Case Name: Bourguignon Building Association versus Commonwealth
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1881-06-06
Citations: 98 Pa. 54
Docket Number: 
Parties: Bourguignon Building Association versus Commonwealth.
Judges: 
Reporter: Pennsylvania State Reports
Volume: 98
Pages: 54–65

Head Matter:
Bourguignon Building Association versus Commonwealth.
1. The provisions of the Act of April 10th 1879 (P. L. 10), exempting mutual savings funds anti building and loan assoedations from taxation, are repealed by the provisions of the Act of June.7th 1879, § 4 (P. L. 112), imposing taxation upon the capital stock of corporations.
2. A building association is not a savings fund, within the meaning of the excepting clause of section 4 of the Act .of June 7th 1879 (P. L. 112), and is therefore liable to taxation as therein provided.
May 16th 1881. Before Sharswood, C. J., Mercur, Gordon, Paxson, Trunkey, Sterrett, and Green, J J.
Error to the Court of Common Pleas of Dcwjylvm county : Of May Term 1881, No. 151.
This was, in the court below, an appeal from the settlement of the Auditor General and State Treasurer against the above named Building Association for tax on capital stock, under the provisions of the Act of June 7th 1879 (P. L. 112), for the year ending the first Monday of November 1879.
The following case stated was agreed on, viz.:
The company is a building association incorporated in 1878, under the Act of 29th April 1874, with a nominal capital of $1,000,000, divided into shares of $200 each. At the time of its incorporation, no' capital had been paid in. 1615 shares have been subscribed, payable one dollar per month ou each share. Up to the first Monday of November 1879, $50,113.45 had been paid in. This money is loaned out to' members on mortgage security. ■ _.
By the Act of Assembly approved April 10th 1879, building associations are exempted from the tax claimed under the settlement made in this case.. The Act was- formally accepted by appellants, and thereupon new letters' patent were issued thereunder.
The Commonwealth demands the tax in cpiestion under the provisions of the general Revenue Act of June 7th 1879.
The following questions are submitted to the court:
First. — Are the provisions of the Act of April 10th .1879, exempting the appellants from taxation, repealed by the general Revenue Act of June 7th 1879?
Second. — If repealed, does the Act of-June 7th 1879 impose a tax upon the capital stock of building associations ?
If the Court find both these propositions against the appellants, the judgment is to be entered-for the Commonwealth for $73.03; otherwise judgment to be entered for the Bourguignon Building Association.
After argument the court below filed the following opinion, April 13 th 1881:
“ The facts are agreed upon and appear in the case stated. Upon these, two questions are submitted to the court:
‘‘ First. — Are the provisions of the Act of April 10th 1879,' exempting the appellants from taxation, repealed by the general Revenue Act of June 7th 1879 ?
“ This association brought itself within the protection of the Act of April 10th 1879 by filing the certificate of acceptance required by the ninth section of said act. This released it from taxation under existing laws. Wo do not, however, see anything in the letter or the spirit of this Act to indicate a legislative intent to exempt these associations from any burden or taxation imposed by subsequent legislation,'and certainly it has no contract feature which good faith is called upon to enforce and protect against the Commonwealth’s right to tax. It does not strike me that the liability of the defendant to the Tax Act of June 7th 1879 depends upon the-question of a repeal of a former Act. 'The Act of April 10th 1879 may have served its purpose. It ended litigation. It took these associations out of the grasp of the Act of 1868, and any other act then in force. But it did not cast its shadow into the future. We .cannot entertain the argument that because of the eighth section of the Act of April 10th 1879, these associations are not subject to a tax imposed by a subsequent general tax law. There is no attempt to exempt them from future taxation, or from any special tax that might be imposed. The language of the section is peculiar: ‘The bonus or tax due to the Common wealth upon the capital stock of corporations, as provided for by Act of 1st of May 1868, or by any other act, shall not apply to or be due from mutual savings fund or building and loan associations,’ and therefore the necessity of a repeal of this Act, either by implication or express words, in order to make effectual the subsequent tax, if there is one imposed in general terms, by a general, tax law, is not apparent. This doctrine is not in conflict with Egypt Street, 2 Grant, 455, and other kindred cases, including Kilgore v. Commonwealth, 9 W. N. C. 184, relied upon by the defendants to show that implied repeals are not favored. The right to tax the capital of mutual savings fund or building and loan associations, was not relinquished by the sovereign power of the legislature, and hence there is no right to be restored, or law repealed, before effect is given to a general tax law. There is no principle better established, and it requires no long array of cases to prove it, that no surrender of the general power of taxation by any legislative act can be implied. It must be expressed: Erie Railway Co. v. Commonwealth, 16 P. F. S. 84.
“We come now to consider, Second. — If repealed, does the Act of Juno 7th 1879 impose,a tax upon building associations?
