Cohen v. Maus

• Decision Date: 01 July 1929
• Docket Number: 142
• Citation: 147 A. 103,297 Pa. 454
• Parties: Cohen et al., Appellants, v. Maus et al
• Court: Pennsylvania Supreme Court

147 A. 103

297 Pa. 454

Cohen et al., Appellants, v. Maus et al

No. 142

Supreme Court of Pennsylvania

July 1, 1929

Argued May 14, 1929

Appeal, No. 142, Jan. T., 1929, by plaintiffs, from order of C.P. Northumberland Co., May T., 1925, No. 314, refusing to take off nonsuit, in case of Herman Cohen and Abe L. Cohen trading as H. & A. L. Cohen, v. J. W. Maus et al. and Catherine Moser, executrix of J. R. Moser, deceased, J. H Bader et al. Reversed in part.

Trespass for conversion. Before STROUSS, P.J.

The opinion of the Supreme Court states the facts.

Nonsuit; refusal to take off. Plaintiffs appealed.

Error assigned was order, quoting record.

The judgment of nonsuit is affirmed as to all of defendants except J. W. Maus; as to him the nonsuit is set aside and a procedendo awarded.

Richard H. Klein, of Knight, Taggart, Klein & Reich, for appellants. -- The duty of passing on the credibility of testimony and reconciling conflicting statements of the same or different witnesses is for the jury and not for the court: Creachen v. Carpet Co., 209 Pa. 6; Moyer v. R.R., 247 Pa. 210.

Where there is a trespass in conversion it renders the person committing it liable in trover, although he may commit it to the use of another: Eckert v. Ship Building Co., 280 Pa. 340; Carey v. Bright, 58 Pa. 70; Hindson v. Markle, 171 Pa. 138; McCrea v. McClenahan, 115 N.Y.S. 720; Passaic Falls Throwing Co. v. Villeneuve-Pohl Corp., 155 N.Y.S. 669.

Defendant directors by the exercise of due diligence could have known of the conversion and prevented it, and, in default thereof, are liable: Murphy v. Transit Co., 285 Pa. 399; Fell v. Pitts, 263 Pa. 314; Cornell v. Seddinger, 237 Pa. 389; Loan Soc. v. Eavenson, 248 Pa. 407.

Charles C. Lark, with him Fred B. Moser and Edward Raker, for appellees. -- Defendants are not individually liable: Brown v. Orr, 112 Pa. 233; Mechanic's B. & S. Assn. Assigned Est., 202 Pa. 589.

Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, KEPHART, SADLER and SCHAFFER, JJ.

OPINION

MR. JUSTICE SCHAFFER:

This is an action of trespass in the nature of trover and conversion brought to recover the value of merchandise belonging to plaintiffs, which it is alleged defendants sold, and converted the proceeds therefrom to the use of the Wearever Knitting Mills, a corporation in which they were all directors. A nonsuit was entered in the court below and from the refusal to take it off plaintiffs appeal.

Appellants purchased hosiery from the Wearever Knitting Mills which it had manufactured valued, so they claimed, at $5,186.15 and paid the corporation therefor. The merchandise was left with it and set apart to plaintiffs, subject to their shipping directions. The Knitting Mills became bankrupt and upon investigation appellants discovered that the goods belonging to them had been resold to a third party and the proceeds realized therefrom received by the Knitting Mills. Upon so ascertaining, this action was brought to recover from appellees individually the amount of appellants' loss under the claim that they had unlawfully and wrongfully converted the proceeds of the goods sold to the use of the Knitting Mills. The theory upon which it is sought to hold defendants individually liable is embodied in the following question stated by appellants' counsel in their brief Are directors of a corporation individually liable for the conversion of plaintiffs' goods by the corporation or the general manager thereof where the facts of the conversion appeared on the books of the corporation and could have been known to the directors and the conversion prevented by them through the use of ordinary diligence? The trial judge answered "no" to this proposition, saying there was no testimony showing that any of the defendants, save Maus, knew of the sale by the company of the merchandise to plaintiffs and that none of them had any knowledge of the sale of it, after plaintiffs' purchase thereof, to the person who acquired it and that it was not shown that they had wilfully, knowingly and intentionally participated in the trespass. Our reading of the testimony convinces us that this determination was correct as to all of the defendants except Maus. This is not an action by the corporation or its receiver or trustee or in behalf of its creditors or stockholders against directors alleging loss due to their default where such rulings, cited by appellants, as Fell v. Pitts, 263 Pa. 314; Cornell v. Seddinger, 237 Pa. 389, and kindred cases might be invoked in aid of recovery. Here persons who were directors in a corporation are sought to be held individually liable for a conversion of property about which they knew nothing merely because, if they had examined the books of the corporation, they might have ascertained that the conversion had taken place. We...