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COMMONWEALTH PENNSYLVANIA EX REL. PENNSYLVANIA SECURITIES COMMISSION v. ALLAMANDA INVESTMENT COMPANY ET AL. (07/27/78)

decided: July 27, 1978.

COMMONWEALTH OF PENNSYLVANIA EX REL. PENNSYLVANIA SECURITIES COMMISSION, APPELLANT
v.
ALLAMANDA INVESTMENT COMPANY ET AL., APPELLEES



Appeal from the Order of the Court of Common Pleas of Allegheny County in case of The Commonwealth of Pennsylvania ex rel. Pennsylvania Securities Commission v. Allamanda Investment Company, Royal Poinciana Investment Company, R. William Ozimec, individually, and R. William Ozimec, as General Partner of Allamanda Investment Company and Royal Poinciana Investment Company, No. G.D. 76-26280.

COUNSEL

Robert V. Campedel, Assistant Attorney General, with him Robert P. Kane, Attorney General, for appellants.

Howard T. Gilfillan, with him George Shorall, for appellee.

Judges Mencer, Rogers and DiSalle, sitting as a panel of three. Opinion by Judge Mencer.

Author: Mencer

[ 37 Pa. Commw. Page 34]

The Pennsylvania Securities Commission (Commission) began an investigation of Royal Poinciana Investment Company (Royal Poinciana), Allamanda Investment Company (Allamanda), and Rudy W. Ozimec, after receiving complaints from various investors in Royal Poinciana and Allamanda. The Commission's investigation revealed that Rudy W. Ozimec was the promoter, general partner, and salesman of Royal Poinciana and Allamanda. Ozimec, through various representations which the Commission found to be misleading or false, solicited investments in the amount of $124,415 in Royal Poinciana from seventeen persons and in the amount of $162,000 in Allamanda from twelve persons. The investments were in the form of limited partnerships which are defined as securities in Section 102(t) of the Pennsylvania Securities Act of 1972 (Act),*fn1 70 P.S. § 1-102(t). The limited partnership interests were not registered as securities as required by Section 201 of the Act, 70 P.S. § 1-201.

The goal and purpose of Royal Poinciana and Allamanda, as represented by Ozimec, was the ownership and development of land in Florida. After many unkept promises by Ozimec, some investors filed criminal complaints in Westmoreland County charging Ozimec with theft of funds, but he could not be found in Pennsylvania. Thereupon, the Commission filed a complaint in equity, pursuant to Section 509(a)

[ 37 Pa. Commw. Page 35]

    of the Act, 70 P.S. § 1-509(a), seeking equitable relief for the investors and the appointment of a receiver. On November 30, 1976, the Court of Common Pleas of Allegheny County entered an order appointing George Shorall, Esquire, as receiver for Royal Poinciana and Allamanda.

The receiver proceeded to collect the assets of Royal Poinciana and Allamanda and determined that the total assets consisted of land in Florida and $1199 in cash. The receiver decided that it would be desirable for him to travel to Florida and inspect the property of the receiverships.

The receiver filed for a rule to show cause why the Commonwealth of Pennsylvania, Pennsylvania Securities Commission, should not advance sufficient funds to the receiver to cover his travel expenses to Florida and to pay the receiver for the costs he had advanced and for his services. On May 18, 1977, the Court of Common Pleas of Allegheny County ordered the Commission to pay George Shorall, receiver, the sum of $1,000 for reimbursement of his expenses and the sum of $5,000 in partial payment for his services, with both sums to be credited to and returned to the Commission from any sums realized from the assets of the debtor. The Commission attempted to file exceptions to this order, but it was refused permission to file exceptions by an order dated June 3, 1977. This appeal followed and we reverse.

The courts are without authority to direct payments of demands upon the Commonwealth of Pennsylvania, Pennsylvania Securities Commission, except when empowered so to do by appropriate legislation. No authority has been found and none cited by the receiver or court below, warranting the order made by the court, and we are therefore ...


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