ceeding under the Act of 1798, for the produc- Motion granted. Order accordingly. Common Pleas—Law. This being a joint and several note of plaintiff and defendant, the former was only entitled to judgment against the latter in one-half the amount of the damages assessed. If the garnishee was to pay the amount of this judgment, he would have no remedy against the defendant. Therefore he is obliged to question the validity of the judgment, in order to protect himself. Pierce Archer, contra. The garnishee has no status here to question the validity of the judgment. The defendant alone can do this. [PEIRCE, J. Suppose the judgment had been granted by a Court that had no jurisdiction, could not the garnishee then question it? Is he not bound to protect himself against the defendant by so doing?] The judgment of this Court alone is his protection. It is against the policy of the attachment law to allow the garnishee to either question the validity of such a judgment or dispute the amount of it. Walker v. Gibbs, 2 Dall. 211. C. A. V. C. P. No. 1. Sept. 16, 1878. C. P. No. I. Collins v. Walker. Foreign attachment-Time for entering judgment against the defendant-Third term of Court after execution of writ-The garnishee cannot question the validity of the judgment against defendant, where the Court rendering judgment had jurisdiction. Rule to set aside a sci. fa. against garnishee and open judgment in attachment. Sept. 21, 1878. Warren v. Thompson. Affidavit of defence-Promissory note—Order of endorsements-When the payee's endorsement appears in regular order, any endorser will be held responsible to subsequent ones unless there is actual notice that such payee's name was written after the other endorsement. Rule for judgment for want of a sufficient affidavit of defence. Assumpsit on a promissory note by the last endorsee against a prior endorser. Foreign attachment. The writ issued July 26, 1877, returnable to the 3d Monday of September, 1877. Service was accepted by the garnishees. The affidavit of defence set forth that defendJudgment was entered March 19, 1878, against ant endorsed the note solely for the accommothe defendant for default of appearance. The dation of the maker, and at the time of his encause of action was a joint and several note signed dorsement there was no other endorsement by the plaintiff and defendant for the sum of thereon, and in this condition it was delivered to $4896.50, and damages were assessed against de- the payee, and that the latter signed his name fendant for the full amount of the note with in- after that of the defendant, and that the defendterest and cost of protest. A writ of sci. fa. was ant believes that the plaintiff had notice of these then issued against the garnishees, who obtained facts. the present rule. The note showed the endorsements to be in regular order, the payee's being first. Warren, for the rule. Booth, contra. The note not being endorsed by the defendant in accordance with the regular course of business, he canno. be held liable without evidence dehors the instrument, showing his liability. Schafer v. The Bank, 9 Smith, 144. THE COURT. According to the copy filed the defendant appears as a subsequent endorser to the payee, and unless notice was given to the holder, | fendants had furnished patterns to the plaintiffs he must be held responsible to subsequent en- from which to make castings for them. dorsees. Promissory note-Patent-Act of April 12, 1872 -A note given in consideration of a patent but without so stating on its face is not absolutely void. Rule for judgment on point reserved. Assumpsit by endorsee against maker of a promissory note given in consideration of a patent right, but not so stated on its face, as required by Act 12 April, 1872. The Court directed the jury to find for plaintiff, reserving the point whether he was entitled to recover under the Act. A. L. Smith, for the rule. A contract made about a matter prohibited by statute is void, though the statute does not declare it so. Holt v. Green, 23 Sm. 198. Marshall v. B. & O. R. R. Co., 16 Howard, 334. It is not necessary, to make a contract void, that it violate the policy of the common law; it is equally so if it violate the policy of statutes. Hatzfield v. Gulden, 7 W. & S. 154. Biddis v. James, 6 B. 321. Swan v. Scott, 11 S. & R. 155. Meyer, contra. That plaintiffs still retained the patterns and refused to return them upon demand, and that by the detention of the patterns the defendants had been damaged to the extent of $500. A supplemental affidavit set forth that plaintiffs had used the patterns in making castings which they had fraudulently sold to other parties, and the damages arising therefrom defendants asked to be set off against the demand of plaintiffs in this action. J. B. Colahan, Jr., for the rule, cited— Hunt v. Gilmore, 9 Sm. 450. Kachlein v. Ralston, I Y. 571. Kachlin v. Mulhallon, 2 Dall. 237. Dunlop v. Speer, 3 Binn. 169. Gogel v. Jacoby, 5 S. & R. 117. Lehmaier v. Born, I WEEKLY NOTES, 444. Henry T. King, Esq., contra. Rule absolute. Connolly v. The Association. Affidavit of defence law-The fact that an assignment for the benefit of creditors has been made by a building association defendant is no reason for withholding judgment. Rule for judgment for want of a sufficient affidavit of defence. Assumpsit, upon an order drawn by the Practical Building and Loan Association upon its trea66 for three shares first series withdrawn" in