SPECIAL CASES.

Attention is called to a few of the cases in which the Attorney General's Department was concerned, which involved important is

sues.

Commonwealth vs. McAfee.

The amendment to the Constitution of 1909, and the schedule to carry those amendments into effect, were found to be so incomplete that the Legislature passed the Act of March 2, 1911, P. L. 8, for the purpose of carrying the amendments into complete operation, and of preventing any hiatus in the terms of offices affected by the ámendments and the confusion incident to such hiatus.

This Act of Assembly was, by its terms, comprehensive and included all public officers whose terms were in any way affected by the amendments and schedule.

Doubts arose as to whether the Legislature could further legislate on the subject with reference to judges, and a petition for mandamus was filed by the Commonwealth at the relation of Hon. Norris S. Barratt, a Judge of the Court of Common Pleas No. 2 of Philadelphia, against Robert McAfee, Secretary of the Commonwealth, to compel the Secretary of the Commonwealth to certify his name as a candidate for election at the municipal election on the Tuesday following the first Monday of November, 1911.

The Supreme Court held, affirming the Court of Common Pleas of Dauphin County (232 Pa. 36), that the Act of March, 1911, was unconstitutional, inasmuch as it is an attempt to extend the constitutional term of judges beyond the limit fixed by the constitution.

Etter vs. McAfee, et al.

Under the amendments of the constitution of 1909 which were adopted at the same time that Hon. A. E. Sisson was elected Auditor General, he contended that those amendments extended his term as Auditor General from three years as it was prior thereto, to four years beginning the first Monday of May, 1910. George E. Etter, a taxpayer of the City of Harrisburg, brought a bill in equity against Robert McAfee, Secretary of the Commonwealth, and against the Commissioners of Dauphin county, the clerk of the Commissioners and the Sheriff of Dauphin county to prohibit the names of the several persons nominated by political parties for the office of Auditor General from being certified to the County Commissioners and printed on the ballots.

This case raised the question as to whether or not the constitutional amendments of 1909 or the schedule to carry them into effect, operated to extend the term of the Auditor General who was elected on the same day on which the amendments were adopted, but who entered upon the duties of his office on the first day of May, 1910.

The Court of Common Pleas of Dauphin County and the Supreme Court held that the amendments did not operate to extend the term of Auditor General Sisson, and the general election held on Tuesday next following the first Monday in November, 1912, was the appropriate time to elect his successor.

Provident Life & Trust Company vs. Blakely D. McCaughn, et al.

This was a bill in equity brought by the Provident Life & Trust Company to restrain the assessment of a tax upon $59,999,086.39 of the assets of that company. The Provident Life & Trust Company operates in the dual capacity of a trust and insurance company, and under the provisions of its charter "all the net profits to be derived from the business of life insurance after deducting the expenses of the company, shall be divided pro rata among the holders of policies of such life insurance, equitably and rateably as the directors of said company shall and may from time to time ascertain, determine and report the same for division." The $59,999,086.39 are insurance assets of which $8,070,812.81 were undivided profits.

An Act of Assembly of June 7, 1911, (P. L. 673) introduced a provision into the law taxing personal property, which provided that only those corporations, limited partnerships, joint stock associations which are liable to capital stock tax should be exempt from the payment of any further tax on mortgages, bonds and other securities owned by them, where the "whole body of stockholders or members as such have the entire equitable interest in the remainder," in such mortgages, bonds and securities. The Assessors and Board of Revision of Taxes for the City and County of Philadelphia, demanded a return of the insurance assets of the Provident Life & Trust Company of Philadelphia, for the purpose of taxing the same, and a bill in equity was brought by the company, enjoining them from effecting such taxation.

The Court of Common Pleas No. 2 of Philadelphia has decided against the Commonwealth, upon the ground that the insurance assets thus invested in securities are securities "in which the whole body of stockholders or members as such have the equitable interest in remainder" and are therefore not taxable.

Henry Heide, et al., vs. James Foust, Dairy and Food Commissioner,

et al.

This case was brought by twelve non-resident candy manufacturers in the Circuit Court of the United States for the Eastern District of Pennsylvania, upon a bill in equity praying the Court to restrain the Dairy and Food Commissioner and his agent by injunction, from bringing or causing criminal prosecutions against certain citizens of Pennsylvania, customers of the plaintiffs, for violation of the Pure Food Law of May 13, 1909, (P. L. 520). The constitutionality of this law was attacked in a number of particulars. The case was several times argued, and its final determination awaited the determination of the case of Commonwealth vs. Christian Pflaum in the criminal courts of the State. After the determination of the case of Commonwealth vs. Christian Pflaum, the Circuit Court of the United States dismissed the bill and sustained the Pure Food Act of 1909 in every particular. Application was made to the United States Supreme Court for the allowance of an appeal, and that application was refused.

Commonwealth of Pennsylvania vs. Christian Pflaum.

