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decided: May 13, 1968.


Appeal from order of Court of Common Pleas of Dauphin County, No. 592 Commonwealth Docket 1965, in case of The Firemen's Relief Association of Washington, Pa. v. Thomas Z. Minehart, Treasurer, and Grace Sloan, Auditor General, of Commonwealth of Pennsylvania.


Raymond Kleiman, Deputy Attorney General, with him William C. Sennett, Attorney General, for Commonwealth, appellants.

Frank C. Carroll, with him Alexander McIlvaine, Henry W. Rhoads, and McIlvaine and Carroll, and Rhoads, Sinon & Reader, for appellee.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell joins in this opinion and files a concurring opinion. Mr. Justice Eagen concurs in the result. Concurring Opinion by Mr. Chief Justice Bell. Dissenting Opinion by Mr. Justice Cohen. Mr. Justice Jones joins in this dissenting opinion. Dissenting Opinion by Mr. Justice O'Brien.

Author: Roberts

[ 430 Pa. Page 68]

Foreign fire insurance companies in Pennsylvania are assessed a tax of two percent on premiums collected by them in this Commonwealth. 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 in Pennsylvania a portion of this tax money corresponding to the amount of foreign fire insurance written in the receiving municipality. This same Act of 1895 further requires the recipient municipality to pay over the amount received to the designated firemen's relief or pension fund which serves the specific area. The City of Washington and the Township of Canton, having designated the Firemen's Relief Association of Washington as the authorized recipient of its share of tax money, have been collecting funds from the state and disbursing them to the Association since 1931.

By letter of January 12, 1965 the Auditor General informed the Association that payments under the Act of 1895 would thereafter be suspended. According to this letter, the Auditor General concluded that certain by-laws of the Association rendered its pension plan invalid for purposes of receiving said funds.*fn1 The challenged

[ 430 Pa. Page 69]

    by-laws provided (1) for pension benefits based solely upon years of service;*fn2 (2) for certain medical benefits for any member of the Association in good standing;*fn3 and (3) for certain death benefits to the family of a deceased member of the Association.*fn4 In response to this refusal to pay, appellee brought an action of mandamus in the Court of Common Pleas of Dauphin County. That court issued the mandamus, directing that appellee be paid its proper share of the

[ 430 Pa. Page 70]

    tax moneys collected under the Act. From that decision the Auditor General and Treasurer have taken this appeal.

Appellants maintain that the Act of 1895 does not authorize the payment of moneys to any pension plan which fails to establish a minimum age for receiving benefits. They further contend that the Legislature did not intend to bestow Commonwealth funds upon any pension association which would use this money to provide medical and/or death benefits for its members. We are unable, however, to find any such limitations in the language of the Act of 1895, and thus agree with the court below that mandamus properly issued.

The Act of 1895 provides, in relevant part, as follows: "On and after the first day of January, one thousand nine hundred and nineteen, and annually thereafter, there shall be paid by the State Treasurer to the treasurers . . . [of the municipalities of this Commonwealth], the entire net amount received from the two per centum tax paid upon premiums by foreign insurance companies. . . . Each . . . [municipality] receiving any payment from the State Treasurer hereunder, shall forthwith pay the amount received to the relief fund association of, or the pension fund covering the employes of the fire department. . . [of such municipality]." (Emphasis supplied.)

It is readily apparent that, in the present case, the Auditor General has unilaterally decided that the only pension funds eligible for money under this statute are those which do not provide medical and death payments and which condition their benefits upon a minimum age. Since the statutory language quoted above fails to so limit the words "pension fund," we have, pure and simple, this classic problem of administrative law: To what extent may an administrative body or officer, under the guise of its regulatory power, actually

[ 430 Pa. Page 71]

    amend a legislative pronouncement? The answer to this question is clear. It cannot so amend. As this Court said in Commonwealth v. DiMeglio, 385 Pa. 119, 124, 122 A.2d 77, 80 (1956): "The power of an administrative agency to prescribe rules and regulations under a statute is not the power to make law, but only the power to adopt regulations to carry into effect the will of the Legislature as expressed by the statute: [citing cases]." In the present case it nowhere appears that the "will of the Legislature as expressed by the statute" even remotely condones the arbitrary placing of these conditions upon pension plans, and we must therefore conclude that this administrative officer has stepped squarely upon the toes of our legislature in direct contravention of established principles of administrative law and in flagrant disregard of Pennsylvania's judicial precedents.

Just recently this Court, in litigation involving the Firemen's Relief Association of Reading, set out the limitations on the Auditor General's power under the Act of 1895. The Auditor General sought to withhold funds from the Firemen's Relief Association of Reading on the ground that this association planned to use part of the money for certain death benefits that would not be available equally to all members of the association. This, said the Auditor General, was not permitted under the Act of 1895. The controversy first reached our Court on the issue of whether mandamus was the proper remedy to compel payment of the funds to Reading. Volunteer Firemen's Relief Association v. Minehart, 415 Pa. 305, 203 A.2d 476 (1964). It was there held that mandamus would lie. The Court read the Act of 1895 as being a non-discretionary directive to the Auditor General that he shall pay this money to the municipality and that these funds may be used "by the latter for any lawful purpose." Id. at

[ 430 Pa. Page 72307]

, 203 A.2d at 478. (Emphasis supplied.) Cf. Firemen's Relief Association v. Scranton, 217 Pa. 585, 66 Atl. 1103 (1907).

Several statements made by the Court in the first Reading opinion shed additional light on the present problem. In deciding that mandamus was a proper remedy the Court noted that "mandamus will lie to compel action by an official where his refusal to act in the requested way stems from his erroneous interpretation of the law. [Citing case.] The present case falls squarely within these principles." 415 Pa. at 311, 203 A.2d at 479-80. Finally, the death knell was sounded for the Auditor General's position in that case when we said at page 308, 203 A.2d at 478: "'The manner in which the fund was to be set up or administered was left by the legislature to the municipalities.'", quoting from Commonwealth v. Souder, 172 Pa. Superior Ct. 463, 470, 94 A.2d 136, 139 (1953), aff'd, 376 Pa. 78, 101 A.2d 693 (1954).

The merits of the Reading mandamus were not reached by our Court until three years later, when, in Volunteer Firemen's Relief Association of the City of Reading v. Minehart, 425 Pa. 82, 227 A.2d 632 (1967), the result so clearly foreshadowed by our first Reading case came to actual fruition: the Auditor General was ordered to disburse the money. Facing practically the same problem confronting this Court today, we held in the second Reading case that the Auditor General could not read words into the Act of 1895, and since that act contained no language whatsoever indicating that death benefits had to be made available equally to all members of the firemen's association, the Auditor General was not permitted to withhold ...

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