N. R. Bagley Co., Inc., v. Cameron, Commissioner of Banking.

in the testimony or in the exhibits that the purchasers of the treasury stock, for which some of them paid $20 a share, were informed that the company selling them the stock had received 11,000 shares as a gratuity, and, in addition, was receiving 25 per cent. commission for selling the stock. We think this plan of doing business on the part of the petitioner was unjust, unfair and inequitable to the purchasers of the treasury stock, as the 24,000 shares, which were sold, or were to be sold, for as much as $20 a share, were to bear the burden of putting said corporation upon a dividend paying basis without cost to the owners and holders of the 26,000 shares of stock issued, as we have above indicated, to persons only two of whom paid anything for their stock, and those two only paying at the rate of $1 a share. Certainly it cannot be claimed that such a plan of doing business on the part of the petitioner was either fair, just or equitable.

It is further alleged by the petitioner in one of its circulars that in the sale of the Dickinson Cord Tire Corporation stock it was selling to the public an "initial offering" of stock of said corporation. This statement was not true, as it appears from the evidence that some of the stock had been sold prior to the time when the Bagley & Co., Inc., was organized for the purpose of selling this stock. It is quite true Bagley states that what he meant was this was an "initial offering" so far as Bagley & Co. was concerned, but it does not appear anywhere in the evidence that he or any of his salesmen explained their understanding of the statement to the buying public. Without such explanation, it would naturally appear to the intending purchaser that for the first time this stock was placed upon the market, which might tend, and probably did tend, to enhance the value of said stock in the eyes of the prospective purchaser. We think this and any other statement embraced in our findings of fact made by the petitioner or its salesmen calculated to stimulate the sale of stock, but not based upon the truth, constituted a plan of doing business on the part of the petitioner which was unjust, unfair and inequitable, and, therefore, justified the Commissioner of Banking in refusing to register this corporation as a dealer under the Securities Act.

It further appears in one part of the statement of facts issued by Bagley & Co., Inc., that the Dickinson Cord Tire Corporation "is manufacturing machines which 'are installed under license by which royalties are guaranteed'" (Exhibit D). This statement is admittedly untrue. It appeared from the evidence that the Dickinson Cord Tire Corporation had not manufactured and installed, under license, any machine for the manufacture of cord tires, and, therefore, no royalties were guaranteed. An effort was made at the trial to explain this statement by the suggestion that machines would be installed in the future; but would an intending purchaser of these securities find anything in the statement of facts, from which we have quoted, which would indicate that the machines of the Dickinson Cord Tire Corporation were to be installed in the future? The language of the statement of facts is "are installed under license." This statement on the part of the petitioner was clearly misleading, and we conclude that said statement formed a part of the proposed plan of doing business of the petitioner which was clearly unfair, unjust and inequitable to the public.

Section 9 of the said Securities Act directs that our decision "shall consult only the rights of the plaintiff and the protection of the public." Having due consideration, therefore, for the rights of the plaintiff in this case, we, nevertheless, decide from the weight of the evidence that the protection of the public imperatively requires us to conclude that the proposed plan of doing

N. R. Bagley Co., Inc., v. Cameron, Commissioner of Banking.

business of Bagley & Co., Inc., is unfair, unjust and inequitable, calculated to mislead unthinking and uninformed prospective purchasers, and that, therefore, the official act of the Commissioner of Banking, refusing to register the plaintiff as a dealer under the Securities Act, must be for the protection of the public, and the same is hereby affirmed.

Conclusions of law.

1. The proposed plan of business of the applicant is unfair, unjust and inequitable.

2. The Commissioner of Banking, in refusing to register the petitioner, proceeded in conformity with the Securities Act of 1923, and is affirmed, and the petition of N. R. Bagley & Co., Inc., is dismissed, at the cost of the petitioner.

From George R. Barnett, Harrisburg, Pa.

Parole of Prisoners.

Criminal law-Parole of prisoners-Recommendation of prison inspectors —Acts of June 19, 1911, P. L. 1055, and June 29, 1923, P. L. 975.

1. The Board of Prison Inspectors have no power to release a prisoner on parole at the end of his minimum term of sentence. They have only power to recommend. 2. If the prison inspectors think that a prisoner should not be paroled, they may take into consideration not only his conduct in prison, but whether or not there is a reasonable probability that the convict will live and remain at liberty without violating the law.

3. In reporting to the Board of Pardons, the inspectors should state not only the prisoner's conduct while in prison, but also their reasons, based on other grounds, for thinking that he should or should not be released.

Department of Justice. Opinion to Dr. Ellen C. Potter, Secretary of Wel

fare.

