Am. Jur. 2d

CONVERSION
by
Daniel D. Kopka, J.D.

TOPIC SCOPE

This article discusses the tortious act of wrongfully exercising the dominion over another's personal property in denial of, or inconsistent with, the owner's rights.  The treatment includes the nature and elements of the tort; what kinds of property are subject to conversion; persons by and against whom a conversion action may be brought; defenses; recoverable damages; and procedural matters.

Other articles discuss the application, by federal courts sitting in diversity, of state law in suits to recover damages for conversion of personal property (see 32 Am Jur 2d, Federal Practice and Procedure § 276); the issue whether Federal District Courts have federal question jurisdiction under 28 USCS §  1331(a) of conversion suits (see 32A Am Jur 2d, Federal Practice and Procedure § 1640); and the right of the United States under 28 USCS §  1345 to sue for conversion of personal property (see 32A Am Jur 2d, Federal Practice and Procedure § 1648).

RESEARCH REFERENCES

7 Am Jur Pl & Pr Forms (Rev),  Conversion
 14 Am Jur POF2d 37.3, Circumstances Warranting Assessment of Punitive Damages–Action for Wrongful Conversion of Automobile;  32 Am Jur POF2d 659, Landlord's Conversion of Tenant's Property 3 Am Jur Trials 681, Tactics and Strategy of Pleading § 84 (pleadings in actions relating to personal property);  4 Am Jur Trials 445, Solving Statutes of Limitation Problems § 45 (statute of limitations in action for conversion)

I.  IN GENERAL [1-6]

Conversion can be defined as a distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his title or rights therein, or in derogation, exclusion, or defiance of such title or rights, 1        without the owner's consent 2   and without lawful justification. 3    A conversion takes place where a person does such acts in reference to the personal property of another as amount, in view of the law, to the appropriation of the property to himself. 4  

Under the Restatement of Torts, conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel. 5

Trover is the name of the action which lay, at common law, for the recovery of damages for the conversion of personal property. 6   Although old forms of action have been abolished under modern codes of civil procedure, the common-law action for conversion still exists in fact, if not in form. 7

̈ Distinction: The gist of an action in trespass is the injury to the plaintiff or to real or personal property in his possession, while a conversion is an act of dominion wrongfully exerted over another's personal property. 8  

Conversion is any act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use. One who wrongfully withholds personal property from another who is entitled to it under a security agreement may be liable for conversion. Messerall v Fulwider (1988, 3d Dist) 199 Cal App 3d 1324, 245 Cal Rptr 548, mod, reh den (3d Dist) 200 Cal App 3d 490c.

In a broad general sense, "recovery" is the regaining of that which has been lost, missing, or taken away. In a narrower legal sense, it means the obtaining by judgment of some right or property that has been taken or withheld. The distinction between an action to recover possession, or the value in case a delivery cannot be had, and one to recover damages for the wrongful conversion of personal property, is just as broad as that between the common law actions of detinue and trover (the technical name for an action for conversion). One lies for the recovery of the property itself, with damages for the wrongful detention of it, the other for the recovery of damages for the wrongful conversion of it. In the case of an action for recovery of the property, the judgment must be for the possession of the property, if a delivery can be had, or for the value thereof, if a delivery cannot be had, with damages for the detention, in either case. Taylor v Forte Hotels International (1991, 4th Dist) 235 Cal App 3d 1119, 1 Cal Rptr 2d 189, 91 CDOS 8821, 91 Daily Journal DAR 13493, reh den (Cal App 4th Dist) 91 Daily Journal DAR 14388.

Although damages for conversion are frequently the equivalent to the damages for negligence, i.e., specific recovery of the property or damages based on the value of the property, negligence is no part of an action for conversion. Taylor v Forte Hotels International (1991, 4th Dist) 235 Cal App 3d 1119, 1 Cal Rptr 2d 189, 91 CDOS 8821, 91 Daily Journal DAR 13493, reh den (Cal App 4th Dist) 91 Daily Journal DAR 14388.

Footnote 1. Quaker Oats Co. v McKibben (CA9 Cal) 230 F2d 652; Shartzer v Ulmer, 85 Ariz 179, 333 P2d 1084; De Vries v Brumback, 53 Cal 2d 643, 2 Cal Rptr 764, 349 P2d 532; Byron v York Invest. Co., 133 Colo 418, 296 P2d 742; Moore v Waterbury Tool Co., 124 Conn 201, 199 A 97,  116 ALR 564; Shea v Fridley (Mun Ct App Dist Col) 123 A2d 358; Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Thoma v Tracy Motor Sales, Inc., 360 Mich 434, 104 NW2d 360; Steller v Thomas, 232 Minn 275, 45 NW2d 537; Gebhardt v D.A. Davidson & Co. (Mont) 661 P2d 855; Sorensen v Jacobson, 125 Mont 148, 232 P2d 332,  26 ALR2d 1186; Employers' Fire Ins. Co. v Cotten, 245 NY 102, 156 NE 629,  51 ALR 1462; Spinks v Taylor, 303 NC 256, 278 SE2d 501; Baird v Howard, 51 Ohio St 57, 36 NE 732; Gottesfeld v Mechanics & Traders Ins. Co., 196 Pa Super 109, 173 A2d 763; Groves v Hanks (Tex Civ App Corpus Christi) 546 SW2d 638, writ ref n r e; Vermont Acceptance Corp. v Wiltshire, 103 Vt 219, 153 A 199,  73 ALR 792.

Practice Aids: –Instruction to jury–Definition of Conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion Forms  1,  2.

Footnote 2. Stevenson v Economy Bank of Ambridge, 413 Pa 442, 197 A2d 721,  4 ALR3d 1450.

Footnote 3. Baram v Farugia (CA3 Pa) 606 F2d 42; Collins v Intervest, Inc. (Fla App D2) 418 So 2d 1030; Stevenson v Economy Bank of Ambridge, 413 Pa 442, 197 A2d 721,  4 ALR3d 1450.

Footnote 4. Richstein v Roesch, 71 SD 451, 25 NW2d 558,  169 ALR 98; Stidham v Lewis (Tex Civ App) 23 SW2d 851.

Footnote 5. Restatement, Torts 2d § 222A.

Footnote 6. United States v Loughrey,  172 US 206,  43 L Ed 420,  19 S Ct 153; Kitchen v Bedford,  80 US 413,  20 L Ed 637; May v Le Claire,  78 US 217,  20 L Ed 50; Tome v Dubois,  73 US 548,  18 L Ed 943; Teal v Felton,  53 US 284,  13 L Ed 990; Dawsey v Kirven, 203 Ala 446, 83 So 338,  7 ALR 1658; Sackville v Wimer, 76 Colo 519, 233 P 152,  41 ALR 1255; Douglass v Hart, 103 Conn 685, 131 A 401,  44 ALR 820; Weed v Boston & M. R. R., 124 Me 336, 128 A 696,  42 ALR 487; Somerville Nat. Bank v Hornblower, 293 Mass 363, 199 NE 918,  104 ALR 1107; Hopkins v Grand Rapids Trust Co., 262 Mich 261, 247 NW 175; National Bank of Commerce v Morris, 114 Mo 255, 21 SW 511; Brady v Brady, 161 NC 324, 77 SE 235; Danielson v Roberts, 44 Or 108, 74 P 913; Gunzburger v Rosenthal, 226 Pa 300, 75 A 418; Peeples v Hornik, 153 SC 321, 150 SE 802; Bodne v Austin, 156 Tenn 353, 2 SW2d 100,  62 ALR 1410; Ferrous Products Co. v Gulf States Trading Co. (Tex Civ App Houston (1st Dist)) 323 SW2d 292, affd 160 Tex 399, 332 SW2d 310; Vermont Acceptance Corp. v Wiltshire, 103 Vt 219, 153 A 199,  73 ALR 792.

Footnote 7. Pribble v Kent, 10 Ind 325; Ferrous Products Co. v Gulf States Trading Co. (Tex Civ App Houston (1st Dist)) 323 SW2d 292, affd 160 Tex 399, 332 SW2d 310.

Footnote 8. 75 Am Jur 2d,  Trespass § 3.

The elements of a conversion cause of action are:  (1) plaintiffs' ownership or right to possession of the property at the time of the conversion; (2) defendants' conversion by a wrongful act or disposition of plaintiffs' property rights; and (3) damages. 9      In another formulation, it has been stated that one claiming conversion must show a tortious conversion of the chattle, a right to property in it, and a right to immediate possession which is absolute, unconditional, and not dependent upon the performance of some act. 10

Bank was liable to payee in conversion pursuant to UCC § 3-419(1)(c) for accepting check that had been wrongfully endorsed by its customer where it did not act in accordance with reasonable commercial standards so as to meet exception to liability found in UCC § 3- 419(3), in that it did not inquire as to endorser's authority to cash check despite form of check, fact that check had been altered, bank president's awareness of endorser's history of returned checks and overdrafts, and fact that payee had account with bank in past. Phariss v Eddy (1991, Iowa App) 478 NW2d 848, 17 UCCRS2d 181.

Footnote 9. Hartford Financial Corp. v Burns (2d Dist) 96 Cal App 3d 591, 158 Cal Rptr 169, 27 UCCRS 843; Brown v Meyer (Mo App) 580 SW2d 533; Gebhardt v D.A. Davidson & Co. (Mont) 661 P2d 855.

As to the requirement that the plaintiff have a right to possession of the property at the time of the conversion, see  §§ 75 et seq.

As to acts constituting a conversion, see  §§ 24 et seq.

As to damages in a conversion action, see  §§ 105 et seq.

Footnote 10. Jensen v Chicago & W. I. R. Co., 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE2d 578.

An action for conversion does not rest on the knowledge 11  or intent of the defendant. 12         The act constituting "conversion" must be an intentional act, but it does not require wrongful intent, and is not excused by care, good faith, or lack of knowledge. 13   Thus, the defendant is answerable for the conversion, no matter how good his intentions were, or how careful he has been, 14  or how apparently well founded was his belief that his tortious act was right. 15     The existence of probable cause does not preclude liability; 16   a person may be liable for conversion even though he was reasonably mistaken in thinking the facts to be such as would give him a legal right to the goods. 17  

However, there are cases in which the defendant does not clearly appropriate the property to his own use, 18   and in which the question whether there is a conversion therefore depends upon the intent of the defendant, 19   either express or implied. 20   In such cases, the acts of the defendant may be held not to constitute a conversion, because they are performed in good faith, 21      without a wrongful intent 22   or hostility to the rights of the plaintiff, 23  or in ignorance of the interest of the plaintiff in the property. 24  

̈ Observation: The question of motive or good faith is ordinarily one for the consideration of the jury. 25

The motive with which the defendant acts is usually immaterial in an action for conversion. 26   Conversion does not require a conscious wrongdoing, but only an intent to exercise dominion or control over the goods inconsistent with the owner's right. 27   Liability for a conversion is not necessarily precluded by the fact that the defendant acts without ill will or malice 28   or by the fact that he acted in good faith, 29         sincerely, 30  innocently, 31  inadvertently, by mistake, 32   or in ignorance of the plaintiff's interest in the property 33   or of the value thereof. 34  

Under the Restatement of Torts 2d, an actor is not relieved of liability to another for trespass to a chattel or for conversion by his belief, because of a mistake of law or fact not induced by the other, that he (a) has possession of the chattel or is entitled to its immediate possession, or (b) has the consent of the other or of one with power to consent for him, or (c) is otherwise privileged to act. 35

̈ Observation: It has been said that as a general proposition, conversion is an intentional tort in the sense that the defendant's action must be willful, although one can commit the tort unwittingly if he is unaware of plaintiff's outstanding property interest. 36

Practice Aids: Instruction to jury–Intent not an essential element of conversion. 7A Am Jur Pl & Pr Forms (Rev), Conversion, §  12.

Footnote 11. Poggi v Scott, 167 Cal 372, 139 P 815; Newhart v Pierce (1st Dist) 254 Cal App 2d 783, 62 Cal Rptr 553; Watkins v Layton, 182 Kan 702, 324 P2d 130.

Footnote 12. Aeroglide Corp. v Zeh (CA2 NY) 301 F2d 420, cert den  371 US 822,  9 L Ed 2d 61,  83 S Ct 38; Poggi v Scott, 167 Cal 372, 139 P 815; Watkins v Layton, 182 Kan 702, 324 P2d 130; Nat Koslow, Inc. v Bletterman,  23 Misc 2d 340, 197 NYS2d 583; Fulks v Fulks, 95 Ohio App 515, 54 Ohio Ops 131, 121 NE2d 180; Tobin v Deal,  60 Wis 87, 18 NW 634.

Practice Aids: –Instruction to jury–Intent not an essential element of conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion Form  4.

Footnote 13. Bader v Cerri, 96 Nev 352, 609 P2d 314.

Fraudulent intent is not an element of conversion.  Baker v Rangos, 229 Pa Super 333, 324 A2d 498.

Footnote 14. Hubbell v Blandy, 87 Mich 209, 49 NW 502.

Footnote 15. Baer v Slater, 261 Mass 153, 158 NE 328,  54 ALR 1328; Stack v Gudgel, 60 Okla 32, 158 P 1144; Central Meat Market v Longwell's Transfer, Inc. (Tex Com App) 62 SW2d 87; Potomac Ins. Co. v Nickson, 64 Utah 395, 231 P 445,  42 ALR 128.

Footnote 16. Interstate Nat. Bank v McCormick, 67 Mont 80, 214 P 949,  34 ALR 721.

Footnote 17. Row v Home Sav. Bank, 306 Mass 522, 29 NE2d 552,  131 ALR 160.

Footnote 18. Cleminshaw v Meehan, 236 App Div 185, 258 NYS 225; Lund v Keeler,  203 Wis 458, 233 NW 769.

Footnote 19. Towns v Pratt, 33 NH 345; New York Life Ins. Co. v Bank of Commerce & Trust Co., 172 Tenn 226, 111 SW2d 371,  115 ALR 643.

Footnote 20. Rogers v Huie, 2 Cal 571 (ovrld on other grounds Swim v Wilson, 90 Cal 126, 27 P 33).

Footnote 21. Lamar v McCulloch,  115 US 163,  29 L Ed 360,  6 S Ct 1; Ashcraft v Tucker, 73 Colo 363, 215 P 877,  28 ALR 692; Varney v Curtis, 213 Mass 309, 100 NE 650; Closson v Morrison, 47 NH 482; Frizzell v Rundle, 88 Tenn 396, 12 SW 918.

Footnote 22. Rogers v Huie, 2 Cal 571 (ovrld on other grounds Swim v Wilson, 90 Cal 126, 27 P 33); Towns v Pratt, 33 NH 345; Salt Springs Nat. Bank v Wheeler, 48 NY 492; Lund v Keeler,  203 Wis 458, 233 NW 769.

