Appeals from the Order of the Court of Common Pleas of Philadelphia County in cases of Lawrence R. Stoltz, James H. J. Tate, The Honorable Joseph Tracy, Harold E. Kohn v. James C. McConnon, William R. Eaton, Joseph T. Mack, No. 4597 December Term, 1974; James C. McConnon, et al. v. Lawrence R. Stoltz, et al., No. 3085 May Term, 1975; and Southeastern Pennsylvania Transportation Authority, et al. v. Harold E. Kohn, No. 3013 May Term, 1975.
Harold E. Kohn, with him Robert A. Swift, and Kohn, Savett, Marion & Graf, P.C., for appellants.
Lewis H. Van Dusen, Jr., with him Edward M. Posner, for appellees.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Rogers. Concurring and Dissenting Opinion by Judge Wilkinson. President Judge Bowman joins in this concurring and dissenting opinion.
When members of bodies politic charged with conducting essential public services fall out among themselves, the litigation which it seems must inevitably follow always has two features in common with all other such political contests at law. The first is a surfeit of lawsuits intended, no doubt, to demonstrate the magnitude and sincerity of each faction's outrage at the alleged falsity, if not wickedness, of the other's actions. The second common characteristic of this kind of litigation is that the principal issue raised by the excess of actions, if not always easy to decide, is invariably simple.
The public body here involved is the Southeastern Pennsylvania Transportation Authority. SEPTA, as this Authority is known, was created by the Counties of Bucks, Chester, Delaware and Montgomery and the City of Philadelphia by allowance of the Metropolitan Transportation Authorities Act of 1963, Act of August 14, 1963, P.L. 984, as amended, 66 P.S. § 2001 et seq., hereinafter referred to as MTAA. The name given to this piece of legislation is something of a misnomer, because the Act permits the creation of only one Authority. The territory in which an Authority created may operate is expressly limited to that described by the boundaries of a County of the First Class and all other counties located within twenty miles of such First Class County. Philadelphia is the Commonwealth's only County of the First Class and Bucks, Chester, Delaware and Montgomery Counties are the only municipalities within twenty miles of Philadelphia.
MTAA was an outgrowth of the earlier, highly effective and most amicably executed compact or written
agreement entered into among Bucks, Chester, Montgomery and Philadelphia Counties called SEPACT. Under and by means of SEPACT, the constituent counties contributed their own money and obtained larger sums by grant of the Federal government which enabled it to prevent the shutdown of the railway commuter lines in the Philadelphia area whose financially distressed owners, the Pennsylvania and the Reading Railroad Companies, could no longer stand the enormous and continuous losses from those operations.
All persons concerned with SEPACT, including especially their sponsors, the elected officials of the municipalities involved of which the then Mayor of Philadelphia was a leader, became convinced that Philadelphia and the suburban counties needed an Authority created by the Legislature and vested by the Legislature with the duty and power to acquire and operate an integrated transit system consisting of the suburban commuter trains, the City's subway*fn1 and the bus, trolley and other transit facilities of the privately owned Philadelphia Transit Company then operating in the City. The adoption of the MTAA and the creation of SEPTA followed.
SEPTA performed its stated missions admirably. The Philadelphia Transit Company's properties, and those of a large trolley and bus company operating in Delaware County, were acquired and all important mass transit facilities in the five municipalities were placed in SEPTA's charge and operation.
For reasons which do not appear on this record, but which, as all other current municipal problems, no doubt have their origin in financial stringency, the good will among members of SEPTA's Board has dissipated.
The Board, as the MTAA prescribes, has eleven members, one appointed by the Governor of Pennsylvania, and the remaining appointed, two each, by the Commissioners of four of the constituent counties of Bucks, Chester, Delaware, Montgomery, and by the Mayor of Philadelphia.
At a meeting of the Authority held November 27, 1974 two resolutions were moved, one amending the tentative operating budget for the calendar year 1975 and the other adopting the operating budget for the "City Transit Divisions and the Red Arrow Division and the 12th Street offices." Upon the call of the question, ten members being present, five voted yes, four no and one abstained. The Chairman declared the motion carried over the objections of member Harold E. Kohn, Esq., the Governor's appointee.
At a meeting of the Board held December 18, 1974 and at a time when nine members were present five resolutions were moved and upon call of the question five members voted yes and four no. The Chairman declared the resolutions carried. These five resolutions would have (1) authorized payment of bills for counsel fees to two law firms amounting in the aggregate to about $8500, (2) named Main Lafrentz & Co., accountants, to make certain apparently routine audits, and (3) (4) and (5) authorized the General Manager to submit in behalf of SEPTA applications for certain federal grants.
At another time during the meeting of December 18, 1974 when all eleven members were present the following resolution was moved, received seven yes and four no votes and was declared carried:
"Now, therefore, Be It Resolved that the Septa Board recognizes that the tentative operating budget submitted to all members of the Septa Board on September 27, 1974, or approved by its Budget Committee, and as amended on November 27, 1974, was adopted
as the Septa operating budget for the calendar year 1975 and confirms and ratifies that said tentative operating budget is the Septa operating budget for the calendar year 1975."
At a meeting held January 22, 1975, a further resolution authorizing payment to SEPTA's two legal advisors of fees amounting in the aggregate to about $17,000 was declared adopted after a vote of five yes and four no.
The events just described impelled the voting minority on each of the nine resolutions declared adopted at the three meetings, consisting of Mr. Kohn, Lawrence E. Stoltz and James H. J. Tate, Philadelphia's two members, and Joseph Tracy, a Bucks County appointee, to bring original equity actions in both the Court of Common Pleas of Philadelphia County and in this Court against SEPTA'S Chairman, its General Manager and its Treasurer. The plaintiffs sought an order setting all of the mentioned resolutions aside, declaring the 1975 budget invalid because unadopted, and that a money judgment be entered against the defendants for their alleged malfeasance and misfeasance in implementing that budget. SEPTA and Main Lafrentz & Co. filed a petition for a declaratory judgment in this Court against Mr. Kohn seeking an order declaring the several resolutions adopted December 18, 1974 to have been effectively adopted.
The procedural history of these three suits is fully described in President Judge Bowman's opinion in SEPTA v. Kohn, 18 Pa. Commonwealth Ct. 546, 336 A.2d 904 (1975), where we held that this Court had original jurisdiction of all. On transfer, the suits were consolidated for trial below ...