Com. v. Musser Forests, Inc.

• Decision Date: 25 November 1958
• Citation: 394 Pa. 205,146 A.2d 714
• Parties: COMMONWEALTH of Pennsylvania, Appellant, v. MUSSER FORESTS, INC., Fred Musser, Dorothy Musser, George W. Musser, Kathryn M. Peelor, Executrix, and The Savings and Trust Company of Indiana, Pennsylvania, Co-executor (substituted for L. Murray Peelor, deceased), and Robert M. Fisher.
• Court: Pennsylvania Supreme Court

Page 714

146 A.2d 714

394 Pa. 205

COMMONWEALTH of Pennsylvania, Appellant, v. MUSSER FORESTS, INC., Fred Musser, Dorothy Musser, George W Musser, Kathryn M. Peelor, Executrix, and The Savings and Trust Company of Indiana, Pennsylvania, Co-executor (substituted for L. Murray Peelor, deceased), and Robert M. Fisher.

Supreme Court of Pennsylvania.

Nov. 25, 1958.

Rehearing Denied Jan. 3, 1959.

Lois G. Forer, Deputy Atty. Gen., and Thomas D. McBride, Atty. Gen., for appellant.

John Y. Scott, Harrisburg, for appellees Musser Forests, Inc., and others.

E. E. Creps, Indiana, Pa., for appellees Kathryn M. Peelor and Savings & Trust Co. of Indiana.

Before CHARLES ALVIN JONES, C. J., and BELL, MUSMANNO, ARNOLD and BENJAMIN R. JONES, JJ.

CHARLES ALVIN JONES, Chief Justice.

The Commonwealth seeks by this action in trespass to recover damages from the defendant, Musser Forests, Inc., and the several named individual defendants, some of whom are officers and all of whom are stockholders of the defendant corporation. The defendants filed preliminary objections to the plaintiff's amended complaint. After argument thereon, the court below sustained the objections and entered judgment for the defendants. The Commonwealth has appealed.

The gravamen of the complaint is that the defendants conspired among themselves to defraud the Commonwealth by concertedly breaching a series of contracts which the various defendants separately entered into with the Department of Forests and Waters for the purchase by them from the Commonwealth of large quantities of seedling or transplant trees at cost as authorized by the Forest Tree Seedling Act of May 5, 1927, P.L. 817, Section 2, as amended by the Act of June 21, 1947, P.L. 777, Section 1, 32 P.S. § 454. Under the contracts of purchase, the defendants covenanted to conserve the trees, so purchased by them, solely for possible future wood products or watershed protection. The complaint further alleges certain welldefined overt acts in furtherance of the alleged conspiracy, viz., the defendants' sale of the trees commercially for ornamental purposes.

All of the contracts between the defendants and the Commonwealth for the purchase and sale of trees contained, substantially, the following in accordance with the provisions of the Forest Tree Seedling Act, supra, 32 P.S. § 453 et seq.: '(a) That all forest tree seedlings and transplants so purchased shall be planted in Pennsylvania on the site indicated in the sketch attached hereto and made a part thereof for watershed protection or for wood products; (b) That the trees will not be sold by the purchaser for removal from the land until they become large enough for use as wood products; (c) That a report on the planting will be furnished by the planter when requested by the Department; (d) That the planted area will be protected as far as possible from fire, grazing, and trespassing; (e) That the trees will not be planted for hedges table trees, potted trees or for shade or ornamental use; (f) That if such trees are sold or offered for sale for ornamental purposes the person, partnership, or corporation shall become liable to the Commonwealth for the payment of a penalty equal to three times the sale value of the trees sold * * *' and that the purchaser '* * * fully understand[s] that the term 'ornamental purposes' is construed to include the use of the trees as Christmas trees.'

The court below concluded that the amended complaint fails to state a cause of action in trespass for damages resulting from the defendants' conspiracy to violate their covenanted obligations to the Commonwealth and that, since the Commonwealth's claim for damages is laid in a sum three times the sales value of the trees sold by the defendants, the Commonwealth is in effect seeking payment of what the Forest Tree Seedling Act denominates a penalty and that, consequently, the suit is barred by the Act of March 26, 1785, 2 Sm.L. 299, Section 6, 12 P.S. § 44.

The averments of the complaint, if supported by proof at trial, would warrant a jury's finding that all of the contracts between the defendants and the Commonwealth were entered into by the defendants in furtherance of the original conspiracy and were carried to fruition by the subsequent breaches. Thus, the complaint is replete with averments of fact which, if proven, would justify a finding of a civil conspiracy on the part of the defendants to defraud the Commonwealth to its damage, and that the conspiracy was fully and effectively carried out by the defendants to their own pecuniary advantage.