Footnote 23. Koch v Branch & Crookes, 44 Mo 542; Closson v Morrison, 47 NH 482; Bowe v Palmer, 36 Utah 214, 102 P 1007.

Footnote 24. Nanson v Jacob, 93 Mo 331, 6 SW 246; Shellenberg v Fremont, E. & M. V. R. Co., 45 Neb 487, 63 NW 859; J. T. Fargason Co. v Ball, 128 Tenn 137, 159 SW 221; Paccos v Rosenthal, 137 Wash 423, 242 P 651,  43 ALR 142.

Footnote 25. Weiland Tool & Mfg. Co. v Whitney, 100 Ill App 2d 116, 241 NE2d 533, revd on other grounds 44 Ill 2d 105, 251 NE2d 242; Closson v Morrison, 47 NH 482.

Footnote 26. Harker v Dement (Md) 9 Gill 7; Mapledge Corp. v Coker, 167 Neb 420, 93 NW2d 369; Baltimore & O. R. Co. v O'Donnell, 49 Ohio St 489, 32 NE 476.

Footnote 27. Allred v Hinkley, 8 Utah 2d 73, 328 P2d 726.

Footnote 28. Associates Discount Corp. v Walker, 39 Ill App 2d 148, 188 NE2d 54; Interstate Nat. Bank v McCormick, 67 Mont 80, 214 P 949,  34 ALR 721.

Footnote 29. United States v Union Livestock Sales Co. (CA4 W Va) 298 F2d 755, 20 Ohio Ops 2d 253,  96 ALR2d 199 (applying West Virginia law); Scott v Shook, 80 Colo 40, 249 P 259,  47 ALR 1108; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Row v Home Sav. Bank, 306 Mass 522, 29 NE2d 552,  131 ALR 160; Kearney v Clutton, 101 Mich 106, 59 NW 419; Richtmyer v Mutual Live Stock Com. Co., 122 Neb 317, 240 NW 315,  180 ALR 608; Pacific & Atlantic Shippers, Inc. v Schier, 109 NH 551, 258 A2d 351; McGlynn v Schultz, 95 NJ Super 412, 231 A2d 386, certif den 50 NJ 409, 235 A2d 901; Wright v Bank of Metropolis, 110 NY 237, 18 NE 79; Eade v First Nat. Bank, 117 Or 47, 242 P 833,  43 ALR 374; Ferrous Products Co. v Gulf States Trading Co. (Tex Civ App Houston (1st Dist)) 323 SW2d 292, affd 160 Tex 399, 332 SW2d 310; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Good or bad faith is not included in the gist of the action for conversion.  Poggi v Scott, 167 Cal 372, 139 P 815; Newhart v Pierce, 254 Cal App 2d 783, 62 Cal Rptr 553.

Footnote 30. Stack v Gudgel, 60 Okla 32, 158 P 1144.

Footnote 31. White v Yawkey, 108 Ala 270, 19 So 360; Warren Stave Co. v Hardy, 130 Ark 547, 198 SW 99; Byer v Canadian Bank of Commerce, 8 Cal 2d 297, 65 P2d 67; Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Case v Hart, 11 Ohio 364; Gilbert v Citizens' Nat. Bank, 61 Okla 112, 160 P 635; Chapman & Dewey Lumber Co. v Tri-State Veneer & Plywood Co., 201 Tenn 660, 301 SW2d 363.

Footnote 32. Ivy Coal & Coke Co. v Alabama Coal & Coke Co., 135 Ala 579, 33 So 547; Hudmon v Du Bose, 85 Ala 446, 5 So 162; Newhart v Pierce (1st Dist) 254 Cal App 2d 783, 62 Cal Rptr 553; Omaha & Grant Smelting & Refining Co. v Tabor, 13 Colo 41, 21 P 925; Greer v Equity Co-operative Exchange, 137 Minn 300, 163 NW 527; Wright v Bank of Metropolis, 110 NY 237, 18 NE 79; Forsyth v Wells, 41 Pa 291; Chapman & Dewey Lumber Co. v Tri-State Veneer & Plywood Co., 201 Tenn 660, 301 SW2d 363; Graves v Smith,  14 Wis 5.

Footnote 33. Hudmon v Du Bose, 85 Ala 446, 5 So 162; Swim v Wilson, 90 Cal 126, 27 P 33; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Alexander v Swackhamer, 105 Ind 81, 4 NE 433, reh overr 105 Ind 90, 5 NE 908; Watkins v Layton, 182 Kan 702, 324 P2d 130; Varney v Curtis, 213 Mass 309, 100 NE 650; Robinson v Bird, 158 Mass 357, 33 NE 391; Hoven v McCarthy Bros. Co., 163 Minn 339, 204 NW 29; Wilson v Holmes, 174 Okla 527, 50 P2d 1081; Alamo Live Stock Com. Co. v Heimer (Tex Civ App) 192 SW 591.

Footnote 34. Poggi v Scott, 167 Cal 372, 139 P 815 (holding that a mistaken belief on the part of the defendant that the property converted was mere rubbish will not relieve him from liability).

Footnote 35. Restatement, Torts 2d § 244.

Footnote 36. Warren Tool Co. v Stephenson, 11 Mich App 274, 161 NW2d 133, 5 UCCRS 1017.

Conversion is a continuing tort, lasting as long as the person entitled to the use and possession of his property is deprived of it.  It does not necessarily end when the original wrongdoer transfers physical possession to another. 37

Footnote 37. De Vries v Brumback, 53 Cal 2d 643, 2 Cal Rptr 764, 349 P2d 532.

Although, in an action for the wrongful conversion of personal property, the plaintiff may recover the full value of the property, 38   and the satisfaction of the judgment ordinarily transfers the title in the property to the defendant, which transfer relates back to the time of the conversion, 39   the title of the owner of the property remains unaffected by the mere conversion itself. 40   Thus, conversion of personal property by a wrongdoer does not necessarily deprive the owner of the power of making a valid sale of the same, since he may, if he sees fit, waive the tort.  In that event, he may convey a good title to a third person, and the purchaser, first giving due notice of the transfer, may demand the property, and in case of refusal, may maintain trover for the wrongful detention of the property. 41  

Practice Aids: Instruction to jury–Effect of conversion of part of chattel. 7A Am Jur Pl & Pr Forms (Rev), Conversion, §  13.

Footnote 38.  § 105.

Footnote 39.  § 180.

Footnote 40. Birdsell v Shaliol,  112 US 485,  28 L Ed 768,  5 S Ct 244; Lovejoy v Murray,  70 US 1,  18 L Ed 129; Spivey v Morris, 18 Ala 254; Atwater v Tupper, 45 Conn 144; Bradley v Boynton, 22 Me 287; Frisch v Wells, 200 Mass 429, 86 NE 775; John A. Tolman Co. v Waite, 119 Mich 341, 78 NW 124; Haas v Sackett, 40 Minn 53, 41 NW 237; Russell v McCall, 141 NY 437, 36 NE 498; Acheson v Miller, 2 Ohio St 203; Sandy Holding Co. v Ferro, 144 Or 466, 25 P2d 561; Jacob E. Decker & Sons v Milwaukee Cold Storage Co.,  173 Wis 87, 180 NW 256,  14 ALR 416.

Footnote 41. Tome v Dubois,  73 US 548,  18 L Ed 943.

III.  ACTS CONSTITUTING CONVERSION [24-56]

A.  In General [24-27]

Conversion, being a wrongful act, cannot spring from the exercise of a legal right, such as the right of execution on a judgment 37  or contesting rights under a contract. 38   The general rule is that there is no conversion until some act is done which is a denial or violation of the plaintiff's dominion over or rights in the property. 39    To constitute conversion of a chattel, there must be an unauthorized assumption of the right to possession or ownership. 40   Moreover, for an act to be a conversion, it must be essentially tortious; 41  a conversion imports an unlawful act, or an act which cannot be justified or excused in law. 42

Insurer's refusal to pay over interest to insured on its cash escrow account held by insurer for paying covered claims did not constitute conversion under Georgia law, so as to support award of punitive damages, since insurer's failure to pay interest constituted simple breach of contract, involving no tortious misuse of funds. LaRoche Industries, Inc. v AIG Risk Management, Inc. (1992, CA11 Ga) 959 F2d 189.

Bank was liable to payee in conversion pursuant to UCC § 3-419(1)(c) for accepting check that had been wrongfully endorsed by its customer where it did not act in accordance with reasonable commercial standards so as to meet exception to liability found in UCC § 3- 419(3), in that it did not inquire as to endorser's authority to cash check despite form of check, fact that check had been altered, bank president's awareness of endorser's history of returned checks and overdrafts, and fact that payee had account with bank in past. Phariss v Eddy (1991, Iowa App) 478 NW2d 848, 17 UCCRS2d 181.

The trial court did not err in granting plaintiff's motion for judgment notwithstanding the verdict on defendant's conversion counterclaim where defendant claimed that the act constituting conversion was the changing by plaintiff of the name on a contract with the federal Agricultural Stabilization and Conservation Service, but the evidence presented at trial failed to establish ownership in defendant of the federal funds at the time of the alleged conversion. Lyon v May (1993, NC App) 108 NC App 633, 424 SE2d 655.

Footnote 37. Commercial Credit Equipment Corp. v People's Loan Service, Inc. (La App) 351 So 2d 852.

Footnote 38. Owens v Zippy Mart of South Carolina, Inc., 268 SC 383, 234 SE2d 217.

Footnote 39. American Standard Life Ins. Co. v Johnson, 231 Ala 94, 163 So 632; Doolittle v Shaw, 92 Iowa 348, 60 NW 621; Hildegarde, Inc. v Wright, 244 Minn 410, 70 NW2d 257; Williams v International Harvester Co., 172 Or 270, 141 P2d 837 (ovrld on other grounds Rogue Valley Memorial Hospital v Salem Ins. Agency, Inc., 265 Or 603, 510 P2d 845); Ridenour v Woodward, 132 Tenn 620, 179 SW 148,  4 ALR 1192; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Practice Aids: –Complaint, petition, or declaration–For conversion–By employer against employee.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  73.

Complaint, petition, or declaration–For conversion–By employer against employee–Another form. 7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  73.5.

Footnote 40. Jensen v Chicago & W. I. R. Co., 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE2d 578.

Footnote 41. Tsuru v Bayer, 25 Hawaii 693; Carver v Ketchum, 53 Idaho 595, 26 P2d 139; Pitcock v Higgins (Mo App) 239 SW 870; United States Zinc Co. v Colburn, 124 Okla 249, 255 P 688; Fidelity Title & Trust Co. v First Nat. Bank, 277 Pa 401, 121 A 505.

Footnote 42. Gottesfeld v Mechanics & Traders Ins. Co., 196 Pa Super 109, 173 A2d 763; Allred v Hinkley, 8 Utah 2d 73, 328 P2d 726; Booth v New York C. R. Co., 95 Vt 9, 112 A 894.

B.  Depriving Owner of Possession [28-32]

The exercise of ownership over the property may take a number of forms, and may occur even when the original possession was not wrongful. 64  All that is required is that the defendant exercise control over the chattel in a manner inconsistent with the plaintiff's right of possession. 65   The gist of a conversion is not the acquisition of the property by the wrongdoer, but the wrongful deprivation of another person's property which the owner is entitled to possess. 66   Such conversion may be either direct or constructive. 67   A conversion consists of an act in derogation of the plaintiff's possessory rights, 68   and any wrongful exercise or assumption of authority over another's goods, depriving him of the possession, permanently or for an indefinite time, is a conversion. 69   A conversion occurs whenever there is a serious interference with a party's rights in his property. 70   It is not necessary for the party taking wrongful possession of property to assert absolute ownership of the property in order to give the owner of the property the right to an action for conversion.  If the owner, entitled to the immediate possession of his property, has been deprived of that possession by the unauthorized act of another, or by the exercise of dominion over the property inconsistent with the right of possession of the owner, it is a conversion of the property. 71   An action for conversion is not maintainable unless the plaintiff is wrongfully deprived of possession, 72  but one may be liable for conversion without ever having the actual possession of the property converted. 73  

One who dispossesses another of a chattel is subject to liability in trespass for the damage done.  If the dispossession seriously interferes with the right of the other to control the chattel, the actor may also be subject to liability for conversion, according to the Restatement of Torts. 74

Conversion does not require a manual taking.  Where one makes an unjustified claim of title to personal property or asserts an unfounded lien to the property which causes actual interference with the owner's rights of possession, a conversion exists. 75

On the other hand, less serious interferences with personal property are not sufficient to constitute a conversion.  A mere temporary exclusion of plaintiff from possession of his property will not give rise to an action for conversion. 76

Some cases illustrating this rule include the following:  A telephone company did not commit a wrongful domination of telephone equipment by interrupting telephone service or denial of the owner's rights in the equipment where the owner violated a tariff and the telephone company thereupon had the right and duty to interrupt service after notice. 77   There was no conversion of documents taken from a United States Senator's files where the documents were removed from the files at night, photocopied, and returned undamaged before office operations resumed in the morning. 78    

In an action by a country club concessionnaire against a city alleging conversion of personal property when the city cancelled its lease with the country club and changed locks on the property, there was no conversion where the uncontroverted evidence was that the plaintiff's property was available to them upon identifying themselves and their property to the security guard. 79   And a verdict that the plaintiff take nothing in suit for conversion of mobile home was proper where there was no evidence that the defendant denied or in any way excluded the plaintiff from access to the home, nor was any intent or purpose to convert the home shown. 80

Footnote 64. Unigard Ins. Co. v Tremont, 37 Conn Super 596, 430 A2d 30.

Footnote 65. Jensen v Chicago & W. I. R. Co., 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE2d 578.

Footnote 66. National Surety Corp. v Applied Systems, Inc. (Ala) 418 So 2d 847; Newhart v Pierce (1st Dist) 254 Cal App 2d 783, 62 Cal Rptr 553; McLaughlin v Clementi, 144 Colo 34, 355 P2d 100; Star Fruit Co. v Eagle Lake Growers, Inc., 160 Fla 130, 33 So 2d 858; Jensen v Chicago & W. I. R. Co., 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE2d 578; Importsales, Inc. v Lindeman, 231 La 663, 92 So 2d 574; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Pacific & Atlantic Shippers, Inc. v Schier, 109 NH 551, 258 A2d 351; Wood v Grau, 55 NM 429, 234 P2d 362; Carlson v Stern's Boatyard, Inc. (2d Dept)  79 App Div 2d 981, 434 NYS2d 478; Fulks v Fulks, 95 Ohio App 515, 54 Ohio Ops 131, 121 NE2d 180; P&T Mfg. Co. v Exchange Sav. & Loan Asso. (Tex App Dallas) 633 SW2d 332, writ ref n r e; Ligon v E. F. Hutton & Co. (Tex Civ App Dallas) 428 SW2d 434, writ ref n r e.

