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filed: December 4, 1989.


Appeal from the Judgment of Sentence of the Court of Common Pleas, Allegheny County, Criminal Division, at No. CC87-10351A.


Ernest W. Baum, Pittsburgh, for appellant.

Brian P. Gottlieb, Deputy Atty. Gen., Harrisburg, for Com.

Cavanaugh, Brosky and Rowley, JJ. Cavanaugh, J., filed a concurring opinion.

Author: Brosky

[ 389 Pa. Super. Page 579]

This appeal is taken by Kurt E. Smallhoover from the judgment of sentence following his conviction of 75 Pa.C.S.A § 9510(c), willfully failing to pay the oil company franchise tax.

On appeal, he raises various constitutional and statutory challenges to the legislation empowering the imposition and collection of the oil company franchise tax and alleges sundry trial errors. We affirm.

Smallhoover is vice-president and general manager of the R. W. Geiser Company ("the Company"), a wholesale oil and gas distributorship. His mother, Mrs. Smallhoover, is the president of the company, and his father, Mr. Smallhoover, acts as Secretary-Treasurer. The tax which Smallhoover was found to have willfully failed to remit is an excise franchise tax imposed for highway maintenance and construction.

[ 389 Pa. Super. Page 580]

The tax is imposed at the rate of sixty mills for each dollar of an oil company's petroleum revenues for the privilege of exercising a corporate franchise, doing business, employing capital, owning or leasing property, maintaining an office or having employees in Pennsylvania. 75 Pa. C.S.A. § 9502(a).

The company was initially audited by the Commonwealth Department of Revenue in 1984 and was found to have been delinquent in its payment of the franchise tax for a seven-month period commencing January 1984 through July 1984. The field auditor attributed the company's delinquency at that time to a general confusion surrounding the enactment of the oil company franchise tax rather than to any criminal intent to defraud. Following the audit, the taxes were regularly remitted to the Department of Revenue. Subsequently, payment once again ceased, and Smallhoover was then charged with willful failure to pay the tax for the period July 1985 through and including December 1985 in the total amount of $50,384.57. Following his conviction and from his sentence of six consecutive terms of probation (for each of the six counts of willful failure to pay), fifteen hours of community service per month and restitution in the amount of $50,384.57, Smallhoover filed this timely appeal.

Smallhoover challenges the authority of the Commonwealth to prosecute him under the penal provision of the taxing statute, 75 Pa.C.S.A. § 9510(c), because he does not meet the statutory definition of a "person" who can be charged with violating the statute. The act defines "person" as "[a]ny oil company subject to tax under this chapter." 75 Pa.C.S.A. § 9501. The term "oil company", in turn, encompasses a "corporation, association, joint-stock association, partnership, limited partnership, copartnership, natural individual or individuals, and any business conducted by a trustee or trustees wherein evidence of ownership is evidenced by certificate or written instrument, formed or engaged in the sale or the importation of petroleum products within this Commonwealth." Id. In his appellate brief, Smallhoover argues, "The statute does not impose

[ 389 Pa. Super. Page 581]

    vicarious liability upon those associated with the oil company [,] nor does it contain a provision to automatically pierce the corporate entity for purposes of imposing either civil or criminal penalties upon the officers, directors or employees of the corporation." At 18. We believe that Smallhoover's concern about a perceived defect in the statutory definition of "person" has been squarely addressed by this court in Commonwealth v. Klinger, 369 Pa. Super. 526, 535 A.2d 1060 (1987).*fn1

In Klinger, appellant, who was the president and, with his wife, the sole owner of Fuel Marketing Corporation, sold fuels at a truck stop operated by the corporation. He collected the franchise tax but failed to remit it for a four month period. Klinger was arrested and charged with violation of 75 Pa.C.S.A. § 9510(c) and another taxing statute and was ultimately convicted. On appeal, Klinger argued that the oil company franchise tax statute does not contain any provision charging a corporate official with criminal responsibility for the acts or omissions of a corporate taxpayer. Klinger maintained that since the corporation was the oil company subject to payment of the franchise tax under the statute he, individually, could not be prosecuted for failure to pay the tax.

The panel considered and rejected this argument, relying on Commonwealth v. Shafer, 414 Pa. 613, 202 A.2d 308 (1964). There, the Supreme Court held that the president of a corporation who was charged with non-payment of sales tax collected by the corporation but not remitted in violation of Section 823 of the Penal Code of 1939 was subject to prosecution under the statute. The appellant in Shafer had argued that it was the corporation, rather than he, individually, who was criminally responsible under the statute. The Klinger court, citing Shafer, stated, "[i]ndividuals

[ 389 Pa. Super. Page 582]

    are subject to indictment for acts done under the guise of a corporation where the individual personally so dominated and controlled the corporation as to immediately direct its action." 369 Pa. at 536, 535 A.2d at 1065, citing Shafer at 624, 202 A.2d at 313. We conclude that the record in the instant matter demonstrates that Smallhoover "personally dominated and controlled the affairs of the corporate taxpayer", id., and, like the Klinger court, we, too, reject Smallhoover's assertion to the contrary and find him subject to criminal prosecution under the oil company franchise tax statute. See N.T. 46-49, 53-54, 70, 77, 80-83, 92, 97, 99-102, 106-07, 111-13.

