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Mueller v. Technical Devices Corp.

Decided: November 26, 1951.


On appeal from the Essex County Court, Law Division.

For reversal -- Chief Justice Vanderbilt and Justices Case, Oliphant, Wachenfeld, Burling and Ackerson. For affirmance -- None. The opinion of the court was delivered by Oliphant, J.


[8 NJ Page 204] This appeal is from a judgment of the Essex County Court in the sum of $16,500 entered in favor of the plaintiff as the result of a jury verdict. The appeal, taken to the Appellate Division of the Superior Court, has been certified here on our own motion.

The two suits involved in this appeal were consolidated for trial, that against Technical Devices Corporation, hereinafter referred to as "Technical," and Roberts was commenced by summons and complaint, that against Seaboard Commercial Corporation, hereinafter referred to as "Seaboard," by writ of attachment. The sufficiency of the moving papers in the suit against Seaboard was reviewed by this court and the action of the trial court in denying defendant's motion to quash the writ of attachment was affirmed, 5 N.J. 28 (1950). In the opinion in that case we held that the affidavits of the plaintiff Mueller prima facie disclosed a cause of action in conversion and that the court properly issued the writ. That cause was remanded and proceeded to trial together with that against Technical and Roberts.

The cases are grounded in trover and conversion. The theory of plaintiff's case is that the defendant Technical was the actual converter of his property and that the defendants Roberts, the president of Technical, and Seaboard were also liable to respond in damages for having participated in the conversion, the latter by reason of its control and domination of the corporate policies of Technical through 100 per cent stock ownership.

Plaintiff asserted that he was the owner of certain goods and chattels referred to as "Radio Guide Assets" and that, at the request of Roberts, an option to purchase this property was given to Technical as well as the right to take, use and keep them in its possession during the option period provided certain rental charges were assumed and paid; that on April 8, 1949, Roberts notified plaintiff that his company, Technical, did not intend to exercise the option and that it had not and did not intend to pay any rentals for their use.

The complaint then alleged that:

"Though the plaintiff has demanded of both the defendants (Technical and Roberts) that they deliver said goods and chattels, known as Radio Guide Assets, to plaintiff, the defendants, well knowing that said goods and chattels are the property of the plaintiff have unlawfully refused to deliver them to the plaintiff."

The goods and chattels involved in these actions consisted of the physical assets of the Radio Navigational Instrument Corporation which were acquired by Mueller from the trustee in bankruptcy of that corporation in April, 1949, for $15,000. Mueller, as secretary of Technical, had been instructed by resolution to put in a bid for the assets of the Radio Navigational Instrument Corporation, but in view of the fact that Technical could not afford the cash expenditure at that time, Mueller purchased these assets in his own name and permitted Technical to make use of them. Mueller testified that he was assured orally that he would be reimbursed by Technical for the money he had expended for the aforementioned assets when the company was in a financial position to do so. The property purchased by Mueller consisted of machinery, office furniture, plant furniture and accessories, instruments and finished and semi-finished units and parts for producing units known as radio navigational guides. Part of the property was delivered to Technical's plant at Roseland, Essex County, where the manufacturing plant of Technical was located. This consisted of furniture and office equipment, plus some technological equipment; the balance was stored at the Federal Storage Warehouses in Newark. Through an error the warehouse receipt was issued in the name of Technical rather than Mueller. On September 28, 1948, a resolution was passed by the board of directors of Technical authorizing the Federal Warehouse to correct the receipt issued by it so that it would read "Chester Mueller, c/o Technical Devices Corporation." The defendant Technical admitted possession of that part of Mueller's property in its plant but denied possession of that portion in storage. The warehouse receipt was continued in Technical's name because its resolution authorizing a change in the receipt was not certified in such a fashion as to be acceptable to the warehouse.

At the end of plaintiff's case motions for judgments of involuntary dismissal against all the defendants were made, denied and exceptions duly taken to the court's rulings, and at the end of the whole cases motions were made for directed

verdicts in favor of the defendants which were likewise denied and exceptions taken thereto. The main point argued by the appellants is that either the motions for involuntary dismissal or the motions for directed verdicts should have been ...

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