Defendants who participated in a transaction whereby one joint tenant of a bank account withdrew the entire amount thereof without the consent of the other joint tenant converted property belonging to the other joint tenant. Schwartz v Schwartz,  81 Misc 2d 177, 365 NYS2d 584, mod on other grounds  82 Misc 2d 51, 365 NYS2d 589.

As to the question whether conversion will lie in favor of one cotenant against another who is taking possession of common property, see 20 Am Jur 2d,  Cotenancy and Joint Ownership §§ 85,  86.

Practice Aids: –Complaint, petition, or declaration–For conversion of property in possession of owner.  7 Am Jur Pl & Pr Forms (Rev) Conversion Form  11.

Complaint, petition, or declaration–For conversion of property in possession of owner–By party who made repairs. 7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  12.

Complaint, petition, or declaration–For conversion of property located on nonowner's premises.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  14.

Complaint, petition, or declaration–Allegation–Wrongful taking of property from plaintiff's possession.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  16.

Instruction to jury–Goods wrongfully taken from plaintiff as conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  18.

Footnote 67. Sandor Petroleum Corp. v Williams (Tex Civ App Eastland) 321 SW2d 614, writ ref n r e.

Footnote 68. Star Fruit Co. v Eagle Lake Growers, Inc., 160 Fla 130, 33 So 2d 858; Importsales, Inc. v Lindeman, 231 La 663, 92 So 2d 574; Hildegarde, Inc. v Wright, 244 Minn 410, 70 NW2d 257; Leach v Kelsch (ND) 106 NW2d 358; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Footnote 69. Quaker Oats Co. v McKibben (CA9 Cal) 230 F2d 652; Unigard Ins. Co. v Tremont, 37 Conn Supp 596, 430 A2d 30; Star Fruit Co. v Eagle Lake Growers, Inc., 160 Fla 130, 33 So 2d 858; Carver v Ketchum, 53 Idaho 595, 26 P2d 139; Importsales, Inc. v Lindeman, 231 La 663, 92 So 2d 574; Hildegarde, Inc. v Wright, 244 Minn 410, 70 NW2d 257; Pitcock v Higgins (Mo App) 239 SW 870; Bader v Cerri, 96 Nev 352, 609 P2d 314; Leach v Kelsch (ND) 106 NW2d 358; United States Zinc Co. v Colburn, 124 Okla 249, 255 P 688; Hunt v First Nat. Bank, 102 Or 398, 202 P 564; Spencer v First Carolinas Joint Stock Land Bank, 167 SC 36, 165 SE 731; Adams v Maxcy,  214 Wis 240, 252 NW 598.

Footnote 70. Bader v Cerri, 96 Nev 352, 609 P2d 314.

Footnote 71. Fulks v Fulks, 95 Ohio App 515, 54 Ohio Ops 131, 121 NE2d 180.

Footnote 72. Floyd v Day, 3 Mass 403; Kunze v Cox, 113 Mich 546, 71 NW 864; Sammis v Sly, 54 Ohio St 511, 44 NE 508.

Footnote 73. Hall v Amos, 21 Ky 89; Bush v Hays, 286 Mich 546, 282 NW 239; Englehart v Sage, 73 Mont 139, 235 P 767,  40 ALR 590; Phillips v Hall (NY) 8 Wend 610; Hooser v G. M. Carlton Bros. & Co. (Tex Civ App) 288 SW 1095.

Footnote 74. Restatement, Torts 2d § 222.

Footnote 75. Bader v Cerri, 96 Nev 352, 609 P2d 314.

Footnote 76. Byron v York Invest. Co., 133 Colo 418, 296 P2d 742.

Footnote 77. Teleco, Inc. v Southwestern Bell Tel. Co. (WD Okla) 392 F Supp 692.

Footnote 78. Pearson v Dodd, 133 App DC 279, 410 F2d 701, 1 Media L R 1809, cert den  395 US 947,  23 L Ed 2d 465,  89 S Ct 2021.

Footnote 79. Malloy v El Paso (Tex Civ App El Paso) 602 SW2d 383, writ ref n r e.

Footnote 80. Fox v American Propane, Inc. (Tex Civ App Austin) 508 SW2d 426, writ ref n r e.

An act accompanied by a wrongful assertion of ownership, 81   or by a wrongful denial of the plaintiff's ownership, 82  may be a conversion.  But a mere assertion of ownership which in no way injures the owner of the property is ordinarily not regarded as constituting a conversion. 83

Footnote 81. Culp v Signal Van & Storage, 142 Cal App 2d Supp 859, 298 P2d 162; Hartford Ice Co. v Greenwoods Co., 61 Conn 166, 23 A 91; Wood v Frank Graham Co., 91 Ga App 621, 86 SE2d 691; Associates Discount Corp. v Walker, 39 Ill App 2d 148, 188 NE2d 54; Edlen v Tweed (Mo App) 295 SW2d 397; Meyer v Doherty,  133 Wis 398, 113 NW 671.

Footnote 82. Culp v Signal Van & Storage, 142 Cal App 2d Supp 859, 298 P2d 162; Barnett v Wedgewood, 28 NM 312, 211 P 601.

Footnote 83. Winchester v Joslyn, 31 Colo 220, 72 P 1079; Johnson v Tuttle, 108 Vt 291, 187 A 515,  106 ALR 1291.

Although an actual, forcible dispossession or manual taking of personal property need not exist to constitute an act a conversion, 84  a conversion generally consists of a wrongful, tortious, or unlawful taking of property from the possession of another 85  by fraud, duress, 86   trespass, 87  theft, 88      or force, 89    and without the other's consent 90   or approbation, either express or implied. 91   The unlawful taking of goods out of the possession of the owner with intent to convert them to the use of the taker is clearly a conversion, 92  although the fact that the defendant acts by mistake does not preclude his liability. 93   In this connection, the Restatement of Torts provides that a dispossession may be committed by intentionally taking a chattel from the possession of another without the other's consent. 94   Where the person seizing the property has the right to do so, there is no conversion, 95   even though the seizure was accomplished by force. 96  Accordingly, one who is rightfully in possession of property, though the legal title thereto may be in another, is not guilty of conversion. 97   The Restatement of  Torts appears to be in accord, in that it states that one who is entitled to the immediate possession of a chattel is not liable to another for dispossessing him of it. 98

̈ Caution: The possession of property by means of an illegal entry may constitute conversion, even though the person is otherwise entitled to take possession of the property. 99

A repossession of a purchaser's automobile constituted conversion and not a breach of contract, where a credit company had agreed that the purchaser could keep the automobile until certain disputes were settled, the purchaser had the right of possession, and the credit company committed a tortious wrongful taking inconsistent with that right. 1  

Footnote 84. Bolling v Kirby, 90 Ala 215, 7 So 914; Tsuru v Bayer, 25 Hawaii 693; Carver v Ketchum, 53 Idaho 595, 26 P2d 139; Taylor v Missouri Cent. Type Foundry Co., 143 Kan 175, 53 P2d 815; Webber v Davis, 44 Me 147; Englehart v Sage, 73 Mont 139, 235 P 767,  40 ALR 590; Simmons v Verblinn Realty Corp.,  32 Misc 2d 811, 224 NYS2d 750; United States Zinc Co. v Colburn, 124 Okla 249, 255 P 688; Bowe v Palmer, 36 Utah 214, 102 P 1007.

Footnote 85. Shapard v Hynes (CA8 Indian Terr) 104 F 449; Carver v Ketchum, 53 Idaho 595, 26 P2d 139; Brian v Wilson (La App 2d Cir) 81 So 2d 145; Desseau v Holmes, 187 Mass 486, 73 NE 656; Hutchinson v Whitmore, 90 Mich 255, 51 NW 451; E. B. Jones Motor Co. v Pullen (Mo App) 298 SW2d 448; Wilson Motor Co. v Dunn, 129 Okla 211, 264 P 194,  57 ALR 17; Hunt v First Nat. Bank, 102 Or 398, 202 P 564; Cook v C. I. T. Corp., 191 SC 440, 4 SE2d 801,  125 ALR 306; Newman v Garfield, 93 Vt 16, 104 A 881,  5 ALR 1507; Western Bond & Mortg. Co. v Chester, 145 Wash 81, 259 P 13; Adams v Maxcy,  214 Wis 240, 252 NW 598.

Footnote 86.  § 32.

Footnote 87. Brian v Wilson (La App 2d Cir) 81 So 2d 145; Hutchinson v Merchants' & Mechanics' Bank, 41 Pa 42.

Footnote 88. Pierpoint v Hoyt, 260 NY 26, 182 NE 235,  83 ALR 1195; Hutchinson v Merchants' & Mechanics' Bank, 41 Pa 42; Moore v Barlow (Tex Civ App San Antonio) 352 SW2d 804, writ ref n r e; Hadley Warehouse Co. v Broughton, 126 Wash 356, 218 P 257.

As to a criminal prosecution as a prerequisite to an action predicated upon the theft of the property, see  § 147.

As to a failure to prevent the theft of stolen goods as a conversion, see  § 54.

As to the receipt or disposal of stolen goods as a conversion, see  § 37.

Footnote 89. Manhattan Credit Co. v Brewer, 232 Ark 976, 341 SW2d 765,  99 ALR2d 354; Elliott v Federated Fruit & Vegetable Growers, Inc., 108 Cal App 412, 291 P 681; Graham v Warner's Exrs., 33 Ky 146; Potts v Farmers' Mut. Auto. Ins. Co.,  233 Wis 313, 289 NW 606.

Footnote 90. Tsuru v Bayer, 25 Hawaii 693; Shelby v Hudiburg Chevrolet, Inc. (Okla) 361 P2d 275; Gottesfeld v Mechanics & Traders Ins. Co., 196 Pa Super 109, 173 A2d 763; New York Life Ins. Co. v Bank of Commerce & Trust Co., 172 Tenn 226, 111 SW2d 371,  115 ALR 643; Hicks Rubber Co. v Stacy (Tex Civ App) 133 SW2d 249.

A creditor who takes exclusive possession of a stock of goods on which the debtor has executed a mortgage to secure the debt, with a contemporaneous written agreement for joint possession for the purpose of selling them to liquidate the debt, is guilty of conversion, where the creditor's exclusive possession is not justified by any contingency provided for in the mortgage, and is taken over the protest of the debtor.  Aylesbury Mercantile Co. v Fitch, 22 Okla 475, 99 P 1089.

Footnote 91. New York Life Ins. Co. v Bank of Commerce & Trust Co., 172 Tenn 226, 111 SW2d 371,  115 ALR 643.

Footnote 92. Schlittenhardt v Bernasky, 147 Colo 601, 364 P2d 586; Clark v Whitaker, 19 Conn 319; Taylor v Missouri Cent. Type Foundry Co., 143 Kan 175, 53 P2d 815; Murrell v Griswold (Okla) 338 P2d 150; Velzian v Lewis, 15 Or 539, 16 P 631.

Footnote 93.  § 3.

Footnote 94. Restatement, Torts 2d § 221(a).

Footnote 95. McArthur Bros. Mercantile Co. v Hagihara, 22 Ariz 100, 194 P 336,  13 ALR 1038; Silverstin v Kohler & Chase, 181 Cal 51, 183 P 451,  9 ALR 1177; Carr v Hoy,  2 NY2d 185, 158 NYS2d 572, 139 NE2d 531, remittitur amd  2 NY2d 882, 161 NYS2d 137, 141 NE2d 623.

Footnote 96. Silverstin v Kohler & Chase, 181 Cal 51, 183 P 451,  9 ALR 1177 (holding that taking forcible possession of property under a conditional sale after default in instalments of purchase money is not a conversion of the property).

Footnote 97. Cantrell v Broadnax (Tex Civ App Dallas) 306 SW2d 429.

Footnote 98. Restatement, Torts 2d § 272.

Footnote 99. Henderson v Security Nat. Bank (1st Dist) 72 Cal App 3d 764, 140 Cal Rptr 388, 22 UCCRS 846.

Footnote 1. Price v Ford Motor Credit Co. (Mo App) 530 SW2d 249.

A wrongful seizure or sale of property under legal process constitutes a conversion. 2   Such a conversion may be predicated upon the seizure or sale of property exempt by law, 3   or of property of one person under legal process directed against another, 4  or upon the failure to comply with various legal requirements in reference to the disposition of the property, or to conduct the sale thereof in accordance with the requirements of law. 5  

Practice Aids: Complaint, petition, or declaration–By third party claimant–Against sheriff for conversion of automobile seized under execution. 7A Am Jur Pl & Pr Forms (Rev), Conversion, §  99.

Complaint, petition, or declaration–For value of property seized under wrongful attachment. 7A Am Jur Pl & Pr Forms (Rev), Conversion, §  97.

Footnote 2. Shapard v Hynes (CA8 Indian Terr) 104 F 449; Milner & Kettig Co. v De Loach Mill Mfg. Co., 139 Ala 345, 36 So 765; Whittler v Sharp, 43 Utah 419, 135 P 112.

Footnote 3. Winstead v Hicks, 135 Ky 154, 121 SW 1018; Hutchinson v Whitmore, 90 Mich 255, 51 NW 451; Oliver v Wilson, 8 ND 590, 80 NW 757; Below v Robbins,  76 Wis 600, 45 NW 416.

Footnote 4. Yockey v Smith, 181 Ill 564, 54 NE 1048; Baker v Seavey, 163 Mass 522, 40 NE 863; Dickey v Converse, 117 Mich 449, 76 NW 80; Dyett v Hyman, 129 NY 351, 29 NE 261; Case v Hart, 11 Ohio 364; Vickery v Crawford, 93 Tex 373, 55 SW 560.

If the legal title to property and the right to its immediate possession are in one person, the possession of an officer under an attachment writ against another person is illegal, and the property is not in the custody of the law so as to prevent the real owner from maintaining an action for conversion against one who purchases it at the sale under such attachment. Milner & Kettig Co. v De Loach Mill Mfg. Co., 139 Ala 345, 36 So 765.

Footnote 5. Wright v Spencer (Ala) 1 Stew 576; French v Hall, 9 NH 137; Teddy's Drive In, Inc. v Cohen,  47 NY2d 79, 416 NYS2d 782, 390 NE2d 290; Whitney v Adams, 66 Vt 679, 30 A 32; Bromley v Goodrich,  40 Wis 131.

