Court Opinion

ID: 9756483
Source: CourtListenerOpinion
Date Created: 2023-08-28 21:30:36.426551+00
Date Added: 2024-06-11T07:28:23.597160
License: Public Domain

*553KELLEY, Judge,
dissenting.
I respectfully dissent.
As Mr. Chief Justice Marshall so aptly stated in his oft-quoted phrase, “the power to tax involves the power to destroy...” McCulloch v. Maryland, 4 Wheat. 316, 17 U.S. 316, 431, 4 L.Ed. 679 (1819). In reviewing the claims raised in the instant appeal, I believe it is necessary to keep this principle in mind.
That taxes must be collected by the Commonwealth and its various lesser constituents cannot be disputed. They are “burdens or charges imposed by the legislative power[1] upon persons or property to raise money for public purposes, and to defray the necessary expenses of government.” Woodward v. City of Philadelphia, 333 Pa. 80, 86, 3 A.2d 167, 170 (1938). See also Young Men’s Christian Association of Germantown v. Philadelphia, 323 Pa. 401, 413, 187 A. 204, 210 (1936) (“Taxes are not penalties but are contributions which all inhabitants are expected to make (and may be compelled to make) for the support of the manifold activities of government. Every inhabitant and every parcel of property receives governmental protection. Such protection costs money. When any inhabitant fails to contribute his share of the costs of this protection, some other inhabitant must contribute more than his fair share.”)
In addition, that this necessary and awesome power has been conferred upon the legislative branch of our government is likewise beyond dispute. Indeed, as the Pennsylvania Supreme Court stated long ago:
That the power to tax is peculiarly a power of the legislature has never been questioned in this country and has frequently been asserted by our courts. The taxing power, one of the highest prerogatives, if not the highest, of the legislature, must be exercised through, representatives chosen by the people. It is clearly within the interdiction of this principle of constitutional government against delegation. True, in this state, and in many others, the power to tax has been delegated to and exercised by smaller units of state government, such as municipal bodies chosen by the people. For, while the principle of non-delegation of taxing power is the general rule, delegation to municipal authorities has been recognized as lawful. This is an exception to the general rule, but such delegation is kept within defined lines, with supervisory control always vested in elective bodies. There are reasons for this exception, at least in this state. Justice Sharswood in Durach’s Appeal, [62 Pa. 491, 493-494 (1870)], said: “Municipalities, such as counties, cities and boroughs, are public corporations created by the government for political purposes. They are invested with subordinate legislative powers for local purposes connected with the public good... To carry out these objects [of local government] there must be money, and hence the necessity of taxation for that purpose.” These local units of government possess a legislative body chosen by the people, and delegation of power to them does not actually remove this important subject from the control of the people. Justice Shars-wood stated that the great principle which lies at the base of our tax institution is popular representation. It was the reliance on this principle that induced the framers of our Constitution to plant in the legislature the taxing power without stint or reservation. As popular representation is one of the attributes of our lesser units of government, it would seem that the theory he speaks of is maintained by delegation to them.
*554There is another historical reason which supports the right of the legislature to entrust local taxation to municipal governments. Local government units, in many instances, antedated federal or state governments and before their inception levied taxes. In this state this is particularly true. Our earliest taxes were levied by the townships under the laws of the Duke of York for poor relief and governmental expenses. Under the proprietary government the county was the taxing unit. When the legislature authorized cities, townships, boroughs and counties to levy taxes, it merely carried on a system that had been historically in existence.
Wilson v. Philadelphia School District, 328 Pa. 225, 229-230, 195 A. 90, 94 (1937) (citations omitted).
However, the exercise of this awesome legislative power is circumscribed. It may only be exercised by a legislative body and, generally speaking, may not be constitutionally delegated by that body. See, e.g., William Penn Parking Garage, Inc. v. City of Pittsburgh, 464 Pa. 168, 217, 346 A.2d 269, 294 (1975) (“[W]e agree that the power to tax is a legislative power, and that its delegation to the judiciary would be unconstitutional”) (citations omitted); Danson v. Casey, 33 Pa.Cmwlth. 614, 382 A.2d 1238, 1241 (1978), aff'd, 484 Pa. 415, 399 A.2d 360 (1979) (“The power of taxation, in all forms and of whatever nature, is the sole prerogative of the General Assembly, and although delegation of this power to municipalities and school districts without any definite restrictions has been upheld, such a delegation is impermissible when made to a nonelective body.”) (citations omitted).
Likewise, the Commonwealth, as sovereign, may act to sell one’s property to recover the taxes assessed thereon. Indeed, as the Pennsylvania Superior Court has noted:
Every owner of real estate holds it subject to the paramount sovereign power of the Commonwealth to subject it to the burden of taxes and, if need be, to enforce the collection thereof by sale of the land. The land itself is made liable for taxes by assessment and lien, separate and apart from personal liability which may be imposed by statute on the owner for their payment, and an owner is powerless to divest his land of its tax burden except by payment of the taxes.
Day v. Ostergard, 146 Pa.Super. 27, 21 A.2d 586, 588 (1941). I believe that this sovereign authority to compel the sale of real estate to satisfy a tax debt, like the sovereign authority to impose the tax, cannot be delegated, or assigned, by a legislative body.
The crux of the instant appeal is the interpretation of the language of the Municipal Claims and Tax Liens Act (Act)2. In particular, this case involves the interpretation of section 33 of the Act which provides, in pertinent part, that “[a]ny claim filed or to be filed, under the provisions of this act, and any judgment recovered thereon, may be assigned or transferred to a third party, either absolutely or as collateral security, and such assignee shall have all the rights of the original holder thereof.” 53 P.S. § 7147 (emphasis added).
The majority concludes that by using the term “any claim”, section 33 allows a municipality to assign both its tax and municipal claims, and the assignee thereby steps into the shoes of the municipality and may enforce the claim as that entity could. I strongly disagree with this notion.
In examining this provision, the majority notes that the Act makes a distinction between a “tax claim” and a “municipal claim”. Section 1 of the Act defines a “tax claim” as “the claim filed to recover taxes.” 53 P.S. § 7101. Section 1 defines a “municipal claim” as:
