Appeal from decree of Court of Common Pleas of Philadelphia County, Dec. T., 1966, No. 3144, in case of City of Philadelphia v. Penn Plastering Corporation et al.
Levy Anderson, First Deputy City Solicitor, with him Thomas A. Matthews, Assistant City Solicitor, and Edward G. Bauer, Jr., City Solicitor, for City of Philadelphia, appellant.
Ronald N. Rutenberg, with him Rutenberg, Rutenberg, Rutenberg and Rutenberg, for appellee.
Bell, C. J., Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Cohen.
This matter comes before our Court on the appeal of the City of Philadelphia from the decree of the Court of Common Pleas of Philadelphia County, sitting in equity, sustaining the preliminary objections
filed by appellee Joseph Ritter to appellant's complaint in equity and dismissing the complaint as to Ritter only. The corporation-defendant sued jointly with Ritter was continued in the action.
The complaint averred that defendant Ritter was the president and a director of a Pennsylvania corporation engaged in the business of plastering contracting in the City of Philadelphia. In such capacities he was actively engaged in the management, operation, direction and control of the corporation and had full and complete control of its business activities, bank securities, assets, collections, payment of taxes and preparation and filing of tax returns.
It was also averred that the corporation had employees during the above set forth periods, that it collected wage taxes from those employees by withholding, that it filed wage tax returns with the Department of Collections showing wage taxes deducted and withheld in the total sum of $8,547.04, that the individual defendant knew the City wage taxes were withheld and not remitted to the plaintiff as required by the ordinance, that the corporate defendant paid the sum of $1,500 on account of this wage tax obligation on or about December 3, 1965, and that this was applied to the basic tax for May of 1964, and that there is still due a total of $7,047.04 plus interest and penalty.
The complaint alleges that the wage taxes so collected and withheld became the property of the City and that the corporate defendant and the individual defendant who controlled the corporate defendant were trustees of those wage taxes and under a duty to pay those funds over to the City, and that the failure to pay these trust funds over to the City rendered them liable as trustees ex maleficio to account for the sums claimed.
Defendant filed preliminary objections to the complaint in equity, asserting that the complaint failed to set forth a cause of action. The action of the lower court sustained the preliminary objections which generated the question whether the active and controlling officer of a corporation which has collected city wage tax from its employees by withholding, but has failed to pay them over to the city, may be required individually to account in equity as a trustee ex maleficio for the wage taxes so collected. At first it might seem that our decision in Philadelphia v. Mancini, 431 Pa. 355, 246 A.2d 320 (1968), is dispositive of the issue. There the city sought to have the defendant held as a trustee ex maleficio for wage taxes allegedly due the City of Philadelphia. We rejected the city's claim on the ground that at the trial of the case the evidence was ...