“The title of the Act is “To Provide Revenue by Taxation,’ and if we turn to the fourth section, under which the tax is imposed against the defendants, we find no appearance of an intention on the part of the law-making power to limit the scope of its grasp by any words of special or limited designation. Hence it is we read, ‘ That every company or association whatever, now or hereafter incorporated by or under any law of this Commonwealth, or now or hereafter incorporated by any other state or territory of the United States, or foreign government, doing business in this Commonwealth, . . . except foreign insurance •companies, banks and savings institutions,’ shall be subject to a tax. There is no escape for the defendants from the sweep of this section, unless it falls within the exception.
“ The. ingenuity of the argument that ‘ Building Associations,’ because ‘the monthly deposit is made up of the members’ savings,’ because ‘ they may afford to the indigent an opportunity to save and profitably invest their savings,’ and because of the designation of other companies in connection with them in legislation as ‘ savings fund and loan associations ’ belonging to the excepted class of ‘ banks and savings institutions,’ falls upon the imagination, and. does not convince the understanding. The same ingenuity is taxed to demonstrate that building associations are not to be taxed as ‘ banks and savings institutions,’ under the seventeenth section of the act.
“ ‘ Banks and savings institutions ’ are a class of corporations having banking privileges, ahd have been long known to the law-making power, and the use of these terms is not misunderstood, and should not be misconstrued. They were in use and the subject of legislation and taxation, long before‘building associations’ demanded special exemptions. Building associations have heretofore been exempt from the operation of tax impositions, but always by their technical names.
“ Again, ‘ banks and savings institutions ’ were exempt from the operation of the fourth section of the Act of May 1st 1808, and in the proviso of the same section we find ‘ building associations ’ exempt from liability ‘ for any tax to the Commonwealth, when such companies make or declare no dividends.’ And further on, in the General Tax Act of April 21th 1871, in section 5, both classes are included in the exemption, as follows, to wit: ‘ excepting also banks a/ncl savings institutions, building associations and foreign insurance companies.’ And also in the third section of the Act of March 20th 1877, entitled ‘ An Act to equalize taxation of corporations and companies,’ the same designation of corporations is used to save them from the tax imposed, ‘ except building associations, banks, smi/ngs institutions and foreign insurance companies.’ We cannot, therefore, arrive at any other conclusion than that ‘ banks and savings institutions’ have been uniformly applied to a different class of corporations than ‘ buildmg associations,’ and hence that the latter are not, by any legislative understanding, within the exception of the fourth section of the Act of June 7th 1879.
“ We are of the opinion that the defendant is liable for the tax assessed under the law as it now stands, and therefore find in favor of the plaintiff for the sum of seventy-three and 3-100 dollars ($73.03), and against the defendant, the Bourgnignon Building Association.”
The following exceptions were filed by the Bourguignon Building Association to the above judgment and finding of the Court:
(1) Because the leaimed court erred in deciding that the General Revenue Act of June 7th 1879, repealed the provisions of the Act of April 10th 1879, exempting defendants from State taxation.
(2) Because the learned court erred in deciding that the defendants were taxable upon the capital stock under the General Revenue Act of June 7th 1879.
(3) Because the learned court erred in entering judgment for the Commonwealth on the case stated.
[Bourguignon Building Association O. Commonwealth.]
The Court dismissed the exceptions, whereupon the building association took this writ of error, assigning for error, the dismissal of the exceptions and the entering of judgment in favor of the Commonwealth.
J. W. M. Newlin and M. H. Stutzbach (J. P. Klinges with them), for the plaintiffs in error.
(1.) The Act of April 10th 1879 is an express declaration of the legislative intention that building associations shall be exempt from taxation. The general Eevénue Act of June 7th 1879, approved within a month of the April Act, contains only the usual general words used in all bills taxing corporations, and does not name building associations. Though approved on different dates, during the same legislative session, the two acts were in fact passing through the formal stages of enactment simultaneously, and, we contend, they must be read together. They can be, and therefore should be, construed harmoniously, so that both may stand. Building associations are expressly named and exempted in the April Act — they are not expressly named and taxed in the June Act. There is therefore no expressed inconsistency. On general principles a subsequent general statute does not repeal a prior special statute: Kilgore v. Commonwealth, 9 W. N. C. 184; Brown v. Commissioners, 9 Harris 37; M‘Farland v. State Bank, 4 Ark. 410 ; Ottawa v. La Salle, 12 Ill. 339; Shinn v. Commonwealth, 3 Grant Cas. 205; Bounty Accounts, 20 P. F. S. 96; Williams v. Pritchard, 4 T. R. 2.
