The opinion of the Court was delivered by
The plaintiff, as Revenue Commissioner of the Department of Collections of the City of Philadelphia, brought an action in the Law Division of our Superior Court to recover wage taxes due to Philadelphia from the defendant who had been employed at the Erankford Arsenal in Philadelphia from 1943 through 1966. See Application of Thompson, 157 F. Supp. 93 (F. D. Pa. 1957), aff’d, 258 F. 2d 320 (3 Cir. 1958), cert. denied, 358 U. S. 931, 79 S. Ct. 317, 3 L. Ed. 2d 303 (1959); Consolidation Coal Company v. Bailey, 330 F. Supp. 474, 475 (W. D. Pa. 1971). The matter was transferred to the Atlantic County District Court which entered judgment for the defendant and this was
There is much discussion in legal publications as to whether the courts of a state may and should entertain actions seeking to collect tax claims due to sister states or their political subdivisions. See Eobertson, “Extraterritorial Enforcement of Tax Obligations,” 7 Ariz. L. Rev. 219 (1966); Goldstein, “Interstate Enforcement of Tax Laws of Sister States,” 30 Taxes 247 (1952); Leflar, “Extrastate Enforcement of Penal and Governmental Claims,” 46 Harv. L. Rev. 193 (1932); Note, “Extraterritorial Enforcement of Tax Claims,” 12 Wm. <& Mary L. Rev. 111 (1970); Restatement (Second) Conflict of Laws § 89, at 266 (1971). The English cases which gave rise to the early American common law notion that one state would not enforce the revenue laws of another, arose in international commercial contexts which have no relation whatever to the context at hand. Thus Boucher v. Lawson, 95 Eng. Rep. 53 (K. B. 1734), involved an action for nondelivery of gold which had been shipped from Portugal in violation of its exporting restrictions. The action was held maintainable with Lord Hardwicke stressing that enforcement of Portugal’s exporting restrictions “would be of very bad consequence to the principal and most beneficial branches of our trade” (95 Eng. Rep. at 56). In Holman v. Johnson, 98 Eng. Rep. 1120, 1121 (K. B. 1775), Lord Mansfield remarked that “no country ever takes notice of the revenue laws of another” but his remark came in an action to recover the purchase price of tea lawfully sold by the plaintiff in France to the defendant who intended to smuggle it into England. Shortly thereafter the quoted remark was repeated in Planche v. Fletcher, 99 Eng. Rep. 164, 165 (K. B. 1779), where the plaintiffs sued to recover insurance for the loss of goods which had been placed on board a ship bound for France but diverted to Belgium for its lower duties. By 1823 Abbott, C. J. was able to say in James v. Catherwood, 3 Dowl. & Ry. 165 (K. B.), that
Relying entirely on the doctrine that foreign revenue laws would not be noticed, the courts in Municipal Council of Sydney v. Bull, [1909] 1 K. B. 7 and In re Visser, [1928] Ch. 877, declined to entertain actions seeking to recover taxes and assessments imposed by foreign law. In Bull the City of Sydney in New South Wales brought an action in England to recover local property assessments due from the defendant. Grantham, J. described the proceeding as “analogous to an action brought in one country to enforce the revenue laws of another”; he held that such an action “will not lie outside the confines of the last mentioned State.” 1 K. B. at 12. In Visser the court relied on Bull to support its holding that the Queen of Holland could not maintain an action in an English court to recover taxes due from the estate of a deceased subject of Holland. Neither decision embodied any discussion of the pertinent policy considerations and each may be viewed as broadly extending the early judicial expressions in international commercial contexts to the current tax context. See Mann, “Foreign Revenue Laws and the English Conflict of Laws,” 3 Intfl. & Comp. L. Q. 465 (1954) where the author, in commenting on a Scottish decision (Att-Gen. for Canada v. William Schulze & Co. (1901) 9 3. L. T. 4) which had declined to entertain a foreign tax claim though it had been reduced to judgment, noted (at 471-72) that while in theory the result was harmonious with the general refusal of the English courts to entertain foreign governmental claims “in practice a rule which encourages tax evasion appears discreditable.”
