I find no warrant whatever for holding that the Act of June 4, 1901, P. L. 364, was not repealed in toto by the Act of May 24, 1921, P. L. 1089. Section 32 of this latter Act says: "The Act approved the 4th of June, 1901, P. L. 364, entitled [giving the full title], and the several amendments and supplements thereto, so far as the same relate or apply to tax liens and tax claims are hereby repealed." It is argued that since the Act of 1921, section 1, declares: "The word 'taxes' as used in this act means any county, bridge, road, borough, township, school or poor taxes," that all of the 1901 Act was repealed except that part which relates to city taxes. If this view is accepted we have the anomalous situation that the Act of 1901 was repealed as to seven kinds of taxes but left in force as to city taxes. This interpretation is not only not required by the context but is in conflict with it. Section 32 of the Act of 1921 plainly says that the Act of June 4, 1901, is repealed. The words "the same" which follow the phrase "the several amendments and supplements thereto," clearly refers to that phrase appearing before the pronoun "same." Webster's New International Dictionary defines the pronoun "same" as "the one just referred to — now chiefly archaic except in legal language." The things "just referred to" were "the several amendments and supplements thereto." Section 33 of Article III of the Statutory Construction Act of May 28, 1937, P. L. 1019, says that in construing an act "General words shall be construed *Page 330 to take their meaning and be restricted by preceding particular words." The general words, "the same," therefore must be restricted by the preceding particular words "amendments and supplements." Section 52 of the Construction Act says that, in ascertaining the intention of the legislature, courts must consider "that the legislature does not intend a result that is absurd . . . or unreasonable." To hold that section 32 of the Act of 1921 repealed the Act of 1901 as to county, bridge, road, borough, township, school and poor taxes is to reach a result that is "absurd and unreasonable." No possible reason can be assigned for making city taxes an exception in this repealing clause 32. No proper purpose could be served by making an exception to it and the legislature nowhere indicated any intention of making city taxes an exception to the repealing clause.
That those able lawyers who make it their business to annotate Pennsylvania statutes consider the entire Act of 1901 repealed by the Act of 1921, is evidenced by an examination of Purdon's Pennsylvania Statutes, which are widely used by the bench and bar of Pennsylvania. On page 155 of Purdon's Tables, there appears in the last column under 1901 P. L. 364, this notation: "Entire act including amendments or supplements repealed as to tax liens and tax claims 1921, May 24, P. L. 1089, sec. 32. Supplied 1923, May 16, P. L. 207." Again, in 53 Purdon Statutes, sec. 2051, pp. 457, 461, 462, 465, and elsewhere in the notes, the Act of June 4, 1901, is referred to as having been "repealed" by section 32 of the Act of 1921 and "supplied" by the Act of 1923. Nowhere in Purdon's Statutes is any part of the Act of 1901 treated as being in force after the passage of the Act of 1921. That the careful editors of Purdon's Statutes, who are adept and experienced in determining whether or not statutes have been repealed, interpret section 32 of the Act of 1921 as repealing the Act of 1901 in itsentirety harmonizes with my conviction that *Page 331 section 32 of the Act of 1921 does in fact repeal in toto the Act of 1901. Nowhere in Purdon's Statutes or in Pennsylvania decisions is there any indication that any part of the Act of 1901 was operative after the repealing clause in section 32 of the Act of 1921 was passed. On the contrary, the very language of section 2 of the Act of 1923 shows that the legislature recognized the fact that the Act of 1901 had been repealed in toto by the Act of 1921. This section provides: "All taxes which may hereafter be lawfully imposed or assessed on any property in this Commonwealth, and all taxes heretofore lawfully imposed or assessed by any municipality on any property in this Commonwealth for the years one thousand nine hundred and twenty-one, one thousand nine hundred and twenty-two, and one thousand nine hundred and twenty-three, in the manner and to the extent hereinafter set forth, shall be and they are hereby declared to be a first lien on said property, together with all charges, expenses, and fees added thereto for failure to pay promptly; and such liens shall have priority to and be fully paid and satisfied out of the proceeds of any judicial sale of said property, before any other obligation, judgment, claim, lien, or estate with which the said property may become charged or for which it may become liable, save and except only the costs of the sale and of the writ upon which it is made." If the Act of 1901 had not been entirely repealed by the Act of 1921, why was it necessary in the Act of 1923 to specifically declare that taxes imposed "by any municipality" on any property in this Commonwealth for the years 1921, 1922, and 1923 shall be a first lien on said property. If the Act of 1901 was operative during those years in respect to municipal taxes, as the majority opinion declares it was, there was no purpose served by the just quoted provision in the Act of 1923. And why were only taxes imposed "by any municipality" thus referred to, while no other taxes were mentioned in that paragraph, if the legislature was not thus *Page 332 recognizing the fact that the Act of 1921 had entirely repealed the Act of 1901, and that the word "municipality" (or "city") had been inadvertently omitted from the second clause of paragraph one of the Act of 1921?
