession as trustee, executor or in any other fiduciary capacity in the same manner and to the same extent as was held and enjoyed by such state or district bank so consolidated with such national banking association. When such consolidation shall have been effected and approved by the comptroller, any shareholder of either the association or of the state or district bank so consolidated, who has not voted for such consolidation, may give notice to the directors of the consolidated association, within twenty days from the date of the certificate of approval of the comptroller, that he dissents from the plan of consolidation as adopted and approved, whereupon he shall be entitled to receive the value of the shares so held by him, to be ascertained by an appraisal made by a committee of three persons, one to be selected by the shareholder, one by the directors of the consolidated association, and the third by the two so chosen; and in case the value so fixed shall not be satisfactory to such shareholder, he may, within five days after being notified of the appraisal, appeal to the Comptroller of the Currency, who shall cause a reappraisal to be made, which shall be final and binding; and the consolidated association shall pay the expenses of reappraisal, and the value as ascertained by such appraisal or reappraisal shall be deemed to be a debt due and shall be forthwith paid to said shareholder by said consolidated association, and the shares so paid for shall be surrendered and, after due notice, sold at public auction within thirty days after the final appraisement provided for in this act; and if the shares so sold at public auction shall be sold at a price greater than the final appraised value, the excess in such sale price shall be paid to the said shareholder; and the consolidated association shall have the right to purchase such shares at public auction, if it is the highest bidder therefor, for the purpose of reselling such shares within thirty days thereafter to such person or persons and at such price as its board of directors by resolution may determine. The liquidation of such shares of stock in any state bank shall be determined in the manner prescribed by the law of the state in such eases, if such provision is made in the state law; otherwise as hereinbefore provided. No such consolidation shall be in contravention of the law of the state under which such bank is incorporated.
“The words ‘state bank,’ ‘state banks,’ ‘bank’ or ‘banks,’ as used in this section, shall be held to include trust companies, savings banks or other such corporations or institutions carrying on the banking business under the authority of state laws.”

The legal effect of a consolidation under the above act has been considered fully by the Supreme Judicial Court of Massachusetts in the cases of Petition of Worcester County National Bank of Worcester, 161 N. E. Repr. 797, and 162 N. E. Repr. 217. In the first case, the facts were that the Fitchburg Bank and Trust Company had consolidated with the Merchants’ National Bank of Worcester, the name of which was simultaneously changed to Worcester County National Bank of Worcester, and the question involved was whether the national bank could continue to function as administrator of an estate of which the Merchants’ National Bank of Worcester had been duly appointed administrator prior to the consolidation. The court answered the question in the affirmative, discussing in its opinion the effect of the consolidation upon the status of the national bank in the following language (page 798) :

“It is unnecessary for the decision of this case to determine whether the trust company lawfully could consolidate with the national bank, because we are of opinion that the legal obligation of the national bank appointed by the court to administer this estate is not in any respect impaired by what has taken place with respect to consolidation with the trust company under said section 3. The national bank has not been extinguished, dissolved or essentially altered by the form of consolidation under said section 3, whether that consolidation be treated as lawful and effective or as unauthorized and futile. Plainly, if it be the latter, the obligation of the national bank to administer the estate remains in full force. That obligation, lawful at its inception, has not been diminished, enhanced or changed thereby any more than it would be by any other ultra, vires act of the national bank. If the consolidation be treated as lawful and effective, the national bank is the corporation now existing and operative. By the terms of said section 3 the consolidation was ‘under the charter’ of the national bank. That bank has continued to exercise all its functions, without modification, under the same charter in the same manner and under the same legal sanctions and authorization since the consolidation as before. No new charter has been issued to it. The certificate of approval of the consolidation by the Comptroller of the Currency is in no sense a new or modified charter. It is no more than a formal expression by the Comptroller of the Currency of his approval of the consolidation. The corporate identity of the national bank has continued unaffected by anything in connection with the consolidation. Its corporate existence under the same charter, subject to the same laws and owing fealty to the same jurisdiction has persisted without change. Its financial resources may have been increased or diminished by the addition of the assets of the trust company and the assumption of its debts, but its obligations and duties not arising out of the consolidation abide in full force and effect as if there had been no consolidation. Among the duties and obligations which eifdure undisturbed by the consolidation is the trust to continue and finish the administration of the estate of the decedent.
“The simple change of name of the national bank did not disturb its corporate identity or continuity of existence, which has remained uninterrupted. See Act of Congress of May 1, 1886, ch. 73, § 2, 24 U. S. Stat. at L. 18 (12 U. S. C. A., § 30) ”

