Appeal from decree of Court of Common Pleas of Dauphin County, sitting as Commonwealth Court, No. 331 Commonwealth Docket 1961, No. 2487, in re Philadelphia Life Insurance Co. v. Commonwealth of Pennsylvania, Charles M. Dougherty, Secretary of Revenue, Thomas Z. Minehart, Auditor General, Anne X. Alpern, Attorney General and their Deputies, Agents and Successors in Office.
David F. Maxwell, with him Herbert A. Fogel, Joseph M. Hartley, Jr., and Obermayer, Rebmann, Maxwell & Hippel, for appellant.
Eugene J. Anastasio, Deputy Attorney General, for Commonwealth, appellee.
Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Nix. Mr. Justice Eagen and Mr. Justice O'Brien concur in the result. Concurring Opinion by Mr. Justice Roberts. Mr. Justice Manderino joins in this concurring opinion.
The narrow issue presented by this appeal is whether the Gross Premiums Tax Act of 1961*fn1 is unconstitutional when applied to renewal premiums received by insurance companies from non-participating life insurance
policies*fn2 written prior to January 1, 1961, the effective date of the tax.
The appellant, Philadelphia Life Insurance Company, is a Pennsylvania stock life insurance company which receives 80% of its revenues from non-participating policies. On June 21, 1961, appellant instituted this equity action seeking to restrain the collection of the tax.*fn3 After a trial, the lower court entered a Decree Nisi denying the requested relief and appellant filed exceptions which were overruled by the Court en Banc. This appeal followed.
Appellant contends that the Gross Premiums Receipt Tax, insofar as it is applied to non-participating policies written prior to 1961, is unconstitutionally retroactive.*fn4
It is well established that: "An Act of Congress or an Act of the legislature of Pennsylvania which imposes a retroactive tax is not unconstitutional per se merely because it is retroactive in its language or in its operation: Billings v. United States, 232 U.S. 261, 282; Milliken v. United States, 283 U.S. 15, 21; Welch v. Henry, 305 U.S. 134; Shirks Motor Express Corp. v. Messner, 375 Pa. 450, 462, 100 A.2d 913." Commonwealth v. Budd Co., 379 Pa. 159, 170-1, 108 A.2d 563 (1954). See also, Commonwealth v. Rockwell Mfg. Co., 392 Pa. 339, 140 A.2d 854 (1958). However, after making the above statement in Budd, this Court went on to note that there must be some limit to the legislature's ability to reach events buried in the distant past.
"It is obvious, however, that there must be some limitation on the right of a legislative body to pass laws imposing taxes retroactively for otherwise a legislature could constitutionally impose new or increased taxes retroactively for a period of 25 or 50 years which would be so onerous or confiscatory and unjust as to bankrupt the individuals or corporations thus taxed. This was recognized in Welch v. Henry, 305 U.S., supra, where the Court sustained an Act of Wisconsin passed in 1935 which for the first time taxed corporate ...