The general and permanent legislative intent is shown by the fact that by all the tax laws passed prior to the Act of April 10th 1879 (see section 4 of Act of May 1st 1868 ; section 5 of Act of April 29th 1874, P. L. 70 ; and section 1 of Act of March 20th 1877, P. L. 6), building associations were in express terms exempted from taxation; aud there was, therefore, at the time of the passage of the Act of April 10th 1879, no law in force imposing a tax upon the capital stock of- these associations from which they could then be exempted. There would, therefore, be no purpose in said exemption clause if it related only to laws then in force imposing taxes, for there were none for this purpose. There must, therefore, have been some other pirrpose to be attained for inserting this exemption clause; and this purpose, we claim, was to exempt them from all taxes to be imposed by the Acts then before the legislature (such as the Eevenue Act of June 1879, then in process of enactment), in which these associations were not called specially by their well-known name. While limited partnerships, insurance companies, transportation companies, mining companies and all other stock corporations are named by their proper names in the Act of June 7th 1879, as subjects of taxation, in no part of said act are building associations included by name, which we think the Legislature would have done (considering tbe fact that they had just passed a law exempting them) if they had intended to include them in said act. It does not seem possible that it could have been the intention of the legislature to enact a law imposing a tax on the capital stock of these associations, when almost in the same breath they had enacted and declared that they should not be subject to any law imposing such tax on capital stock.
This exemption is not merely from the operation of the acts specially named, but also from taxation “ by any other act.” This clearly meant subsequent general legislation. Had it been the intention to tax these associations by the Act of June 7th 1879, the legislature, no doubt, would have said so in clear terms; since the fact that they had been exempt,from the payment of a tax by the Act of April 10th 1879, was fresh in their mind.
Unless acts passed at the same session of the legislature, on the same subject, are read together, it may easily happen that the governor may affix his signature to two bills in the inverse order of the date of their final passage by the legislative houses, and thus by accident or design reverse the true legislative intent.
(2.) But even if the June Act repeals the April Act, we contend that building associations fall within the terms “ savings institutions,” which are exempted by the provisions of the June Act. The popular term “ building associations ” is a misnomer, “savings institutions” would be a more appropriate name, In the various acts relating to them they are termed “ mutual savings fund or building and loan associations.” — Act of April 12th 1859, preamble; Act of April 10th 1879. The savings character of the association, in the view of the legislature, is further indicated by the second section of the Act of April 12th 1859, and the thirty-seventh section of the Act of April 29th 1871, limiting the periodical payment on stock to a sum not exceeding $2 per share.
Lyman D. Gilbert, deputy attorney-general (Henry W. Palmer, attorney-general, with him), for the Commonwealth.—
This is a pure question of legislative intention, as expressed by tbe formal words of the Act of June 7th 1879, in connection with the provisions of former acts. Building associations are clearly included in the enacting clause of the act, and are not within the clause exempting “ foreign insurance companies, banks and savings institutions.”
The Act of May 1st 1868, is the first general codification of tax law. That act draws a distinction between “ savings institutions ” and “ building associations,” and shows (1) that where the legislature did not intend to tax building associations., they expressly exempted them by name; (2) that the legislature in that act treated “foreign insurance companies, banks and savings institutions” as a class, just as they do in the Act of June 7th 1879. The next general tax act was the Act of April 21th 1871, in which the same distinction was continued, both classes — “ savings institutions ” and “ building associations” — being expressly exempted by name. ' So in the next general tax law, of March 20th 1877, “building associations ” and “ savings institutions ” were distinguished, and both exempted by name. The inference from this prior legislation is irresistible that “ banks and savings institutions ” conveyed to the legislative mind a different meaning than that indicated by “ building associations.”
Now when we come to the tax law of June 7th 1879, and find that the former class (banks and savings institutions) are again expressly exempted, but that “ building associations ” by their identifying name are omitted from the exempting clause, the inference is equally strong that the legislature intended that such associations should cease to be exempt, and should fall under the taxing clause, within the general terms “ every company or association whatever,” etc. And the equity of the change is plain. “ Foreign insurance companies, banks and savings institutions ” are all taxable under another section of the same act, or under other acts, while “ building associations ” are not. It is more than doubtful if the exemption of such corporations would be constitutional under Art. IX. § 1 of the constitution.
No canon of construction warrants the argument, insisted on by the other side, that an act of the legislature is to be affected by another act passed on a prior day of the same session. On the contrary, this court has' held that they cannot inquire into circumstances attending the passage of a bill, but must construe the act just as they find it.
But further, we contend that the tax from which building associations were exempted by the Act of April 10th 1879, was not a similar tax to that imposed by the Act of June 7th 1879, —which is an annual tax on capital stock — but was, as expressly stated, “ the bonus or tax due to the Commonwealth upon the capital stock of corporations, as provided for by Act of May 1st 1868, or by any other act: ” i. e., it was the “ bonus ’’ or tax. imposed on the creation of a corporation under the Act of 1868, as the price of its birth. That is wholly different from the annual tax on capital stock, imposed by the 8th section of the Act of 1868. It follows therefore, that the Act of April 1879, operated on an entirely different subject; and (whether that is so or not) it cannot control the operation of the later Act of June 1879.
June 6th 1881.

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