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PENN ELECTRIC SUPPLY CO. v. BILLOWS ELECTRIC SUPPLY COMPANY (07/01/87)

filed: July 1, 1987.

PENN ELECTRIC SUPPLY CO., INC. AND COATESVILLE ELECTRIC SUPPLY CO., INC., APPELLANTS,
v.
BILLOWS ELECTRIC SUPPLY COMPANY, INC.



Appeal from the judgment entered March 20, 1986 in the Court of Common Pleas of Philadelphia County, Civil Division, at No. 977 April Term, 1978.

COUNSEL

Gary Schildhorn, Philadelphia, for appellants.

Jonathan Braff, Philadelphia, for appellee.

Cirillo, President Judge, and Beck and Johnson, JJ. Johnson, J., files concurring opinion.

Author: Beck

[ 364 Pa. Super. Page 545]

The issue before us is whether in the context of a conversion action the court is required to accept the plaintiffs' valuation of damages where defendant fails to identify and value the goods he converted. We find that the court is not required to accept the plaintiffs' valuation and therefore affirm the trial court.

[ 364 Pa. Super. Page 546]

Plaintiff-appellants, Penn Electric Supply Company and Coatesville Electric Supply Company (hereinafter collectively Penn Electric), assert that in a conversion action the court must accept the plaintiff's valuation as to damages unless the defendant satisfies the burden of proving lesser damage. Penn Electric contests the dollar amount of damages awarded to them against defendant-appellee Billows Electric Supply Company, Inc. (Billows Electric) after Penn Electric prevailed in a bench trial in a conversion action.

This case involves a somewhat complicated series of transactions relating to certain goods, namely tools, electrical supplies and trailers, which we will hereafter refer to collectively as "the goods." The goods originally belonged to B & W Electric Construction Company, Inc. (B & W).*fn1 In 1971, appellee Billows Electric perfected a security interest in all of B & W's inventory, equipment, accounts receivable, furniture, machinery, and proceeds from the sale of any of the above. In 1973, B & W went out of business and, pursuant to the security agreement, Billows Electric alleges that it acquired ownership of the goods. After the demise of B & W, David L. White, its president, started Gar-Dan Electrical Construction Company (Gar-Dan) at the same address, and retained possession of the goods in a transaction the nature of which is in dispute. On October 14, 1976, Penn Electric entered into a security agreement with Gar-Dan, under which Penn Electric procured a perfected security interest in all of the inventory, tools, equipment, accounts receivable and all the property of Gar-Dan. In March of 1977, Gar-Dan went out of business and then Billows Electric removed the goods.

Penn Electric filed a complaint in trespass against Billows Electric alleging that Penn Electric had a perfected security interest in the goods and that therefore Billows Electric converted the goods when it removed them. Billows Electric

[ 364 Pa. Super. Page 547]

    defended on the ground that it had merely loaned the goods to Gar-Dan and thus Gar-Dan had only a possessory and not an ownership interest. Billows Electric contended, therefore, that Gar-Dan's possessory rights in the collateral were not adequate to permit Penn Electric's security interest to attach. Under this theory, Billows Electric could not be liable in conversion when it removed the goods.

The case was tried without a jury, and the trial court rendered a verdict in favor of Penn Electric and against Billows Electric in the amount of $14,500, plus interest from the date of conversion. Post-trial motions were denied. The verdict was reduced to judgment. Billows Electric appealed the judgment in favor of Penn Electric,*fn2 and Penn Electric cross-appealed on the adequacy of the damages awarded to it. In this instant appeal, only the damages question is before us.

Appellant, Penn Electric, argues: (1) that the trial court erred in limiting damages to $14,500; and (2) that the trial court erred in declining to award Penn Electric punitive damages.

Penn Electric's first argument is that the trial court should have awarded damages in excess of $50,000 based on the testimony of Penn Electric's expert. Even though the figure suggested by the expert was clearly a broad estimate and was based on no precise accounting, Penn Electric argues that in a conversion action, once plaintiff establishes the measure of his damages, the burden of proof to rebut plaintiff's claim is on the defendant. Therefore, since Billows Electric did not sustain its burden, Penn Electric argues, the trial court was required to accept Penn Electric's calculation of damages, $50,000.

Penn Electric bases its assertion on Billows Electric's wrongful taking of the goods and its inability to produce an inventory ...


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