In the second Worcester County National Bank case, the consolidation of the Fitchburg Bank and Trust Company and the Merchants’ National Bank of Worcester was likewise involved. The Worcester County National Bank filed a petition with the Probate Court of Worcester County for leave to render an account as executor of the estate of Julia A. Legnard, deceased, of which estate the bank and trust company had been appointed and duly qualified as executor prior to its consolidation with the national bank. No change in the administration of the estate appeared on the court record. Leave to so account was denied. The court said, in considering the effect of the consolidation upon the status of the state banking institution (162 N. E. Repr. 220) :

“The next question to be determined is what is the legal effect of such consolidation upon the trust company and upon the national bank. The words of said section 3 (44 U. S. Stat. at L., part II, pages 1225, 1226) are explicit to the point that the consolidation shall be ‘under the charter of such national banking association.’ This of itself is clear indication of intent that the state trust company shall not continue as a corporation in combination with the national bank. The words of St. 1922, ch. 292, amending G. L., ch. 172, § 44, are equally explicit that upon any consolidation of a Massachusetts trust company, whether with a bank or another trust company, its charter ‘shall be void except for the purpose of discharging existing obligations and liabilities.’ The statutes of this Commonwealth upon the subject of a trust company owing its creation and existence exclusively to those statutes must be valid and binding to this extent. The later provision of said section 3 that there shall be transferred to the national banking association and be held by it, among other things, the ‘franchise’ of the state bank, cannot mean its right to be a corporation. The right to transfer franchise powers of a corporation organized under the laws of one sovereignty to a corporation organized under the laws of a different sovereignty is extraordinary. It cannot be implied in the absence of explicit statutory enactment to that end. There is no such provision in the statutes of this Commonwealth. Any other conclusion would be in contravention of the laws of this Commonwealth. It is manifest from the terms of said section 3 (44 U. S. Stat. at L., part II, pages 1225, 1226) and from the terms of said St. 1922, eh. 292, that the charter of the trust company here in question became void on the consolidation (except for purposes not here material), and that the only corporation now operative is the national bank. The trust company as a Massachusetts corporation has ceased to be an institution capable of transacting business. The national bank existing before the consolidation has continued to exercise all its functions without alteration or modification under the same charter since the consolidation as before. The consolidation contemplated by said section 3 is an absorption of the state bank with all its assets by the national banking association, which retains its corporate identity. Its provisions differ in this particular from many statutes authorizing the consolidation of corporations which effect the extinguishment of the constituent corporations and the establishment of a new corporation.”

The latter case was appealed to the United States Supreme Court, and Mr. Chief Justice Taft, in delivering the opinion of that court, commented upon the decision of the Massachusetts court upon the question here under consideration in the following language, 73 L. Ed. (Adv. 427) :

