Commonwealth v. Miller

Decision Date17 March 1964
Citation202 Pa.Super. 573,198 A.2d 373
PartiesCOMMONWEALTH v. Stewart MILLER, Appellant.
CourtPennsylvania Superior Court

Desmond J. McTighe, Norristown, Walter J Collins, Jr., David F. Maxwell, Philadelphia, for appellant.

Elkins Wetherill, William L. O'hey, Jr., John F. Solomon, Jr. Norristown, for appellee.



This is an appeal from an order of the Court of Quarter Sessions of Montgomery County made against a father for the support of his four sons, 10 to 16 years of age. The parents of the boys are separated but not divorced.

The mother and her four sons are living in a $34,000 house on which there is a mortgage of approximately $20,000, and the father is living in a house valued at between $55,000 and $60,000 on which there is a mortgage of an amount unknown to us. Title to both premises is in both parents. The defendant was ordered 'to pay the weekly sum of $40.00 for each of his four sons, making a total of $160.00 per week.' He was further directed to make the monthly payments on the mortgage, together with taxes and fire insurance on the house in which his wife and children are residing. He contends that the order is too high.

The defendant is a self-employed registered professional engineer who works as a business representative for several engineering companies and is paid a commission for negotiating contracts for them. From January 1, 1957 through 1962, he grossed from a low of $47,533 in 1962 to a high of $64,709 in 1957. In his 1962 federal income tax return, he took deductions for business expenses which brought the net profit of the business down to $22,722. The court below concluded that the defendant was currently earning after taxes between $18,000 and $20,000 a year, or between $350 and $400 per week. The mortgage payments, taxes and insurance on the house in which the boys and their mother reside appear to be approximately $2300 a year. An order of approximately $10,600 a year for the support of children would be too high for a defendant whose income would be only $18,000 a year after taxes. However, we must view the order here in the light of all the facts, and when we do so, we find that it must be affirmed.

The test here is not whether we would have made a similar order but whether the trial court is chargeable with an abuse of discretion. Commonwealth ex rel. Sosiak v. Sosiak, 177 Pa.Super 116, 118, 111 A.2d 157 (1955).

The trial court easily could have found the earning capacity of the defendant to be in excess of $20,000 a year after taxes. The defendant in testifying concerning his financial requirements indicated that in 1962 he had paid Internal Revenue 'back additional taxes' for 1959, 1960 and 1961, from which it could be inferred that his actual net income exceeded that appearing in his tax returns.

The net income of a defendant as shown on income tax returns is not to be accepted in a support case as the infallible test of his earning capacity. Particularly is this true where the defendant is in business for himself and is allowed substantial business 'expenses', items of depreciation and sundry other deductions which enable him to live luxuriously before spending his taxable income.

Depreciation involves no cash expenditure at the time it is taken as a deduction. The amount claimed for depreciation represents additional cash available for the defendant's use. In Commonwealth ex rel. Rankin v. Rankin, 170 Pa.Super. 570, 573, 87 A.2d 799 (1952), we said that depreciation should not enter into a computation of a defendant's income upon which a support order may be based, but in Williams v. Williams, 175 Pa.Super. 409, 413, 104 A.2d 499 (1954), for reasons there set forth, we modified the rule by saying that depreciation must not be treated as an expense, but neither should it be treated as net profit. Several items of depreciation were used by the defendant in his tax return to help reduce his gross income from $47,533 to a net of $22,722. In ascertaining the earning capacity of a defendant, the net income ordinarily should not be increased by the entire amount of depreciation claimed in the tax return but by a part of it as determined from all the circumstances including the amount of depreciation claimed and the property depreciated.

Numerous figures from the defendant's income tax returns are in the record, but the returns themselves are not there. It is evident, however, that the defendant received commissions and other business income of over $47,000 in 1962 and a larger sum in other years; that he resides in a house valued at over $55,000 from which he conducts his business; that there is charged to business expense, at least in part, a 30 foot Chris Craft boat, an El Dorado Convertible Cadillac and a Chrysler automobile (both now with high mileage) and that club dues, florist's bills, luncheon bills, and similar expenditures were deducted as business expenses prior to arriving at the net profit. Like the exemptions he claimed for his four sons, these items may have been proper deductions under the income tax law, but consideration must be given in a support case to those deductible expenditures which improve the defendant's standard of living and have the effect of perquisites. See Commonwealth ex rel. Gutzeit v. Gutzeit, 200 Pa.Super. 401, 406-408, 189 A.2d 324 (1963).


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