*555both (1) the claim arising out of, or resulting from, a tax assessed, service supplied, work done, or improvement authorized and undertaken, by a municipality, although the amount thereof be not at the time definitely ascertained by the authority authorized to determine the same, and a hen therefor be not filed, but becomes filable within the period and in the manner herein provided, (2) the claim filed to recover for the grading, guttering, macadamizing, or otherwise improving, the cartways of any public highway; for grading curbing, recurbing, paving, repaving constructing, or repairing the footways thereof; for laying water pipes, gas pipes, culverts sewers, branch sewers, or sewer connections therein; for assessments for benefits in the opening, widening or vacation thereof; or in the changing of water-courses or the construction of sewers through private lands; or in highways of townships of the first class; or in the acquisition of sewers and drains constructed and owned by individuals or corporation, and of rights in and to use the same; for the removal of nuisances; or for water rates, lighting rates, or sewer rates, and (3) the claim filed to recover for work, material, and services rendered or furnished in the construction, improvement, maintenance, and operation of a project or projects of a body politic or corporate created as a Municipal Authority pursuant to law.
Id. Thus, the Act makes explicit distinctions between assessments imposed as a form of taxation, and assessments imposed for municipal works that are completed and affect the physical nature and value of real property.
Our courts have long recognized a distinction between assessments imposed for taxes and those imposed 'for municipal improvements. As the Pennsylvania Supreme Court has stated:
A tax was anciently defined to be a certain aid, subsidy or supply granted by the commons of Great Britain, and constituting the King’s revenue, 4 Inst. 216-33, as the name itself imports, from its derivation, it means tribute, and belonged to the King’s treasury. And I think the common mind every where has taken in the understanding that taxes are a public imposition, levied by authority of the government, for the purpose of carrying on the government in all its machinery and operations; that they are imposed for a public purpose; whereas municipal charges are often for the benefit of lot-holders on a particular street, and the assessment, as in this instance, induced by the request, made known according to their charter, of a majority of the inhabitants.
The assessment or charge is an equivalent from the owner for the improvement made to the value of the property. Such assessments are not collected like public taxes, but generally, as in this instance, a particular mode of recovering the charge is pointed out by the law. It is evident from the face of all of acts of assembly in relation to this incorporated district, that the legislature had in view the difference between taxes, property so denominated, and charges or assessments for the improvement of particular streets as the advance of population required such improvement.
The Northern Liberties v. St. John’s Church, 13 Pa. 104, 107 (1850).
Contrary to the majority, and like Appellant, I believe that the only construction of section 33 of the Act that comports with Article 2, Section 1 of the Pennsylvania Constitution requires this court to read “any claim” as meaning “any municipal claim”. That is, I believe that the only construction of this section, which would comport with our constitution, is one that permits a municipality to assign its municipal claims to third parties, and the assign-ee thereby obtains all of the rights of the municipality. I believe that allowing a municipality to assign its tax claims, and transfer its powers in their collection and *556enforcement, constitutes an unconstitutional delegation of its taxing authority in violation of Article 2, Section 1 of the Pennsylvania Constitution.
In fact, I believe that our construction of section 33 of the Act is controlled by the Pennsylvania Supreme Court’s opinion in Hagemann’s Appeal, 88 Pa. 21 (1879). In that case, Conrad Schad owned property in the city of Pittsburgh (City). Pursuant to the Act of January 6, 1864, P.L. 1131, the City filed municipal claims against the property. The claims were based on assessments made by the City for the costs of widening, extending, grading and paving streets in the City on the properties benefited thereby. The City initiated a scire facias proceeding on the claims, judgments were obtained, executions had issued, and Schad’s property was advertised to be sold to satisfy the judgments. On the day before the sale, Schad went to William Ha-gemann and asked him to advance the money owed on the claims plus costs to prevent the sale. As a favor to Schad, Hagemann paid the money due to the City’s solicitor, who then assigned to Ha-gemann any rights the City had in the claims.
After Schad’s death, the property against which the liens were filed was sold pursuant to an order of the Orphans’ Court of Allegheny County (trial court). The amount realized from the sale was sufficient to satisfy Hagemann’s claims against the property, but was not enough to satisfy the hens held against the property by other creditors. Hagemann claimed that because his rights were assigned to him by the City, his liens were entitled to the priority enjoyed by the City. When the proceeds of the sale were distributed to Hagemann, the other creditors filed exceptions to the distribution. The trial court sustained the exceptions, and Hagemann appealed the matter to the Pennsylvania Supreme Court.
In reversing the trial court’s order sustaining the exceptions, the Supreme Court stated the following:
The [Act of January 6, 1864, P.L. 1131] provides, inter alia, for the widening, extending, grading and paving of streets in the city of Pittsburgh, and for assessing the costs and expenses thereof on the property benefited thereby. It also declared .the assessments thus made should be hens on the properties charged therewith from the commencement of the improvement for which they were made. The [trial] court thought the power to make and collect these assessments was an attribute of sovereignty, and could not be delegated or exercised by any other than the city; and as it had received the money, it mattered not in what manner the priority of hen was extinguished. It thought to hold the full claim of the city in these judgments could be assigned would be hazardous to the person against whose property the claim was assessed, and to the public. It will, however, be observed that this was not an ordinary tax imposed for a public purpose. It was a municipal charge for the benefit of lot-holders on the particular street. The assessment was intended as an equivalent from the owner for the improvement made to the value of his property. They were not to be collected like public taxes. The act directed the hens to be filed in the District Court of the county, in the same manner as mechanic’s hens are filed, and that writs of scire facias and levari facias be issued thereon, in hke manner. Hence the mode of assessment to pay some persons damaged by the improvement, as well as the manner of their collection, distinguish these assessments from public taxes generally. Conceding, however, in a broad sense, that in their inception, these assessments may be considered as taxes, how stands the case? When the assignment was made the claim had changed its form. It had not only become a judgment in rem ripe for execution; but the latter had actually issued. The collection of the judg*557ment was to be enforced like other judgments in rem. No unusual powers of sale attached to the judgment. Its only preference over a mechanic’s hen was its priority.