The majority opinion takes the position that city taxes and the methods of collection therefor remained subject to the Act of 1901, as amended in 1915, section 9 of which is, in substance, the same as section 31 of the Act of 1923, P. L. 207, 53 PS sec. 2051. Since section 9 of the Act of May 28, 1915, P. L. 595, refers to "the lien of a tax," and since after the repeal in 1921 of the Act of 1901 there was no lien for city taxes until the Act of 1923 was passed, it follows that the quoted section 9 of the Act of 1915 is of no materiality whatever in determining the question before us.
Since the Act of 1901 was repealed by the Act of 1921, then in 1922 when the mortgage in question was recorded, city taxes were not a lien on the mortgaged premises. "A lien is a hold or claim which one person has upon the property of another as a security for a debt or charge": Bouvier. The city in 1922 hadno such hold on this seated land. Nothing can be more certain than the fact that as against the mortgage, the city's claim for taxes in 1922 had to take a secondary place. In Gormley'sAppeal, 27 Pa. 49, this court, in an unanimous opinion written by Justice BLACK, said: "Liens are to be paid according to their priority, and the mortgage is several years older than the taxes. The legislature might give a lien for taxes a preference to all others; but this has not been done. The law says that certain taxes shall be a lien merely, and that does not authorize us to say that it is more than any other lien, taking grade according to its date." In Briggs' Appeal, 1 Walker 199, this court in a Per Curiam opinion said: "As a general rule, however, taxes assessed upon land are not a preferred lien thereon. It requires an act of Assembly expressly so declaring them, to give that preference." *Page 333
That this mortgage constituted when recorded a first lien on the premises is beyond doubt, the Act of 1901 not then being in effect. A mortgage gives its owner an estate in the premises mortgaged. Chancellor KENT defines a mortgage as "the conveyance of an estate by way of pledge for the security of debt, and to become void on payment of it." When the mortgagee acquired its estate in this land, there was no act which made taxes on seated land in cities a first lien. Such taxes were payable out of personality. There was then no provision in the law under which the lien of the mortgage could be divested on a sale for unpaid city taxes. The court below held, and, I think, properly that "the mortgagee obtained certain vested rights, and at a time when there was no Act of Assembly which might interfere with the same."
The second part of the majority opinion assumes that even if the Act of 1901 had not been in effect in 1922, the Act of 1923 was retroactive to such an extent that it subordinated the appellees' mortgage of May 22, 1922, to subsequently created liens for city taxes. The first answer to that is the Act of 1923 does not purport to do any such thing. It is a settled principle in interpreting statutes that they are presumed to operate prospectively and not retrospectively. The presumption is that they are not intended to affect existent rights. Justice WOODWARD, speaking for this court in Dewaxt v. Purdy,29 Pa. 113, 117, declared "retroactive legislation" to be "uncongenial to our institutions and hazardous to private rights." He refers to the fact that Blackstone said that all laws should commence "in futuro."
If the legislature in 1923 possessed the power to enact a law which would work retrospectively and place the mortgagee's estate in the land in a position second to the lien then (i. e., in 1923) created for city taxes, it should have made it clear in that act that it was intended to operate retrospectively and the "estates" it referred to in the act meant these subsisting mortgages *Page 334 (i. e., "estates in the property") as well as mortgages which might thereafter be executed and recorded. The Statutory Construction Act of 1937 provides in section 56: "No law shall be construed to be retroactive unless clearly and manifestly so intended by the legislature." That merely expresses what has always been the rule. Endlich on "The Interpretation of Statutes," sec. 271, says statutes "are construed as operating only on cases or facts which come into existence after the statutes were passed, unless a retrospective effect be clearly intended." Endlich cites as an example of this rule the following: "A provision that married women shall be bound like other persons, by estoppel in pais, was held inapplicable to the case of a mortgage made by such person before the enactment." Another example is "an act which makes certain provisions 'when any judgment is obtained' is construed as referring to such cases only 'when any judgment is hereafter obtained.' " In section 273 Endlich says: "It is chiefly where the enactment would prejudicially affect vested rights, or the legal character of past transactions, that the rule in question prevails. Every statute, it has been said, which takes away or impairs vested rights acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect of transactions or considerations already past, must be presumed out of respect to the Legislature to be intended not to have a retrospective operation. . . ."
