Appeal, No. 34, May T., 1964, from judgment of Court of Common Pleas of Dauphin County, No. 146 Commonwealth Docket, 1963, in case of The Volunteer Firemen's Relief Association of the City of Reading and City of Reading v. Thomas Z. Minehart, Auditor General, and Grace M. Sloan, State Treasurer.Judgment reversed.
Paul H. Rhoads, with him George B. Balmer, Henry W. Rhoads, Ralph W. D. Levan, City Solicitor, and Snyder, Balmer & Kershner, and Rhoads, Sinon & Reader, for appellants.
Morris Gerber, Deputy Auditor General, with him William H. Smith, First Assistant Counsel, for Auditor General, Russell A. Davis, Counsel for State Treasurer, Edward Friedman, Deputy Attorney General, and Walter E. Alessandroni, Attorney General, for appellees.
Andrew R. Klein, filed a brief for amicus curiae.
Before Bell, C.j., Jones, Cohen, Eagen, O'brien and Roberts, JJ.
OPINION BY MR. JUSTICE COHEN
By the Act of June 28, 1895, P.L. 408, § 2, as amended, 72 P.S. § 2262, the amount collected by the Commonwealth from the two percent state tax on gross premiums received annually by foreign fire insurance companies from business done by them within the Commonwealth is to be paid by the State Treasurer to the treasurers of the various municipalities within the Commonwealth and by the latter to the firemen's relief associations or pension funds in each municipality. Payment from the State Treasurer to the municipalities is to be made pursuant to warrants drawn by the Auditor General from time to time.
As originally enacted in 1895, this statutory provision contained no direction regarding payment by the municipalities to the firemen's relief fund associations or pension funds. We pointed out in an early case that once the moneys were paid by the State Treasurer to the municipalities, they might be used by the latter for any lawful purpose. Firemen's Relief Ass'n v. Scranton, 217 Pa. 585, 66 Atl. 1103 (1907).
The present requirement that the moneys be paid to firemen's associations or funds was first added by the amendment of April 25, 1929, P.L. 709. Shortly thereafter, in an opinion from the office of the Attorney General of Pennsylvania, Relief Funds for Firemen, 13 Pa.D. & C. 65 (1929), the Auditor General was advised that if a municipality had no firemen's relief
fund association, it had no right to retain the moneys received from the State Treasurer and should return them. And in Commonwealth v. Souder, 172 Pa. Superior Ct. 463, 94 A.2d 136 (1953), aff'd, 376 Pa. 78, 101 A.2d 693 (1954), it was decided that individual members of an association designated by a municipality to receive these moneys could not divide the moneys privately but had to use them for the purpose indicated by the statute - i.e., the general relief and protection of the members of the association. It was noted, however, ever, that "The manner in which the [relief] fund was to be set up or administered was left by the legislature to the municipalities." 172 Pa. Superior Ct. 463, 470, 94 A.2d 136, 139.
Finally, in his Formal Opinion No. 684, 1957, Op. Att'y Gen'l 20, the Attorney General of Pennsylvania informed the Auditor General that the latter has a duty to audit the accounts and records of firemen's relief fund associations which receive the moneys paid to the municipalities by the State Treasurer. This duty arises from section 403 of The Fiscal Code, Act of April 9, 1929, P.L. 343, 72 P.S. § 403, which requires the Auditor General's Department to audit the accounts and records of every recipient of money payable from the State Treasury as far as is necessary to satisfy the Auditor General that the money received is being expended properly. If it is not being expended properly, the Auditor General is ...