A person who obtains possession of goods by duress 6  or fraud may be liable for the conversion thereof. 7      To take possession of personal property where the consent of the owner is induced by a fraudulent misrepresentation is a conversion. 8    The Restatement of Torts 2d agrees.  It provides that a dispossession may be committed by intentionally obtaining possession of a chattel from another by fraud or duress. 9   Consent to possession of a chattel obtained by fraud or duress is also not effective to prevent recovery for trespass to the chattel or for conversion against any one other than a bona fide purchaser of the chattel, according to the Restatement. 10   Thus, the owner of goods, after having sold them to an impostor, has been permitted to maintain an action for their conversion or to recover their value from one to whom the impostor has resold them. 11

However, there is authority for the rule that where a transfer of possession is obtained by the owner's consent, even though under misrepresentation as to the purpose of the transfer, an action for conversion will not lie until some further act is done by the transferee in denial or violation or disregard of the owner's rights in the property. 12   For instance, a bailee's liability for conversion is not established by evidence that at the time he obtained possession of the property, he may have intended to use it for a purpose other than for which it was entrusted to him; the bailor cannot recover until the terms under which the transfer was made are violated. 13  

Footnote 6. United States v Ein Chemical Corp. (SD NY) 161 F Supp 238, 1 FR Serv 2d 91.

Footnote 7. Kitchen v Bedford,  80 US 413,  20 L Ed 637; Elliott v Federated Fruit & Vegetable Growers, Inc., 108 Cal App 412, 291 P 681; John Silvey & Co. v Tift, 123 Ga 804, 51 SE 748; Atlas Shoe Co. v Bechard, 102 Me 197, 66 A 390; Blake v Blackley, 109 NC 257, 13 SE 786; Baird v Howard, 51 Ohio St 57, 36 NE 732; Potts v Farmers' Mut. Auto. Ins. Co.,  233 Wis 313, 289 NW 606.

Footnote 8. Roehrich v Holt Motor Co., 201 Minn 586, 277 NW 274 (ovrld on other grounds Fischer v Market Ford Sales, Inc., 302 Minn 301, 225 NW2d 370); Schaffner v Pierce,  75 Misc 2d 21, 347 NYS2d 411 (holding that a television repair company that obtained possession of a television set by falsely representing that the company's improper repair of the set would be remedied at its shop, but retained the set to force payment for the improper repair was liable for conversion).

Practice Aids: –Complaint, petition, or declaration–For conversion of property in possession of owner–Property obtained by false representation.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  13.

Footnote 9. Restatement, Torts 2d § 221(b).

Footnote 10. Restatement, Torts 2d § 252A.

Footnote 11. Alexander v Swackhamer, 105 Ind 81, 4 NE 433, reh overr 105 Ind 90, 5 NE 908; Birmingham v Rice Bros., 238 Iowa 410, 26 NW2d 39,  2 ALR2d 1108, cert den  332 US 768,  92 L Ed 353,  68 S Ct 79, reh den  332 US 820,  92 L Ed 397,  68 S Ct 151; Moody v Blake, 117 Mass 23; Hamet v Letcher, 37 Ohio St 356.

Footnote 12. Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Footnote 13. Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

C.  Receipt of Property [33-37]

A person who accepts the possession of personal property from one not authorized to transfer the same may be regarded as a converter, 14  especially where the person accepting the goods acquires a proprietary interest therein, such as by a pledge or purchase. 15   

The Restatement of Torts provision is in accord, stating that one who receives possession of a chattel from another with the intent to acquire for himself or for a third person a proprietary interest in the chattel which the other has not the power to transfer is subject to liability for conversion to a third person then entitled to the immediate possession of the chattel. 16

In these cases, the mere act of accepting possession of the goods is regarded as a conversion. 17    However, the mere acceptance of the possession of goods of a third party without his consent does not under all circumstances constitute a conversion. 18   A bailee, agent, or servant who receives the possession of a chattel for storage, safekeeping, or transportation on behalf of his bailor, principal, or master, is subject to liability for conversion if, but only if, he does so with knowledge or reason to know that a third person has the right to immediate possession of the chattel. 19   Thus, a person who, without knowledge that a party is in possession of property as a bailee merely, and not authorized to make a bailment thereof, accepts the property as bailee for him does not, by such acceptance, become guilty of a conversion. 20  

A person who receives possession of the goods of a third party may become guilty of a conversion where, in addition to such act of receiving the goods, he does other acts constituting an exercise of dominion or control over the goods against the wish of the person rightfully entitled thereto. 21   

Footnote 14. Warner v Martin,  52 US 209,  13 L Ed 667; Dawsey v Kirven, 203 Ala 446, 83 So 338,  7 ALR 1658; First Nat. Bank v Boyce, 78 Ky 42; Hyde v Noble, 13 NH 494; Velzian v Lewis, 15 Or 539, 16 P 631; Woods v Nichols, 21 RI 537, 45 A 548; McCreary & Barlow v Gaines, 55 Tex 485; Crampton v Valido Marble Co., 60 Vt 291, 15 A 153.

Practice Aids: –Complaint, petition, or declaration–For conversion of property–Against defendant who receives plaintiff's property from a third person.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  15.

Footnote 15.  §§ 34,  36.

Footnote 16. Restatement, Torts 2d § 229.

Footnote 17. O'Connell v Chicago Park Dist., 376 Ill 550, 34 NE2d 836,  135 ALR 698; General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442.

Footnote 18. General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Varney v Curtis, 213 Mass 309, 100 NE 650.

Footnote 19. Restatement, Torts 2d § 230.

Footnote 20. 8 Am Jur 2d,  Bailments § 103.

Footnote 21. General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Dixon v Southern Pac. Co., 42 Nev 73, 172 P 368, adhered to 42 Nev 83, 177 P 14 and mod on other grounds 42 Nev 90, 179 P 382.

Practice Aids: –Complaint, petition, or declaration–By principal against agent–For converting money received as agent.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  75.

Complaint, petition, or declaration–For conversion–By insurance company against insurance agent–Money collected as agent.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  76.

A person who purchases personal property from one not authorized to sell the same may be held liable for the conversion thereof, 22   regardless of the fact that the purchaser was honestly mistaken, 23  or acted innocently, 24  in good faith, 25  and without knowledge of the seller's lack of right to make the sale. 26   The rule is generally applied where, in addition to the act of purchasing the property, the purchaser takes possession of the goods, 27  mixes them with his own property, 28  holds them to his own use, 29    refuses to surrender possession on demand, 30  disposes of the goods to a third person 31  by sale, 32   lease, 33   or bailment, 34  or, in general, exercises rights of ownership as to the property purchased, 35  in denial of the real owner's rights 36  after knowledge of the rights of the true owner. 37  

When the delivery of, and payment for, goods are to be concurrent acts, a buyer who receives and refuses to pay for the goods obtains a wrongful possession which renders him liable in trover. 38   Similarly, where one receives the property of a third party in exchange for his own, he is guilty of the conversion of the property received, especially when he continues to claim it and use it after knowledge of the title of the true owner. 39   It is of no consequence that the property passed through several hands after leaving the possession of the plaintiff and before it was sold to the defendant. 40

There are some cases in which the purchaser of personal property in which a third person has an interest is not regarded as guilty of a conversion, 41   such as where the buyer, acting in good faith, merely purchases the property without any other act or intermeddling with the rights of the true owner. 42    The mere taking of a bill of sale, without the exercise of dominion over the property or the doing of any act that interfered with the third party's interest in the property, did not amount to a conversion. 43    A purchase of mortgaged goods and acceptance of possession thereof from the mortgagor in possession, without any further act of dominion over the goods, does not render the purchaser liable to the mortgagee for conversion of the goods. 44   And a bank which in good faith has purchased from the treasurer of a corporation negotiable instruments payable to him as such does not thereby render itself liable to the corporation as for a conversion. 45  

Footnote 22. Pine River Logging Co. v United States,  186 US 279,  46 L Ed 1164,  22 S Ct 920 (superseded by statute on another point as stated in United States v Mitchell,  463 US 206,  77 L Ed 2d 580,  103 S Ct 2961); Fowler v Kragel, 93 Ga App 403, 91 SE2d 794; Commercial Credit Corp. v Stan Cross Buick, Inc., 343 Mass 622, 180 NE2d 88; Exchange State Bank v Occident Elevator Co., 95 Mont 78, 24 P2d 126,  90 ALR 740; Burns v Commonwealth Trailer Sales, 163 Neb 308, 79 NW2d 563; Allred v Hinkley, 8 Utah 2d 73, 328 P2d 726.

Practice Aids: –Complaint, petition, or declaration–Against purchaser of property–Unauthorized sale by owner's employee. 7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  74.

Footnote 23. Omaha & Grant Smelting & Refining Co. v Tabor, 13 Colo 41, 21 P 925; Universal C. I. T. Credit Corp. v Kaplan, 198 Va 67, 92 SE2d 359.

Footnote 24. White v Yawkey, 108 Ala 270, 19 So 360; Keegan v Lenzie, 171 Or 194, 135 P2d 717; Universal C. I. T. Credit Corp. v Kaplan, 198 Va 67, 92 SE2d 359.

Footnote 25. Martin v Federal Surety Co. (CA8 Minn) 58 F2d 79; Fowler v Kragel, 93 Ga App 403, 91 SE2d 794; Railway Co. v Hutchins, 32 Ohio St 571; Allred v Hinkley, 8 Utah 2d 73, 328 P2d 726; Universal C. I. T. Credit Corp. v Kaplan, 198 Va 67, 92 SE2d 359.

Footnote 26. Fowler v Kragel, 93 Ga App 403, 91 SE2d 794; Commercial Credit Corp. v Stan Cross Buick, Inc., 343 Mass 622, 180 NE2d 88; Universal C. I. T. Credit Corp. v Kaplan, 198 Va 67, 92 SE2d 359.

Footnote 27. Commercial Credit Corp. v Stan Cross Buick, Inc., 343 Mass 622, 180 NE2d 88; Allred v Hinkley, 8 Utah 2d 73, 328 P2d 726.

Footnote 28. Omaha & Grant Smelting & Refining Co. v Tabor, 13 Colo 41, 21 P 925.

Footnote 29. Dows v National Exchange Bank,  91 US 618,  23 L Ed 214; Milner & Kettig Co. v De Loach Mill Mfg. Co., 139 Ala 345, 36 So 765; Glass v Brunt, 157 Kan 27, 138 P2d 453; Velzian v Lewis, 15 Or 539, 16 P 631; Rosum v Hodges, 1 SD 305, 47 NW 140; Crampton v Valido Marble Co., 60 Vt 291, 15 A 153.

Footnote 30. Arkansas Valley Land & Cattle Co. v Mann,  130 US 69,  32 L Ed 854,  9 S Ct 458; Kitchen v Bedford,  80 US 413,  20 L Ed 637; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Hindahl v American Loan Soc., 180 Minn 447, 231 NW 408.

Footnote 31. Martin v Federal Surety Co. (CA8 Minn) 58 F2d 79; Omaha & Grant Smelting & Refining Co. v Tabor, 13 Colo 41, 21 P 925; Newton v Porter, 69 NY 133; Wilson v Holmes, 174 Okla 527, 50 P2d 1081; Woods v Nichols, 21 RI 537, 45 A 548.

Footnote 32.  § 39.

Footnote 33.  § 41.

Footnote 34. Gilmore v Newton, 91 Mass 171.

Footnote 35. Martin v Federal Surety Co. (CA8 Minn) 58 F2d 79; Winchester v Joslyn, 31 Colo 220, 72 P 1079; Williams v Merle (NY) 11 Wend 80; Velzian v Lewis, 15 Or 539, 16 P 631.

Footnote 36. Merchants & Farmers State Bank v Rosdail, 257 Iowa 1238, 131 NW2d 786, clarified (Iowa) 136 NW2d 286; Woods v Nichols, 21 RI 537, 45 A 548.

Footnote 37. Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Fowler v Kragel, 93 Ga App 403, 91 SE2d 794.

Footnote 38. Kroll v Collins (Tex Civ App San Antonio) 340 SW2d 838.

Footnote 39. Porter v Foster, 20 Me 391.

Footnote 40. Fowler v Kragel, 93 Ga App 403, 91 SE2d 794; Alexander v Swackhamer, 105 Ind 81, 4 NE 433, reh overr 105 Ind 90, 5 NE 908.

Footnote 41. Hall v Merchants' State Bank, 199 Iowa 483, 202 NW 256,  38 ALR 1093.

Footnote 42. Winchester v Joslyn, 31 Colo 220, 72 P 1079; Hall v Merchants' State Bank, 199 Iowa 483, 202 NW 256,  38 ALR 1093.

Footnote 43. Hall v Merchants' State Bank, 199 Iowa 483, 202 NW 256,  38 ALR 1093.

Footnote 44. Dean v Cushman, 95 Me 454, 50 A 85.

Footnote 45. Quanah, A. & P. R. Co. v Wichita State Bank & Trust Co., 127 Tex 407, 93 SW2d 701,  106 ALR 821.

D.  Disposal of Property [38-46]

An action for conversion may be predicated upon an improper disposal, removal, transportation, delivery, or transfer of possession of property to one not authorized by the owner to receive the property. 68      The Restatement of Torts states that, except as stated in the next 2 sentences, one who makes an unauthorized delivery of a chattel to a person not entitled to its immediate possession is subject to liability for conversion to another who is so entitled. 69   A bailee, agent, or servant who redelivers to his bailor, principal, or master is not liable for conversion unless the person entitled to immediate possession has made an adverse claim upon him. 70   A bailee, agent, or servant who delivers the chattel to a third person pursuant to the instructions of his bailor, principal, or master is not liable for conversion unless he has knowledge or reason to know that his bailor, principal, or master is not authorized so to dispose of it. 71

The removal of the goods to a warehouse or other place of storage has been regarded as a conversion. 72   An attorney committed a conversion of an insurance carrier's lien imposed by statute on the proceeds of a policyholder's settlement with a tort feasor, where the attorney, with notice of the lien, disbursed settlement proceeds to the policyholder and other attorneys upon the policyholder's instructions, thereby impairing and extinguishing the insurance carrier's lien. 73  But the fact that a defendant in possession of real property on which he finds chattels of another removes the chattels to a warehouse or other place of storage has been held in effect not to be such an assertion of ownership or control over the chattels as to render the defendant liable for conversion. 74

The fact that the person who received the goods and induced the defendant to deliver the goods to him was an impostor, 75    the defendant turned the goods over to his principal, 76   or that the defendant acted under the authority of one who himself had no authority to dispose of the goods, does not relieve the defendant from liability. 77    The rule may be applied notwithstanding the defendant acted innocently and by mistake, 78  or through neglect, 79  and in good faith. 80     It is particularly applicable where the defendant had sufficient notice of the claim of the true owner 81   who has made a demand for the property or has asserted his title and instructed the defendant to retain the property for him. 82    Accordingly, one to whom a diamond is delivered for gratuitous appraisement is liable to the owner for its value if he refuses to return it upon demand, but delivers it to a stranger not authorized by the owner to receive it. 83  

However, not every disposal, delivery, transportation, or parting with the possession of the property of another authorizes a recovery for a conversion. 84     For example, the disposition of a chattel by one who is privileged to do so is not a conversion. 85   And where a bailee returns the property to the bailor, or, acting as a mere conduit, delivers it to a third person in accordance with the terms of the bailment, before he has notice of any adverse claim to the property, he is not liable to the true owner of the property for its conversion. 86  

Footnote 68. Bell v Carter (CA8 Colo) 164 F 417; Orange Nat. Bank v Southern P. Co., 162 La 223, 110 So 329,  56 ALR 1167; Citizens' State Bank v United States Fidelity & Guaranty Co., 130 Neb 603, 266 NW 81,  103 ALR 1401; Wood v Grau, 55 NM 429, 234 P2d 362; Pierpoint v Hoyt, 260 NY 26, 182 NE 235,  83 ALR 1195; E. I. Du Pont De Nemours Powder Co. v Pederson, 104 Wash 433, 176 P 542.