In Barnesboro Boro. v. Speice, 40 Pa. Super. 609, that court held: "Retrospective laws may be supported when they impair no contract and disturb no vested right, but only vary remedies, cure defects in proceedings otherwise fair, and do not vary existing obligations contrary to their situation when entered into and when prosecuted: Shonk v. Brown, 61 Pa. 320. 'Retrospective laws generally, if not universally, work injustice, and ought to be so construed only when the mandate of the legislature is imperative': Taylor v. Mitchell, *Page 335 57 Pa. 209. 'There is no canon of construction better settled than this, that a statute shall always be interpreted so as to operate prospectively and not retrospectively unless the language is so clear as to preclude all question as to the intention of the legislature': Neff's Appeal, 21 Pa. 243;McCabe v. Emerson, 18 Pa. 111. These well-settled principles have never been departed from and have been recognized and reaffirmed in a long line of cases [citing them]."
In section 2 of the Act of 1923 it is declared that the lien "for city taxes for 1921, 1922 and 1923 shall be a first lien . . . and have priority to and be fully paid . . . before any other obligation, judgment, claim, lien or estate with which the said property may become charged or for which it may becomeliable" (italics supplied). That was a clear legislative declaration that the then created lien for city taxes should be paramount to future charges and estates (mortgages) but should not be paramount to existing charges and estates. That the Act of 1923 was to operate only prospectively is further shown by section 40 of that Act which unequivocally provides that "therights of other claimants under existing laws shall remainunaffected by its [i. e., the act's] passage" (italics supplied).
The collection of taxes on property is so important to the government that the belief easily arises that taxes become ex proprio vigore a first lien on any property they are assessed against. But such is not the fact. They become liens against the property only when the legislature says so, as this court has heretofore said: See Justice BLACK'S opinion (supra). "There is no common-law rule which makes the levy of taxes of its own force a lien on the property of the taxpayer. Unless expressly made so by statute, a tax is not a lien on property": 61 Corpus Juris, sec. 1155, p. 912. The legislature has the power to say that in the future all taxes shall be first liens on the properties assessed. When the legislature so declares, one taking a mortgage knows *Page 336 that his mortgage is subordinate to future liens for taxes. The law as it exists when the mortgage is executed and recorded is a part of the contract and therefore the subordination of the mortgage to the tax lien is no impairment of the contract's obligation. In Olyphant Borough v. Egreski, 29 Pa. Super. 116, that court said: "The argument that a statute which gives to municipal liens the right to priority of payment over a mortgage, which is prior in point of time, impairs the obligation of contracts, and is for that reason unconstitutional, does not require serious consideration. The mortgage in the present case was taken years after the Act of 1891 had been passed, and the mortgagee accepted his security with knowledge of the fact that the property was liable to become charged with municipal assessments which would be entitled to priority of payment out of the proceeds of a sale upon the mortgage." If when the mortgage in the instant case was executed and recorded an act of assembly had made the city's claim for taxes a first lien on the property mortgaged, we would have a situation identical with that in the Olyphant case just cited, but there was no such act of assembly when this mortgage came into being.
The majority opinion cites Bryan's Appeal, 101 Pa. 389. The decision in that case supports in no degree the position taken in the majority opinion. In that case Justice PAXSON quotes the "Act of May 16, 1857, sec. 4, P. L. 542," which provides that "all taxes, rates and levies which may hereafter be lawfully imposed or assessed by authority of said city [Pittsburgh] on any real estate therein, shall be and they are hereby declared to be a lien thereon, . . . and that the said lien shall have priority to, and shall be fully paid and satisfied before any recognizance, mortgage, judgment, debt, obligation or responsibility, which the said real estate may become charged with, or liable to, from and after the passing of this Act." The important phrase is: "which may hereafter be lawfully imposed or assessed" shall be *Page 337 a first lien. That act simply made a first lien of taxes as against mortgages, etc., which "may," i. e., later, "become" charges against the real estate. The city taxes in the instant case for 1921, 1922 and 1923 were not first liens when assessed. No one contends that "charges upon or estates in land created by the owner thereof can avail as against the taxing power of the Commonwealth." But the important point is the taxing power of the Commonwealth must act vigilantly and intime to make taxes a first lien. They do not become first liensautomatically. No proposition of law is better settled thanthat.
