# Commonwealth v. National Biscuit Co. > Supreme Court of Pennsylvania · November 11, 1957 · 390 Pa. 642 URL: https://www.frixlaw.com/law-library/cases/9754705 ## Case - **Full name:** Commonwealth v. National Biscuit Company, Appellant - **Court:** Supreme Court of Pennsylvania - **Decided:** November 11, 1957 - **Citations:** 390 Pa. 642; 136 A.2d 821; 1957 Pa. LEXIS 331 - **Precedential status:** Published - **Opinion:** Concurrence by Bell - **Judges:** Chidsey, Jones, Bell, Ciiidsey, Musmanno, Arnold - **Cited by:** 34 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9754705 ## Opinion text Concurring Opinion by Mr. Justice Bell: I Avrite this opinion Avith great reluctance, but fairness to the appellant compels me to do so. I am in complete disagreement Avith some parts of the majority opinion, its attempted distinctions of prior decisions of this Court, and its failure to overrule the latest decision of this Court, viz., National Biscuit Company v. Philadelphia, 374 Pa. 604 , 98 A. 2d 182 (1953). In that case, Avhere the basic issue was, as in the present case, whether the (State) Foreign Corporation Franchise Tax Act of May 16, 1935, P. L. 184, 72 PS 1871, imposed a franchise tax or a property tax, this Court held that said Act imposed a property taso; and therefore the so-called Philadelphia Mercantile License Tax, since it was an excise or franchise tax, was not a duplication of the State Foreign Corporation Franchise *662 Tax Act and for this reason, it was not legislatively prohibited under the Sterling Act. The Court * relying upon the most recent decisions of this Court, viz., Federal Drug Company v. Pittsburgh et al., 358 Pa. 454 , 57 A. 2d 849 (1948), and Murray v. Philadelphia et al., 364 Pa. 157 , 71 A. 2d 280 (1950), held, we repeat, that the aforesaid Foreign Corporation Franchise Tax Act of May 16, 1935, imposed a property tax and not a franchise tax, and said (page 612) : “. . . as to the payments made to the Commonwealth of capital stock taxes, corporate net income taxes, foreign corporation franchise taxes, * and taxes on net earnings or income, it need merely be pointed out that all those taxes have been held, many times, to be property taxes. In an opinion by Mr. Justice Linn, who cited many previous authorities so holding, the capital stock tax was again declared in Murray v. Philadelphia, 364 Pa. 157, 166 , 71 A. 2d 280, 284 , to be a tax on the property of the corporation, and so likewise (following Blauner’s Inc. v. Philadelphia, 330 Pa. 342 , 198 A. 889 , and Philadelphia v. Samuels, 338 Pa. 321 , 12 A. 2d 79 ) the corporate net income tax (p. 169, A. p. 286), the franchise tax (p. 170 A. p. 286), and (following Kelley v. Kalodner, 320 Pa. 180, 187 , 181 A. 598, 601 ) a tax on net earnings or income (p. 175, A. p. 289). On the other hand, the authorities are equally numerous to the effect that a mercantile license tax is not a tax on property or income, but an excise [or franchise] ** tax upon the privilege of transacting business measured by the gross volume of business annually transacted: Knisely v. Cotterel, 196 Pa. 614 , 46 A. 861 ; Commonwealth v. Harrisburg Light & Power Co., 284 Pa. 175 , 130 A. *663 412 ; Commonwealth v. Globe Furnishing Co., 324 Pa. 180 , 188 A. 170 ; Commonwealth v. McKinley-Gregg Automobile Co., 345 Pa. 544 , 28 A. 2d 919 ; Commonwealth v. Bailey, Banks & Biddle Co., 20 Pa. Superior Ct. 210 ; H. J. Heinz Co. v. School District of Pittsburgh, 170 Pa. Superior Ct. 441 , 87 A. 2d 85 . Since clearly, therefore, a mercantile license tax is not a duplication of any of the property taxes paid by appellees to the Commonwealth, the City of Philadelphia is not prohibited by reason of any limitation on its power contained in the Sterling Act from imposing such a tax on corporations otherwise subject thereto.” The present majority opinion says: “Appellant contends that the tax as computed and imposed on it offends various provisions of the State and Federal Constitutions. The contention rests upon the premise or assumption that the Franchise Tax Act of 1935 imposed a property tax. In cases