Footnote 69. Restatement, Torts § 235(1).

Footnote 70. Restatement, Torts 2d § 235(2).

Footnote 71. Restatement, Torts 2d § 235.

Footnote 72. Hull v Laugharn, 3 Cal App 2d 310, 39 P2d 478; Henderson v Beggs (Tex Civ App) 207 SW 565.

Footnote 73. Unigard Ins. Co. v Tremont, 37 Conn Supp 596, 430 A2d 30.

Footnote 74. Edinburg v Allen Squire Co., 299 Mass 206, 12 NE2d 718; Lee Tung v Burkhart, 59 Or 194, 116 P 1066; Browder v Phinney, 37 Wash 70, 79 P 598.

Footnote 75. Alvin Adams & Co. v Blankenstein, 2 Cal 413; Southern Express Co. v Vanmeter, 17 Fla 783; Pacific Exp. Co. v Shearer, 160 Ill 215, 43 NE 816; General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Baer v Slater, 261 Mass 153, 158 NE 328,  54 ALR 1328; L. Kommel & Son v Champlain Transp. Co., 93 Vt 1, 105 A 253,  2 ALR 275.

Footnote 76.  § 72.

Footnote 77. Swim v Wilson, 90 Cal 126, 27 P 33; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Louisville & N. R. Co. v Citizens' & Peoples' Nat. Bank, 74 Fla 385, 77 So 104; Brown v James H. Campbell Co., 44 Kan 237, 24 P 492; General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Robinson v Bird, 158 Mass 357, 33 NE 391; Koch v Branch & Crookes, 44 Mo 542; Spraights v Hawley, 39 NY 441.

Footnote 78. Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Gilbert v Citizens' Nat. Bank, 61 Okla 112, 160 P 635.

Footnote 79. Hobbs v Chicago Packing & Provision Co., 98 Ga 576, 25 SE 584; General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Gilbert v Citizens' Nat. Bank, 61 Okla 112, 160 P 635.

Footnote 80. Baer v Slater, 261 Mass 153, 158 NE 328,  54 ALR 1328; Hubbell v Blandy, 87 Mich 209, 49 NW 502; Lockwood v Bull (NY) 1 Cow 322; Stack v Gudgel, 60 Okla 32, 158 P 1144; Central Meat Market v Longwell's Transfer, Inc. (Tex Com App) 62 SW2d 87; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Footnote 81. Bolling v Kirby, 90 Ala 215, 7 So 914; Varney v Curtis, 213 Mass 309, 100 NE 650; Hattiesburg Auto Sales Co. v Morrison, 136 Miss 632, 101 So 690,  43 ALR 147; Nanson v Jacob, 93 Mo 331, 6 SW 246; Maser v Farmers' & Merchants' Bank, 90 Mont 33, 300 P 207.

Footnote 82. General Ins. Co. v Watts (La App 1st Cir) 142 So 2d 442; Hattiesburg Auto Sales Co. v Morrison, 136 Miss 632, 101 So 690,  43 ALR 147.

Footnote 83. Rubin v Huhn, 229 Mass 126, 118 NE 290,  4 ALR 1190.

Footnote 84. Schlieff v Bistline, 52 Idaho 353, 15 P2d 726; Varney v Curtis, 213 Mass 309, 100 NE 650; Nanson v Jacob, 93 Mo 331, 6 SW 246; Shellenberg v Fremont, E. & M. V. R. Co., 45 Neb 487, 63 NW 859; Holden v Farmers' & Traders' Nat. Bank, 77 NH 535, 93 A 1040; Ridenour v Woodward, 132 Tenn 620, 179 SW 148,  4 ALR 1192; Paccos v Rosenthal, 137 Wash 423, 242 P 651,  43 ALR 142.

Footnote 85. Thoma v Tracy Motor Sales, Inc., 360 Mich 434, 104 NW2d 360.

Footnote 86. 8 Am Jur 2d,  Bailments, § 83.

A person who wrongfully sells personal property in which another has an interest is liable for conversion. 87            In some cases, the seller has been regarded as a converter where the sale was made not in bad faith, 88  but by mistake, 89  without notice of the plaintiff's interest, 90  or under the authority of one claiming to be the owner, and in ignorance of such person's want of title. 91

̈ Observation: Where the sale was a mere paper sale made by mistake and without any misappropriation of the property in fact, the seller is not liable for a conversion. 92   And the mere mistaken advertisement of goods for sale, not followed by a sale or any other exercise of dominion or ownership, is not a conversion. 93.

Sufficient evidence supported jury's finding that sale of 650,000 brick stored on seller's premises by owner of brick, as part of sale of seller's assets, resulted in the conversion of brick where seller allowed buyer to take possession of brick and contract supported notion that brick was included in sale of assets; furthermore, suit by owner against seller for conversion was not barred by statute of limitations because owner's cause of action did not accrue until it knew or should have known of the conversion because the discovery rule applies to those conversion cases composed of initial lawful possession, discovery of unequivocal acts of conversion and no demand and unqualified refusal. Hofland v Elgin-Butler Brick Co. (1992, Tex App Corpus Christi) 834 SW2d 409.

Footnote 87. Walker v Houston, 215 Cal 742, 12 P2d 952,  87 ALR 937; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Bove v PBW Stock Exchange, Inc. (Fla App D2) 382 So 2d 450 (disagreed with on other grounds Senfeld v Bank of Nova Scotia Trust Co. (Cayman), Ltd. (Fla App D3) 450 So 2d 1157); Fowler v Kragel, 93 Ga App 403, 91 SE2d 794; Smyth v Stoddard, 203 Ill 424, 67 NE 980; Alexander v Swackhamer, 105 Ind 81, 4 NE 433, reh overr 105 Ind 90, 5 NE 908; Laverrierre v Casco Bank & Trust Co., 155 Me 97, 151 A2d 276; Goff v Files, 133 Me 157, 174 A 901,  95 ALR 1123; Commercial Credit Corp. v Stan Cross Buick, Inc., 343 Mass 622, 180 NE2d 88; Kearney v Clutton, 101 Mich 106, 59 NW 419; McLeod Nash Motors, Inc. v Commercial Credit Trust, 187 Minn 452, 246 NW 17,  87 ALR 296; Interstate Mfg. Co. v Interstate Products Co., 146 Mont 449, 408 P2d 478; Richtmyer v Mutual Live Stock Com. Co., 122 Neb 317, 240 NW 315,  180 ALR 608; Mullen v J. J. Quinlan & Co., 195 NY 109, 87 NE 1078; Leach v Kelsch (ND) 106 NW2d 358; Eade v First Nat. Bank, 117 Or 47, 242 P 833,  43 ALR 374; Cohen v Maus, 297 Pa 454, 147 A 103; Personal Finance Co. v Henley-Kimball Co., 61 RI 402, 1 A2d 121,  117 ALR 1476; Royal-Liverpool Ins. Group v McCarthy, 229 SC 72, 91 SE2d 881; Presley v Cooper, 155 Tex 168, 284 SW2d 138; Mason v Sault, 93 Vt 412, 108 A 267,  18 ALR 1426.

Practice Aids: –Instruction to jury–Unauthorized sale as conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  43.

Footnote 88. Swim v Wilson, 90 Cal 126, 27 P 33; Wright v Bank of Metropolis, 110 NY 237, 18 NE 79; Woods v Nichols, 21 RI 537, 45 A 548.

Footnote 89. Greer v Equity Co-operative Exchange, 137 Minn 300, 163 NW 527.

Footnote 90. Swim v Wilson, 90 Cal 126, 27 P 33.

Footnote 91. Swim v Wilson, 90 Cal 126, 27 P 33.

Footnote 92. Ivers & Pond Piano Co. v Allen, 101 Me 218, 63 A 735; Kunze v Cox, 113 Mich 546, 71 NW 864; Brandenburg v Northwestern Jobbers' Credit Bureau, 128 Minn 411, 151 NW 134.

Footnote 93. Brandenburg v Northwestern Jobbers' Credit Bureau, 128 Minn 411, 151 NW 134.

Persons acting together in effecting a conversion may be held jointly and severally liable. 6  Thus, a person may be guilty of a conversion by actively aiding or abetting 7      or conniving with another in such an act. 8   This is true of a person who procures or instigates an act of conversion, 9  such as a person who directs an officer to commit an act constituting a conversion. 10

̈ Caution: When the person who converts property sells it to another who has knowledge of the conversion, the buyer and seller may be sued jointly for conversion. 11   Moreover, one may be liable for assisting another in a conversion though acting innocently. 12   These rules are particularly applicable where the defendant received benefit from the conversion, and subsequently approved and adopted it. 13

On the other hand, there are some cases in which persons who aid and abet others in committing a conversion are not regarded as liable therefor. 14   And the mere act of one in advising another not to surrender property on demand does not make the former a party to a conversion where he had no authority over the other. 15  

Footnote 6. Norton Refrigerated Express, Inc. v Ritter Bros. Co. (Tex Civ App Texarkana) 552 SW2d 910, writ ref n r e.

Footnote 7. Aeroglide Corp. v Zeh (CA2 NY) 301 F2d 420, cert den  371 US 822,  9 L Ed 2d 61,  83 S Ct 38; Warren Stave Co. v Hardy, 130 Ark 547, 198 SW 99; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Varney v Curtis, 213 Mass 309, 100 NE 650; Mohr v Langan, 162 Mo 474, 63 SW 409; Bower v Yellow Cab Co. (Tex Civ App) 13 SW2d 708, writ ref; Parker v Cone, 105 Vt 426, 168 A 715.

Footnote 8. Bowe v Palmer, 36 Utah 214, 102 P 1007.

Footnote 9. Ault v Phillips, 108 Ind App 535, 27 NE2d 379; Allen v Crary (NY) 10 Wend 349; Aust v Pursley, 189 Okla 388, 117 P2d 523; Bower v Yellow Cab Co. (Tex Civ App) 13 SW2d 708, writ ref; Western Bond & Mortg. Co. v Chester, 145 Wash 81, 259 P 13.

Footnote 10. Calkins v Lockwood, 17 Conn 154; Ault v Phillips, 108 Ind App 535, 27 NE2d 379; Allen v Crary (NY) 10 Wend 349; Western Bond & Mortg. Co. v Chester, 145 Wash 81, 259 P 13.

Footnote 11. National Livestock Credit Corp. v Schultz (WD Okla) 425 F Supp 966.

Footnote 12. Warren Stave Co. v Hardy, 130 Ark 547, 198 SW 99.

Footnote 13. Clark v Whitaker, 19 Conn 319; Hooser v G. M. Carlton Bros. & Co. (Tex Civ App) 288 SW 1095.

Footnote 14. Polley v Lenox Iron Works, 84 Mass 182.

Footnote 15. Lewiston Trust Co. v Deveno, 145 Me 224, 74 A2d 457; Johnson v Tuttle, 108 Vt 291, 187 A 515,  106 ALR 1291.

A principal or employer, including a corporation, 16  may be liable for an act of conversion committed by his or its agent or employee within the scope of the latter's authority or employment. 17  It seems that in order to charge one as employer with liability for the conversion or destruction of property, the proof of the scope of employment must be particularly plain. 18    Accordingly, a private hospital is not liable for loss of the ring of a patient, stolen by a nurse while the patient was unconscious, on the theory that the nurse was acting within the scope of her employment in stealing the ring. 19   A cleaner of clothing is not rendered liable for articles stolen from pockets by his employees, by a statute making employers liable for wrongful acts committed by their agents in and as a part of the transaction of their business, since the stealing of the articles is not within the scope of the employee's duties even though he is required to search the clothing. 20   And a master is not liable for the act of his servant, employed to deliver goods and collect the amount due, in fraudulently inserting a fictitious bill under one presented to the receiving clerk for his signature, so as to get a carbon indorsement of it and permit collection of a raised amount from the paying clerk, where the purpose was to permit the clerk to misappropriate the additional amount so received, and the master is therefore not bound to account to the customer for the misappropriation. 21  

Footnote 16. Mueller v Seaboard Commercial Corp., 5 NJ 28, 73 A2d 905.

Footnote 17. Aeroglide Corp. v Zeh (CA2 NY) 301 F2d 420, cert den  371 US 822,  9 L Ed 2d 61,  83 S Ct 38; Miller v Long, 126 Ind App 482, 131 NE2d 348, reh den 126 Ind App 501, 132 NE2d 272; Turner v Zip Motors, Inc., 245 Iowa 1091, 65 NW2d 427,  45 ALR2d 1174; Interstate Ins. Co. v Logan, 205 Md 583, 109 A2d 904; Horton v Jones, 208 Miss 257, 44 So 2d 397,  15 ALR2d 824; Gurdus v Philadelphia Nat. Bank, 273 Pa 110, 116 A 672,  23 ALR 1227; Rucker v Smoke, 37 SC 377, 16 SE 40.

Annotation:  15 ALR2d 829.

Footnote 18. Inland Trucking Corp. v United States, 150 Ct Cl 642, 281 F2d 457; Morse v Jones, 223 La 212, 65 So 2d 317.

Annotation:  15 ALR2d 829.

Footnote 19. Vannah v Hart Private Hospital, 228 Mass 132, 117 NE 328.

Footnote 20. Copelin v Berlin Dye Works & Laundry Co., 168 Cal 715, 144 P 961.

Footnote 21. Brooks v Gray-Von Allmen Sanitary Milk Co., 211 Ky 462, 277 SW 816,  46 ALR 1207.