Since the appellee obtained a first lien on the mortgaged premises in 1922 and since the Act of 1923 was obviouslynot intended to operate retrospectively so as to subordinate the mortgagee's lien to subsequently created liens for city taxes, it is not necessary to discuss the question whether the legislature had the power to thus subordinate a mortgage lien without violating the constitutional prohibition against impairing the obligation of contracts. To decide this case it is not necessary to decide that question.
However, there is both reason and authority to support the view that the legislature had no such power. In Barnitz v.Beverly, 163 U.S. 118, 125, the United States Supreme Court said, in declaring unconstitutional a state law which impaired a mortgagee's rights in a mortgage: "The obligation of a contract consists in its binding force on the party who makes it. This depends on the laws in existence when it is made. These are necessarily referred to in all contracts, and forming a part of them as the measure of the obligation to perform them by the one party, and the right acquired by the other. . . . If any subsequent law affect to diminish the duty, or to impair the right, it necessarily bears on the obligation of the contract, in favor of one party to the injury of the other; hence any law, which in its operation amounts to a denial or obstruction of the *Page 338 rights accruing by a contract, though professing to act only on the remedy, is directly obnoxious to the prohibition of the Constitution."
In Scranton Lackawanna Tr. Co., to use, v. ScrantonLackawanna Tr. Co., Guardian, et al., 310 Pa. 125, 165 A. 42, a controversy arose regarding the balance for distribution from the sale of a property on the foreclosure of a first mortgage. Appellee claimed the balance on account of the mortgage debt; the Commonwealth claimed the balance on account of a collateral inheritance tax assessed against the estate of a later owner, who inherited the property subject to the mortgage. This court, in affirming the order of the court below, pointed out that the Commonwealth's claim was based on the assessment of the whole of the estate and not upon decedent's interest, which was only an equity of redemption. We held that the lien of the collateral inheritance tax was restricted to that equity of redemption. We referred to the fact that the collateral inheritance tax statute which was in force when the mortgage was executed and at the time of its foreclosure was that of June 20, 1919, P. L. 521, as immaterially amended by later acts. The significant part of Justice SIMPSON'S opinion in that case as applicable to the instant case, is the following: "It was also suggested that the Commonwealth's right might be sustained under section 1401 of the Fiscal Code of April 9, 1929, P. L. 343, 420. . . . The mortgage now under consideration was executed, acknowledged, delivered and recorded in 1928, and the provisions of the Code, passed in 1929, in so far as, if at all, they might seem to impair thelien of the mortgage, as it existed at the time of its creation [italics supplied], would be unconstitutional and void: Brinev. Hartford Fire Ins. Co., 96 U.S. 627, 637." The paragraph just quoted was not necessary to the decision but its reasoning is sound and would apply to the instant case if the legislature by the Act of 1923 had attempted *Page 339 to impair the lien of the mortgage by subordinating it to tax liens subsequently created.
In National Bank of Commerce v. Jones, 18 Okla. 555,91 P. 191, the Supreme Court of Oklahoma held that an act of the legislature, which postpones an existing valid mortgage lien, and makes a subsequently created lien superior to the mortgage lien, is a law impairing vested property rights and impairing the obligations of a contract, and is void for conflict with the Constitution of the United States. That court there said: "A mortgage lien constitutes a vested property right, and, after it has attached, the legislature has no power to create a lien superior to the vested interest, or to provide that such vested lien shall be made inferior to a lien subsequently created."
In Crowther v. Fidelity Insurance, Trust Safe-Deposit Co.,et al., 85 Fed. 41, the Fourth Circuit Court of Appeals held that the provision of Code Va., sec. 2485 (adopted in 1887), providing that persons furnishing certain supplies to mining or other specified companies shall have a lien prior to mortgages executed since March 21, 1877, is inoperative to displace the lien of a mortgage executed in 1881, which, at that time, became by contract a vested first lien, for to give it such an effect would be to impair the obligation of the contract.