“The court then considered what was the legal effect of the consolidation on the trust company and the national bank and emphasized the explicit provision of section 3 that the consolidation was to be under the charter of the national bank. It referred again to the provision of the state law that upon the consolidation the charter of the trust company should be ‘void except for the purpose of discharging existing obligations and liabilities.’ It held that the word ‘franchises’ directed to be transferred to the national bank by virtue of section 3 did not mean its charter or its right to be a corporation, for that would be in contravention of the law of the commonwealth; that it was only the national bank that retained its corporate identity; that the certificate of the Comptroller did not constitute a charter, but only his approval of the consolidation; that the trust company had gone out of existence and all its property had become the property of the consolidated bank; and that the latter was not a newly-created organization, but an enlargement of the continuously existing national bank. Thus, the court found that the identity of the trust company had not been continued in a national bank, but had been extinguished. The court distinguished this case from eases of union where contract obligations had been held to pass from one of the uniting corporations to the other. Such cases were held not to be applicable to sustain the view that positions of trust like executor, administrator and other fiduciaries could be transferred to the national bank by the mere consolidation under Massachusetts law.”

It will be noted that, while the holding of the state court is not expressly adopted or approved, no dissent is expressed. The Act of Congress clearly provides that the consolidation shall take place under the charter of the existing national bank, and the decision in the Massachusetts case clearly holds that the corporate existence of the state bank or trust company consolidating with the national bank is not rendered void .and its corporate existence dissolved by the mere fact of such consolidation. The legal effect of such a consolidation upon the charter and corporate existence of the state institution depends upon the laws of the state under which the institution is organized. In Massachusetts, the state statute specifically provides that the charter of a state institution shall become void upon consolidation with any other bank or trust company, and since its scope is not limited to the consolidation of one state institution with another state institution, it was held to apply to the case of the consolidation of a state banking institution with a national banking association.

On the other hand, it would seem to be contrary to every principle of law that a corporation created under the laws of one sovereignty could be dissolved and its corporate existence terminated by virtue of the provisions of a law of another sovereignty in the absence of the express consent, evidenced by legislative enactment, of the sovereignty creating such corporation. We can see no escape from this proposition, and it'is supported by the authority above cited.

The only statute in Pennsylvania relative to the disposition of the charter of a state bank upon its affiliation with a national bank is the Act of April 26, 1889, P. L. 56, which provides a method for the surrender of the charter of a state bank upon its becoming a national banking association, but the surrender takes place only upon compliance with the requirements of the act. If, therefore, in any case in which a bank or trust company of this Commonwealth is consolidated with a national banking institution under the Act of Congress referred to above, the provisions of the Act of 1889 just referred to are also followed, a surrender of the charter of the state bank or trust company will necessarily follow.

You are, therefore, advised that, unless the provisions of the Act of April 26, 1889, P. L. 56, are followed, the consolidation of a state bank or trust company with a national bank, under the Act of Congress of Feb. 27, 1927, does not void the charter or terminate the corporate existence of such state bank or trust company. Proceedings should be taken by the proper officers of the- state institution to effect a voluntary dissolution under the provisions of the Act of April 9, 1856, P. L. 293. If such proceedings are not taken, you should return such institution to the Attorney-General, under the provisions of section 17 of the Banking Act of 1]923 (Act of June 15, 1923, P. L. 809), as amended by the Act of May 5, 1927, P. L. 762, for the institution of quo warranto proceedings.

Prom C. P. Addams, Harrisburg, Pa.


author: Cummins, J.,

text:
    Hommell v. West Brownsville Borough.
    Before Brownson, P. J., and Cummins, J.

      C. L. V. Acheson and Adolph L. Zeman, for plaintiffs.

      Eugene C. Sloan, for defendant.
    Jan. 28, 1929.
   Cummins, J.,

A proceeding by view was instituted to assess damages and benefits resulting from a change of grade on Watt and Williams Streets, in defendant borough, resulting from the construction of an improved highway through said municipality by the County of Washington, pursuant to an agreement entered into between said county and borough under the provisions of the Act of May 11, 1911, P. L. 244, and its supplement of May 24, 1917, P. L. 291.