The early decisions in the United States embraced the English expressions without discussion. Thus in Ludlow v. Van
In State v. Rodgers, 238 Mo. App. 1115, 193 S. W. 2d 919 (Ct. App. 1946), we find, for the first time, a full examination of the underpinnings of the prohibition against actions on foreign tax claims. Judge Anderson pointed out that the English precedents furnished no sound base and that the American precedents had relied on them without any independent evaluation. He noted that in Milwaukee County v. White Co., 296 U. S. 268, 56 S. Ct. 229, 80 L. Ed. 220 (1935), the Court had held that a state must give full faith and credit to another state’s judgement for income taxes and that the Court had given strong indications favoring the liberal enforcement of such foreign tax claims which it viewed as statutory obligations, perhaps quasi-contrac
The court in Rodgers flatly upheld the right of Oklahoma to bring an action in Missouri to collect income tax obligations incurred by the defendants while they were residents of Oklahoma; it found no “local public policy” which would prompt the Missouri court to refuse enforcement of the Oklahoma tax; and it found no inconveniences attending the action beyond those which are “common to all transitory civil actions, and have never been considered as a reason to bar them.” 193 S. W. 2d at 927. Rodgers has received the virtually unanimous approval of the commentators and has been followed in many cases throughout the country. See Ohio v. Arnett, 314 Ky. 403, 234 S. W. 2d 722, 725-727 (1950); State v. Neely, 225 Ark. 230, 282 S. W. 2d 150 (1955); Detroit v. Gould, 12 Ill. 2d 297, 146 N. E. 2d 61 (1957); State Tax Comm’n. v. Cord, 81 Nev. 403, 404 P. 2d 422 (1965); Nelson v. Minnesota Income Tax Div., 429 P. 2d 324, 325 (Wyo. Sup. Ct. 1967); Leflar, American Conflicts Law § 270, at 641—43 (1968); Goodrich, Conflict of Laws (Scoles Ed. 1964) § 66, at 99-100; Ehrensweig, Conflict of Laws § 49, at 174 (1962).
There is no reason to doubt that New Jersey’s common law is now firmly in accord with the holding in Rodgers. See Pennhurst State School v. Estate of Goodhartz, 42 N. J. 266, 272 (1964); State v. Amsted Industries, 48 N. J. 544, 549 (1967); cf. Standard, &c., Co. v. American Salpa Corp., 113 N. J. Eq. 468 (Ch. 1933); New York v. Coe Mfg. Co., 112 N. J. L. 536 (E. & A.), cert. denied, 293 U. S. 576, 55 S. Ct. 89, 79 L. Ed. 674 (1934). In American 8alpa Delaware was permitted to recover a franchise tax in a New Jersey receivership proceeding and in Coe Mfg. New York was permitted to recover a franchise tax which it had imposed on a New Jersey corporation and which it had pur
Pennhurst State School v. Estate of Goodhartz, supra, 42 N. J. 266, upheld the right of Pennsylvania to maintain an action in a Few Jersey court against a Few Jersey estate to recover the cost of oaring for the decedent’s incompetent son in a Pennsylvania State institution. In the course of our opinion we pointed out that:
There is no sensible basis for declining to entertain the plaintiff’s action in our courts for we have long become accustomed to the enforcement of rights created by foreign states which are neither penal in nature nor offensive to our policy. See Giardini v. McAdoo, 93 N. J. L. 138 (E. & A. 1919) ; Masci v. Young, 109 N. J. L. 453 (E. & A. 1932), aff’d, 289 U. S. 253, 53 S. Ct. 599, 77 L. Ed. 1158 (1933) ; Marshall v. Geo. M. Brewster & Son, Inc., 37 N. J. 176 (1962) ; cf. Zurich General Accident, &c., Co. v. Ackerman Bros., Inc., 124 N. J. L. 187 (E. & A. 1940). 42 N. J. at 271.
