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SECRETARY REVENUE v. JOHN'S VENDING CORPORATION (09/19/73)

decided: September 19, 1973.

SECRETARY OF REVENUE
v.
JOHN'S VENDING CORPORATION, APPELLANT



Appeal from order of Commonwealth Court, No. 608 C.D. of 1971, affirming order of Secretary of Revenue in case of Secretary of Revenue, Cigarette Tax Board, Department of Revenue v. John's Vending Corp.

COUNSEL

Lawrence Mazer, with him David S. Rasner, and Bogutz & Mazer, for appellant.

Edward T. Baker, Deputy Attorney General, for Commonwealth, appellee.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Nix. Mr. Chief Justice Jones, Mr. Justice Eagen and Mr. Justice Pomeroy concur in the result.

Author: Nix

[ 453 Pa. Page 490]

This is an appeal challenging the revocation of the Wholesale Cigarette Dealer's License of appellant John's Vending Corporation, based upon evidence that a shareholder and former president of that corporation had previously been convicted of certain crimes, and that such convictions were not listed on appellant's license application. On appeal, the Commonwealth Court affirmed the revocation. John's Vending Corp. v. Cigarette Tax Board, 3 Pa. Commonwealth Ct. 658, 284 A.2d 834 (1971). We granted allocatur to review that decision, and we now reverse.

The facts are not in dispute. On June 3, 1971, the Bureau of Cigarette and Beverage Taxes filed a complaint with the Cigarette Tax Board alleging that appellant had violated Sections 402(2) and (3) of the Cigarette Tax Act.*fn1 The Board issued a citation to the appellant charging that: "1. An officer of your corporation had been convicted of a crime involving moral turpitude in violation of Section 403(2) of the Pennsylvania Cigarette Tax Act, and 2. You failed to disclose material information regarding the aforementioned conviction in violation of Section 403(3) of the Pennsylvania Cigarette Tax Act." On June 29, 1971, a hearing was held before the Board to show cause why appellant's license should not be suspended or revoked. The only representative for appellant at this hearing was Raymond Martorano, a 50% shareholder who had been president of the corporation until June 1, 1971. The evidence at the hearing clearly established that Mr. Martorano had been convicted of selling untaxed liquor in 1951, of possessing and transporting unstamped whiskey in 1952, and of possessing and selling derivatives of opium in 1954 and again in 1955. It was further established

[ 453 Pa. Page 491]

    that appellant had left blank the space on its 1971 application calling for previous convictions of "the applicant". The Board filed a recommendation that appellant's license be revoked, and on July 14, 1971, the Secretary of Revenue did so.

Initially, the appellees argue that this appeal is moot because the license at issue expired by law on February 28, 1972. See, Cigarette Tax Act, supra, art. IV, § 410, 72 P.S. § 3169.410. We do not accept the argument of mootness. The appellant has been a wholesale cigarette dealer for twelve years and it's desire to continue in that business is evidenced by this appeal. An applicant who has violated any provision of the Cigarette Tax Act is ineligible to hold a wholesale license. Section 403(5), 72 P.S. § 3169.403(5). Thus although the license for the year in question would have terminated at the close of that year and the applicant would have been required in any event to reapply for licensing for the current year under Section 401, failure to allow review in this action could well prejudice appellant in future applications if this alleged violation should in the future be determined to fall within the purview of Section 403(5). In addition, resolution of the issues herein involved will be determinative of Mr. Martorano's right in the future to seek a license as wholesaler. We therefore proceed to the merits of the appeal.

Section 403 of the Cigarette Tax Act provides that in order to qualify for a wholesale license, the applicant must meet the following requirements: "(1) The premises on which said applicant proposes to conduct his business are adequate to protect the revenue; (2) Said applicant is a person of reasonable financial stability and reasonable business experience. The applicant or any officer, director or shareholder controlling more than fifty per cent of the stock, if the applicant is a corporation, shall not have been convicted of any crime involving moral turpitude; (3) Said applicant

[ 453 Pa. Page 492]

    shall not have failed to disclose any material information required by the department; (4) Said applicant shall not have made any material false statement in his application; (5) Said applicant shall not have violated any provision of this act; (6) The wholesale dealer's license shall be valid for one specific location only." Section 406 provides for revocation of a license upon a complaint to and a finding by the Board that the licensee: "has not in good faith complied with this act and with the conditions and/or requirements under Sections 401 to 404 inclusive in this act. . . ." As noted, appellant was charged with violating both Sections 403(2) and 403(3). The Commonwealth Court held that there was insufficient evidence to sustain the allegation of a material false statement in the application; in view of ...


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