Appeal from the Order of the Court of Common Pleas of Dauphin County in case of Commonwealth of Pennsylvania, Department of Revenue v. Nachman M. Gerber, Para One Corporation and Para Two Corporation, No. 1058 June Term, 1974.
John D. Rively, for appellants.
John F. Lyons, with him Becky Ammerman Titus, Assistant Attorney General, for appellee.
Judges Wilkinson, Jr., Mencer and Rogers, sitting as a panel of three. Opinion by Judge Mencer.
[ 37 Pa. Commw. Page 619]
This is an appeal from the refusal of the Court of Common Pleas of Dauphin County to open a judgment entered against Nachman M. Gerber, a principal of Hotel Harrisburger, Inc., and two corporate sureties on June 27, 1974. We affirm.
On September 19, 1969, Hotel Harrisburger, Inc., ceased business operations, due to insolvency. At the time, tax assessments made against the corporation for 1969 and prior years, pursuant to the Tax Act of 1963 for Education (Act),*fn1 formerly 72 P.S. § 3403-1 et seq., remained unpaid. The Commonwealth believed that a certain percentage of the amount due constituted taxes collected by Gerber, as an officer of the corporation, but not remitted to the Commonwealth, and that Gerber was personally liable for the payment of this percentage under Section 535 of the Act, formerly 72 P.S. § 3403-535. A criminal action was instituted against Gerber pursuant to Section 573 of the Act, formerly 72 P.S. § 3403-573, but was discontinued after the execution, on November 25, 1970, of an agreement between Gerber and the Commonwealth.
This agreement acknowledged the indebtedness of Hotel Harrisburger, Inc., as well as the fact that Gerber "may, under applicable statutes, be personally liable for all or a portion of said tax indebtedness." The agreement further recited that Gerber had delivered to the Commonwealth a judgment note in the amount
[ 37 Pa. Commw. Page 620]
of $8,341.96 "to secure the payment of any personal liability of Gerber."*fn2 The Commonwealth was authorized to enter the judgment note of record at any time. However, Gerber was given 24 months from the date of the agreement to submit evidence to adjust the indebtedness represented by the note, during which time the Commonwealth agreed not to seek execution on the judgment. Finally, the agreement recognized Gerber's right to petition to open the judgment "in the event the parties hereto are unable to agree as to the actual amount due."
Gerber never submitted any evidence to the Commonwealth, and his right to do so under the agreement expired on November 25, 1972. The Commonwealth did not enter the judgment note of record until June 27, 1974. Notice of the entry of judgment was properly forwarded to Gerber. Under the terms of the agreement, the Commonwealth could have sought immediate execution, since more than 24 months had passed since the date of the agreement, but execution proceedings were not instituted until October 14, 1976, over 2 years later. On October 26, 1976, Gerber filed a petition to open judgment.*fn3 This petition was denied by the Court of Common Pleas of Dauphin County because it had not been promptly filed and because no defense had been shown to exist on the merits. This appeal followed.
One who petitions to open a confessed judgment must act promptly and aver a meritorious defense. . . . A petition to open judgment is addressed ...