Since the defendants have chosen to file preliminary objections, in the nature of demurrers, every material and relevant fact well pleaded and every inference fairly deducible therefrom are to be taken as true. Byers v. Ward, 368 Pa. 416, 420, 84 A.2d 307. Thus, for present purposes, it is admitted that the defendants have not only failed to conserve the seedlings and transplants as they were under express obligation to the Commonwealth to do but that they have actually sold the seedlings and transplants commercially for ornamental purposes. These averments and others in the complaint, such as the defendants' actions in respect of the land specified for the planting of the seedlings and transplants and the one report they ultimately made jointly to the Commonwealth of their asserted disposition of the seedlings and transplants, support a reasonable inference that throughout the defendants were acting in concert with the common purpose of defrauding the Commonwealth for their personal gain.

It is well established, and sustained by abundant authority, that a conspiracy may be proven by circumstantial evidence. Ballantine v. Cummings, 220 Pa. 621, 630-631, 70 A. 546; Kaiser v. Insurance Co. of North America, 275 Pa. 239, 243, 117 A. 791; Novic v. Fenics, 337 Pa. 529, 534-535, 11 A.2d 871; Commonwealth v. Mittelman, 154 Pa.Super. 572, 581, 36 A.2d 860. Necessarily, even in a criminal conspiracy proceeding, the actions of the conspirators will be sufficient evidence to prove that a conspiracy exists. Commonwealth v. Strantz, 328 Pa. 33, 43, 195 A. 75; Commonwealth v. Rosen, 141 Pa.Super. 272, 277, 14 A.2d 833. The rule is, of course, not limited to criminal conspiracy; it is equally applicable to cases involving civil conspiracy. Kaiser v. Insurnce Co. of North America, supra, 274 Pa. at page 243, 117 A. at page 792.

In Commonwealth v. Strantz, supra, 328 Pa. at page 43, 195 A. at page 80, the court aptly stated that 'An explicit or formal agreement to commit crimes can seldom, if ever, be proved and it need not be, for proof of a criminal partnership is almost invariably extracted from the circumstances that attend its activities * * *. 'The joint assent of minds required to sustain a charge of conspiracy may be inferred from the facts which establish * * * that the conspiracy had been formed.'' The following figurative description is contained in William Goldman Theatres, Inc., v. Loew's, Inc., 3 Cir., 150 F.2d 738, 743: "The picture of conspiracy as a meeting by twilight of a trio of sinister persons with pointed hats close together belongs to a darker age.' Temporary National Economic Committee, Monograph No. 16, p. 15.'

In an early case, Rogers v. Hall, 4 Watts 359, 361, Chief Justice Gibson stated 'Now the least degree of concert or collusion between parties to an illegal transaction makes the act of one the act of all * * *.' The rule has been summarized, at a more recent time, as follows: 'Defendant was not required to present direct and positive testimony of a collusive agreement to do something unlawful. The nature of the crime attempted usually makes it susceptible of no other proof than by circumstantial evidence * * *.' Kaiser v. Insurance Co. of North America, supra, 274 Pa. at page 243, 117 A. at page 792.

The Act of 1785, which provides that all actions, etc. 'for any forfeiture, upon any penal act of assembly' shall be brought within one year after the offense is committed, is not germane to the redress afforded the Commonwealth by the contracts drawn in accordance with the requirements of the Forest Tree Seedling Act. Nonetheless the court below gave the Act of 1785 present effect by construing the word 'penalty', used in the Forest Tree Seedling Act, as coming within the term 'forfeiture' in the 1785 statute of limitations. It is, of course, well known that the description 'penalty' does not ipso facto connote a penalty in the restricted sense of that term but may well be a convenient formula for determining damages in particular circumstances. Certainly, the Commonwealth's right of recovery under the contracts does not work a 'forfeiture, upon any penal act of assembly.' Neither by intent nor scope does the Forest Tree Seedling Act qualify as a penal statute which even a cursory reading of the Act will readily confirm.

In Gross v. Exeter Machine Works, Inc., 277 Pa. 363, 369, 121 A. 195, 197, it was stated that 'Whether the parties have denominated the sum specified in any given case a penalty or liquidated damages is of little moment in determining its real character. Kunkel & Jordan v. Wherry, 189 Pa. 198, 42 A. 112.' See also Sautter v. Rowland, 285 Pa. 212, 217, 131 A. 733. In Keck v. Bieber, 148 Pa. 645, 646, 24 A. 170, chief Justice Mitchell said that, 'The name by which [a penalty or liquidated damages clause] is called is but of slight weight, the controlling elements being the intent of the parties and the special circumstances of the case.' The following statement contained in March v. Allabough, 103 Pa. 335, 341, has often been quoted as the test for determining whether a particular term will be enforced as a liquidated damage provision. '[T]he question * * * is to be determined by the intention of the parties, drawn from the words of the whole contract, examined in the light of its subject matter and its surroundings; and that in this examination we must consider the...