Case Name: Catawissa Railroad Company v. Philadelphia & Reading Railway Company, Appellant
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1916-10-25
Citations: 255 Pa. 269
Docket Number: Appeal, No. 56
Parties: Catawissa Railroad Company v. Philadelphia & Reading Railway Company, Appellant.
Judges: Before Brown, C. J., Mestrezat, Potter, Stewart, Moschzisker, Frazer and Walling, JJ.
Reporter: Pennsylvania State Reports
Volume: 255
Pages: 269–277

Head Matter:
Catawissa Railroad Company v. Philadelphia & Reading Railway Company, Appellant.
Contracts — Construction—Intention—Leases—Corporations—Income tax — Agreement to pay — Act of May li¡., 1915, P. L. 183.
1. Where a lease specifically designates certain taxes which the lessee is to pay, and subsequently other taxes of a different character are levied upon the property, the principle expressio unius est exclusio alterius applies and the lessee will not be required to pay the additional taxes.
2. In an action by the lessor of a railroad property to recover from the lessee a tax levied by the Federal government upon the income which plaintiff derived from the property and which plaintiff had paid, it appeared that the lease provided thqt the lessee should “punctually and faithfully pay all taxes, charges and assessments which, during the continuance of the term hereby demised, shall be assessed or imposed under any existing or future law on the demised premises or any part thereof, or on the business there carried on, or on the receipts, gross or net, derived therefrom, or upon the franchises of said company, for the payment or collection upon the capital stock of the (lessor) or the dividends thereon, or upon the franchises of said compapy for the payment or collection of any of which said taxes the (lessor) may otherwise be or become liable or accountable under any lawful authority whatever.” Held, that such tax on income was not within the clear and specific terms of the lease, and was not contemplated by'the parties at the time of its execution, and that the plaintiff could not, require payment thereof by defendant; and defendant was given leave to move for judgment under the Act of May 14,1915, P. L. 483.
Mr. Justice Frazer dissents.
Argued March 21,1916.
Reargued April 17,1916.-
Appeal, No. 56, Jan. T., 1916, by defendant; from judgment of C. P. No. 4, Philadelphia Co., June T., 1915, No. 4842, for plaintiff for want of a sufficient affidavit of defense, in the case of Catawissa Railroad Company v. Philadel-' phia and Reading Raihvay Company.
Before Brown, C. J., Mestrezat, Potter, Stewart, Moschzisker, Frazer and Walling, JJ.
Reversed.
Assumpsit to recover money paid to defendant’s use under the terms of a lease. *
Rule for judgment for want of a sufficient affidavit of defense.
Before Carr, J.
The opinion of the Supreme Court states the facts.
The court entered judgment for plaintiff for want of a sufficient affidavit of defense. Defendant appealed.
Error assigned was in entering judgment for want of a sufficient affidavit of defense.
Abraham, M. Beitler, with him Charles Heebner, for appellant.
— Under the terms of the lease the taxes which the lessee could be required to pay were specified. The income tax is not specified therein, and therefore the lessee is not required to pay it.
John Hampton. Barnes, for the appellee.
— The lease imposed an obligation on the lessee to assume and pay so much of the Federal income tax against the lessor’s income as is chargeable after proper deductions have been made from the rentals received under the lease; the wording of this lease directing the payment by the lessee of certain taxes is broad enough to cover the income clause and should be construed to cover it in accordance with the general intention of the parties.
October 25, 1916:

Opinion:
Opinion by
Mr. Chief Justice Brown,
This action, brought on a lease between the appellee and appellant, executed December 7,1896, is for the recovery of income tax paid by the lessor to the United States government. The following is the clause iu the lease under which the court below entered judgment against the lessee: "The Railway Company shall and will also punctually and faithfully pay all taxes, charges, and assessments which, during the continuance of the term hereby demised, shall be assessed or imposed under any existing or future law on the demised premises or any part thereof, or on the business there carried on, or on the receipts, gross or net, derived therefrom, or upon the said several issues of bonds or the interest thereon, or .upon the capital stock of the Catawissa company or the dividends thereon, or upon the franchises of the said company, for the payment or collection of any of which said taxes the Catawissa Company may otherwise be or become liable or accountable under any lawful authority whatever." Nothing in the foregoing justifies the judgment from which the Philadelphia and Reading Railway Company has appealed. The lease provides specifically what taxes it is to pay, and expressio unius est exclusio alterius. The income tax was not imposed by the government upon "the demised premises or any part thereof," nor "on the business there carried on," nor "on the receipts, gross or net, derived therefrom," nor upon the "issues of bonds or the interest thereon," nor "upon the capital stock of the Catawissa company, or the dividends thereon," nor "upon the franchises of the said company." It was imposed upon rental received by the lessor from the ^lessee; but what is to be found in the lease from which it is to be inferred that the intention of the parties to it was that the lessee was to pay any taxes that might be assessed on what it paid as rent? . In North Pennsylvania Railroad Company v. Philadelphia and Reading Ry. Company, 249 Pa. 326, relied upon by learned counsel for appellee in support of the judgment in its favor, the express covenant in the lease was that the lessee was to pay "all taxes......upon the yearly payments herein agreed to be made by the party of the second part to the party of the first part." It is well contended for appellant that the terms of the present lease are radically different. The judgment in favor of the plaintiff below imposed upon the defendant a burden which is not within the clear and specific terms of the lease, and is not, therefore, to be regarded as having been cpntemplatéd by the parties to it at the time of its execution.
The judgment is reversed, the rule to show cause why it should not be entered for want of a sufficient affidavit of defense is discharged and the record is remitted with leave to the defendant to move for judgment under the Act of May 14,1915, P. L. 483. .