favor of plaintiff. Payment on account of the above order to the amount of $190 was admitted. The Act of 12th April, 1872, under which de-surer for $385.80, fendant seeks to protect himself, does not on its face declare a note made in violation of its provisions to be void. In this it differs from the Acts of 1817 and 1820, with reference to wages, etc., and certainly this difference has some significance. This note, therefore, is none the less valid and binding. June 19. THE COURT. Judgment for plaintiff on point reserved. The affidavit of defence averred that an assignment for the benefit of creditors had been made by the defendant association on September 16, 1878, and suggested that, owing to the said assignment, the plaintiff's claim should be referred to the assignee, and that otherwise great injury would result to the remaining creditors of the Association. J. L. Jones, for the rule. Assignment for the benefit of creditors does not alter the relative positions of a debtor and creditor, so as to prevent a suit by the former, and the recovery of judgment. WEEKLY NOTES OF CASES. VOL. VI.] THURSDAY, NOV. 14, 1878. [No. 14. Supreme Court. May, '78, 154. Constitutional law-Insurance companies-Taxation-Corporations in the State doing business out of it-Receipts on business done out of the State-Act of March 20, 1877—Constitutionality of. The Act of March 20, 1877, imposing a tax upon "the entire amount of premiums received by insurance companies," was intended to reach the gross receipts of such companies from whatsoever localities derived, and is not repugnant to the provisions of the Constitution of the United States, relating to the regulation of inter-state commerce. Error to the Common Pleas of Dauphin County. Debt, by the Commonwealth of Pennsylvania against the Insurance Company of North America, to recover a balance of tax on premiums of insurance received by the said company. The following facts appeared : The Insurance Company of North America entered an appeal from a settlement of their account with the Commonwealth, made by the Auditor General in August, 1877, charging the company, under the Act of March 20, 1877, §6,* *This is the only section of the Act which relates to the subject of taxing gross premiums, and is as follows:"That hereafter it shall be the duty of the president, secretary, or other proper officer of each and every insurance company or association, incorporated by or under any law of the Commonwealth (except companies doing business upon the purely mutual plan, without any capital stock or accumulated reserve, and purely mutual beneficial associations whose fund for the benefit of members, their families or heirs, is made up entirely of the weekly or monthly contributions of their members and the accumulated interest thereon) to make report in writing to the Auditor General, semi-annually, upon the first day of July and January in each year, setting forth the entire amount of premiums received by such company or association during the preceding six months, whether the said premiums were received in money, or in the form of notes, credits, or any other substitute for money; and every such company or association shall pay into the State Treasury, at the dates aforesaid, a tax of eight-tenths of one per centum upon the gross amount of said premiums: Provided, That said report shall be made under oath or affirmation, and that it shall be the duty of the accounting officers of the Commonwealth to add ten per centum to the account of any company or association whose officers shall neglect or refuse, for a period of thirty days, to make the said report," etc. VOL. VI.-12 Leaving a balance unpaid as per settlement . $5485.04 The declaration was in debt, to recover this balance. The defendants pleaded, first, the general issue, and afterwards, by consent, on the trial of the cause two additional special pleas were filed, setting forth that the defendants were a corporation created by the State of Pennsylvania, authorized to effect insurance against fire and the perils of the seas, and that $5230.05, part of the sum claimed, was a tax of eighttenths of one per cent. assessed by the AuditorGeneral on $653,757.22, received as gross premiums on contracts of insurance effected and entered into by the defendants in the several other States and Territories of the United States, between the times specified, in the several accounts therein mentioned. And that the said company so received and collected the said premiums at agencies established in such other States and territories by virtue of licenses and permissions granted to the defendants by the lawful authorities thereof, to transact therein said business of insurance under the laws of such other States and territories. And that no part of the said sum was received for business transacted or premiums taken within the State of Pennsylvania, the State of Pennsylvania. And that in all such or for insurances on property or effects within other States and territories the defendants were obliged to and did pay taxes imposed by the laws of such other States and territories while transacting their business. The second special plea was a similar averment as to the remainder of the sum claimed for premiums received outside of Pennsylvania, in the British Provinces of New Brunswick, Newfoundland, and Canada, amounting to $214.98. The plaintiff demurred to the two special pleas, and on the trial of the issue raised by