On the question of the power of a legislature to subordinate a mortgage lien to a later tax lien, the majority opinion cites the case of People of Puerto Rico v. Federal Land Bank ofBaltimore, 108 F.2d 275. In that case the law of Puerto Rico provided that "the tax that is assessed for the current fiscal year and for the three prior fiscal years against any parcel of real property . . . shall constitute the first lien thereon." Due to economic conditions an act was passed which upon a taxpayer's application extended the time of payment "over a period of 20 years." In 1937 suits were instituted to foreclose certain mortgages on property in *Page 340 Puerto Rico. Then attachments were levied on the mortgaged property to cover installments due on "extended" taxes. The District Court, upon application, cancelled these attachments and held that "the only lien for taxes which has priority to complainant's mortgage is for taxes for the current year and the three preceding fiscal years." On appeal the Circuit Court of Appeals, First Circuit, reversed the decree of the District Court. The Circuit Court pointed out that "the records do not indicate what years are covered by the attachments for extended taxes involved in this appeal. If they were for the fiscal year 1934-1935, and perhaps also for the fiscal year 1933-1934, then at the time the taxes were extended the old prior liens given by Section 315 of the Political Code were still valid and subsisting. . . . As a matter of indulgence, the tax collector refrained from enforcing the liens. As a matter of grace, the legislature prescribed that the People of Puerto Rico would not insist upon a preference over the outstanding mortgagee's interest for more than three years after the taxes became due. But the mortgagee, whose interest was at all times subordinate to the taxing power, had no vested right to a continuation of this indulgence and of this legislative grace." Since the mortgagee took the mortgage knowing that under the law then existing his mortgage would be subordinate to the lien of taxes, there was no substantial impairment of his estate in the land by the passage of the law which gave the taxpayer anextension of time for the payment of those taxes. The mortgagee could proceed at any time after default in payment due him to foreclose on the mortgage. The decision in that case is not a precedent against what the court below decided in this case. There are dicta in that Puerto Rico Case about the power to revive lapsed liens even to the prejudice of a mortgagee, which dicta I think are unsound in reasoning and contrary to the weight of authority. It is flatly contradictory to the above quoted dictum of this court in Scranton Lackawanna *Page 341 Trust Co. v. Scranton Lackawanna Trust Co., Guardian (supra).
I repeat that it is not necessary to decide whether the legislature could have passed an act in 1923 divesting a first lien, i. e., a first "estate in land" created under the laws existing in 1922, for the fact is it did not attempt in the Act of 1923 (supra) to do any such thing, as section 40 already quoted conclusively proves.
Haspel v. O'Brien, 218 Pa. 146, 67 A. 123, is cited by the majority opinion, but the only bearing that case has on the question now before us is to sustain the view herein expressed that taxes do not become liens against property until thelegislature so decrees. Chief Justice MITCHELL in his opinion in that case points out that not until the passage of the Act of February 3, 1824, P. L. 18, were taxes "entitled to be first paid." That Act of 1824 was repealed by the Act of 1901.
The majority opinion cites the City of Johnstown v. Dibert,88 Pa. Super. 117, which involved the question of whether or not a judicial sale of property upon a mortgage which had been recorded on February 8, 1904, divested the lien of an assessment of benefits and damages of abutting property in the City of Johnstown, the lien of which assessment was filed on January 31, 1920. It was held that it did not so discharge the claim. The Superior Court in its opinion said: "The Act of [May 28, 1915, P. L. 599] did not change the established law that a judicial sale divests all liens and turns them over to the proceeds, but qualified the rule only to this extent, that, so far as tax and municipal claims are not reached and paid in full, they shall continue to be a lien. This related only to the remedy for the collection of taxes and municipal claims,which claims, under the pre-existing law, already had the rightto priority of payment over the mortgage [italics supplied]." The "preexisting law" referred to was the Act of 1901, supra, which, as we have already pointed out, was repealed by section 32 of the Act of May 24, 1921, P. L. 1089, in *Page 342 so far as the same applies to tax liens and tax claims. At the time the mortgage involved in the instant case was executed, the Act of 1901, which the Superior Court referred to in the City of Johnstown case, was no longer in force.
While the case of Perry v. Brinton, 13 Pa. 202, decided in 1850, does not rule the question now before us, this court used language in its opinion in that case which is applicable to the lien which appellant is here attempting to make paramount. There this court spoke of a lien "which can be ascertained and guarded against by the mortgagee" as opposed to a lien "which is to spring into existence in after years, and by retroaction, jostle the mortgage from its conceded place."
I find nothing in the Act of 1923 which indicates a legislative intent to "jostle" appellees' mortgage "from its conceded place," and I would affirm the judgment of the court below.