CAMPBELL, 1st Dep. Att'y-Gen., Dec. 10, 1923.-This department has your letter transmitting to it, for its opinion, inquiries of the Board of Inspectors of the Western Penitentiary.

These inquiries may be stated under three heads, which, with our opinion to each, are as follows:

1. Is it imperative upon the board of inspectors to parole a prisoner upon completion of his minimum sentence when his behavior in the prison has been good?

There seems to be some misconception of the province of the board of inspectors. It does not parole, simply recommends.

"The power given to the prison inspectors is not to release on parole at the expiration of the minimum term of the sentence, but is simply to recommend. "There is nothing in the act making it obligatory on the Governor to adopt the recommendation of the prison inspectors:" Com. ex rel. v. McKenty, 52 Pa. Superior Ct. 332, 340.

Section 6 of the Act of June 19, 1911, P. L. 1055, as amended by the Act of June 29, 1923, P. L. 975, requires the court, in sentencing convicts to a penitentiary, to impose a maximum and a minimum term of imprisonment.

Sections 8, 9 and 11 specify the duties of the inspectors. They shall meet monthly and hear applications for release on parole from convicts whose

Parole of Prisoners.

terms will expire within three months. They shall determine whether or not there is a reasonable probability that any such applicant, if paroled, will live and remain at liberty without violating the law; if so, they shall recommend to the Governor that such convict be released on parole; if not, they shall report in writing to the Governor the reason in detail for not recommending a parole.

In case a parole is recommended, the recommendations shall include such rules and regulations for such convict as the board of inspectors may prescribe, together with certain data as prescribed in the act.

2. What course should the board of inspectors follow in cases in which it believes the prisoner should not be paroled at the expiration of his minimum sentence, not because of any misconduct while in the penitentiary, but because the sentence thus served is not adequate to the offence committed?

Section 9 of the aforesaid Act of 1911 provides that the board of inspectors shall recommend a parole in those cases in which it finds “that there is a reasonable probability that such applicant (convict) will live and remain at liberty without violating the law."

The question naturally arises as to what matters are to be taken into consideration in determining this question. The intent of these acts is to stimulate proper conduct on the part of the convict and to effect his reformation, and his conduct in the institution is, probably, the most important factor

"When the sentence is for an indefinite term, and the law prescribes a maximum punishment for the crime committed, the prisoner, in contemplation of that law, is committed for the full term, but may secure a release at a much earlier period if by his deportment and good conduct he proves himself worthy of the clemency which it is the policy of indeterminate sentence laws to extend him:" Com. v. Kalck, 239 Pa. 533, 542.

As to what other matters are to be considered by the board of inspectors in arriving at its conclusion, it must be the judge. The Act of June 11, 1911, P. L. 1055, provides, in section 7, that it shall have for its use certain data which has no reference to the conduct of the convict while in the penitentiary, including stenographic notes of testimony taken at the trial. It would be useless to gather this data and consider it if the recommendation of the board were to depend wholly upon the conduct of the convict during his term in the penitentiary.

However, the court having fixed the minimum sentence and the general policy of the law being to discharge upon the expiration of the minimum sentence, the board should be careful not to set its judgment up against the judgment of the court upon the question as to what is an adequate sentence for the offence committed.

The act places upon the board of inspectors the responsibility of determining whether or not "there is a reasonable probability that the convict will live and remain at liberty without violating the law," and if the conscience of the board will not permit a favorable recommendation on account of the length of time served or for any other reason, it should in its return give its reasons for not recommending parole, and should also state its findings as to the conduct of the convict while in the penitentiary, in order that the Board of Pardons may have the benefit of that finding in the final determination by it of the application for parole.

I think it clarifies this whole situation if it be borne in mind that the Constitution places the right of granting commutation and pardons in the Governor and restricts his action to such cases as are approved by the pardon board. Whether or not the legislature could place that authority somewhere else to

Parole of Prisoners.

run concurrent with the authority of the Governor need not be considered, because the legislature has not attempted to do so. The legislature has directed that persons sentenced to the penitentiary shall be given a maximum and a minimum term, and at the end of the minimum term the board of inspectors shall submit a recommendation to the Board of Pardons, which shall be acted upon by the Board of Pardons and a recommendation made to the Governor. The province of the board of inspectors is merely advisory, but it has full discretion to recommend for or against parole.

3. Should the board of inspectors recommend what action the pardon board should take on applications for pardon made on behalf of prisoners confined in the institution over which the board of inspectors presides?

