decided: October 9, 1970.
CAMPBELL ET AL., APPELLANTS,
COATESVILLE AREA SCHOOL DISTRICT
Appeal from decree of Court of Common Pleas of Chester County, No. 2038 of 1968, in case of John Campbell et al. v. Coatesville Area School District et al.
A. Bruce Niccolo, with him Arthur A. Moorshead, and Moorshead & Niccolo, for appellants.
Franklin L. Gordon, with him Milton Apfelbaum, for appellees.
Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Jones. Mr. Justice Cohen, Mr. Justice Eagen and Mr. Justice Pomeroy concur in the result. Dissenting Opinion by Mr. Justice Roberts. Mr. Chief Justice Bell joins in this dissent.
[ 440 Pa. Page 498]
In this appeal we are confronted basically with the same factual situation and legal principles presented to this Court in Crosson v. Downingtown Area School District, 440 Pa. 468, 270 A.2d 377 (1970).
Appellants, taxpayers, in the Court of Common Pleas of Chester County in an equity action sought to enjoin a school district*fn1 and its tax collectors from collecting occupation taxes and to have the taxes declared invalid and unconstitutional. The occupational classification and assessment schedule is identical to that in Crosson although the tax resolution is different as to both the exemptions as well as the rate of taxation.*fn2 Again, as in Crosson, the authority for the school district's action was The Local Tax Enabling Act, Act of December 31, 1965, P. L. 1257, § 1 et seq., 53 P.S. § 6901 et seq. (Supp. 1970).
The same collateral issues raised in Crosson concerning the occupational assessments made by the county assessing authorities upon which the tax was levied were raised below in the case at bar. An additional collateral argument was raised that, although each type of occupation was valued by the chief county assessor prior to the resolution, the occupation of each individual taxpayer situated within the school district was not
[ 440 Pa. Page 499]
pigeon-holed within the aforementioned occupational schedule until after the resolution was adopted. Hence, the argument is made that the county assessment at the time of the levy was improper and incomplete.
While a direct challenge to the tax resolution, comparable to that in Crosson, was advanced to the effect that the tax was not assessed and levied within the time provided by statute, two novel contentions were asserted: (1) the tax violates the Uniformity Clause of the Pennsylvania Constitution, Article VIII, § 1, as it was the averred policy of the school district to create a de facto exemption for persons under twenty-one or over sixty-five or earning less than $600 per year, even though such exemptions were not included in the resolution; and (2) the schedule of occupational classification incorporated into the tax resolution is so vague and indefinite as to be unconstitutional.
The chancellor, by an adjudication dated June 2, 1969, entered a decree nisi dismissing the complaints, exceptions to this decree were dismissed by the court en banc and a final decree was entered on October 20, 1969. This appeal followed.
Turning to the collateral issues concerning the allegedly improper assessment procedures, appellee argued and the chancellor and the court en banc agreed, that a court of equity does not have jurisdiction or competency to determine the controversy. As to this contention we could simply affirm on the basis of Crosson. However, since the proper jurisdiction of equity in tax disputes has recently been expanded as well as contracted in a trilogy of cases, perhaps a more thorough explanation of this development is in order. The first of these cases, Lynch v. Owen J. Roberts Sch. Dist., 430 Pa. 461, 244 A.2d 1 (1968), considered the earlier case law in this area and concluded that, when a constitutional challenge to a tax resolution is presented,
[ 440 Pa. Page 500]
equity has the jurisdiction and competency to consider both the constitutional and non-constitutional challenges even though there exists a specific statutory remedy at law. Moreover, Lynch demonstrated that, once equity obtains jurisdiction by reason of the presence of the constitutional issue, it may invalidate the tax resolution on solely non-constitutional grounds without ever considering the constitutional argument. Rochester & Pittsburgh Coal Co. v. Indiana County Board of Assessment and Revision of Taxes, 438 Pa. 506, 266 A.2d 78 (1970), actually restricted the broad doctrine of Lynch by requiring that the constitutional challenge affording jurisdiction to a court of equity must be "a substantial question of constitutionality (and not a mere allegation)." 438 Pa. at 508, 266 A.2d at 79. Finally, Crosson limited Lynch by holding that, even the presence of a substantial question of constitutionality concerning the tax resolution, does not justify equity taking jurisdiction over every collateral, non-constitutional attack on the assessment. The thrust of Crosson is that, if the non-constitutional challenge to the assessment could not have been maintained in a separate action in equity on the assessment, it cannot be advanced in an attack on the tax resolution which was based on the assessment. As in Crosson, appellants' instant contentions in this regard do not substantially question either the constitutionality of the assessment or that the Chief County Assessor lacked the power to make the assessments and, in addition, a statutory appeals route is available.*fn3 Accordingly, a court of equity should not entertain these collateral attacks.
