19 A.2d 95 | Pa. | 1941
Plaintiff Building Association foreclosed certain mortgages which it held and became the owner of the properties bound by them. There were unpaid taxes on all the properties which the Building Association had to discharge. Having done so, it brought this action *134 against defendant, Rosenheim, to recover the amounts paid, alleging that while he was not the registered owner of the real estate at the time the taxes were levied, he was the real and beneficial owner. On the trial, at the conclusion of the evidence, the judge gave binding instructions for defendant. From judgment entered on the verdict, plaintiff, by its liquidating trustees, appeals.
Being vested with title to the properties, subject to the association's mortgages, defendant caused a corporation to be created to take title thereto. A Pennsylvania charter was applied for and issued. The corporate name was Thackeray Realty Company. The stated capital was $500.00. The stock, consisting of 100 shares, was subscribed for by three persons who were evidently dummy incorporators. They transferred their subscriptions to defendant, his wife and daughter. To him 98 shares were issued and one share each to his wife and daughter. Neither by the original incorporators nor by defendant, his wife or daughter, was the $500.00 capital, or any part of it, ever paid into the treasury of the corporation. Shortly after the grant of the charter, defendant conveyed the real estate here involved to the corporation for a nominal consideration. He admits that the conveyances were made for the purpose of relieving him from personal liability for future taxes. The minutes of the corporation recite that it was to pay defendant $500.00 in cash and take the titles subject to the mortgages. This sum was not paid. Defendant, who had been the conveyancer for the association, had stated to it that the properties were not worth the amount of the mortgages against them.
After the conveyances, defendant continued to collect the rents as he had previously done. The rents went into his bank account. The Realty Company never had a bank account. It kept no books in any real sense. After paying expenses connected with the properties, defendant retained the remainder of the rents for himself. *135 He charged management fees and commissions which absorbed all the income except trifling sums which he disbursed to his wife and daughter when the Realty Company lost control of the properties after the foreclosures. No taxes were paid while title was vested in the Realty Company.
The position of appellant is that the facts as we have outlined them show that defendant was the real and beneficial owner of the properties and such being the case he cannot escape liability for the taxes. An owner of real estate cannot transfer the registered title to another, retaining the beneficial interest to himself and thereby escape liability for taxes: North Phila. Trust Co. v. Heinel Bros., Inc.,
While it is true the Business Corporation Law of May 5, 1933, P. L. 364, Sec. 207, 15 PS Sec. 2852-207, provides that a certificate of incorporation "shall be conclusive evidence of the fact that the corporation has been incorporated," we are not concerned with the question as to whether the Thackeray Realty Company had been incorporated in the sense that the State had issued a charter to it, but are mindful of a strongly buttressed legal principle invoked by us in our recent decision in Markovitz v. Markovitz,
Appellee makes a point of fact that in the foreclosure proceedings, an affidavit was made by an employee in the office of the attorneys who conducted them that the *138 Thackeray Realty Company was the real owner of the premises. This formal affidavit was required by Rule 96 of the Rules of Court. We think under the circumstances here existing this formal affidavit is a matter of no consequence.
The judgment is reversed, with directions to the court below to enter judgment for plaintiff for the amount claimed, with interest.