In a related vein, Smallhoover alleges that because he was not charged in the information as an officer or agent of a corporation required to collect and remit the oil franchise tax, no statutory obligation can be imposed upon him, individually, for the payment of the tax under Section 9510(c). Instead, if he were responsible at all, Smallhoover continues, the controlling provision is Section 307(e) of the Crimes Code, 18 Pa.C.S.A. § 307(e), entitled "Persons acting or under a duty to act for organizations"*fn2 and that the failure of the information to include the specific language of Section 307(e) in addition to the reference to Section 9510(c) deprived him of the ability to effectively defend. However, this court's analysis in Commonwealth v. Klinger, supra, renders the above contention meritless.

[ 389 Pa. Super. Page 583]

Smallhoover's claim that the information does not allege that he was an officer or agent of a corporation required to collect and remit the applicable tax is belied by the very language of the information, itself:

[T]he above named defendant, who was the vice-president and general manager of R. W. Geiser Company, Inc., a Pennsylvania business corporation engaged in the sale of petroleum products, and who was a person required by law to charge, collect and remit to the Department of Revenue of the Commonwealth of Pennsylvania the excise tax described in the Oil Company Franchise Tax Act on behalf of said business, did willfully fail, neglect or refuse to pay said taxes at the time required by law, in violation of the Act of June 23, 1981, P.L. 98, No. 35, § 3, 72 [sic] Pa.C.S. § 9510(c) . . . .

Emphasis supplied. We read the above language as charging Smallhoover as the person who, in his capacity as vice-president and general manager of the corporation, was required to collect and remit the applicable oil franchise tax to the Commonwealth. Acting in the capacity of a corporate representative or agent, Smallhoover is, indeed, a person designated by statute to collect and remit the oil franchise tax.

Smallhoover also maintains that the trial court refused to instruct the jury on his requested point for charge on the statutory definition of "person." The Commonwealth responds that this issue is waived and cites Commonwealth v. Rineer, 310 Pa. Super. 241, 456 A.2d 591 (1983), to support this claim. In Rineer, the appellant submitted a written point for charge which the trial court denied because it was covered in the general charge. Counsel took an exception. At the end of the charge, the court inquired whether counsel had any additions or corrections to the charge. Rineer's counsel responded negatively and did not object to the court's refusal to read the requested

[ 389 Pa. Super. Page 584]

    point for charge. The Rineer court, relying on Pa.R.Crim.P. 1119(b),*fn3 held:

[I]n order to preserve an issue regarding the charge to the jury, a specific objection must be made pursuant to Pa.R.Crim.P. 1119(b), even where jury instructions have been timely offered and refused. As noted in [ Commonwealth v.] Martinez, [475 Pa. 331, 380 A.2d 747 (1977)] this will absolutely ensure that the trial court is given an opportunity to avoid error.

310 Pa. Super. at 249, 456 A.2d at 595; footnote omitted. Because the identical scenario ensued at the instant trial, we find that this alleged error has been waived. Id.; See also Commonwealth v. Klinger, supra.

Moreover, this argument is meritless in any event. In reviewing a trial court's instructions to the jury, it is the charge, taken as a whole, which controls. Therefore, an appellate court will not find error in an isolated excerpt of the charge. Even if the instruction is erroneous, reversal is mandated only if the error prejudiced the appellant. Id. The trial court charged as follows:

In this case, the evidence shows that the business which sold the fuel, and subject to the tax, was a corporation and the defendant is alleged to be an individual who was acting on behalf of the corporation. In this regard, I charge you that if a person so dominates and controls the affairs of the corporation as to immediately direct its action, then he is legally accountable for any conduct he performs or causes to be performed in the name of the corporation or on its behalf to the same extent as if it were performed in his own name or behalf.

Thus, the defendant would be guilty of a crime if he acted or omitted to act -- correct that -- thus, a defendant would be guilty of a crime if he acted or admitted [sic] to an act in his own name or behalf [sic] is equally guilty if the act

[ 389 Pa. Super. Page 585]

    or admission [sic] is done in the name or on behalf of the corporation, provided that the person so dominated and controls [sic] the affairs of the corporation as to immediately direct its action.

N.T. 178-79; emphasis added. The language of the above charge tracks that used by the Klinger court in discussing the appellant's culpability there. Therefore, we conclude that the trial court unerringly charged the jury on Smallhoover's liability as a ...

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