the general issue on March 11, 1878, admitted the truth of the facts set forth in these two special pleas. the Commonwealth for the sum of $5989.54, bePEARSON, P. J., directed the jury to find for ing the full amount claimed, reserving the following points for the opinion of the Court: (1) If the Court shall be of opinion that the defendants are not liable for the tax laid by the Legislature of Pennsylvania on premiums of in surance received by the defendants in other States of the United States, and within the limits of the State of Pennsylvania, upon contracts of insurance made by the defendants in places without the limits of the State of Pennsylvania, and with citizens of other States, then the verdict shall be set aside, and judgment shall be entered for the defendants. (2) If the Court shall be of opinion that the defendants are liable for taxes assessed upon such premiums, then judgment shall be entered for the plaintiffs upon the verdict. The Court below gave judgment in favor of the Commonwealth on the points reserved, and the demurrer to the special pleas, which were argued at the same time, PEARSON, P. J., delivering the following opinion: the receipts of this company arising from contracts made and business transacted without as well as within the State. The design was to impose it on all of the receipts from its business, wherever done. (2) Is there anything in the Constitution of this State or of the United States which prevents the imposition of the tax on business done or money due in another State? It certainly is not a tax on commerce between the States. It is said in the argument that insurance is as necessary to commerce as bills of lading, decided to be protected in Almy v. California (24 Howard, 169). In that case it was not merely the bill of lading that was exempted, but the gold dust or bullion which it represented. An insurance, although common, is not necessary to commerce. Many strong merchants or wealthy firms never The points reserved in effect present two ques-insure. But this very point is decided in Paul v. tionsVirginia (8 Wallace, 168). "A policy of insurance First, Does the sixth section of the Act of is not a transaction of commerce, it is a mere conMarch 20, 1877, impose a tax on the gross re- tract." This tax is much less objectionable than ceipts of the defendant corporation, for business that imposed on the gross receipts of railroads. done without as well as transacted within the In many cases they were not incorporated by the State of Pennsylvania, on which it received laws of Pennsylvania, but were the creation of money, notes, credits, or any other substitute for other States, and barely permitted to pass through money? this, yet a tax of $76,788 was imposed on the New York and Erie Railway, which only ran about forty-five miles through Pennsylvania. And, secondly, Can the tax on business done out of the State be lawfully imposed by our legislature? (1) The language of the statute in the present case, imposing the tax, is quite as strong and almost identical with that found in the Act of the 23d of March, 1866, imposing a tax on the gross receipts of railroads, which was construed by the Supreme Court of the United States, in the Reading Railroad Case (15 Wallace, 284), to extend to all receipts, as well of business done within as that without the limits of the State of Pennsylvania. When the same words, substantially, are used in the act of Assembly they should receive the same construction; especially when applied to a corporation doing business of a kind where it is more objectionable than that transacted by this company. The Supreme Court of the United States decided that a tax could not be imposed on goods by the ton carried through Pennsylvania to or from other States, in the Reading Railroad Company Case (15 Wallace, 232), which met my entire approbation; yet held the same company liable to a tax on the gross receipts of freight in the case of the same road. (See same book, 284.) We are unable to see the difference between taxing the freight and the money paid for its transportation; each has the same effect on the commerce between the States, and each State through which the road passes might impose a tax on the gross receipts ad libitum, until the commerce would be wholly excluded, as fully as if imposed on the article carried by the barrel, the bushel, or the ton. The law on both points is too firmly settled to be shaken. (See Minot v. P. W. & B. R. R. Co., 18 Wallace, 206; Erie R. R. Co. v. Penna., 21 Wallace, 492.) The individual opinion of one lawyer or judge is of no consequence whatever. The Insurance Company of North America owes its whole existence to the laws of Pennsylvania. It received a perpetual charter from this State in the year 1794, under which it continued to transact its business within this Commonwealth until the twenty-seventh day of February, 1854, when it was authorized by statute to extend it to any of the States of the It is urged that the business done or obligations Union, or without its limits, giving its contracts held out of the State cannot be taxed. This is the same validity as if made in this State. It is not done by a natural but by an artificial person, by virtue of the authority contained in that law over which the State has entire control. It is that the contracts were made on which the pre-only when the premium is received, or the same sent tax is imposed. secured to the corporation