An agent or employee who, acting at the direction or command of his principal or employer, has converted or assisted in converting to the latter's use the property of a third person, is liable to such third person for the loss thereby inflicted. 22       He may not escape liability by reason of his status as agent or employee. 23   Thus, an agent who takes the property of another without his consent, and delivers it to his principal, is guilty of a conversion, and he may be held liable although he acted in ignorance of the true owner's title and in perfect good faith. 24     And a broker or sales agent who has sold property for one who is shown not to have been the owner of the goods may be held liable, as for a conversion, at the suit of the owner. 25  Under the almost universally accepted rule, an agent, factor, commission merchant, or auctioneer who receives property from his principal and sells it and pays the proceeds of the sale to the principal, is guilty of conversion if the principal has no title to the property, even though the agent acts without knowledge of the defect in the title. 26     However, in the case of negotiable instruments, where an agent innocently acts merely as a "conduit" for their sale, unaware that they are stolen property, he is not liable for a conversion of them. 27

The Restatement provides that one who, as agent or servant, receives the possession of a chattel on behalf of his principal or master in consummation of a transaction negotiated by the actor for the purpose of giving a proprietary interest in the chattel to the principal or master, is subject to liability for a conversion to another who is entitled to the immediate possession of the chattel. 28   An agent or servant who negotiates a transaction for the purpose of giving to his principal or master a proprietary interest in a chattel is not liable for a conversion to another who is entitled to the immediate possession, if the agent or servant does not receive the possession of the chattel in consummation of the transaction and if he neither knows nor has reason to know that the person disposing of the chattel is not authorized so to dispose of it. 29  An agent or servant who receives the possession or custody of a chattel on behalf of his principal or master in consummation of a transaction negotiated by his principal or master is not liable for a conversion to another who is entitled to the immediate possession of the chattel, if the agent or servant neither knows nor has reason to know that the person thus disposing of the chattel is not authorized so to dispose of it. 30   And one who as agent or servant receives on behalf of his principal or master current money or a document which is negotiable either by common law or by statute, pursuant to a transaction by which the agent or servant or the person on whose behalf the money or document is received becomes a holder in due course is not liable for conversion. 31

Footnote 22. Hills v Ross,  3 US 184,  1 L Ed 562; Ashcraft v Tucker, 73 Colo 363, 215 P 877,  28 ALR 692; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Continental Supply Co. v White, 92 Mont 254, 12 P2d 569; Spraights v Hawley, 39 NY 441.

Footnote 23. Harding v Ohio Casualty Ins. Co., 230 Minn 327, 41 NW2d 818; Passaic Falls Throwing Co. v Villeneuve-Pohl Corp., 169 App Div 727, 155 NYS 669.

Footnote 24. Ashcraft v Tucker, 73 Colo 363, 215 P 877,  28 ALR 692; Semple v Morganstern, 97 Conn 402, 116 A 906,  26 ALR 21; Miller v Wilson, 98 Ga 567, 25 SE 578; First Nat. Bank v Goldberg, 340 Pa 337, 17 A2d 377.

Footnote 25. Swim v Wilson, 90 Cal 126, 27 P 33; Alexander v Swackhamer, 105 Ind 81, 4 NE 433, reh overr 105 Ind 90, 5 NE 908; Brown v James H. Campbell Co., 44 Kan 237, 24 P 492; Kimball v Billings, 55 Me 147; Spooner v Holmes, 102 Mass 503; Koch v Branch & Crookes, 44 Mo 542; Williams v Merle (NY) 11 Wend 80.

Footnote 26. United States v Union Livestock Sales Co. (CA4 W Va) 298 F2d 755, 20 Ohio Ops 2d 253,  96 ALR2d 199.

As to the rule that an auctioneer may be held liable for having sold the property which belonged to one other than the person who employed him, see 7 Am Jur 2d,  Auctions and Auctioneers § 69.

Footnote 27. First Nat. Bank v Goldberg, 340 Pa 337, 17 A2d 377.

Footnote 28. Restatement, Torts 2d § 231(1).

Footnote 29. Restatement, Torts § 231(2).

Footnote 30. Restatement, Torts § 231(3).

Footnote 31. Restatement, Torts 2d § 231(4).

An officer or agent of a corporation is personally liable for his acts which constitute a conversion of the property of a third person, and it is no answer to such liability that the act was done while the officer or agent was acting for the corporation. 32     Any officer or director who aids, instigates, or assists in the conversion by a corporation becomes personally liable. 33  Accordingly, the sole managers and owners of a corporation conducting a brokerage business are personally liable for the conversion by the corporation of margins belonging to a customer, provided they actively participated. 34  

On the other hand, an officer or director of a corporation is not personally liable for a conversion committed by the corporation or one of its officers merely by virtue of the office or directorship that he holds; he must participate or have knowledge amounting to acquiescence or commit a breach of the duty he owes to the owner of the property before he will be held liable. 35  

In the absence of a statute fixing the basis for determining the individual liability of directors and officers of a private business corporation to a third person, there is a division of authority as to whether or not such directors or officers may be held personally liable for negligence on their part which permitted the conversion of property belonging to a third person by the corporation.  A number of courts support the view that in suits instituted by third persons whose property has been converted by the corporation, a director or officer may not be held liable to creditors or persons dealing with the corporation, for negligence in the management of its affairs. 36    On the other hand, some courts have taken the view that a corporate director or officer may be held personally liable for negligence approximately causing or contributing to the loss sustained by the third person. 37   

̈ Practice guide: Counsel for the director or officer of a corporation charged with liability for his negligence in permitting the conversion of property of third persons by the corporation should advance, first of all, the proposition that no cause of action was stated and that his client cannot be held liable personally under any circumstances, on the grounds that his client is a trustee for the stockholders of the corporation and not for its creditors, 38  and that a mere corporate creditor cannot hold an officer of a corporation responsible for a mere neglect in managing the affairs of the corporation. 39   In those jurisdictions which presently do not adhere to this view, counsel, of course, cannot limit himself to advancing the above legal theory, even though he may try to persuade the court to follow the precedents so holding, but he must go one step further and allege and prove that his client was not negligent, or that his negligence, if any, did not proximately cause or contribute to the loss sustained by plaintiff. It is important that counsel stress the fact that there were no circumstances calculated to put the director or officer upon inquiry, and that absent any suspicious circumstances, he was entitled to rely upon statements made to him by competent persons who were in immediate charge of the corporation's business and whose integrity and honesty he had no reason to doubt. 40   In this connection, counsel should also allege and prove that the defendant director has used reasonable care in the selection of the officers and employees and that there has not come to his knowledge any reasonable ground of suspicion of lack of care or integrity, or of any inefficiency.  In the case of conversion by an inferior officer or employee appointed by the director, counsel should stress that his client, not being a surety to the corporation for the fidelity of subordinate personnel, has acted prudently and in good faith, and had no knowledge that the subordinate was untrustworthy. 41   Counsel for plaintiff, on the other hand, will have to base his case against the corporate director primarily on the ground that he did not exercise the degree of care or diligence which was required of him. 42    He should allege and prove, where feasible, that the director or officer had recklessly reposed confidence in an obviously untrustworthy officer or employee, has refused or neglected, for no just reasons, to perform his duty as a director, and has ignored, either wilfully or through inattention, obvious danger signs of employee wrongdoing.  Counsel should stress the fact that the director has no right to commit the management of the affairs of a corporation to an officer or to a committee of directors and thereafter take no steps to keep himself informed of what is being done with the corporate assets.  Counsel should point out that the director of a corporation is presumed to know that which it is his duty to know and which he has the means of knowing, and that he is generally charged with knowledge of corporate transactions reflected in various reports and statements presented at the directors' meetings. 43    As to the form of action to be brought, relief against corporate directors or officers for negligence in permitting conversion of property of third persons by a corporation may be sought either in an action at law for damages, or in a suit in equity, upon the theory that the directors are quasi-trustees. 44

VI.  CONDITIONS PRECEDENT TO RECOVERY [75-89]

A.  Interest in Property [75-82]

In order to maintain an action for conversion, the plaintiff must have an interest in the thing converted. 47   He must recover on the strength of his own title, without regard to the weakness of that of his adversary. 48    It is necessary that the plaintiff be the owner of the property claimed to be converted, or that he be in possession or entitled to possession at the time of the alleged conversion. 49  Absolute and unqualified title is sufficient, 50   but it is not required; 51  a special, qualified, limited title, 52  or a temporary interest, is sufficient to enable the plaintiff to maintain the action, 53  provided such title or interest carries with it a right of possession.  Indeed, a mere right of possession is generally regarded as an interest sufficient to maintain the action. 54    

̈ Observation: Conversion is concerned with possession, not title. 55

If subsequent to a conversion the owner sells the property with the right to recover damages for the conversion, he cannot maintain an action for the conversion, but his transferee can. 56  

Footnote 47. Wm. H. Wise & Co. v Rand McNally & Co. (SD NY) 195 F Supp 621; American Standard Life Ins. Co. v Johnson, 231 Ala 94, 163 So 632; Mitchell v Georgia & A. R. Co., 111 Ga 760, 36 SE 971; Missouri P. R. Co. v Peru-Van Zandt Implement Co., 73 Kan 295, 85 P 408, adhered to 73 Kan 302, 87 P 80; Weed v Boston & M. R. R., 124 Me 336, 128 A 696,  42 ALR 487; Handy v C. I. T. Corp., 291 Mass 157, 197 NE 64,  101 ALR 447; Kinsman v Stanhope, 50 Mont 41, 144 P 1083; Cleminshaw v Meehan, 236 App Div 185, 258 NYS 225; Roberson v Ellis, 58 Or 219, 114 P 100; Robinson v Saxon Mills, 124 SC 415, 117 SE 424.

Until a defrauded vendor rescinds, the title remains in the purchaser, and therefore an action for conversion by the vendor is premature.  Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888.

Practice Aids: –Instruction to jury–Property interest necessary to maintain action.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  84.

Footnote 48. Denver Live Stock Com. Co. v Lee (CA8 Colo) 18 F2d 11, reh den (CA8 Colo) 20 F2d 531; Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Baker v Seavey, 163 Mass 522, 40 NE 863; Dorrell v Clark, 90 Mont 585, 4 P2d 712,  79 ALR 1000; Sussman v Mentzer, 193 Wash 517, 76 P2d 595.

Footnote 49. National Produce Distributors, Inc. v Miles & Meyer, Inc., 75 Idaho 460, 274 P2d 831.

Footnote 50. Greer v Carl Johnson Motor Co., 269 Ala 617, 114 So 2d 907; Byron v York Invest. Co., 133 Colo 418, 296 P2d 742; Hambrick v Bedsole, 93 Ga App 192, 91 SE2d 205; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Snyder v Guider,  17 Misc 2d 558, 185 NYS2d 110.

Footnote 51. Carey v Cyr, 150 Me 405, 113 A2d 614.

Footnote 52. Greer v Carl Johnson Motor Co., 269 Ala 617, 114 So 2d 907; Walker v Houston, 215 Cal 742, 12 P2d 952,  87 ALR 937; Byron v York Invest. Co., 133 Colo 418, 296 P2d 742; Twin Falls Bank & Trust Co. v Weinberg, 44 Idaho 332, 257 P 31,  54 ALR 1527; Ax v Schloot, 118 Ind App 458, 81 NE2d 379; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Handy v C. I. T. Corp., 291 Mass 157, 197 NE 64,  101 ALR 447; Walker v Johnson, 108 Mont 398, 91 P2d 406,  124 ALR 937; Harris v Seaboard A. L. R. Co., 190 NC 480, 130 SE 319,  49 ALR 1452; Commercial Secur., Inc. v Mast, 145 Or 394, 28 P2d 635,  92 ALR 194; Personal Finance Co. v Henley-Kimball Co., 61 RI 402, 1 A2d 121,  117 ALR 1476; Pacific Finance Corp. v Crouch (Tex Civ App) 243 SW2d 432; Vermont Acceptance Corp. v Wiltshire, 103 Vt 219, 153 A 199,  73 ALR 792; Burnett v Edw. J. Dunnigan, Inc., 165 Wash 164, 4 P2d 829.

Footnote 53. M'Connell v Maxwell (Ind) 3 Blackf 419.

Footnote 54.  §§ 76,  77.

Footnote 55. P&T Mfg. Co. v Exchange Sav. & Loan Asso. (Tex App Dallas) 633 SW2d 332, writ ref n r e.

Footnote 56. Brady v Whitney, 24 Mich 154.

Annotation:  3 ALR2d 218 § 6.

An action for conversion may be maintained by persons having the immediate right to possession of the article converted. 57   The Restatement says that for a conversion the actor is subject to liability to one who at the time was entitled to immediate possession of the chattel. 58

̈ Practice guide: In order for a plaintiff to recover in a suit for conversion, it is necessary that the plaintiff establish a right to the property and what was converted. 59   And, ordinarily, an immediate right to possession at the time of conversion is all that is required in the way of title or possession to enable the plaintiff to maintain an action. 60

̈ Observation: While there are a number of cases in which the statement is made that the plaintiff, in order to maintain an action for conversion, must have an interest in the property "and," "with," "concurring with," or "united with," a right of possession at the time of the conversion, 61   in these cases, it generally appears that the statement has reference to the question whether an interest in property which does not carry with it a right of possession is sufficient, rather than the question whether a right to possession alone is an interest sufficient for the maintenance of an action for conversion.  When it is said that the plaintiff must have had, at the time of conversion, the right to the property, and also a right of possession, nothing more can be intended than that the right of which he complains he has been deprived must have been either a right actually in possession, or a right immediately to take possession. 62   An interest in the property which does not carry with it a right to possession is not sufficient. 63    For example, the right to maintain the action may not be based upon a right to possession at a future time, 64      and it is by virtue of this rule that it is sometimes held that an action for conversion may not be brought by a bailor who has relinquished the bailed property for a definite term which is unexpired. 65    Thus, in the case of a bailment at will, 66   or at the expiration or completion of a bailment for a term, the bailor, who has a right to the immediate possession, is entitled to maintain the action for conversion. 67   And a right of possession arising out of the conversion itself, such as where a wrongful sale of mortgaged chattels gives the mortgagee a right to possession, is sufficient to support an action. 68  In any event, an action for conversion is not maintainable where the plaintiff has neither a right of property in, nor a right to possess, the chattels alleged to have been converted, at the time of the alleged conversion. 69  

For example, a conversion action could not be maintained to recover for wrongfully delivered commissions where the plaintiff never had ownership, possession, or control of the money constituting the commissions. 70  

In order to recover for conversion, plaintiffs must show that, at the time of the alleged conversion, they had either actual possession or the right to immediate possession or control of the property in question. Re 604 Columbus Ave. Realty Trust (1992, CA1 Mass) 968 F2d 1332, CCH Bankr L Rptr ¶ 74697.

