Baram v. Farugia

606 F.2d 42 (3rd Cir. 1979)

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Nature of the Case

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Facts

Baram (P) acquired legal title to a filly racehorse for $3,000 in a claiming race in Bucks County, Pennsylvania. Fredella became the trainer for the horse and was given authority to enter the horse in races under P’s name. The horse raced under P’s name on October 11,17 and November 8, 1975. A certificate of Foal Registration on the horse was issued by the Jockey Club of America and came into Fredella’s possession at a time when he was indebted to D. Without the knowledge and consent of P, Fredella forged P’s signature and gave the certificate to D. The district court found that both Fredella and D knew or should have known that the signature on the certificate had been forged and that Fredella had not authority to transfer the horse. D then transferred the horse to himself and then transferred her to Hackett and himself. The horse raced in Canada without the knowledge and consent of P. P eventually learned of the transfers and then met with D and demanded the return of the horse. D refused and refused to pay the $3,000 but offered a modest cash settlement. P rejected that offer and initiated this lawsuit. P sued for a complaint sounding in Trespass for Conversion. A default judgment was entered against Fredella. P acknowledged at trial that as a result of criminal proceedings against Fredella, he had been paid $3,000. The case then proceeded as a bench trial for compensatory and punitive damages for conversion against D and Hackett. The court awarded compensatory damages of $3,000 against each defendant and then assessed punitive damages of $5,000 against D. The court dismissed the complaint against Fredella with prejudice. Both D and Hackett appealed. They argued that the payment of $3,000 by Fredella extinguished the claim of conversion.