Opinion ID: 2157565
Heading Depth: 1
Heading Rank: 2

Heading: This brings us to the second question: Is the ordinance, when so construed, unconstitutional as an infringement upon the independence of the judicial branch of government?

Text: Two propositions bearing upon that question are self-evident. One is that the privilege of practicing law carries with it no exemption from the duties of citizenship, including the sharing with all others the expense of government, national, state and municipal; lawyers pay federal income taxes, state personal property taxes, municipal real estate and net profits taxes the same as all other persons. The other proposition is that lawyers are officers of the courts and it is solely from the courts that they derive the authority to practice their profession; the legislative branch of government, whether state or municipal, can neither grant nor revoke such authority, nor prescribe or in any manner interfere with their functions and activities, nor regulate the conduct of their practice. If, therefore, the present ordinance involved any encroachment upon the judiciary it would represent but a vain attempt on the part of the municipal authorities to exercise a power which they do not possess; ( Hoopes v. Bradshaw, 231 Pa. 435, 487, 80 A. 1098, 1099.). The question, therefore, is whether the tax which it imposes does constitute any such encroachment upon, or interference with the judiciary thereby violating the constitutional separation of power among the three branches of government. In deciding that question we must be careful not to be misled merely by inept terminology. Thus the ordinance requires the payment of a fee of $3.00 for procuring a mercantile license. Taken literally, the word license would connote the granting of a permission, and, since a mercantile license tax is on the privilege of doing business, [3] it might offhand appear that the obtaining of a license is made a prerequisite or condition for the right of the taxpayer  in this case the lawyer  to continue in the practice of his business or profession. But nothing could be further from the truth, for it is too clear for discussion, and indeed we have definitely held, that the charge of $3.00 is not in fact a license fee but a registration charge,  a mere procedural device to establish the identity of those who, by reason of their occupations, are subject to the tax, the $3.00 being merely to cover the clerical expense of the registration and issuance of the license certificate: Armour & Co. v. Pittsburgh, 363 Pa. 109, 112, 113, 69 A. 2d 405, 407; National Biscuit Co. v. Philadelphia, 374 Pa. 604, 616, 618 (footnote 4), 98 A. 2d 182, 188, 189. It need scarcely be said that an attorney at law requires no license, other than from the courts, to practice his profession; indeed merchants also, for that matter, have the legal right to conduct their business operations without license by governmental authority save only in the case of certain special businesses which, because of their nature, are subject to the police power, as, for example, the sale of liquor. But the important and indeed the controlling point here is that a lawyer's right to engage in, or continue to engage in, the practice of his profession is not conditioned upon his procuring the so-called license or paying the tax imposed by the ordinance, nor is it in any manner regulated or affected thereby; if he fails or refuses to carry out any of the duties imposed upon him therein the only penalty is that which applies ordinarily to all other tax measures, namely, an entry of judgment and execution against his property, fine and possibly imprisonment for making false or fraudulent statements on a return or wilful default in filing one. In short, the ordinance is purely a revenue measure; it does not interfere with, or seek to exercise any power or authority over, the rights and obligations of the lawyer as an officer of the court or in the pursuance generally of his professional practice; in those respects it nowise differs from all the other taxes which lawyers now pay in common with their fellow citizens. And it may well be asked, What is the practical difference between a revenue tax on income or gross receipts, admittedly valid, and a revenue tax on a privilege measured by that same income or gross receipts? It would be a work of supererogation to cite the numerous cases in other jurisdictions which, with little if any break in their unanimity, hold that while, as members of the bar, their admission to practice and their professional conduct after admission are essentially matters to be regulated by the judiciary department of the government, as members and citizens, on the other hand, of nation, state and city, their rights, privileges and immunities, as well as their duty to pay their share of the expenses of government like those of any other citizen, are controlled by the laws and ordinances of the political body of which they are a part and from which they receive protection. [4] The contention that they are exempt from municipal license, privilege, or occupation taxes has been consistently denied by courts and text writers alike, as shown by the authorities collated in the annotation entitled Validity of municipal license, privilege, or occupation tax on attorneys in 16 A.L.R. 2d 1228 et seq. See also 18 L.R.A. 409; 5 Am. Jur. pp. 268, 269; § 12; McQuillin, Municipal Corporations, (3rd ed.) volume 9, p. 293, § 26.130. In the United States Supreme Court as early as the case of Royall v. Virginia, 116 U.S. 572 (1886), a license tax on a lawyer was held to be an occupation tax for which the so-called license was merely a receipt and not an authority,  nothing more than a mere form of imposing a tax for revenue and not an exaction for purposes of regulation. The court there said: In the case of Humphreys v. The City of Norfolk, supra, the Supreme Court of Appeals of Virginia, referring to the previous case of Ould v. City of Richmond, said: `The objection was made in that case that a power to license involves in its exercise the power to prohibit without such license; and that such power vested in a municipal corporation is incompatible with the rights of attorneys conferred by their general license to practice in any and every part of the State. This objection did not prevail. Judge ANDERSON, upon this point, speaking for the entire court, conceded that the city authorities could not prohibit attorneys at law, already licensed, from practicing their profession within the city limits. The exercise of the vocation was, however, a civil right and privilege, to which are attached valuable immunities and pecuniary advantages, and is a fair subject of taxation by the State and by municipal corporations.. . . `The principles settled by that case,' continued the court, `are decisive of this. In neither case is the attempt made to prohibit the exercise of the business or vocation. The license required by the corporation is merely a mode of assessing the tax; if it be reasonable and just, it matters but little by what name it is called.' Since the right of the municipality to impose this tax on lawyers is challenged on the ground that it is an invalid interference with their activities as officers of the courts, the charge is somewhat analogous to that long made against the right of the federal government to tax the salaries of state officials. The view originally prevailed that such tax was an unconstitutional encroachment upon the independence of the state government and an interference with its capacity to perform its functions. But in Graves v. New York ex rel. O'Keefe, 306 U.S. 466, the United States Supreme Court, taking a more practical view of the problem, reversed the earlier decisions so holding. [5] It is argued that if the municipality be conceded the power to tax members of the bar on the privilege of conducting their professional activities, so great a tax might be imposed as to make it difficult, if not impossible, for them to continue in practice. But, apart from the fact that a similar argument would be equally applicable to all other tax impositions, the famous cliche of Chief Justice MARSHALL in McCulloch v. Maryland, 4 Wheat. 316, 431, that the power to tax involves the power to destroy, questioned by Mr. Justice HOLMES in his dissenting opinion in Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U.S. 218, 223, has been practically abandoned as being an unrealistic legal pronouncement. Plaintiff makes some attack on the ordinance on the ground that its title is constitutionally defective. In the National Biscuit Co. case, however, we said that such criticisms did not merit serious discussion. Decree reversed and bill dismissed; each party to bear its own costs.