The facts show that this is not the case of one buying a tax against a taxpayer, without the knowledge or consent of the latter, and with a view to enforce unusual remedies against him ; but it was the purchase of judgments with restricted remedies, at the earnest solicitation of [Schad],

Granting then that it would be against the policy of law to permit a municipality to become “a farmer of taxes” and to sell and transfer against the wishes of the tax-payer, a tax, with harsh or unusual powers for its collection, yet that is not this case. The law gave to the city one mode only for the collection of these assessments. It created no personal liability. The hen of the judgments and right of sale were limited to the specific properties described. To prevent the city from selling the property at a sacrifice, at the urgent request of [Schad], and to give him further time for their payment, [Ha-gemann] advanced the money. Both parties to the judgments were satisfied. What right has a third party to complain? The interposition of [Hagemann] worked no injury to other creditors. Without any action on his part, the judgments were preferred hens. [Schad], to further his own interests, and to the prejudice of no one, cause the equitable right of enforcing the hens resting on his property to be transferred to [Ha-gemann]. Under ah the circumstances we cannot see that any principle of public policy was thereby assailed. If not, then ah the incidents of the preferred hens passed with the assignment to [Ha-gemann].
Hagemann’s Appeal, 88 Pa. at 26-27 (citation omitted and emphasis added).
By interpreting section 38 of the Act so as to include the power to assign tax claims against the wishes of the taxpayer, I beheve that the majority is allowing Allegheny County to become “a farmer of taxes” in violation of public pohcy. Moreover, I beheve that such a construction constitutes an impermissible delegation of the taxing powers conferred under Article 2, Section 1 of the Pennsylvania Constitution. As a result, I would reverse the order of the Court of Common Pleas of Allegheny County dismissing Catherine Maierhoffer’s complaint with prejudice.

. The legislative power in Pennsylvania is conferred upon our General Assembly and its subordinate constituents by Article 2, Section 1 of the Pennsylvania Constitution which states that ‘‘[t]he legislative power of this Commonwealth shall be vested in a General Assembly, which shall consist of a Senate and a House of Representatives.” Pa. Const. art. II, § 1.

. Act of May 16, 1923, P.L. 207, as amended, 53 P.S.§§ 7101-7505.