The opinion of the court was delivered, October 9th 1871, by
Read, J.Dividends are not net earnings or income as used in the second section of the Act of 30th April 1864, P. L. 218, for individuals are included in the persons taxed, who neither pay nor declare dividends. A manufacturing company, not paying a tax to the state upon dividends under existing laws, pays a tax upon its annual net earnings or income, and this description includes the plaintiffs in error. The fourth section of their charter provides: “ That the company shall pay into the treasury of the state a bonus of two and a half per cent, on the capital stock, hereby authorized, or any increase of the same, in three equal annual instalments, in lieu of any tax on dividends. Net earnings or income are the products of the business, deducting the expenses only,” (Commonwealth v. Penn Gas Coal Co., 12 P. F. Smith 242); and the tax upon them is not a tax of dividends; and if it were, and if they were exempted by the fourth sectión as contended, still, under the decisions of this court in The Iron City Bank v. The City of Pittsburg, 1 Wright 340, and in The Commonwealth v. Fayette County Railroad Co., 5 P. F. Smith 452, it is impossible to hold that the tax is not a legal charge. The learned judge’s charge is perfectly correct.
Judgment affirmed.