606 F.2d 42 (3d Cir. 1979)
In 1975, Dr. Joseph Baram acquired legal title to Foxey Toni, a bay filly race horse, for $3,000 in a claiming race at the Keystone Race Track in Bucks County, Pennsylvania.1 Dennis Fredella became the trainer for Foxey Toni and was given authority to enter her in races in Dr. Baram’s name. Foxey Toni raced under Dr. Baram’s name on October 11, October 17, and November 8, 1975.2
Thereafter, a Certificate of Foal Registration for the horse, issued by the Jockey Club of America, came into Fredella’s possession at a time when he was indebted to Robert Farugia. Without the knowledge or consent of Dr. Baram, Farugia obtained possession of the horse from Fredella and was given the foal certificate bearing the forged signature of Dr. Baram.3 Farugia first dated the certificate, transferring the horse to Glenn Hackett and himself. Foxey Toni was subsequently raced in Canada by the putative new owners without the knowledge or consent of Dr. Baram.
After Dr. Baram learned of these events, he met with Farugia and demanded the return of Foxey Toni. Farugia refused to return the horse or pay her value of $3,000, but offered instead a modest cash settlement, which Dr. Baram rejected.4 Dr. Baram filed a complaint sounding in “Trespass for Conversion” in the district court against Farugia, Hackett, and Fredella. A default judgment for failure to appear was entered against Fredella.5
Dr. Baram acknowledged at trial that, as a result of previous criminal proceedings against Fredella in state court, he had been paid $3,000 by Fredella covering Dr. Baram’s claim for the value of the horse, Foxey Toni, and that he agreed to accept that.6 This case then proceeded as a bench trial for compensatory and punitive damages for conversion against Farugia and Hackett. The court awarded compensatory damages of $3,000 against both defendants for the value of Foxey Toni and assessed punitive damages of $5,000 against Farugia. The court dismissed the complaint against Fredella with prejudice. This appeal by Farugia and Hackett followed.7
Whether payment of the horse’s full value to the owner by one converter precludes recovery by the original owner in a conversion action against persons who received possession from the original converter?8
Conversion under Pennsylvania common law is an act of willful interference with the dominion or control over a chattel, done without lawful justification, by which any person entitled to the chattel is deprived of its use and possession.9 The modern law remedy for conversion has emerged from the common law action of trover, which was premised on the theory that the defendant had appropriated the plaintiff’s chattel, for which he must pay.10 A plaintiff who proved conversion in a common law trover action was entitled to damages equal to the full value of the chattel at the time and place of conversion.11 When the defendant satisfies the judgment in trover, the title to the chattel passed to him, and the plaintiff had nothing more to do with it.12 Pennsylvania courts have long recognized the forced sale aspect of conversion actions.13 Satisfaction of the earlier conversion by payment in full of the value of the chattel acts as a complete bar to subsequent recoveries.14
Yes. In this case, Dr. Baram acknowledged at trial that, as a result of previous criminal proceedings against Fredella in state court, he had been paid $3,000 by Fredella covering Dr. Baram’s claim for the value of the horse, Foxey Toni. He agreed to accept that. This payment and acknowledgment preceded judgment on the claims against Farugia and Hackett.15 On receipt by Dr. Baram of the $3,000 from Fredella, and acknowledgment that this sum reflected the true value of the horse, a common law forced sale was effected, passing title from the legal owner to the converter at the time and place of the original conversion on November 29, 1975.16
With title so vested, Fredella therefore had the right to transfer Foxey Toni on November 29, 1975, and Farugia then took possession of the horse from a person legally entitled to possess and transfer.17 Dr. Baram retroactively lost his right to possession of Foxey Toni, and without a right of possession at the time of the alleged conversion could not maintain an action for conversion against Farugia and Hackett.18 The recovery from Fredella of $3,000 fully satisfied Baram’s claim because it represented the true value of the claim as stated in the complaint and as found by the trial judge.19 The failure of his claim for compensatory damages also precludes his recovery of punitive damages under Pennsylvania law.20
Yes, payment of the horse’s full value to the owner by one converter precludes recovery by the original owner in a conversion action against persons who received possession from the original converter.21