torial limits are not affected by subsequent | This is not an attempt to evade the payment changes of municipal division lines. of taxes upon property which other like cor[Ed. Note. For other cases, see Municipal porations throughout the commonwealth are Corporations, Dec. Dig. § 966.*]

compelled to pay, but appellants complain that

5. STATUTES (§ 214*)-CONSTRUCTION-ARGU-they should not be subjected to taxation up

MENT OF CONVENIENCE.

The argument of convenience cannot prevail in construing a statute when the legal rights of parties are involved.

[Ed. Note. For other cases, see Statutes, Dec. Dig. 214.*]

6. MUNICIPAL CORPORATIONS (§ 966*)-TAXATION-SCOPE OF POWER.

The consolidated city of Pittsburg has power to tax all taxable subjects as they existed at the time of consolidation, but cannot extend

the territorial limits of a local act so that a new subject of taxation will be created and property made taxable in a locality where neither by general nor local laws was such property ever taxable before.

[Ed. Note.-For other cases, see Municipal Corporations, Dec. Dig. § 966.*]

Appeal from Court of Common Pleas, Allegheny County.

Bill by the Federal Street & Pleasant Valley Passenger Railway Company and another against the City of Pittsburg and others. From a decree of dismissal, plaintiffs appeal.

Reversed.

on property never taxed before and which' is not taxed in any other part of the commonwealth unless located within the limits of some district in which prior to the adoption of the new Constitution the Legislature had expressly provided that property of the kind here involved should be a subject of taxation for local purposes like other real estate in the locality affected.

No exemption is claimed from the payment of taxes expressly imposed by statute and ordinarily paid throughout the commontion of new burdens limited to the local diswealth, but resistance is made to the impositrict, and not generally borne by other like corporations in other parts of the state. With these facts, axiomatic and fundamental principles in mind, let us proceed to a consideration of the merits of the controversy here involved. While in the preparation and consideration of the case by counsel and court many collateral, incidental, and material matArgued before FELL, BROWN, MESTRE-ters have been discussed, the real question is ZAT, POTTER, ELKIN, and STEWART, JJ. within narrow limits. It is all a question Samuel McClay, for appellants. Lee C. of authority for the imposition of the new Beatty and O. A. O'Brien, for appellees. burden. If the consolidated city of Pittsburg has the authority to tax the property in quesELKIN, J. A statement of a few rules and tion, that is an end of the case; but, if it principles of law about which there is and does not possess such power, its right to imcan be no dispute will be helpful to a proper pose the taxes in question does not exist. understanding of the questions involved in There is no general tax statute subjecting the this proceeding. While taxation is an inci- property here involved to taxation, and we dent of sovereignty absolutely necessary to must look elsewhere for the authority if in maintain government, the authority to impose fact there be any. The contention of the city taxes depends upon express legislative grant, is that by the consolidating act of February and not upon incidental governmental power. 7, 1906 (P. L. 7), and the local act of JanuThere is no such thing as taxation by impli- ary 4, 1859 (P. L. 828), applicable to the old cation. The burden is always upon the tax- city of Pittsburg, such power was either exing authority to point to the act of assembly pressly conferred upon the municipality or which authorizes the imposition of the tax results by necessary implication. The anclaimed. Taxation is a sovereign state gov-swer to this position must be found in the ernmental power not possessed by municipal- acts themselves. ities or municipal divisions unless delegated Some confusion has arisen by an indefinite to them. In other words, municipalities have and somewhat loose use of the term "governno implied power of taxation and must look mental powers." Of course, if the city has to the statutory grant for such authority as been delegated the municipal governmental they possess in the imposition of taxes. In power to create new subjects of taxation or Pennsylvania it has been uniformly held that to extend old ones, no one could question its the real estate of a public or quasi public cor- right to exercise the power so possessed. poration essential to the exercise of its corpo- This is the pinch of the case. Governmental rate franchises is not subject to assessment power is a broad and comprehensive term, and taxation for local purposes in the ab- the extent and degree of which depend upon sence of legislative authority imposing such the authority asserting it. Sovereign state taxes. Prior to the consolidation of the two governmental power is one thing and delegatcities the property in question was not sub-ed municipal power quite another. The first ject to assessment and taxation as real es- is only restrained in its exercise by constitutate. It was located in what was formerly tional limitations, the second is entirely rethe city of Allegheny, and no act of assembly, stricted by its grant, and does not extend be general or local, was ever passed subjecting yond the limitations imposed by the statute property of the kind involved in this proceed- conferring it. Sovereign power is state wide ing to taxation as real estate in that city. while municipal power is limited to the lo

