Appeal 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.
Paul H. Rhoads, with him George B. Balmer, Henry W. Rhoads, Ralph W. D. Levan, City Solicitor, and Balmer, Kershner, Mogel & Speidel, and Rhoads, Sinon & Reader, for appellants.
William H. Smith, First Assistant Counsel, with him Harry L. Rossi, Deputy Auditor General, for Auditor General, appellee.
Morris Gerber, Deputy State Treasurer, for State Treasurer, appellee.
Edward Friedman, Attorney General, for Commonwealth, appellee.
Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell concurs in the result. Dissenting Opinion by Mr. Justice Cohen. Mr. Justice O'Brien joins in this dissenting opinion.
Under the Act of June 28, 1895, P. L. 408, § 2, as amended, 72 P.S. § 2262, there must be paid annually to the treasurers of the various municipal subdivisions of the Commonwealth the entire proceeds of the two percent tax paid upon premiums by foreign fire insurance companies. The Act further requires each recipient municipality to pay over the amount received by it to the relief fund association or pension fund covering the fire companies engaged in fire-fighting service in the municipality.
The City of Reading long ago recognized The Volunteer Firemen's Relief Association of the City of Reading (hereinafter the Relief Association) as the proper ultimate recipient of the funds received by it under the Act of 1895 and for many years has turned over these funds to the association. The association, in turn, has deposited them in its general fund.
The Auditor General of the Commonwealth is charged with the duty of auditing the accounts and records of every recipient of a state appropriation of money or any portion of a state tax to insure that funds received are expended only for the purposes for which they were paid. If they are not so expended, the Auditor General must notify the Governor and decline thereafter to approve requisitions for payment of such funds to the offending recipient until the improperly expended amount is restored by a proper expenditure. Act of April 9, 1929, P. L. 343, § 403, 72 P.S. § 403.*fn1
Pursuant to Formal Opinion No. 684 of the Attorney General of Pennsylvania, 1957 Official Opinions of the Attorney General 20, the Auditor General's Department began to audit the accounts and records of firemen's relief fund associations which receive the funds described above. In concluding its audit of appellant, Relief Association's*fn2 accounts for 1959, 1960 and 1961 the Auditor General noted seven items of improper expenditure. As required by the Act of 1929, the Auditor General thereupon declined to approve further payments under the provisions of the Act of 1895.
Contending that the challenged expenditures were in fact not improper, appellants sought a writ of mandamus to compel appellees, the Auditor General and the State Treasurer, to approve and make payments to the City. The Court of Common Pleas of Dauphin County dismissed their complaint, holding that mandamus would not lie to compel payment, but this Court reversed ...