decided by this Court following the passage of the Act of 1935 we unequivocally and repeatedly held that the franchise tax imposed by it is not a property tax but, as its name implies, a tax levied for the privilege of doing business in the Commonwealth, and its constitutionality was upheld: Commonwealth v. Columbia Gas and Electric Corporation, supra (1939); Commonwealth v. Ford Motor Company, supra (1944) ; Commonwealth v. Quaker Oats Company, 350 Pa. 253 (1944), 38 A. 2d 325 ; Commonwealth v. Monessen Amusement Company, Inc., 352 Pa. 120 (1945), 42 A. 2d 158 .” This statement flies in the teeth of the more recent opinions and decisions of this Court which as above demonstrated held expressly, squarely and specifically to the contrary. The present majority opinion attempts to distinguish the earlier cases from the recent cases whieh hold clearly, directly and exactly to the contrary, on *664 the ground that the recent cases dealt with a local ordinance. Of course this attempted distinction not only disregards the recent decisions and the clear and forceful language of the Court’s opinions, but it also completely overlooks the fact that the local ordinance (of the City of Philadelphia) whose validity was challenged was absolutely invalid and void under the Sterling Act, if it levied or collected “any tax on a privilege, transaction, subject, or occupation or on personal property which is now or may hereafter become subject to [1] a state tax or [2] a license fee.” The most important and basic issue in National Biscuit Company v. Philadelphia, 374 Pa., supra, as well as in the recent cases hereinabove cited, was whether the State taxes — including the State Franchise Tax Act of May 16, 1935— were franchise taxes or property taxes. In that' case the majority, we repeat, held that the taxes imposed by the State Franchise Tax Act of 1935 (and other State Tax Acts enumerated therein) were property taxes and consequently sustained the validity of the Philadelphia so-called Mercantile License Tax as a franchise or excise tax, i.e., a tax for the privilege of doing business in Philadelphia. This was the basic and only legal ground upon which (a majority of) the Court sustained the ordinance. How this Court can one moment say that a tax imposed by a certain State Act is a property tax, and the next moment say that it is a franchise tax, or vice versa, is to me incomprehensible; * how this Court can *665 then say that all the flatly contradictory and irreconcilable decisions of this Court on this point are harmonious and reconcilable, is to me incomprehensible; and finally, how this Court can reach its present conclusion (that the State franchise tax is a franchise tax, with which I agree) without overruling National Biscuit Company v. Philadelphia, 374 Pa., supra, and the recent cases which say exactly the opposite, is likewise incomprehensible. I would hold that the franchise tax which is imposed by the State by the Act of May 16, 1935, supra, on foreign corporations doing business in Pennsylvania, is a franchise tax; and I would overrule all prior decisions of this Court which hold that it imposes a property tax; and I would particularly overrule National Biscuit Company v. Philadelphia, 374 Pa., supra. Mr. Justice Musmanno and Mr. Justice Benjamin B. Jones join in this concurring opinion. With Justices Allen M. Stearne, Bell and Musmanno dissenting. Italics and brackets throughout, ours. See footnote to my dissenting opinion in National Biscuit Company v. Philadelphia, 374 Pa., supra (page 637) : “The distinction or line of demarcation between a privilege tax, an excise tax and a property tax, which in the last analysis must be determined by the incidents and the nature and legal effect of the Act rather than by the name by which it is described, is so nebulous, flexible and fluctuating, that the decisions on this point throughout the *665 entire country are ofttimes vacillating, confused and contradictory. See: 53 C.J.S., Licenses, pp. 457-461.” --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9754705. Public record. Not legal advice.