For other cases see same topic and section NUMBER in Dec. & Am. Digs. 1907 to date, & Reporter Indexes

power was expressly conferred by the statute. Real estate throughout the commonwealth is made subject to taxation by the acts of 1834 and 1844 and other supplemental legislation of a general character. Prior to that time real estate was taxed under general laws now repealed. The authority to levy and assess a tax is a very different thing from the power to create a taxable subject. Levy and assessment have to do with the rate and valuation and the method of fixing the amount of the tax, while the taxable subject is the res; that is, the property or thing upon which the levy and assessment operate and against which the tax is levied.

calities affected. The act of 1859 was local, | delegating this power to municipalities, much applicable only to the city of Pittsburg, and confusion would arise, and no uniformity was passed for the purpose of enabling that could be maintained. If municipalities had city to raise additional revenue. It seems to this power to exercise, each one would act have been carefully drawn, and the draughts- from the standpoint of its own necessities, man evidently had in mind the distinction requirements, and ideas of local governmenwhich has always been made between the tal conditions in the creation of taxable subpower to levy and collect a tax and the pow-jects, and we would have new and different er to create a new subject of taxation. This subjects of taxation at every municipal divithought is clearly expressed in that act. By sion line. Such a condition would be dethe first, second, and fourth sections the plorable, and it never has been the policy power to levy, assess, and collect certain li- of our state to confer such power upon mucenses and taxes is expressly conferred up-nicipal governments except in rare and exon the select and common councils of said ceptional instances, and, when so done, the city. In the third section no such power is conferred, but the Legislature giving expression to the sovereign power of the state created a new subject of taxation within the territorial limits of that city for certain purposes. This is what the Legislature did, and the city obtained no greater right than the statute gave, which was the authority to treat certain kinds of property not theretofore taxable as a subject of taxation. The authority to levy and assess the property thus subjected to taxation was not conferred upon city councils by the act of 1859, which only provided as to real estate belonging to railroads that it shall be subject to taxation for city purposes like other real estate in said city. Other real estate in said city was not taxable under that act, but under other general statutes which also gave authority to levy and assess. It seems perfectly clear, therefore, that the old city of Pittsburg never had conferred upon it the municipal power to create property of the kind in question into a taxable subject. The Legislature had the power prior to the adoption of the Constitution of 1874 to subject this kind of property to taxation either in local districts or throughout the commonwealth. In this instance it exercised the power in the old city of Pittsburg as it had the right to do, but it is important to keep in mind that the Legislature exercised the power directly and did not delegate it to the municipality to be exercised as the councils thereof might deem proper. There is good reason for the legislative distinction, made between section 3 and the other three sections of the act of 1859. From the beginning of our state government real estate has been considered a primary source from which necessary revenues may be derived. Real estate is everywhere and is the basis of taxation in every municipal division, large or small. The right to use, enjoy, and possess real estate lies at the foundation of the peace, comfort, and happiness of our people. This right and the burdens which accompany it should be defined and fixed by general laws applicable as nearly as may be throughout the whole commonwealth. For this reason, it has been the policy of our state to subject real estate to taxation by general statutes, so that it will everywhere be treated upon the same basis. If it were

The act of 1859 did not delegate to the select and common councils of the city of Pittsburg the power to provide by ordinance or otherwise that real estate in general and the kind here involved in particular should be made a taxable subject, nor did it authorize city councils to levy and assess taxes against such property. All it did was to provide that property such as is here involved should be subject to taxation within the limits of that city, subject, of course, to the municipal power granted by other statutes to levy and assess taxes against it in the same manner as taxes were levied and assessed against other real estate. We therefore hold that no municipal governmental power was conferred upon the councils of the city of Pittsburg by the act of 1859 to subject property of the kind in question to taxation, and that such property only became a subject of taxation by the exercise of the sovereign power of the state through the Legislature. This is the answer to the very able argument made by learned counsel for appellees in which it is contended that the city possessed this governmental power, which expanded with the expansion of the city. A power never possessed cannot expand. It is clear from what has been said that the act of 1859 is a local act subjecting certain kinds of property to taxation within the territorial limits of the locality affected. If it expanded, it was not by reason of the expansion of a governmental power, but because the territorial limits of the city expanded. This view does not seem to be very confidently pressed. If it be the rule that a local act limited at the time of its passage to a particular city or

expansion, it would follow as of course that it contracts with the contraction of territorial limits; for, if the rule be sound, it must work both ways. In other words, if the two cities involved in this case had been consolidated by annexing the old city of Pittsburg to Allegheny, under the rule sought to be invoked here, all local acts in the annexed city would be inoperative because the municipality to which they applied would then no longer exist. Such a result is not necessary under any proper rule of construction, and no decided case has been called to our attention to warrant such a conclusion.