In conversion action based on failure of employer to deliver payroll check to employee due to dispute over stolen funds, conversion action could not be based on employer's retention of check, as employee had no property right in check until she obtained possession, and obligation to pay debt does not support conversion action. McCain v P.A. Partners, Ltd. (1984, Ala) 445 So 2d 271.

In a broad general sense, "recovery" is the regaining of that which has been lost, missing, or taken away. In a narrower legal sense, it means the obtaining by judgment of some right or property that has been taken or withheld. The distinction between an action to recover possession, or the value in case a delivery cannot be had, and one to recover damages for the wrongful conversion of personal property, is just as broad as that between the common law actions of detinue and trover (the technical name for an action for conversion). One lies for the recovery of the property itself, with damages for the wrongful detention of it, the other for the recovery of damages for the wrongful conversion of it. In the case of an action for recovery of the property, the judgment must be for the possession of the property, if a delivery can be had, or for the value thereof, if a delivery cannot be had, with damages for the detention, in either case. Taylor v Forte Hotels International. Although damages for conversion are frequently the equivalent to the damages for negligence, i.e., specific recovery of the property or damages based on the value of the property, negligence is no part of an action for conversion. Taylor v Forte Hotels International (1991, 4th Dist) 235 Cal App 3d 1119, 1 Cal Rptr 2d 189, 91 CDOS 8821, 91 Daily Journal DAR 13493, reh den (Cal App 4th Dist) 91 Daily Journal DAR 14388.

Ownership, possession, or the immediate right of possession was necessary to maintain a cause of action for conversion in suit between county tax authority and lienholder with a valid and properly perfected security interest when lienholder refused to pay delinquent personal property taxes on the automobile inventory it repossessed from taxpayer auto dealership that failed to pay personal property taxes on the inventory, because the county tax authority had no right to possession of the inventory except through use of tax warrant procedure or by foreclosure of tax lien by judicial proceedings and no such proceedings had been instituted by the tax authority at the time the lien was foreclosed by lienholder. Wichita Falls v ITT Commercial Finance Corp. (1992, Tex App Fort Worth) 827 SW2d 6, reh overr (Feb 11, 1992) and affd in part and revd in part (Tex) 835 SW2d 65, reh overr (Sep 23, 1992).

Footnote 57. McKee v Gratz,  260 US 127,  67 L Ed 167,  43 S Ct 16; Preston v United States (CA7 Wis) 696 F2d 528, 35 UCCRS 579, clarified, reh den (CA7 Wis) 709 F2d 488; Teledyne Industries, Inc. v Eon Corp. (SD NY) 401 F Supp 729, affd (CA2 NY) 546 F2d 495; Wm. H. Wise & Co. v Rand McNally & Co. (SD NY) 195 F Supp 621; Greer v Carl Johnson Motor Co., 269 Ala 617, 114 So 2d 907; Hartford Financial Corp. v Burns (2d Dist) 96 Cal App 3d 591, 158 Cal Rptr 169, 27 UCCRS 843; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Brede Decorating, Inc. v Jefferson Bank & Trust Co. (Mo) 345 SW2d 156; Jessen v Blackard, 159 Neb 103, 65 NW2d 345, op withdrawn 160 Neb 557, 71 NW2d 100; Pierpoint v Hoyt, 260 NY 26, 182 NE 235,  83 ALR 1195; Independence Discount Corp. v Bressner (2d Dept)  47 App Div 2d 756, 365 NYS2d 44; Genova v Johnson, 213 Or 47, 321 P2d 1050 (ovrld as to measure of damages Hall v Work, 223 Or 347, 354 P2d 837); Owens v Andrews Bank & Trust Co., 265 SC 490, 220 SE2d 116; Production Credit Asso. v Nowatzski,  90 Wis 2d 344, 280 NW2d 118, 26 UCCRS 1338.

Practice Aids: –Instruction to jury–Sale of personal property–Purchaser without title or right to bring action for conversion until delivery or tender of full payment.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  87.

Footnote 58. Restatement, Torts 2d § 225.

Footnote 59. Groves v Hanks (Tex Civ App Corpus Christi) 546 SW2d 638, writ ref n r e.

Footnote 60. Barker v Lewis Storage & Transfer Co., 79 Conn 342, 65 A 143; Kennett v Peters, 54 Kan 119, 37 P 999; Rosencranz v Swofford Bros. Dry Goods Co., 175 Mo 518, 75 SW 445; Owens v Andrews Bank & Trust Co., 265 SC 490, 220 SE2d 116.

Footnote 61. Johnson v Wilson & Co., 137 Ala 468, 34 So 392; Danley v Rector, 10 Ark 211; Mitchell v Georgia & A. R. Co., 111 Ga 760, 36 SE 971; Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Ax v Schloot, 118 Ind App 458, 81 NE2d 379; Weed v Boston & M. R. R., 124 Me 336, 128 A 696,  42 ALR 487; Ring v Neale, 114 Mass 111; State ex rel. Lipic v Flynn, 358 Mo 429, 215 SW2d 446; Kinsman v Stanhope, 50 Mont 41, 144 P 1083; Salt Springs Nat. Bank v Wheeler, 48 NY 492; Rexroth v Coon, 15 RI 35, 23 A 37; Pacific Finance Corp. v Crouch (Tex Civ App) 243 SW2d 432.

Footnote 62. Rosencranz v Swofford Bros. Dry Goods Co., 175 Mo 518, 75 SW 445; Gunzburger v Rosenthal, 226 Pa 300, 75 A 418.

Footnote 63. Byland v Miller (DC Ky) 13 F Supp 137; Kennett v Peters, 54 Kan 119, 37 P 999; Axford v Matthews, 43 Mich 327, 5 NW 377; Jackson v Rothschild (Mo App) 99 SW2d 859; New York, L. E. & W. R. Co. v New Jersey E. R. Co., 60 NJL 338, 38 A 828, affd 61 NJL 287, 41 A 1116; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

A materialman asserting a right to remove improvements that can be removed without material injury to the land and to the pre-existing improvements or to the improvements removed must first obtain judicial foreclosure of his lien before he can assert a cause of action for conversion.  The materialman is not entitled to possession of the improvements absent judicial foreclosure of the lien.  P&T Mfg. Co. v Exchange Sav. & Loan Asso. (Tex App Dallas) 633 SW2d 332, writ ref n r e.

Footnote 64. United States v Loughrey,  172 US 206,  43 L Ed 420,  19 S Ct 153; Ring v Neale, 114 Mass 111; Sanborn v Colman, 6 NH 14; New York, L. E. & W. R. Co. v New Jersey E. R. Co., 60 NJL 338, 38 A 828, affd 61 NJL 287, 41 A 1116; Swift v Moseley, 10 Vt 208 (disapproved on other grounds Vermont Acceptance Corp. v Wiltshire, 103 Vt 219, 153 A 199,  73 ALR 792).

A stipulation in a farm lease that straw shall not be removed from the premises gives the landlord no interest therein during the continuance of the term which will entitle him to an action for conversion in case of its removal by the tenant.  Munier v Zachary, 138 Iowa 219, 114 NW 525.

Footnote 65. 8 Am Jur 2d,  Bailments § 284.

Footnote 66. 8 Am Jur 2d,  Bailments § 252.

Footnote 67. 8 Am Jur 2d,  Bailments § 256.

Footnote 68. National Bank of Commerce v Morris, 114 Mo 255, 21 SW 511; George W. Brown & Sons State Bank v Polen, 132 Okla 121, 270 P 9.

Footnote 69. Union Stock Yard & Transit Co. v Mallory, Son & Zimmerman Co., 157 Ill 554, 41 NE 888; Weed v Boston & M. R. R., 124 Me 336, 128 A 696,  42 ALR 487; Johnson-Brinkman Com. Co. v Central Bank of Kansas City, 116 Mo 558, 22 SW 813; Brown v Meyer (Mo App) 580 SW2d 533; Radosevich v Engle, 111 Mont 504, 111 P2d 299; Kimball v Cooper, 134 Neb 536, 279 NW 194.

Footnote 70. Peters Griffin Woodward, Inc. v WCSC, Inc. (1st Dept)  88 App Div 2d 883, 452 NYS2d 599.

One is liable in conversion to another who was, at the time, in possession of the chattel. 71   The right of the owner of a legal interest in personal property to maintain an action for its conversion is unquestioned where such owner is in lawful 72   or constructive possession. 73   Moreover, a person who is in actual possession of personal property at the time of its conversion is often regarded as having an interest by virtue of his possession sufficient to maintain an action for the conversion, 74   at least where such possession is lawful 75  and with the consent of the owner. 76   The possession of personal property carries with it the presumption of title, and enables the possessor to maintain an action for conversion against any person except the rightful owner. 77   As against a stranger, possession alone is good, and, in such case, the plaintiff need prove no more than possession. 78  Although there are some cases in which an interest in the property, in addition to possession, is regarded as necessary to maintain an action for conversion, 79  an actual, peaceable, and exclusive possession is generally regarded as prima facie evidence of title and sufficient to enable one to maintain an action for conversion in the absence of evidence to prove the contrary. 80   Where the plaintiff is not in possession, he must show his interest in the property in order to maintain an action for conversion. 81    

Footnote 71. Restatement, Torts 2d § 224A.

Footnote 72. Greer v Carl Johnson Motor Co., 269 Ala 617, 114 So 2d 907; Hickman v Hannas, 263 Ala 399, 82 So 2d 795; Byron v York Invest. Co., 133 Colo 418, 296 P2d 742; National Produce Distributors, Inc. v Miles & Meyer, Inc., 75 Idaho 460, 274 P2d 831; Ring v Neale, 114 Mass 111; Harris v Seaboard A. L. R. Co., 190 NC 480, 130 SE 319,  49 ALR 1452; Commercial Secur., Inc. v Mast, 145 Or 394, 28 P2d 635,  92 ALR 194; Mussey v Perkins, 36 Vt 690.

Footnote 73.  § 79.

Footnote 74. McKee v Gratz,  260 US 127,  67 L Ed 167,  43 S Ct 16; Preston v United States (CA7 Wis) 696 F2d 528, 35 UCCRS 579, clarified, reh den (CA7 Wis) 709 F2d 488; New England Box Co. v C & R. Const. Co., 313 Mass 696, 49 NE2d 121,  150 ALR 152; Walker v Johnson, 108 Mont 398, 91 P2d 406,  124 ALR 937; Production Credit Asso. of Madison v Nowatzki,  90 Wis 2d 344, 280 NW2d 118, 26 UCCRS 1338.

Practice Aids: –Instruction to jury–Actual possession, charge, and control of property by nonowner as sufficient interest to maintain action.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  85.

Instruction to jury–Rightful possession by nonowner as sufficient interest to maintain action against one showing no right to property.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  86.

Footnote 75. McKee v Gratz,  260 US 127,  67 L Ed 167,  43 S Ct 16; Herries v Bell, 220 Mass 243, 107 NE 944; Rosencranz v Swofford Bros. Dry Goods Co., 175 Mo 518, 75 SW 445.

Footnote 76. Herries v Bell, 220 Mass 243, 107 NE 944.

Footnote 77. Carey v Cyr, 150 Me 405, 113 A2d 614.

Footnote 78. Gunzburger v Rosenthal, 226 Pa 300, 75 A 418.

But see Winlack v Geist, 107 Pa 297, declaring that an action for conversion is founded on property and not merely on possession.

Footnote 79. Odiorne v Colley, 2 NH 66; Rexroth v Coon, 15 RI 35, 23 A 37.

In Mitchell v Georgia & A. R. Co., 111 Ga 760, 36 SE 971, the court declared that possession, to be sufficient for the maintenance of the action, must be in the plaintiff's own right.

Footnote 80. Arkansas Airmotive Div. of Currey Aerial Sprayers, Inc. v Arkansas Aviation Sales, Inc., 232 Ark 354, 335 SW2d 813; Farnum v Hefner, 79 Cal 575, 21 P 955; Harris v Seaboard A. L. R. Co., 190 NC 480, 130 SE 319,  49 ALR 1452; Commercial Secur., Inc. v Mast, 145 Or 394, 28 P2d 635,  92 ALR 194; Winlack v Geist, 107 Pa 297; Missouri P. R. Co. v Cullers, 81 Tex 382, 17 SW 19; Hadley Warehouse Co. v Broughton, 126 Wash 356, 218 P 257; Cook v Cook, 3 W Va 172.

Footnote 81. United States v Loughrey,  172 US 206,  43 L Ed 420,  19 S Ct 153.

C.  Demand [84-89]

A demand and refusal may be necessary to constitute a conversion, and to enable the plaintiff to maintain an action. 21   If possession was not acquired by a tortious taking or the possessor does not appropriate or use the property in a fashion to indicate a claim thereto adverse to the owner, then no evidence of a conversion exists until there is proof, first, that a proper demand for possession was made by the one who is entitled thereto and, second, that the possessor wrongfully refused delivery. 22   Thus, a demand is necessary where the original taking is lawful, 23   where the defendant is rightfully in possession, 24  and there is no assumption of ownership, 25  wrongful use, 26  or any act of conversion prior to the demand, 27  and where, except for the demand, the person on whom it is made would be entitled to continue to hold possession of the property. 28  

̈ Observation: Demand and refusal are never necessary, except to furnish evidence of the conversion, and when, without these, the circumstances are sufficient to prove the conversion, they are superfluous. 29  

Generally, demand and refusal are unnecessary where the act of the defendant amounts to a conversion regardless of whether a demand is made. 30       Thus, no demand is necessary where the conversion results from the defendant's securing possession of the property illegally or tortiously, 31     by fraud 32  or other wrongful conduct, and his denying possession thereof; 33   from his wrongful appropriation of the property to his own use and benefit, 34  after purchase thereof from one who had no right to sell it; 35  from his misuse or abuse of the property; 36  from his destruction of the property; 37  or from his exercise of ownership by disposing of the property 38    by lease, 39  pledge, 40   or sale. 41  

A demand and refusal prior to the bringing of an action for conversion need not be shown where an innocent purchaser of goods from one having no title sells the goods. 42   And a demand is generally unnecessary where it would be useless, 43      as where it would be impossible for the defendant to deliver the goods. 44  

Practice Aids: Instruction to jury–Demand for and refusal of possession as prima facie evidence of conversion. 7A Am Jur Pl & Pr Forms (Rev), Conversion, Form  37.

Answer–Defense–Failure to demand return of property. 7A Am Jur Pl & Pr Forms (Rev), Conversion, Form  35.

Complaint, petition, or declaration–Allegation–Demand for return of property. 7A Am Jur Pl & Pr Forms (Rev), Conversion, Form  33.

Instruction to jury–When demand not necessary. 7A Am Jur Pl & Pr Forms (Rev), Conversion, Form  25.