The case is now before the court upon defendant’s exceptions to the viewers’ award to plaintiffs. Only questions of law appearing on the face of the

record are ordinarily raised by exceptions. Where questions of fact are in dispute, an appeal is the proper remedy. The first exception raises a question of fact alone. This is likewise true of the latter part of the second exception. With reference further to the second exception filed, we call attention to the fact that the defendant borough would be liable in an action by view for the change of grade, whether the proper corporate action authorizing it had first been taken or not: Brown et al. v. Powell, 25 Pa. 229; Deer v. Borough, 220 Pa. 307, 311; Pittsburgh v. Goshorn, 230 Pa. 212, 220. As counsel for defendant, upon oral argument, stated that he did not desire to press the first two exceptions, we shall, therefore, not discuss them further.

The third exception is “that any resolution, ordinance or contract enacted or entered into for said purpose would be illegal and void, for the reason that it would impose an obligation or debt upon the defendant borough in excess of the limitation placed upon such borough by the Constitution of the Commonwealth of Pennsylvania.”

What the status of the defendant borough’s indebtedness is with reference to the constitutional limitation mentioned is, of course, a question of fact, but for the purpose of a proper consideration of the question of law involved in this exception, we assume that the borough indebtedness is in excess of the constitutional limitation. If so, its contract with the county might be illegal, but plaintiffs were not parties to this contract.

It has been repeatedly held in other jurisdictions that a municipality cannot escape liability for an obligation arising ex delicto on the ground that its indebtedness already exceeded the constitutional limit: McCracken v. San Francisco, 16 Cal. 591; Chicago v. Sexton (Ill.), 2 N. E. Repr. 263; Bloomington v. Perdue, 99 Ill. 329; Lorence v. Bean (Wash.), 50 Pac. Repr. 582; Fort Dodge Electric Light Co. v. Fort Dodge (Iowa), 89 N. W. Repr. 7; Rice v. Des Moines, 40 Iowa, 638; Bartle v. Des Moines, 38 Iowa, 414; Conner v. Nevada (Mo.), 86 S. W. Repr. 256; Morris v. Sheridan (Ore.), 167 Pac. Repr. 593; Dallas v. Miller (Texas), 27 S. W. Repr. 498.

Thus it has been held that where damages result from negligent street construction (Bartle v. DesMoines, supra), or from a change of grade (Cook v. Ansonia, 66 Conn. 413, 34 A. 183; Smith v. St. Joseph (Mo.), 27 S. W. Repr. 344), an indebtedness in excess of the constitutional limitation is no defense. Such excess indebtedness likewise cannot be successfully interposed by a municipality to avoid an order directing the construction of a sewage-disposal plant: McCarthy v. Kelso (Wash.), 223 Pac. Repr. 151.

We know of no authority in point in this State, and none has been called to our attention by counsel. On principle, however, we are satisfied that the conclusion reached in the authorities above cited is the correct one. The constitutional provision in question was to incapacitate municipalities from increasing their indebtedness beyond a certain limit, but not for the purpose of absolving them from liability for their wrongful acts. The taking of or injury to land under the power of eminent domain is a tort. Between the defendant borough and the county there was a contract, but between the defendant and these plaintiffs no contractual relationship. The borough could have been restrained from entering into its contract with the county, but it cannot be excused from liability for its tort resulting from such contract, for the plaintiffs were not parties to this contract. The defendant borough cannot plead or interpose as a defense its own wrong.

And now, Jan. 28, 1929, exceptions to viewers’ report dismissed, at defendant’s cost.

From Harry D. Hamilton, Washington, Pa.


author: Stearns, J.,

text:
    Harding’s Estate.

      Robert M. Boyle, for exceptant.

