Commonwealth v. Mitchneck

198 A. 463

 

RULE:

The failure to pay a debt is not necessarily a fraudulent conversion.

FACTS:

The Defendant operated a coalmine and had at least three employees. These employees agreed to allow the Defendant to deduct their wages in order to pay their bills at a local store. Over time, the Defendant deducted the employees’ wages, but did not pay any of their bills at the store. He was charged with a crime under the Fraudulent Conversion Act of 1917.

ISSUE:

Is the failure to pay a debt necessarily a fraudulent conversion?

ANSWER:

No.

CONCLUSION:

The gist of the crime of fraudulent conversion is that the defendant has received the money or property of another person and fraudulently withholds or converts the same for his own use and benefit. Pennsylvania’s criminal statute was not intended to substitute for an action to collect a debt. The Defendant in this case did not steal any money from his employees; he merely violated their agreement and thus owed a debt. His liability for the debt is civil, not criminal.

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