Abbotts Dairies, Inc. v. Philadelphia

Dissenting Opinion by

Mb. Justice Cohen :

The majority adheres to this Court’s decisions in Bell Telephone Company of Pennsylvania v. Philadelphia, 421 Pa. 14, 218 A. 2d 727 (1966); Pinebrook Foundation Inc. v. Shiffer, 416 Pa. 379, 206 A. 2d 314 (1965), and Young Men’s Christian Association v. Reading, 402 Pa. 592, 167 A. 2d 469 (1961), as stating the law in this area. It also concedes that the injunction obtained by appellants in 1953 was overbroad and that the decision by the court below to modify the 1953 injunction is “essentially” correct. The only issue on which there exists a difference of opinion is whether the City should assess taxes beginning with 1954 or 1967.

The majority has selected the latter date as the proper one pursuant to “equitable” principles. That is, because the City failed to appeal the 1953 determination and because appellants relied on that determination for thirteen years, it is reasonable to assert tax liability only from 1967. Such a decision, we are told, is necessary to reinforce the principles of timely appeals and finality of judicial adjudications.

It is certainly anomalous to grant appellants the benefit of equitable principles when they have not acted equitably throughout the period in question. In its *1371953 complaint Abbotts said “defendants are without authority to require plaintiffs to secure licenses, or to pay any taxes on that part of plaintiffs’ business which comprises the manufacture and sale of ice cream, and which is conducted pursuant to the aforesaid state licenses.” Later, in its prayer for relief, appellants asked the court to restrain the City from levying or collecting “any mercantile license fee and mercantile license tax from the plaintiffs, or any of them with respect to that portion of the business of any plaintiff which is subject to the payment of license fees to the Commonwealth of Pennsylvania under the aforesaid Milk Control Law and Ice Cream Law.” Clearly, the plaintiffs in that suit realized that only part of their business was exempt from the City tax. The injunction, however, stated that the City “is hereby enjoined from enforcing any and all of the provisions of the Philadelphia Mercantile License Tax Ordinance . . . against any of the herein enumerated complainants.” Thus, Abbotts knew that the decree was overbroad, and it took advantage of the court’s error for thirteen years without informing the court or the City of that error. Perhaps Abbotts had no legal duty to report that error, but Abbotts is certainly in no position to claim the benefit of equitable principles. Abbotts knew through all these thirteen years that it should have paid taxes on its nonlicensed activity, and surely it is not deserving of this Court’s sympathy.

As to reliance, appellants contend that record destruction and merger policies make it “literally impossible” to assemble mercantile tax information. Perhaps that is so, but appellants’ self-serving assertions should not decide the issue. The taxing authority should at least be given the opportunity of studying appellants’ records to determine whether the proper tax can be computed. If the City imposes a tax that *138is arbitrary and capricious in appellants’ eyes, such a determination can be appealed, and our courts then, on the basis of concrete evidence, can decide the validity of the City’s action. There is now no evidence of such impossibility, and such an order by this Court would cause appellants no irreparable harm.

Certainly the public and those involved in the administration of justice have an interest in the finality of adjudication. But to be weighed against that is the great public interest in having available to it that tax revenue properly due. (It must be remembered that the majority concedes this money was properly owed to the City and would have so ordered in 1953.) With cities so in need of additional funds, the interest in finality of adjudication should not automatically be given precedence.

Finally, this case is factually and legally indistinguishable from Bell Telephone, supra. In that case the court below held that its original decree, issued in 1953, was in error and modified the decree so as to restrain the collection of the City tax only for years up to and including 1953. This Court affirmed the modified decree. The opinion gave no weight to the fact that the City of Philadelphia had not appealed the 1953 decree and did not consider relevant any reliance by Bell. The reasons stated by the majority in this case are not cause enough to refuse to follow Bell Telephone which is directly on point.

The decree should be affirmed so that the City has an opportunity to investigate appellants’ records and determine whether the proper amount of tax due can be ascertained.

I dissent.

Mr. Justice Eagen and Mr. Justice O’Brien join in this dissent.