This question may be best answered by reminding you that the matter of making a recommendation to the pardon board upon applications for pardon is entirely optional with the board of inspectors. No law places such a duty upon the board of inspectors. The Board of Pardons sits monthly, hears arguments pro and con upon the question, studies the whole case and may receive additional evidence.

The board of inspectors has no such opportunity. In my opinion, the board of inspectors, as a board, should not make any definite recommendation. On applications for pardon, it may remain inactive, or file a report on the conduct of the applicant while within the penitentiary. This does not affect the right of any member of the board of inspectors in his individual capacity to furnish in the regular way to the Board of Pardons any evidence he may have upon a case at issue. The pardon board will, of course, treat all such information merely as other evidence in forming its recommendation on the application. From C. P. Addams, Harrisburg, Pa.

Mulberger et al. v. Indiana County.

Taxation Occupation-Farmers-Exemption Constitutional law-Acts of April 15, 1834, and April 29, 1844.

1. The power to tax rests upon necessity, and is inherent in every sovereignty, and there can be no presumption in favor of its relinquishment.

2. The business or vocation of farming is an "occupation" that may be taxed if there is authority of law to so tax.

3. The occupation of farming is taxable under the Act of April 15, 1834, P. L. 509.

4. The Act of April 29, 1844, P. L. 486, which expressly exempted the occupation of farming from taxation, was repealed by sections 1 and 2 of article ix of the Constitution of 1874, and such repeal revived the Act of April 15, 1834.

5. If a statute which repeals another is itself repealed, the first statute is thereby revived.

6. Section 2 of article ix of the Constitution must be read in connection with section 1 of article ix, and refers to exemption from taxation, whether it is of occupations, trades, profession or property.

Appeal from assessment of taxes on occupations of farmers. C. P. Indiana Co., June T., 1923, Nos. 170, 171 and 179.

Peelor & Feit, for appellants.

James W. Mack and John L. Getty, for county.

LANGHAM, P. J., June 1, 1923.—The question presented in the above stated cases is whether or not farmers of South Mahoning, Rayne and White TownVOL. 4-7

Mulberger et al. v. Indiana County.

ships should be valued and assessed with occupations and subject to taxation thereon.

We are not passing upon the question of whether or not the taxing authorities should have levied the occupation assessment and tax on farmers, but we are called upon to say whether there is authority of law to levy such tax when the necessity exists. We are not concerned personally or officially in what the assessors or county commissioners do, so long as they perform their duties according to law.

The assessors of the above named townships, and also of all other townships of this county, made a uniform valuation and assessment of $200 upon all persons engaged in the business of farming for the triennial year 1922. The above named plaintiffs appealed to the county commissioners, acting as a board of revision, asking that the assessment of the occupation tax be stricken off, whereupon the county commissioners refused to strike off said valuation and assessment and sustained the assessment so made by the assessors, hence this appeal to the Court of Common Pleas.

From the best obtainable information that we could gather, possibly a few more than one-half of the counties of our State do not assess farmers with an occupation. The balance, however, do.

"The power to tax rests upon necessity, and is inherent in every sovereignty, and there can be no presumption in favor of its relinquishment:" Bailey v. Magwire, 89 U. S. 215, 226; also, Kirby v. Shaw, 19 Pa. 258. Taxation on any or all classes of subjects is purely statutory. It is not questioned that the business or vocation of farming is an "occupation" that may be taxed if there is authority of law to so tax. That is the real and only question before us.

Section 4 of the Act of April 15, 1834, P. L. 509, provides, inter alia, as fol

"The assessors and assistant assessors of the several counties shall, on the receipt of the precepts aforesaid, proceed to take an account in the form directed by the commissioners of the names and surnames of all the taxable inhabitants within their respective wards, townships and districts, and also an account of the following real and personal property.

"III. All offices and posts of profit, professions, trades and occupations, and all single freemen above the age of twenty-one years who shall not follow any occupation or callings."

This legislation was followed by the Act of April 29, 1844, P. L. 486. Section 32 of the Act of 1844 repeals or limits the language of the Act of April 15, 1834, P. L. 509, and reads as follows: "Salaries and emoluments of office, all offices and posts of profit, professions, trades and occupations, except the occupation of farmers, together with all other things now taxable by the laws of this Commonwealth, shall be valued and assessed and subject to taxation for the purposes in this act mentioned, and for all State and county purposes whatsoever."

It is quite clear, therefore, that under the provisions of section 32 of the Act of April 29, 1844, P. L. 486, farmers were expressly exempted from an occupation tax.

The Constitution of the Commonwealth of Pennsylvania of 1874, art. IX, § 1, reads as follows: "All taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws; but the general assembly may, by general laws, exempt from taxation public property used for public purposes,