decided: July 31, 1974.
CONNELLSVILLE TOWNSHIP SUPERVISORS, APPELLANT,
CITY OF CONNELLSVILLE AND PAUL V. MAHONEY, TRUSTEE FOR MARGARET GRACE COCHRAN, APPELLEES
Appeal from the Order of the Court of Common Pleas of Fayette County in case of In Re: Annexing a Portion of Connellsville Township, Fayette County, Pennsylvania, Fronting Partially on the Southerly Side of Kensington Street, Property Now or Formerly of Helen M. Hyatt and the Mary D. Newmyer Estate, No. 471 Civil Docket 1971.
William H. Soisson, Jr., for appellants.
Robert E. Eberly, Jr., with him Paul V. Mahoney, for appellees.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Crumlish, Jr.
[ 14 Pa. Commw. Page 533]
This appeal is from an order of the Court of Common Pleas of Fayette County discharging a rule to show cause why a decree dated April 4, 1972, should not be opened and vacated. That decree sustained preliminary objections to a complaint filed by Connellsville Township Supervisors (Appellant) which challenged an annexation
[ 14 Pa. Commw. Page 534]
proceeding commenced after April 23, 1970 under the Third Class City Code, Act of June 23, 1931, P.L. 932, 53 P.S. §§ 35501 et seq., inter alia, contending that it violated Article IX, Section 8, of the 1968 Constitution of Pennsylvania because the proceedings failed to provide for an initiative and referendum. In sustaining the preliminary objections and approving the annexation, the lower court held that this constitutional provision was not self-executing and that the "two-year time limitation therein set forth is merely hortatory and does not constitute an express or implied repealer of all extant legislation in those areas" and therefore the annexation provisions of the Third Class City Code controlled. This decision was not appealed.
Following our holding in Middle Paxton Township v. Borough of Dauphin, 10 Pa. Commonwealth Ct. 431, 308 A.2d 208 (1973), that the time limitation of Article IX, Section 8 is mandatory, and that in the absence of supplantive uniform legislation, initiative and referendum is the only procedure available to authoritatively effect changes in municipal boundaries after April 23, 1970, Appellants filed a petition for a rule to show cause why the prior judgment should not be opened. It relied on Middle Paxton Township v. Borough of Dauphin, supra, contending that it conclusively determined that the instant annexation proceedings under the Third Class City Code were null and void. Being so, Appellant argues that the court was without jurisdiction to approve the annexation ordinance in issue. The rule was discharged on October 29, 1973, the lower court finding that the prior unappealed decree was res judicata.
Initially, we note that the identities of party, cause of action, and thing sued for, all the time honored prerequisites to the application of the doctrine of res judicata are present here. McCarthy v. Township of McCandless,
[ 14 Pa. Commw. Page 5357]
Pa. Commonwealth Ct. 611, 300 A.2d 815 (1973); Philadelphia v. Stradford Arms, Inc., 1 Pa. Commonwealth Ct. 190, 274 A.2d 277 (1971). These facts being indisputable, counsel for Appellant argues that the prior judgment is open to collateral attack because the lower court was without jurisdiction to render a judgment since the underpinning of its authority to approve the annexation [the annexation petition having been brought under the Third Class City Code without provision for initiative and referendum] was subsequently declared to be null and void. Appellant falters in this argument because, although a court may have no jurisdiction over a particular subject matter, it may have jurisdiction to determine the question of its own jurisdiction, and an unappealed final determination of its subject matter jurisdiction -- albeit erroneous -- is res judicata as to those litigants. Durfee v. Duke, 375 U.S. 106, 84 S. Ct. 242, 11 L. Ed. 2d 186 (1963); Stoll v. Gottlieb, 305 U.S. 165, 59 S. Ct. 134, 83 L. Ed. 104 (1938); Pulaski Avenue, 220 Pa. 276, 69 A. 749 (1908); Kase v. Best, 15 Pa. 101 (1850); Restatement, Judgments § 10 (1942), comment a.
Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 60 S. Ct. 317, 84 L. Ed. 329 (1940) presents an application to this rule in an analogous, if not weaker, situation. In 1936, a federal district court entered a final decree approving a plan of readjustment of the indebtedness of a municipal authority pursuant to the Municipal Debt Readjustment Act of 1934.*fn1 The decree cancelled the defaulted bonds and enjoined the bondholders from pursuing redemption. The validity of the statute was uncontested in that proceeding, and the decree went unappealed. The Supreme Court thereafter declared the statute unconstitutional,*fn2
[ 14 Pa. Commw. Page 536]
and two bondholders, who were parties to the first action, brought an action in the same district court to collect the bond obligations previously cancelled. The district court and circuit court rejected the res judicata defense asserting that the prior decree was a nullity since the jurisdiction of the bankruptcy court depended upon an unconstitutional statute. The Supreme Court reversed and sustained the defense of res judicata though the question of the bankruptcy court's jurisdiction had not been raised or litigated in the original proceeding. The Court held that, despite the subsequent determination in another proceeding that the court lacked jurisdiction, the district court, nevertheless, had "the authority to pass upon its own jurisdiction and its decree sustaining jurisdiction against attack, while open to direct review, is res judicata in a collateral action." 308 U.S. at 377, 60 S. Ct. at 320, 84 L. Ed. at 334.
This application of the doctrine of res judicata to jurisdictional determinations which are subsequently determined to be erroneous has long been followed in Pennsylvania. In Strauss v. W. H. Strauss & Company, Inc., 328 Pa. 72, 194 A. 905 (1937), our Supreme Court held that a final deficiency judgment entered prior to the determination of the unconstitutionality of the Deficiency Judgment Act*fn3 and based thereon, was res judicata and thus enforceable. The late Chief Justice Stern observed: "But jurisdiction having attached, and no appeal having been taken . . . the judgment of the Blair County court as to the amount remaining due is not impaired by the fact that it was based upon a statute subsequently declared to be unconstitutional. The decision became the law of the case, and neither of the parties to it can now collaterally assail or controvert it." 328 Pa. at 76, 194 A. at 907.
[ 14 Pa. Commw. Page 537]
Although this broad principle admits to exceptions,*fn4 none are present here. At the time of the lower court's decision in 1972, there was no appellate authority on the question of whether or not Article IX, Section 8 of our Constitution was self-executing. In reality, the jurisdiction of the lower court itself is not here attacked, but its determination of the legal question of whether the annexation was procedurally defective. There is no question but that the court had jurisdiction, a complaint having been filed by Appellants under the Third Class City Code, to determine this issue. Having done so, the fact that its construction of Article IX, Section 8 was erroneous does not make the determination any less binding upon the parties to that proceeding.