This was a criminal prosecution against a candy merchant in the City of Philadelphia for selling adulterated candies in violation of the Pure Food Act of May 13, 1909, (P. L. 520). The defendant was convicted in the Quarter Sessions of Philadelphia County, and on a motion in arrest of judgment, the Court of Quarter Sessions sustained some of the contentions of the defendant, which involved an interpretation of the Act of Assembly which seriously affected the scope of the Act of Assembly, and its enforcement by the Pure Food Department. Upon appeal, the Court of Quarter Sessions was reversed by the Superior Court, (48 Super. Ct. 370), and by the Supreme Court of the State, (236 Pa. 294), and every contention made for the construction of the Act and for its constitutionality was sustained.

Commonwealth vs. Independent Trust Company.

This case involved the proper interpretation of the law regulating the imposition of bonus upon corporations. The defendant was incorporated in 1889, under the General Corporation Act of 1874, with an authorized capital of one million dollars. It paid the bonus of one-fourth of one per cent. the rate then established by law, on $1,000,000 capital. In 1903 it decreased its capital stock to $75,000.00 and operated as a corporation of $75,000.00 capital, until 1909, when it increased to $2,000,000.00. It paid a bonus at the rate of onefourth of one per cent. on the second million dollars of its capital.

The Commonwealth claimed a bonus at the rate of one-third of

one per cent. on $1,925,000.00. The Supreme Court (233 Pa. 92) held that the Commonwealth was not entitled to any bonus on the original one million dollars capital on which bonus had once been paid, but it was entitled to a bonus at the rate of one-third and not one-fourth of one per cent. on the second million dollars of capital.

The bonus act provided that corporations were required to pay a bonus upon the amount of capital which they were "authorized" to have, and "upon any subsequent authorized increase thereof." It was understood that under the authority of the case of Commonwealth vs. Railroad Company, 207 Pa. 154, the authority referred to in the bonus acts, means the Act of Assembly authorizing the company to have capital, but this case reverses the rule as understood by the profession, and decides, as contended by the Commonwealth, that the authority refers to the act of the corporation in increasing its capital stock, and not to the Act of Assembly authorizing the in

crease.

Commonwealth vs. Equitable Life Assurance Association of the United States.

This case involved the question as to whether the Commonwealth, under the taxing acts, could exact from a non-resident insurance company the tax on the premiums paid by the residents of this State, when such premiums were sent by mail directly to the home office of the company, or to the agents of the company out of the State, and were not paid through the agents of the company resident in the State.

The Court of Common Pleas of Dauphin County, under the Act which provides for a tax "upon the gross premiums of every character and description received from business done within this Commonwealth," held that the mailing of the premiums by residents in the State to non-resident agents, or to the home office of the company, was not business done within the Commonwealth," and that the Commonwealth was not entitled to tax on such premiums. The case was appealed, argued in the Supreme Court at the May term 1912, but has not yet been finally determined.

Commonwealth vs. Union Trust Company.

This case involved a construction of the Act of June 13, 1907, P. L. 640, providing the method of taxation of trust companies, and its determination was important to the Commonwealth. The Union Trust Company owned certain securities which were carried upon their books at the cost price, but which were admittedly worth two million dollars more than the amount at which they were carried on the books of the company. The Auditor General added the said two million dollars to the valuation, which was obtained by taking the capital stock surplus and undivided profits of the company, as shown on their books, and dividing the same by the number of shares.

The company contended that the Auditor General was bound by the books of the company, and that there were no undivided profits in these securities until they were sold and the profit realized.

The Court of Common Pleas of Dauphin County sustained the contention of the defendant, but the Supreme Court reversed (227 Pa. 353) and held that the Auditor General had a right to ascertain the actual value of the shares by going behind the business of the company and determining the real value of the securities.

Trustees of the State Hospital for the Insane at Danville, vs. County of Lycoming.

The Attorney General, who is charged with the duty of acting for the State Hospital for the Insane at Danville, brought this case against the County of Lycoming to recover the entire cost of the maintenance of the criminal insane committed to that institution from the County of Lycoming. The question raised was whether the County of Lycoming was liable to the whole cost of maintenance of criminal insane who are indigent persons, or whether it was liable only, as in the case of indigent insane, for $1.75 per week. The Commonwealth contended that the Legislature has created two separate and distinct classes: one criminal insane and the other indigent insane; that the Commonwealth has not come to the relief of the counties for the support of its criminal insane, and that therefore the counties are liable for the whole cost of maintenance. The Court of Common Pleas of Dauphin County held that indigent insane includes criminal insane who are indigent; that there is no more liability for insane criminals who are indigent than for other indigent persons, and that the cost to the county was limited to $1.75 per week. This case is on appeal to the Supreme Court of Pennsylvania.

Commonwealth vs. Joseph Patsone.

This case involves the constitutionality of the Act of May 8, 1909, which prohibited unnaturalized foreign born residents from owning or being in possession of a shot gun or rifle.

The defendant was convicted in the Court of Quarter Sessions of Allegheny County, under this law, and appealed to the Superior Court, alleging that the Act was unconstitutional. The Superior Court sustained the constitutionality (44 Pa. Super. Ct. 128) and the Supreme Court affirmed the Superior Court (231 Pa. 46). An appeal has been taken to the Supreme Court of the United States where the case is now pending.