Donald P. Eriksen, Tucker, Arensberg & Ferguson, Pittsburgh, for appellant.
Harvey I. Goldstein, Seymour J. Schafer, Markel, Markel, Levenson & Schafer, Pittsburgh, for appellee.
Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, C. J., did not participate in the consideration or decision of this case. Pomeroy, J., filed a concurring opinion in which Nix, J., joined. Roberts, J., filed a dissenting opinion.
This appeal arises from a final decree in equity which dismissed the complaint of appellant, Richard Jones, who sought an accounting from appellee, the New Pittsburgh Courier Publishing Company (the "New Courier"). Appellant is the court-appointed receiver of Pittsburgh Liquidating Corporation, formerly the Pittsburgh Courier Publishing Company (the "Old Courier"). In 1966, the Old Courier sold the New Courier all of its assets for fifty percent of the New Courier's profits until 1976.
The facts surrounding this appeal are as follows. The Old Courier, a prominent black newspaper, had serious financial problems. Out of a total debt of over one million dollars, the newspaper owed the Internal Revenue Service ("IRS") more than one hundred thousand dollars in unpaid taxes by 1966. Pursuant to the collection provisions of the Internal Revenue Code,*fn1 the IRS obtained liens on all of the Old Courier's assets and was preparing to sell all of the assets to collect part of the unpaid tax bill. At the urging of members of the black community, the IRS agreed to postpone the sale so that a plan could be arranged that would allow the paper to continue operating.
On October 15, 1966, appellee and the Old Courier completed an agreement which provided, inter alia : (1) The Old Courier would convey its assets to the New Courier; (2) The Old Courier would change its name to Pittsburgh Liquidating Corporation for the purpose of
winding up the Old Courier's affairs; and (3) The New Courier would pay one-half of its net profits, as defined by the agreement, to Pittsburgh Liquidating for the next ten years. The assets transferred to the New Courier remained encumbered by the IRS liens. The New Courier agreed to supply periodic financial reports to the IRS, as the fifty percent interest in future profits would first be used to pay the tax debt of Pittsburgh Liquidating.
The New Courier, however, failed to make a profit during its early existence. In 1967, upon petition of a stockholder of Pittsburgh Liquidating, the Court of Common Pleas of Allegheny County named appellant the receiver of the company.
By October, 1968, the New Courier had not shown a profit, and the IRS decided to proceed with the sale of the encumbered assets. On December 17, 1968, the IRS levied on all encumbered assets and left a Notice of Seizure at the office of the New Courier. One of the assets was described in the Notice of Seizure as:
"That portion of the interest in said contract of October 15, 1966 for the payment of one-half of the net profits by the New Pittsburgh Courier Publishing Company to the Pittsburgh ...