in the form declared We cannot doubt that it was the intention of in the act, that the tax is imposed. Then, in the legislature in enacting this statute to tax all contemplation of law, it comes to the corpora tion in this State. It is within its power, and considered to be in its treasury. It may be considered that money at interest, whether secured by note or mortgage, cannot be taxed as such. The State must have jurisdiction of the person or property, and money at interest is not considered as property, except in the State where the owner resides. (See reasoning of the Court in the "Foreign Bond Case," 15 Wallace, 300, and the principles there laid down.) Hoyt. Commissioners of Taxes, 23 N. Y. 228. A State taxes that which it protects, or which exists only by reason of its permission. The business of this company is neither protected nor carried on by permission of this State beyond its limits. This Act is within the prohibition of the Constitution of the United States as a regulation of or interference with commerce. It taxes the transactions of citizens of Pennsylvania, acting in a corporate capacity, with citizens of other States, outside of Pennsylvania. The same doctrine has been reiterated in many other cases and in different States. A mortgage must be taxed where the owner lives, not where [AGNEW, C. J. Is there not a difference bethe mortgaged land lies (Latrobe v. Mayor of Bal-tween property in another State, and the results timore, 19 Md. R. 13). Yet the State of Pennsyl- of business brought into this State?] vania has, for nearly forty years, taxed her citizens for money at interest due in other States, and the right has never been questioned. In the language of Chief Justice MARSHALL, it has jurisdiction of the person. In the present case, the State has full jurisdiction over this corporation, and can tax the money due it wheresoever situated. We are of the opinion that the law is in favor of the State on the points reserved, and therefore direct judgment to be entered on the verdict in favor of the Commonwealth. The defendants took this writ, assigning for error (1 and 2) the entry of judgment for the plaintiffs, on the demurrer to the special pleas, and on the points reserved, and in general (3, 4, and 5), the decision of the two questions discussed in the opinion of the Court below, as above quoted. Richard C. McMurtrie and Morton P. Henry, for plaintiffs in error. The State of Pennsylvania did not intend by the Act of March 20, 1877, to impose a tax on gross receipts from the business of insurance transacted by the Insurance Company of North America without the limits of Pennsylvania. In the case of railways partly in this and other States the tax has always been imposed only on the proportion of gross receipts receivable in Pennsylvania a tax on the franchises exercised within the State, though indirectly affecting commerce with other States. In construing subsequent statutes in pari materia, the legislature is presumed to have intended similar language to have a similar meaning. There is no limit to the right to tax its own corporations if so intended, provided the rights of citizens of other States are not affected thereby. Under the "Judiciary Act," a corporation such as this is treated as a citizen of the State of its creation. Ohio & Mo. Railroad v. Wheeler, 11 Black. 285. Covington Drawbridge Co., 20 How. 227. Pennsylvania thus seeks to tax all transactions of its citizens, natural or artificial, entered into beyond its jurisdiction. She can, of course, forbid her corporations to transact business beyond her own borders, but she cannot tax transactions Otherwise the State could raise revenue on a conbeyond her borders with citizens of other States. struction company in Texas, a silver mine in Nevada, a banking-house in London-because the company engaged in such transactions was chartered by Pennsylvania. Doyle v. Continental Ins. Co., 4 Otto, 535. Where the line of State taxation begins and ends, as an interference with commerce, is difficult to define. State Tax on Railway Gross Receipts, 15 Wall. 296. A license fee for all peddlers dealing in goods not the growth and manufacture of the State; a tax on sales by importers, on coal a product of the State, transported through the State with a view to exportation; on bills of lading for gold to be carried out of the State, were held void inWelton v. Missouri, 1 Otto, 281. Brown v. Maryland, 12 Wheaton, 419. Almy v. California, 24 How. 169. A marine policy of insurance is as much an instrument of commerce as the bill of lading it Reading Railroad, 15 Wall. 284. Erie Railway, 21 Wall. 492. This company can only transact business out-self, giving a value to the latter whereby drafts side of the State by authority of the local governments where it extends its business, and to them it is bound in taxes for protection, etc. Ducat v. Chicago, 10 Wall. 410. Balt. & Ohio R. R. v. Harris, 12 Wall. 65. That personal property follows the situs of the owner for the purpose of administration, does not preclude examination when necessary for the purpose of justice. may be drawn against it. The case of Paul v. Virginia did not decide that insurance was not commerce; the point in that case was that corporations are not citizens within the meaning of the Constitution of the United States. Doyle v. Ins. Co., 4 Otto, 544. This tax of eight-tenths of one per cent., paid by customers in Colorado or Missouri, in an in |
