Appeal from judgment of Commonwealth Court, No. 410 T.D. 1970, in case of Commonwealth of Pennsylvania v. Albacore Corporation.
Eugene J. Anastasio, Deputy Attorney General, for Commonwealth, appellant.
William P. Thorn, with him Samuel H. Levy, and Wolf, Block, Schorr & Solis-Cohen, for appellee.
Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Eagen. Mr. Justice Roberts took no part in the consideration or decision of this case.
The appellee, Albacore Corporation, is a California corporation, which was duly licensed to carry on business in this Commonwealth on August 26, 1959.*fn1 Dolphin Corporation (an affiliate of Albacore) by deed dated August 3, 1959, acquired an office building in Philadelphia, Pennsylvania, commonly known as the Packard Building, located at 15th and Chestnut Streets, from The Fifteenth and Chestnut Realty Company for a consideration of $2,204,184.*fn2 Said deed provided that the property "was subject to the lien of a certain mortgage [in favor of The Equitable Life Assurance Society of the United States] securing the principal sum of $5,350,000. . . ." However, the deed also recited that: "[I]t is expressly understood that Grantee does not assume, and is hereby expressly relieved from, any personal liability either as Indemnitor or otherwise, to
the Grantor or to any other corporation or person, for or by reason of the above mentioned, or any other mortgage debts or interest thereon or other sums secured upon or payable out of the above described property or any part thereof."
Albacore, under a separate and contemporaneous agreement, purchased a one-third interest in the Packard Building from Dolphin for a consideration of $734,728.
The Pennsylvania Foreign Excise Tax Act*fn3 imposed a non-recurring one-third of one percent tax "upon the
amount of any increase of capital actually employed wholly within this Commonwealth."*fn4 [Emphasis supplied.] Therefore, in compliance with this act, the appellee filed on August 24, 1959, its initial Foreign Excise Tax Report. In this return, Albacore reported that its investment in the Packard Building was $734,728, its sole capital employed in Pennsylvania.*fn5
Subsequently, Albacore filed its Pennsylvania Franchise Tax and Corporate Net Income Tax Report, and its Foreign Excise Tax Report for the short period ending September 30, 1959, and duly reported an increase in ...