Case authorities:

Defendant, which sold to another customer an automobile promised to plaintiff, was entitled to a directed verdict on plaintiff's conversion claim, where plaintiff had never demanded return of the deposit. Douglas v Braman Porsche Audi, Inc. (1984, Fla App D3) 451 So 2d 1038.

Footnote 21. Clay County Abstract Co. v McKay, 226 Ala 394, 147 So 407; Baehr v Downey, 133 Mich 163, 94 NW 750; Winkler v Hartford Acci. & Indem. Co., 66 NJ Super 22, 168 A2d 418, certif den 34 NJ 581, 170 A2d 544; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

Practice Aids: –Complaint, petition, or declaration–Allegation–Demand for return of property. 7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  37.

Answer–Defense–Failure to demand return of property. 7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  39.

Instruction to jury–Demand for and refusal of possession as prima facie evidence of conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  41.

Instruction to jury–Refusal to deliver goods after demand in tender of freight and storage charges as conversion.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  42.

Footnote 22. Glass v Allied Van Lines, Inc. (Mo App) 450 SW2d 217.

Footnote 23. Evans v Carroll & Co. (CA9 Mont) 259 F2d 577, 1 FR Serv 2d 787; Finance Corp. v King, 150 Colo 13, 370 P2d 432; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Durst v Durst, 225 Md 175, 169 A2d 755; E. B. Jones Motor Co. v Pullen (Mo App) 298 SW2d 448; Foster v First Nat. Bank, 139 Mont 396, 365 P2d 938; Commercial Factors Corp. v Parrillo, 87 RI 71, 138 A2d 324; Production Credit Asso. v Nowatzski,  90 Wis 2d 344, 280 NW2d 118, 26 UCCRS 1338.

Footnote 24. Shea v Fridley (Mun Ct App Dist Col) 123 A2d 358; E. B. Jones Motor Co. v Pullen (Mo App) 298 SW2d 448; Bliss v Southern Pacific Co., 212 Or 634, 321 P2d 324.

Demand and refusal of delivery gives rise to a cause of action for conversion where the defendant came into possession of the property rightfully.  Interstate Mfg. Co. v Interstate Products Co., 146 Mont 449, 408 P2d 478.

Footnote 25. Clay County Abstract Co. v McKay, 226 Ala 394, 147 So 407; Davis v American Nat. Bank, 149 Colo 34, 367 P2d 325; Turner v Spitcaufsky (Mo App) 45 SW2d 126.

Footnote 26. Finance Corp. v King, 150 Colo 13, 370 P2d 432; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Maryland Lumber Co. v White, 205 Md 180, 107 A2d 73; Montgomery v United States Nat. Bank, 220 Or 553, 349 P2d 464; Gaylord v Hoar, 122 Vt 143, 165 A2d 358.

Footnote 27. Shriner v Meyer, 171 Ala 112, 55 So 156; Kolodney v Kolodney Bros., Inc., 21 Conn Supp 312, 154 A2d 540; Brandenburg v Northwestern Jobbers' Credit Bureau, 128 Minn 411, 151 NW 134; Scott v Waggoner, 48 Mont 536, 139 P 454.

Footnote 28. Roquemore v Sovereign Camp, W. O. W., 226 Ala 279, 146 So 619; Baehr v Downey, 133 Mich 163, 94 NW 750; McNair v Wilcox, 121 Pa 437, 15 A 575; Roberts v James, 160 SC 291, 158 SE 689; Meador v Wagner (Tex Civ App) 70 SW2d 794, writ dism w o j; Fletcher v Pump Creek Gas & Oil Syndicate, 38 Wyo 329, 266 P 1062,  61 ALR 615.

Footnote 29. Colorado Kenworth Corp. v Whitworth, 144 Colo 541, 357 P2d 626,  97 ALR2d 990.

Footnote 30. Colorado Kenworth Corp. v Whitworth, 144 Colo 541, 357 P2d 626,  97 ALR2d 990; Goodrich v Malowney (Fla App D2) 157 So 2d 829; O'Connell v Chicago Park Dist., 376 Ill 550, 34 NE2d 836,  135 ALR 698; Jensen v Chicago & W. I. R. Co., 94 Ill App 3d 915, 50 Ill Dec 470, 419 NE2d 578; Nat Koslow, Inc. v Bletterman,  23 Misc 2d 340, 197 NYS2d 583; Fenberg v Fenberg (Tex Civ App Amarillo) 307 SW2d 139; Peck v Patterson, 119 Vt 280, 125 A2d 813; Crutcher v Scott Pub. Co., 42 Wash 2d 89, 253 P2d 925.

Practice Aids: –Instruction to jury–When demand not necessary.  7 Am Jur Pl & Pr Forms (Rev), Conversion, Form  19.

Footnote 31. Puerto Rico Industrial Development Co. v J. H. Miller Mfg. Corp. (DC Ill) 173 F Supp 596; Flennaugh v Heinrich, 89 Cal App 2d 214, 200 P2d 580; Colorado Kenworth Corp. v Whitworth, 144 Colo 541, 357 P2d 626,  97 ALR2d 990; O'Connell v Chicago Park Dist., 376 Ill 550, 34 NE2d 836,  135 ALR 698; Durst v Durst, 225 Md 175, 169 A2d 755; Mattechek v Pugh, 153 Or 1, 55 P2d 730,  168 ALR 725.

Footnote 32. Thurston v Blanchard, 39 Mass 18; Cary v Hotailing (NY) 1 Hill 311; Baird v Howard, 51 Ohio St 57, 36 NE 732.

Footnote 33. Meyer v Doherty,  133 Wis 398, 133 NW 671.

Footnote 34. Tsuru v Bayer, 25 Hawaii 693; Meador v Wagner (Tex Civ App) 70 SW2d 794, writ dism w o j.

Footnote 35. United States v White (DC Idaho) 143 F Supp 754; Wyman v Carrabassett Hardwood Lumber Co., 121 Me 271, 116 A 729; Hyde v Noble, 13 NH 494; Rosum v Hodges, 1 SD 305, 47 NW 140.

Footnote 36. Clay County Abstract Co. v McKay, 226 Ala 394, 147 So 407.

Footnote 37. American Surety Co. v Baker (CA4 NC) 172 F2d 689; Mastellone v Argo Oil Corp. (Sup) 46 Del 102, 82 A2d 379.

Footnote 38. Re Salmon Weed & Co. (CA2 NY) 53 F2d 335,  79 ALR 379; Mastellone v Argo Oil Corp. (Sup) 46 Del 102, 82 A2d 379; Wyman v Carrabassett Hardwood Lumber Co., 121 Me 271, 116 A 729; Pacific & Atlantic Shippers, Inc. v Schier, 109 NH 551, 258 A2d 351; Mullen v J. J. Quinlan & Co., 195 NY 109, 87 NE 1078; Eade v First Nat. Bank, 117 Or 47, 242 P 833,  43 ALR 374.

An admission by the defendant that he had disposed of the goods obviates the necessity of showing a demand and refusal.  Everett v Coffin (NY) 6 Wend 603.

Footnote 39. Wyman v Carrabassett Hardwood Lumber Co., 121 Me 271, 116 A 729; Gilmore v Newton, 91 Mass 171.

Footnote 40. Re Salmon Weed & Co. (CA2 NY) 53 F2d 335,  79 ALR 379.

Footnote 41. Mastellone v Argo Oil Corp. (Sup) 46 Del 102, 82 A2d 379; Fitzgibbon Discount Corp. v Windisch (Mo App) 271 SW2d 226; Mullen v J. J. Quinlan & Co., 195 NY 109, 87 NE 1078; Eade v First Nat. Bank, 117 Or 47, 242 P 833,  43 ALR 374; Gaylord v Hoar, 122 Vt 143, 165 A2d 358.

Footnote 42. Wyman v Carrabassett Hardwood Lumber Co., 121 Me 271, 116 A 729; Courtis v Cane, 32 Vt 232.

Footnote 43. Flennaugh v Heinrich, 89 Cal App 2d 214, 200 P2d 580; General Motors Acceptance Corp. v Anacone, 160 Me 53, 197 A2d 506; Security Trust Co. v Long, 321 Mo 1229, 16 SW2d 82; Foster v First Nat. Bank, 139 Mont 396, 365 P2d 938; Hochstetler v Graber, 78 ND 90, 48 NW2d 15; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608; Crutcher v Scott Pub. Co., 42 Wash 2d 89, 253 P2d 925.

A demand by the United States for the spirits of turpentine and rosin manufactured from crude gum unlawfully taken from public lands is futile and therefore unnecessary in order to support an action of conversion against a corporation which has received the same from the trespasser, mixed with a much greater quantity to which he had unquestioned title, where the corporation sold the entire product soon after its receipt, and accounted to such trespasser for the proceeds.  Union Naval Stores Co. v United States,  240 US 284,  60 L Ed 644,  36 S Ct 308.

Footnote 44. Tsuru v Bayer, 25 Hawaii 693; Delamater v Miller (NY) 1 Cow 75; Glidden v Mechanics' Nat. Bank, 53 Ohio St 588, 42 NE 995; Christensen v Pugh, 84 Utah 440, 36 P2d 100,  95 ALR 608.

There is no particular formality required in making a demand for the return of property. 45   Thus, efforts of the plaintiff to remove the property, and acts of the defendant preventing such removal may be sufficient to constitute a demand and refusal. 46  

̈ Caution: The demand for return of property must be stated in absolute and unequivocal terms, demanding return of the property by a date certain. 47   A demand by letter to restore goods belonging to the writer is not sufficient to constitute the detention of the goods a conversion, where there is no obligation on the part of the defendant to transmit the goods to the plaintiff. 48   Where a part of the goods is claimed by the plaintiff, a failure to specify the articles demanded has also been held to render the demand insufficient. 49

Trial judge properly directed verdict for payor bank on depository bank's claim, under UCC § 3-419(1)(b), that payor bank's failure to either pay or return documentary drafts on day of presentment constituted their conversion, since depository bank's own evidence showed it did not consider its transmittal letter containing phrase "Do Not Hold After Maturity" and marked "Due: sight" to be demand for payment at time of delivery within meaning of Comment 2 to UCC § 3-419. South Carolina Nat'l Bank v First Union Nat'l Bank (1993) 310 SC 428, 427 SE2d 169, 20 UCCRS2d 1014

Footnote 45. Atwood v Southern California Ice Co., 63 Cal App 343, 218 P 283, later app 75 Cal App 783, 242 P 216 and (disapproved on other grounds Wilson v Crown Transfer & Storage Co., 201 Cal 701, 258 P 596); Molski v Bendza, 116 Conn 710, 164 A 387.

Footnote 46. Molski v Bendza, 116 Conn 710, 164 A 387.

As to refusal to surrender possession, see  § 47.

Footnote 47. Ft. Caroline Orchids, Inc. v Guest (Fla App D1) 378 So 2d 305.

Footnote 48. Pattee v Gilmore, 18 NH 460.

Footnote 49. St. Louis Fixture & Show Case Co., v F. W. Woolworth Co., 232 Mo App 10, 88 SW2d 254.

To constitute a refusal to return goods a conversion thereof, where a demand and refusal are necessary, the demand must be made by the person entitled to possession. 50   Such demand need not, however, be made personally; it may be made by a duly authorized agent. 51   An agent making a demand for the delivery of property belonging to his principal must, as a general rule, display his authority to make the demand and receive the goods.  Where the goods are detained because of a reasonable and bona fide doubt as to the authority of the agent to receive the property, there is no conversion. 52

Footnote 50. Buel v Pumphrey, 2 Md 261.

Footnote 51. Buel v Pumphrey, 2 Md 261; Blankenship v Berry, 28 Tex 448.

Footnote 52. Schmelz v Udetsky (RI) 108 A 584; Blankenship v Berry, 28 Tex 448.

To constitute a failure to surrender goods a conversion, where a demand and refusal are necessary, the demand should be made upon the person obligated to surrender the property. 53    If the demand is made upon an agent or employee, it should be made upon one within the scope of whose employment it is to determine whether a surrender should be made. 54   Thus, a demand upon an agent or employee charged with the bare custody of the property would not make the continued detention of the goods by the principal or employer, without more, so wrongful and tortious as to amount to a conversion. 55  

The fact that a written demand upon persons in possession of property describes them in a different capacity from that in which they hold is immaterial, where it notifies them of the claim and demand for possession. 56 

Footnote 53. Evans v Carroll & Co. (CA9 Mont) 259 F2d 577, 1 FR Serv 2d 787; Mueller v Technical Devices Corp., 8 NJ 201, 84 A2d 620; Fletcher v Pump Creek Gas & Oil Syndicate, 38 Wyo 329, 266 P 1062,  61 ALR 615.

Where property which had been hired was left in the possession of the defendant, and the owner, in the presence of the defendant and the one who had left the property with the defendant, made a demand for it, but of no one in particular, and there was no assertion of title on the part of the defendant, and no refusal to deliver the property, or offer or threat to prevent the owner from taking possession, the defendant was not guilty of conversion. Ragsdale v Williams, 30 NC 498.

Footnote 54. Evans v Carroll & Co. (DC Mont) 155 F Supp 662, affd in part and revd in part on other grounds (CA9 Mont) 259 F2d 577, 1 FR Serv 2d 787; Mueller v Technical Devices Corp., 8 NJ 201, 84 A2d 620; Fletcher v Pump Creek Gas & Oil Syndicate, 38 Wyo 329, 266 P 1062,  61 ALR 615.

Footnote 55. Fletcher v Pump Creek Gas & Oil Syndicate, 38 Wyo 329, 266 P 1062,  61 ALR 615.

Footnote 56. Fredenburg v Horn, 108 Or 672, 218 P 939,  30 ALR 1153.

A demand for the return of goods should be made at the place where the defendant is able to comply with it if he so chooses. 57  However, if demand is made elsewhere and there is an absolute refusal to deliver the property, another demand at the proper place is not essential. 58   It is immaterial that the demand was not made at the place for delivery. 59

̈ Observation: There is authority that a demand may be made wherever the defendant may be, although he is not under obligation to deliver the property at that place. 60

Footnote 57. Pantz v Nelson, 234 Mo App 1043, 135 SW2d 397; Mueller v Technical Devices Corp., 8 NJ 201, 84 A2d 620.

Footnote 58. Pantz v Nelson, 234 Mo App 1043, 135 SW2d 397; Dunlap v Hunting (NY) 2 Denio 643.

Footnote 59. Dooley v Gladiator Consol. Gold Mines & Milling Co., 134 Iowa 468, 109 NW 864; Pantz v Nelson, 234 Mo App 1043, 135 SW2d 397.

Footnote 60. Higgins v Emmons, 5 Conn 76; Dunlap v Hunting (NY) 2 Denio 643.