Appeal, No. 158, Jan. T., 1959, from order of Court of Common Pleas of Luzerne County, Dec. T., 1957, No. 148, In re: Dissolution of the Hanover Township Police Pension and Benefit Fund Association, Inc. Order reversed in part, modified in part, and affirmed in part. Proceedings on petition for dissolution of corporation. Adjudication filed approving master's findings of facts as modified, and order entered directing distribution of corporate assets, opinion by PINOLA, J. Commonwealth of Pennsylvania appealed.
Harry L. Rossi, Deputy Attorney General, with him Jacob Schiffman, Thomas F. Gill, and Anne X. Alpern, Attorney General, for appellant.
Nelson A. Bryan, with him Edward D. Morgan, for appellee.
Before Jones, C.j., Bell, Musmanno, Jones, Cohen and Bok, JJ.
OPINION BY MR. JUSTICE COHEN
A petition for voluntary dissolution of the Hanover Township Police and Benefit Fund Association, Inc., a
nonprofit corporation, was filed for the purpose of dissolving the corporation and winding up its business. From the date of its incorporation, December 24, 1942, it functioned as a pension benefit association - electing officers, collecting and disbursing money as pension benefits to its members. Its principal sources of revenue included funds derived from association activities; payroll deductions of 2% of the annual salary of the members of the police force, who alone comprised the membership; and amounts received from the Commonwealth of Pennsylvania in accordance with the Act of May 12, 1943, P.L. 259, as amended, 72 P.S. § 2263.1, which provided for the payment each year by the Commonwealth to the treasurer of the several cities, boroughs, towns, and townships their share of the amount received by the Commonwealth from a 2% tax paid upon premiums by foreign casualty insurance companies doing business within the said cities, towns and townships of the Commonwealth.
The sole point of controversy is, on dissolution of the association, what disposition should be made of the funds received by the association from the Commonwealth for the years 1946 through 1957, inclusive, which amount totals $67,836.97.
The Commonwealth of Pennsylvania petitioned the court to intervene in the dissolution proceedings alleging that it had an interest in the distribution of this pension fund for the reason that the funds paid by the Commonwealth to Hanover Township were required by law to be used for pension purposes; and further, the Commonwealth maintains an interest in the pension fund since the Auditor General's Department is required, under the Amendment of July 19, 1951, P.L. 1127, 72 P.S. § 2263.1, to make audits of the various pension funds and accounts receiving disbursements from the Commonwealth.
After the Commonwealth was permitted to intervene, the Master held various hearings and submitted his final report. Exceptions were taken to the Master's Report by the Commonwealth. Thereupon, the court of common pleas entered a final order and concluded that the Commonwealth of Pennsylvania and Hanover Township had no right, title, or interest in the fund because, once distributed to the association under the Act of 1943, it became vested in the members of the association, and, therefore, the members had the right to transfer the funds as desired. The membership exercising its domination over the ...