In Pennhurst we cited Rodgers and explicitly accepted the reasons which it advanced in support of the extraterritorial enforcement of ordinary tax claims; such claims are not penal in nature and are consistent with local policy; their enforcement entails no procedural or governmental obstacles and advances the interests of comity between the states; they generally' do not involve any incidents of forum non conveniens and, if an exceptional situation does arise where such incidents are present,'the cause may be remitted to the more convenient forum. 42 N. J. at 272. In Amsied we recently reaffirmed Pennhurst and indicated that we would recognize actions under foreign escheat laws, noting that “escheat laws are not penal and do not offend any policy of our ’State.” 48 N. J. at 549. :
New Jersey has no general tax reciprocity legislation but has Acts containing particularized tax reciprocity provisions. See N. J. J. A. 54:8A-46; N. J. S. A. 54:32B-23. One of these, enacted by L. 1962, c. 70 as an amendment to the Emergency Transportation Act (L. 1961, c. 32), provides that the Attorney General may bring suit in the appropriate court of any other state to collect any tax due under that Act; it further provides that the courts of our State shall recognize and enforce liabilities “for taxes lawfully imposed by any other State, upon incomes” which extends a like comity to New Jersey. L. 1962, c. 70, at 293. N. J. S. A. 54:8A-46. The Appellate Division found that this dealt only with foreign “State” taxes, namely those “imposed by the legislature of another state, assessed and collected by state officials and deposited into the general state treasury for use as appropriated by the legislature.” 115 N. J. Super. at 371; cf. State of Illinois v. City of Milwaukee, 404 U. S. -, 92 S. Ct. 1385, 31 L. Ed. 2d 712 (U. S. 1972). In the light of the legislative history outlined by the Appellate Division we do not differ with the aforementioned conclusion; however, we firmly differ with the Ap
Eor present purposes we may bypass any question as to the constitutional power of the Legislature to prohibit our Superior Court from entertaining actions to recover foreign municipal taxes (cf. art. VI, § 3, para. 2) for we find nothing whatever in the history, terms or purposes of the legislation which evidences a prohibitory intent. The Legislature undoubtedly adopted the reciprocal provision in L. 1962, c. 70 with a view towards strengthening the Attorney General’s hand in asserting New Jersey’s right to maintain actions in foreign states for State taxes due under the Emergency Transportation Act; but that does not even remotely suggest an accompanying intent to curb existing common law rights in our courts. There is no express language evidencing such a negative intent nor is it to be implied under construction principles. Cf. State v. Western Union Telegraph Co., 12 N. J. 468, 486, appeal dismissed, 346 U. S. 869, 74 S. Ct. 124, 98 L. Ed. 379 (1953); State v. Loog, 13 N. J. Misc. 536, 541 (Sup. Ct. 1935), aff’d sub nom., State v. Henry, 117 N. J. L. 442 (E. & A. 1937); Hetfield v. The Central Railroad Co., 29 N. J. L. 571, 573 (E. & A. 1862); State v. Norton, et al., 23 N. J. L. 33, 40 (Sup. Ct. 1850).
In Western Union Justice Waehenfeld referred to the traditional interpretative rule under which statutes containing no “negative or exclusive words” are generally held not to abrogate the common law. In the course of his opinion (12 N. J. at 486) he reaffirmed the following early expressions found in State v. Norton, et al., supra:
When the common law and a statute differ, the common law gives place to the statute, only where the latter is couched in negative terms, or where its matter is so clearly repugnant that it necessarily impliesPage 481a negative. (1 Black Com. 89.) It is a rule of exposition that statutes are to be construed in reference to the principles of the common law, for it is not to be presumed that the legislature intended to make any innovation upon the common law further than the case absolutely required. The law rather infers that the act did not intend to make any alteration other than what is specified, and besides what has been plainly pronounced, for if the parliament had had that design, it is naturally said they would have expressed it. Dwarris on Siat. 695. 23 N. J. L. at 40-41.
More modem expressions recognize that formal interpretative rules have only a subordinate bearing and that faithful statutory construction will turn not on them but on the “objectives of the legislation and the commonsense of the situation.” Motyka, et al v. McCorkle, et al., 58 N. J. 165, 176 (1971); Levin v. Tp. Committee of Tp. of Bridgewater, 57 N. J. 506, 515, appeal dismissed, 404 U. S. 803, 92 S. Ct. 58, 30 L. Ed. 2d 35 (1971). Here it seems clear that delimiting the common law was not one of the statutory objectives and that, sensibly, no such consequence is to be implied.
We are entirely satisfied that the plaintiff has the common law right to proceed in our courts and that the Appellate Division erred in its holding that L. 1962, c. 70 (N. J. S. A. 54:8A-46) precludes its action. Although the plaintiffs complaint refers to the statute, the reference may be considered as surplusage and the action may now proceed under common law principles. The defendant may of course press any defenses he has on the ultimate merits although we note that his brief before us was confined to the jurisdictional issue which we have rejected and to claims addressed solely to the measure of plaintiff’s recovery; these claims were grounded on (1) our statute of limitations (N. J. S. A. 2A:14-1) and (2) our prevailing doctrine that actions to recover foreign penalties as such are not maintainable. See Derrickson v. Smith, 27 N. J. L. 166 (Sup. Ct. 1858); Restatement, supra, § 89, at 264-67.
In Pennhurst, supra, we pointed out that “when a foreign state sues in the courts of our State it lays aside its sovereignty and is to be dealt with as a private suitor” (42 N. J.
Reversed and remanded to the Atlantic County District Court for further proceedings in conformity with this opinion.
For reversal and remandment: Chief Justice Weinteaub and Justices Jacobs, Feancis, Peoctoe, Hall, Schettino and Mountain—7.
For affirmance-. None.