      John S. Sinclair and J. Snowdon Rhoads, contra.
    Nov. 1, 1929.
   Stearns, J.,

To alter the provisions of an act of assembly is clearly beyond judicial authority. The Act of June 20, 1919, P. L. 521, relating to the imposition and collection of transfer inheritance tax, specifically defines what property is taxable where the decedent is a non-resident. It is argued, however, that the parties “domesticated” the estate and thereby subjected it to the same tax which the statute imposes upon the estate of a resident decedent. Such result ensues, it is urged, because the Auditing Judge, at the request of all parties, awarded distribution direct to the beneficiaries without the intervention of an award to, and distribution by, the fiduciary at the domicile. In a carefully considered opinion, the Hearing Judge reviewed all of the authorities, and we agree with his conclusion that there is no merit in the Commonwealth’s contention. The crux of the question, and its answer, pointed out by the Hearing Judge, is found in the language of Mr. Justice Schaffer in Easby’s Estate, 285 Pa. 60 (page 66): “As the act does not impose a tax on the holdings of a non-resident decedent, save in the instances which it specifies, it cannot be extended to embrace other property of the decedent. To say that this property was domesticated by what was done in the Orphans’ Court would not advance the result sought by the Commonwealth, because such property of a non-resident decedent is not within the scope of the act and would not be brought within its scope by being ‘domesticated.’ ”

The exceptions are dismissed.

Lamorelle, P. J., did not sit.


author: Martin, P. J.,

text:
    Schwartz v. Stein et al.
    J. L. Ehrenreich and A. S'. Minster, for plaintiff.
    July 22, 1929.
   Martin, P. J.,

Judgment was entered upon a note signed by Jacob Berman and Rose Berman by virtue of a warrant of attorney contained in the note. Upon the back of the note the defendants, Harry Stein' and Alexander Weinstein, signed an endorsement containing a warrant of attorney authorizing the entry of judgment against them.

When the judgment was entered against the makers, the note was filed with the prothonotary. Upon filing a copy of the warrant of attorney on the back of the note, judgment was entered against Harry Stein and Alexander Weinstein. There being no authority for obtaining judgment upon the filing of a copy, this judgment was struck off. Plaintiff subsequently obtained possession of the note with the endorsement, and upon presentation of the endorsement to the prothonotary, judgment was entered against the endorsers in the present case. This rule was taken to show cause why the judgment should not be struck off.

The warrant of attorney contained on the face of the note and that on the back of the note conferred authority for the entry of two valid judgments, one against the makers and the other against the endorsers, but when judgment was entered against the endorsers without legal authority by presenting to the prothonotary a copy of the warrant of attorney instead of the original endorsement upon the back of the note, the judgment entered was illegal and properly struck off; but having entered judgment based upon the authority of the warrant of attorney on the back of the note, although only a copy was employed, the power of the warrant of attorney was exhausted and judgment cannot now be entered by virtue of the original warrant.

This was declared to be the law in the case of Jacobs v. Busedu, 95 Pa. Superior Ct. 132. It was said in the opinion delivered in that case: “The contention of appellants is that the first judgment was conferred on a copy of the lease; that the prothonotary had no authority to accept a copy; and that the power to enter judgment could not have been exhausted because the paper which gave the power to enter judgment was still in appellant’s hands and was used for the first time in entering the judgment under consideration. The argument is based upon a false premise. The authority which plaintiffs sought to exercise when they entered the first judgment was that given by the lease itself. As stated above, it does not appear that the lease was not exhibited to the prothonotary when he entered the first judgment. While it should have remained on file as evidence of the authority for the judgment and the protection of the defendants (Fraley’s Appeal, 76 Pa. 42), its redelivery to plaintiffs did not have the effect of rendering the judgment a nullity. Surely, plaintiffs are not in a position to assert that the judgment was not entered under the warrant in the lease, for they had no other authority' to enter it. The question whether the power to enter a judgment was exhausted by the entry of the first judgment is not to be determined by what paper was filed by the prothonotary, but by what authority plaintiffs acted. We have no difficulty in concluding that they were exercising their power under the warrant in the lease. It follows that they could not enter another judgment under it.”

Rule absolute.