on such cities, but without power to create a taxable subject in certain kinds of real estate not made taxable by general law. The argument of convenience and the suggestion of confusion are advanced as a reason for holding that the provisions of this local act should be extended into new territory never covered by it. It is suggested that by so holding the constitutional requirement of uniformity in taxation would be more nearly approached, but this is a two-edged sword, because, if uniformity is the goal to be attained, this result can best be accomplished by the repeal of the local act of 1859, and then this kind of property would be uniformly taxed throughout the commonwealth. However, the argument of convenience cannot prevail when the legal rights of parties are involved. Many embarrassing questions arise out of the consolidation of different municipalities and districts when governed by local and inconsistent laws, but these are the burdens and inconveniences assumed in the accomplishment of greater things. The consolidated city has the power to levy and assess taxes upon all taxable subjects just as those subjects of taxation existed at the time of consolidation, but has no power to extend the territorial limits of a local act so that a new subject of taxation will be created and property made taxable in a locality where neither by general or local laws was such property ever taxable before. For the reasons hereinbefore stated and others that might be added, we think the city was without authority to tax the property of appellants located in the city of Allegheny; that is, the particular property involved in this proceeding for city purposes under the act of 1859.

Or, again, let us assume that within constitutional limitations it were possible to divide one county into four counties and that the division was affected while a local act was in force in the parent county, what would result as to the application of the local act under such circumstances? Would it apply only in that part of the original county left after carving out the three new counties, or would it still apply to all of the territory included in the parent county unaffected by the division? The safer and sounder rule is that it applies to the entire territory, no less and no more, to which the Legislature made it applicable, and that these territorial limits are not affected by subsequent changes of municipal division lines. This is the doctrine of Parsons v. Winslow, 1 Grant Cas. 160, and Clifford v. Belsterling, 2 Serg. & R. 108. This has also been the recognized rule in dealing with local prohibitory liquor laws. It is sound and should not be disturbed. Then, in addition, there are the constitutional barriers that no local act shall be passed regulating the affairs of counties, cities, townships, wards, boroughs, and school districts; also that other provision that so much of any law as may be revived, amended, extended, or conferred shall be re-enacted and published at length, which was not done in this case. The Legislature could not have done directly what is claimed to have been done indirectly in the case at bar; that is, extend the operation and territorial limits of a local act by a general statute. It is true that the territorial limits of the act of 1859 was extended several times prior to the adoption of the new Constitution when additional territory was added to the city of Pittsburg, but this result was accomplished by the express provisions of the acts authorizing the consolidation and extensions. The taxation of this kind of real estate under the act of 1859 was purely local, and we find nothing in the consolidating act of 1906 which in any way affected its purpose or attempted to extend its territorial limits. So far as the consolidating act is concerned, it left all subjects of taxation just as they were at the time it was passed and as they existed when the consolidation was effected. The consolidated city is now as it was before the consolidation took place, a city of the second class with Decree reversed, bill reinstated, and record repower to levy and assess taxes conferred up- | mitted, with directions to enter such decree as

Decree reversed, bill reinstated, and record remitted, with directions to enter such decree in accordance with the views herein expressed as will protect the rights of the parties, costs to be paid by appellees.

(226 Pa. 429)

PITTSBURG, A. & M. TRACTION CO. et al.
V. CITY OF PITTSBURG et al.
(Supreme Court of Pennsylvania. Jan. 3, 1910.)
Appeal from Court of Common Pleas, Alle-
gheny County.

Traction Company and another against the
Bill by the Pittsburg, Allegheny & Manchester
City of Pittsburg and others. Decree of dis-
missal, and plaintiffs appeal. Reversed.

