Appeal from the Order of the Court of Common Pleas of Allegheny County in case of City of Pittsburgh, a municipal corporation v. The Monongahela Connecting Railroad Company, No. G.D. 75-23217.
Peter H. Beaman, with him Ronald S. Krasnow, and Kirkpatrick, Lockhart, Johnson & Hutchison, for appellant.
Grace S. Harris, Executive Assistant City Solicitor, with her Mead J. Mulvihill, Jr., City Solicitor, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Blatt and MacPhail. Judges DiSalle and Craig did not participate. Opinion by President Judge Bowman.
[ 45 Pa. Commw. Page 475]
Appellant, Monongahela Connecting Railroad Company (Mon-Con), appeals from an order of the
[ 45 Pa. Commw. Page 476]
Court of Common Pleas of Allegheny County which entered judgment in favor of appellee, City of Pittsburgh, and against Mon-Con in the amount of $16,859.48. Mon-Con contends the trial court's application of the Act of October 26, 1972, P.L. 1032 (Act 255-1972), amending Section 17 of the Act of June 21, 1939, P.L. 626, as amended, 72 P.S. § 5452.17, constitutes an infringement on its constitutional rights as afforded by Article VIII, Section 1 of the Pennsylvania Constitution and Section 1 of the Fourteenth Amendment to the United States Constitution. It argues that the dispute between it and the City would be resolved properly in its favor by the application of Section 17 of the Act of June 21, 1939, as it existed prior to the adoption of Act 255-1972.
The dispute stems from error on error. Mon-Con paid and timely appealed tax assessments of its real estate by the City for the triennials beginning in 1966, 1969 and 1972. On November 26, 1973, the Board of Property Assessments, Appeals and Review sustained the appeals and reduced the assessments levied upon Mon-Con's realty. Upon notice, the City refunded the excess tax collected with interest. Approximately a year later, the City notified Mon-Con that interest was not owed on the tax refund and demanded return of the improper prior payment. Mon-Con's refusal to comply with the City's directive prompted the City to file a complaint in assumpsit in common pleas court. The parties have stipulated the amount in dispute to be $16,859.48.*fn1 In the disposition of exceptions to the trial judge's order, the court en banc reversed the initial determination and found for the City. The trial
[ 45 Pa. Commw. Page 477]
judge, in a concurring opinion, joined in the result reached by the majority.
The development of the obligation of government to refund excess taxes paid voluntarily and to pay interest on such refunds parallels the movement of legal thought away from the theory of the omnipotence of the sovereign. At common law in Pennsylvania there was no cause of action by which a taxpayer could recover taxes paid but not owed unless the assessment was void and paid under compulsion. Statute and judicial decision slowly wrought a more comprehensive right and a recognition of the importance of interest. By 1931, our Supreme Court in Philadelphia & Reading Coal & Iron Co. v. Tamaqua Borough School District, 304 Pa. 489, 156 A. 75 (1931), could characterize the state of the law in this manner:
Undoubtedly, the well established rule in this State is that a voluntary payment of taxes to the public authorities, without any duress, threats, or misstatements on the part of the latter, or protest and notice of intention to reclaim on the part of the taxpayer, precludes subsequent recovery of any overpayment. If the ...