Leberak v. Mayor of Chester

76 Pa. D. & C. 60, 1950 Pa. Dist. & Cnty. Dec. LEXIS 42
CourtPennsylvania Court of Common Pleas, Delaware County
DecidedJuly 13, 1950
Docketno. 119
StatusPublished

This text of 76 Pa. D. & C. 60 (Leberak v. Mayor of Chester) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Delaware County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Leberak v. Mayor of Chester, 76 Pa. D. & C. 60, 1950 Pa. Dist. & Cnty. Dec. LEXIS 42 (Pa. Super. Ct. 1950).

Opinion

Toal, J.,

— This was a bill in equity filed by plaintiffs to enjoin defendants from charging or collecting any tax from them under the provisions of Ordinance No. 73 of 1948 of the City of Chester, Pa., which provides for the imposition on and collection of a mercantile license tax from:

(1) Wholesale vendors of or dealers in goods, wares, and merchandise; that is, those persons who sell to vendors of or dealers in goods, wares and merchandise.

(2) Retail vendors of or dealers in goods, wares and merchandise; that is, those vendors or dealers who are not wholesale vendors or dealers.

The ordinance by its terms exempted from taxation a business furnishing services in part or whole and taxed only that part of the business dealing in goods, wares and merchandise.

The bill avers that plaintiffs are residents and citizens of the City of Chester, Delaware County and State of Pennsylvania; that the City of Chester is a city of the third class and that the other defendants are its mayor and council and collector of taxes; that on or about December 28, 1948, defendants, members of council acting for the City of Chester, duly passed an ordinance known as Mercantile License Tax Ordinance No. 73 of 1948 and on March 29,1949, passed a resolution “in order to carry the said ordinance into effect”, and by reason whereof they have attempted to impose a tax upon “vendors and dealers at wholesale and retail in goods, wares and merchandise”; that plaintiffs are each independent distributors of newspapers in certain districts of the City of Chester and are not “vendors or dealers in goods, wares and merchandise” of any nature or kind; that there are a large number of other distributors of newspapers in the City of Chester, constituting with plaintiffs herein, a class too numerous to join as party plaintiffs herein, and plaintiffs file this bill on their own behalf and in behalf of all the others [62]*62in this class of distributors who desire to join herein; that plaintiffs and the class they represent individually constitute very largely the entire distribution system of certain newspapers (the Chester Times, the Evening Bulletin, the Philadelphia Inquirer and other newspapers of public circulation within the City of Chester), and except for certain stores and newsstands which are large dealers and which are served by the newspapers direct, are the main means of distribution in the city; that the entire business of plaintiffs is conducted as follows: they solicit subscribers or readers to the newspapers by themselves, their employes and agents; call for the papers where instructed by the publisher, procure the number of papers required to meet the requirements of their subscribers and cause the papers to be distributed to them, collecting the bills therefor from their subscribers weekly or as desired and paying the publishers for them weekly or monthly; that they do not maintain any store where papers or any other goods, wares or merchandise are offered for sale and they do not sell or offer for sale any newspapers or other goods, wares or merchandise at their office, warehouse or place of business; that the Chester Times, the Philadelphia Evening Bulletin and the Philadelphia Inquirer are newspapers of general circulation and maintain as a part of their distribution systems the facilities of plaintiffs; that the business of plaintiffs and of the class for which they speak is the furnishing of services in the distribution of newspapers from the publisher to the subscriber and for such services they are compensated by being allowed to retain out of the collections made a certain amount per paper; that both the prices at which the papers are supplied to the subscribers and the amount of commissions or compensation to plaintiffs are fixed by the publisher without any right on the part of the distributor to make any changes; the bill further prays for a restraining order [63]*63to prevent the City of Chester from imposing the mercantile tax upon plaintiffs and others similarly situated on the ground that they are not engaged as dealers or vendors in goods, wares and merchandise and that the taxing ordinance be declared by the court as unconstitutional and void respecting the collection of the tax from distributors of newspapers. Defendants filed an answer to the bill which in essence demands proof of the material averments set forth and further avers that defendants are subject to the terms of the Mercantile Tax Ordinance as “vendors or dealers in goods, wares and merchandise”. The answer also prays that the bill be dismissed.

From the bill, answer and the testimony we make the following

Findings of Fact

1. The court has jurisdiction of the parties and of the subject matter.

2. That plaintiffs are residents and citizens of the City of Chester, Delaware County, State of Pennsylvania.

3. That the City of Chester is a city of the third class of the State of Pennsylvania and that the other defendants are its mayor and council and collector of taxes.

4. That on or about December 28, 1948, defendants, the members of council acting for the City of Chester, duly passed an ordinance known as the Mercantile License Tax Ordinance No. 73 of 1948, effective as of February 1, 1949; and by reason whereof, by sections 2(6), (c) and (d) of this ordinance a mercantile license tax was imposed upon any person who is a dealer in or vendor of goods, wares and merchandise.

5. By resolution passed on March 29, 1949, promulgating certain regulations known as the Mercantile License Tax Regulations, in order to carry into effect the proper administration and collecting of taxes under [64]*64the ordinance, it is provided in article 2(a) that the license and tax provisions of the ordinance apply to retail vendors of or dealers in goods, wares and merchandise, i.e., those vendors who are not wholesale vendors or dealers; and further provides that a person must comply with the license and tax provisions with respect to his business in goods, wares and merchandise, where his business is in part providing services and in part the dealing in goods, wares and merchandise.

6. Approximately 9,000 of the total number of newspapers published by the Chester Times daily are sold to individuals by subscription in the City of Chester and delivered to houses of the subscribers by newsboys, who are hired and employed and controlled by plaintiffs.

7. Plaintiffs also sell by the subscription method, in addition to the Chester Times, the Evening Bulletin, Philadelphia Inquirer and Daily News, and deliver the same to the subscribing homes through newsboys who are hired, employed and controlled by plaintiffs.

8. All of plaintiff newsdealers selling newspapers operate their business in the same method and have similar arrangements with the publishers.

9. By reason of the contractual relationship between the publishers and the newsdealers, the following takes place:

(a) Newsdealers order each day the number of papers which they have sold to individual subscribers.

(b) Newsdealers cannot return any papers ordered and must pay to the publishers the amount fixed to be paid for each paper ordered by the newsdealer from the publisher, which in the case of the Chester Times is 8% cents per paper.

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Cite This Page — Counsel Stack

Bluebook (online)
76 Pa. D. & C. 60, 1950 Pa. Dist. & Cnty. Dec. LEXIS 42, Counsel Stack Legal Research, https://law.counselstack.com/opinion/leberak-v-mayor-of-chester-pactcompldelawa-1950.