Appeals, No. 258, March T., 1953 and No. 9, March T., 1954, from decree of Court of Common Pleas of Allegheny County, Oct. T., 1947, in Equity, No. 3471, in cases of Borough of Pleasant Hills v. Township of Jefferson et al. Record remanded; reargument refused December 16, 1953.
Louis Rosenberg, for Borough, plaintiff.
Alvin J. Ludwig, with him Irwin I. Tryon and Tryon & Ludwig, for Township, defendant.
Paul G. Perry, Gustav W. Wilde and Burgwin, Ruffin, Perry & Pohl, filed a brief for interested parties under Rule 46.
Before Stern, C.j., Stearne, Jones, Bell, Chidsey, Musmanno and Arnold, JJ.
OPINION BY MR. CHIEF JUSTICE HORACE STERN
This proceeding in equity presently involves the question of the proper apportionment of assets and liabilities between plaintiff, the Borough of Pleasant Hills, and defendant, the Township of Jefferson. (The latter has since been erected into the Borough of Jefferson but will still be referred to herein as the township.) The borough was created out of the township and incorporated on April 1, 1947.
The original complaint, in addition to a prayer for such apportionment, sought an injunction restraining the township commissioners from constructing water mains or otherwise expending the moneys procured by the township from the sale of a certain issue of bonds. The court below granted the injunction and at the same time appointed an assessor to prepare an accounting of the township's assets and liabilities as an aid in the proper disposition of the case. The township appealed to this court and we reversed the decree enjoining the defendants and remanded the record to the court below for further proceedings in connection with the apportionment prayed for: Pleasant Hills Borough v. Jefferson Township, 359 Pa. 509, 59 A.2d 697. Thereafter the assessor submitted a report containing a list of the assets and liabilities to be adjusted and valuations thereof, and fixing the relative percentages of the assessments as between the borough and the township for the year 1947 as the basis of the adjustment as prescribed by section 703 of the Act of May 4, 1927, P.L. 519. The percentage thus fixed was approximately 47% for the township and 53% for the brough. Exceptions were filed to the report of the assessor by both parties, considerable testimony was taken, and the chancellor filed an adjudication which was subsequently sustained in all respects by the court
in banc. From the final decree which was entered both the borough and the township appeal and now make various contentions in regard to the apportionment of certain assets and liabilities of the township as determined by the court below.
The first of the questions in dispute arises from the fact that shortly before the incorporation of the borough the township had sold a bond issue of $325,000, the gross proceeds of which, with premium and adjusted interest, amounted to $326,076.56. The purpose of the issue was the purchase of existing water lines, the construction of additional ones, and the procuring and maintaining of a supply of water for the residents of the township. Out of the proceeds which the township had in bank it paid the sum of $10,045.75 for maps, plans and specifications for the construction of the lines, and a few days after the incorporation of the borough, namely, on April 7, 1947, the township commissioners awarded the principal contracts for the work of construction; the contracts were executed on April 24, 1947. The court held that the liability of the township on these bonds as of April 1, 1947 (that being the time of the incorporation of the borough and therefore, under sections 701 and 702 of the 1927 Act, the date governing the apportionment of the assets and liabilities of the township) was not the sum of $325,000, the principal of the bond issue, but only the difference between that amount and the amount of the cash proceeds then in bank, namely $316,030.81.
In our opinion this holding was erroneous. The proceeds of the bond issue were not available to the township for any purpose other than that originally proclaimed by it: Wilds v. McKeesport City School District, 336 Pa. 275, 278, 9 A.2d 338, 339; ...