Argued before FELL, BROWN, MESTRE-
ZAT, POTTER, ELKIN, and STEWART, JJ.
Samuel McClay, for appellants. Lee C. Beat-
ty and C. A. O'Brien, for appellees.

ELKIN, J. This case is on all fours with the preceding one, and is controlled by the same rules and principles. The only difference between the two cases is the character of the real estate involved. It is therefore unnecessary to discuss the question raised by this appeal. For the reasons stated in the opinion filed in the former case (75 Atl. 662), the decree entered br the court below must be reversed.

Appeal from Court of Common Pleas, Al- and has no knowledge of the contract or the legheny County.

“As shown by Exhibit A, contract material,

and Exhibit B extras, hereto attached and made a part hereof; that the kind of materials furnished was finished mill work, and the date when the last labor (or materials) was furnished was on the 21st day of November, 1907."

Exhibit A is an itemized statement giving the items of materials furnished, with the year, month, and day of the several items, and also giving the total sum due for all the items of the materials furnished, but not the price of each item. Exhibit B is an itemized statement of the extras which gives the year, month, and day, the price for the first three items furnished on separate days, the lump sum for the items furnished on another day, and the price for another item.

were furnished was a "written bid accepted
for $3,400 and extras ordered amounting to
$145.50." This, it will be observed, shows
clearly the contract between the subcon-
tractors and the contractor under which the
materials were furnished. The bid was in
writing, for a lump sum, and was accepted
by the contractors. It is not clear how the
contract could have been more definitely
stated, or in what terms it could have been
stated which would have furnished more in-
formation to the owners. It was not a con-
tract in writing executed by both parties,
containing prices fixed for the various items
of material to be furnished. It was simply
an accepted offer to furnish the material
named in Exhibit A for a specific sum, with-
out stating the prices for the various items
of the materials. The notice does not allege
that copies of the written bids were attached
thereto, but that the exhibit containing the

several items of material furnished was at-
tached to the notice. We think the contract
is sufficiently set forth in the statement.
The section also requires that the state-
ment shall set forth "the kind of labor or
materials furnished." Exhibit A contains a
detailed statement of the materials furnish-
ed, showing the items and the dates when
they were furnished. The exhibit is a part
of the notice and statement, and is clearly
sufficient when read in connection with the
statement proper, which avers "that the
kind of materials furnished was finished mill
work." The statement also avers that the
date when the last materials were furnished
was November 21, 1907.

We think the notice and statement are suf

As we have frequently said, the purpose of giving this notice is to furnish information to the owner so that he may protect himself, and not be required to pay an exorbitant price for the same labor or material. Section 9 of the act directs how the owner shall ficient. The statement gives the owners a proceed when he has been served with a no- detailed account of the various items of matice, accompanied by a sworn statement, of terials furnished, the total of the price to be an intention to file a claim by a subcontract-paid, and the kind of materials furnished. or. He may give a copy of the notice to the This is all the information he needs to enparty personally liable for the debt, and no-able him to deal intelligently with the contify him that, unless the claim is settled within 15 days, or he is furnished with a sworn statement setting forth wherein it is intended to be disputed, he may pay the same and deduct the amount from the contract price, or hold the contractor personally liable for any loss. If the contractor approve the claim, or fail to file a sworn statement of defense thereto, the owner may pay the claim and deduct the amount from the contract price, or hold the contractor liable for any loss. The notice and the sworn statement accompanying it should therefore be sufficiently clear and explicit to give the owner such information as will enable him to examine and investigate the claim and determine whether it is correct or not. For this reason the Legislature in section 8 has specifically enumerated what the sworn statement shall contain. It is conceded that the notice and sworn statement were properly served on the owners in the present case. The statement avers that the contract under which the materials

tractor and protect himself. He can readily ascertain, if he desires to know, whether or not the contract price was exorbitant and beyond the fair value of the materials agreed to be furnished. If he desires, he can have a price put upon each item of the material furnished by a person competent to value it, and in that way determine whether the sum total is exorbitant. While the price agreed to be paid was a lump sum, the various items of the materials furnished are specifically set forth in the statement. This differentiates it from the case where the items and character of the material are not given and the price is a lump sum. In such case the statement would not be sufficient because it would not enable the owner to ascertain the fair value of the materials furnished for which only is he liable.

2. The exhibit attached to the claim is a copy of the exhibit attached to the notice, and 'sets out in detail the items of materials furnished by the subcontractors for the own