[ 440 Pa. Page 501]
Appellants' argument that the tax was not assessed (computed) within the time provided by statute*fn4 was also considered in Crosson, which held the statutory time limit to be directory and not mandatory. 440 Pa. at 477-78, 270 A.2d at 381-82. Crosson's holding renders further discussion of this point unnecessary.
In the court below appellants contended that, while the tax resolution contained no exemptions, it was the policy of the school district in the enforcement of the resolution to exclude persons under twenty-one or over sixty-five or earning less than $600 per year and that these de facto exemptions violated the Uniformity Clause of our Constitution and should be enjoined. In Saulsbury v. Bethlehem Steel Co., 413 Pa. 316, 196 A.2d 664 (1964), we found an occupational privilege tax imposed solely on persons earning $600 or more violated the uniformity requirements. On the other hand, Crosson concluded that a tax classification excluding those under twenty-one from payment of an occupation tax did not violate the Uniformity Clause.
We have never decided the substantial constitutional question of whether persons over sixty-five may be released from liability from taxation nor do we need to decide it now. Even if the classification of those over sixty-five years were found to be unconstitutional as was the $600 exemption in Saulsbury, appellants have failed to prove the existence of such a policy or practice. Our case law involving the constitutionality of state taxation places a very heavy burden on those who seek to upset such taxation. Prichard v. Willistown Township Sch. Dist., 394 Pa. 489, 147 A.2d 380 (1959) (not invalid unless "clear, palpable and plain violation"); L. J. W. Realty Corp. v. Philadelphia, 390 Pa. 197, 134 A.2d 878 (1957) ("clearly, palpably, plainly,"
[ 440 Pa. Page 502]
leaving "no doubt or hesitation in our minds"); Sablosky v. Messner, 372 Pa. 47, 92 A.2d 411 (1952). We ascertain no reason to apply a different test in determining the validity of local municipal taxation. The record before us discloses that only one of twenty assessors testified that she excluded anyone -- those under twenty-one only -- another witness testified that the instruction complained of was given and eight other assessors did not state whether there was any such policy. Other evidence in this vein was without substance. The chancellor and the court en banc made no finding of fact that any such exclusionary instruction was given and our scrutiny of the record convinces us no failure to so find was justified by the evidence of record. Appellants have failed to discharge the heavy burden placed on them.
The occupational classification incorporated into the tax resolution is identical to the one considered in Crosson and Crosson controls the disposition of appellants' final argument that the classification is so vague and indefinite as to be unconstitutional.
Decree affirmed. Appellants pay costs.
Dissenting Opinion by Mr. Justice Roberts:
As the majority states, this case presents basically the same factual situation and legal principles involved in Crosson v. Downingtown Area School District, 440 Pa. 468, 270 A.2d 377 (1970), and I again must dissent for the same reasons noted in my dissenting opinion in that case. Further, I am unpersuaded by the majority's treatment of the heavy burden of proof petitioners bear when seeking to challenge the constitutionality of a tax statute or ordinance.
[ 440 Pa. Page 503]
While the majority has stated the rule as to the burden of proof for challenging taxation correctly, it has here misapplied that rule. The heavy burden rests with the challenger on the question of the validity of the tax -- that is whether the provisions of the statute or ordinance involved are constitutional. See Prichard v. Willistown Township Sch. Dist., 394 Pa. 489, 147 A.2d 380 (1959). This burden is separate and distinct from the one where petitioners are alleging the existence of certain facts which would render the administration of the tax unconstitutional. In the latter case, petitioners have only to bear the normal burden for proving the existence of those facts -- a preponderance of the evidence.