TORTS » Conversion
What are the elements of the tort of conversion?
Conversion is an intentional interference with P's personal property that is so substantial that it's fair to require D to pay the property's full value. So P must prove the following elements: 1. DOMINION and CONTROL: That D substantially interfered with P's right of possession in personal property, in a sufficiently serious fashion as to justify ordering D to pay the property's full value. 2. INTENT: That D intended the act that constitutes the assertion of dominion and control. (Mistaken belief in a right to take control is no defense, as with trespass to chattels.) 3. POSSESSION: That P was either in possession of the chattel or had the immediate right to possess it. MNEMONIC: DIP (Dominion; Intent; Possession).
What effect does defendant's good faith have in a conversion claim?
Defendant can be liable for conversion regardless of his good faith. (So if D takes P's hat for six months thinking all the while that it's his own, D has committed conversion.) However, good faith is one of the factors considered in measuring the seriousness of the interference. (Other factors include the extent to which defendant exercised dominion and control over the chattel, the inconvenience to plaintiff, the harm done to the chattel, etc.) D § 62, p. 129.
Emma Scent visits the home of Barbara Mutton, millionairess. Mutton's home is open to the public, and on display are her fabulous jewels. Emma negligently leans too close to one of the displays, and unbeknownst to Emma, a priceless black pearl necklace gets caught on her sweater and falls into her pocket. The pearls are later lost at Emma's cleaners, before Emma even realizes she had them. Will Emma be liable for conversion?
No, because Emma negligently came into possession of the pearls. Conversion requires the intentional misappropriation of another's personal property. RELATED ISSUE: Suppose Emma had taken the pearls on purpose, but had changed her mind and returned them unharmed six hours later. Here, there would probably not be a conversion, despite Emma's intentional act, because the interference with possession would probably not be deemed sufficiently serious. (But this would be trespass to chattels since dispossession occurred, and that's enough to give rise to a claim for damages.) SIMILAR SITUATION: Cleopatra borrows Hatshepsut's pearl necklace with Hatshepsut's okay. Cleo accidentally drops the necklace into a vat of vinegar, and it dissolves. Cleo will not be liable for conversion because she did not intend the act that resulted in interference with the right of possession, as conversion requires. (Note that Hatshepsut will have a negligence claim.) D § 62, pp. 128-30.
King Arthur visits the Round Table Tavern and leaves his sword, Excalibur, in the cloakroom. Sir Launcelot visits soon thereafter and leaves his sword next to Excalibur. When Launcelot returns, he picks up Excalibur by mistake. He doesn't realize the error until he leaves the tavern, and Excalibur immediately starts to sing. Launcelot right away goes back to the cloakroom, where Arthur is singing to all the swords, looking for Excalibur. Launcelot returns it and picks up his own sword. Is Launcelot liable for conversion?
No. Conversion is an intentional interference with the plaintiff's personal property that is so substantial that it's fair to require the defendant to pay the property's full value. In other words, the misappropriation must be serious. Here, Launcelot's interference with Arthur's right of possession was not sufficiently serious to constitute conversion (because Launcelot's interference was the result of a mistake, the duration of Launcelot's dominion and control was brief, and he returned the chattel). As such, he's only likely to be liable for trespass to chattels. RELATED ISSUE: Had Launcelot kept Excalibur for a significant time or lost it, the interference might be deemed serious enough to amount to a conversion. E Ch.3-III(D).
Sweeney Todd operates a barbershop. Fred Snip opens a barbershop across the street and tells all of Todd's customers that Todd slits the throats of his unsuspecting patrons and makes them into pies. This is a lie. Can Todd sue Snip for conversion for stealing his customers?
No. Conversion requires a substantial and intentional interference with another's personal property. Todd may have other claims—like defamation or trade disparagement—against Snip, but Snip isn't liable for conversion because Snip's destruction of Todd's goodwill involves an intangible. Conversion concerns only tangible personal property or intangibles reduced to a physical form (e.g., checks, stock certificates, promissory notes). E Ch.3-III(C).
Can negligence be the basis for an action in conversion?
No. Defendant's assertion of dominion and control over the chattel involved must be intentional. (But as long as the assertion of control is intended, defendant's state of mind about surrounding facts, like who owns the item, is irrelevant. So a mistake of fact, no matter how reasonable, is normally no defense.) D § 62, p. 128; E Ch.3-III(B).
What is the principal difference in legal consequence between a finding that an interference with another's property is conversion and a finding that the interference is trespass to chattels?
The primary consequence of the distinction relates to remedy. The presumptive damage recovery for a conversion is the fair market value of the property at the time and place of conversion. This is often referred to as a forced sale, meaning that P gets the value of the property and D gets to keep it (unless D destroyed it). With trespass to chattels, by consequence, D typically has to pay just for the damages actually caused (or nominal damages), not the entire value of the item. This consequence makes sense, given the definition of a conversion—conversion occurs when D's intentional interference with P's personal property is so substantial as to make it fair to require D to pay the full value of the item. D § 61, pp. 125-27; E Ch.3-III(A).
What is the main factor in determining when an act of interference is severe enough to constitute a conversion?
The seriousness of the interference with P's ownership rights. In a conversion claim, damage to the personal property must be so egregious as to merit D's paying its full value in damages. Thus, not all trespasses to chattels are conversions, but all conversions are trespasses to chattels. (But because damages in a conversion claim are more attractive to the plaintiff, she'll always choose a conversion claim if it's at all possible. Damages in a conversion claim essentially amount to D having to buy the chattel.) Sub-factors determining the seriousness of interference include the extent of D's dominion or control; the duration of the loss; whether D acted in bad faith; the degree of harm to the item; and the degree of inconvenience and expense to P. Rest. 2d § 222A; E Ch.3-III(D).
Icarus asks Orville Wright if he can borrow Wright's wax wings. Wright hands them over, but he tells Icarus not to fly too close to the sun. Icarus straps on the wings and soars into the wild blue yonder. Unfortunately, Icarus flies too close to the sun, the wings melt, and Icarus isn't too well off, either. Icarus returns the wings to Wright as one solid mass of wax. Wright claims that Icarus has committed a conversion. Icarus claims that since he rightfully borrowed the wings, he can't be liable for conversion. Who's right?
Wright's right. Conversion is an intentional interference with the plaintiff's personal property that is so substantial that it's fair to require the defendant to pay the property's full value. Severe damage, destruction, or misuse all qualify as misappropriations serious enough to constitute conversion. It doesn't matter that the initial entrustment of possession to the defendant was with the plaintiff's consent; so long as the interference with the plaintiff's possessory rights went beyond what was consented to—here, Wright didn't consent to flying too close to the sun—there can be a conversion. SIMILAR SITUATION: Say Fairy Godmother turns Farmer Brown's coach into a pumpkin. She will be liable for conversion because substantial change to the chattel is sufficient to justify the claim. D § 61, p. 126.
Christopher Columbus asks Isabella if he can borrow her boat to run a couple of errands. Isabella says OK. Unbeknownst to Isabella, Columbus sails away and discovers America. On the return trip, the boat sinks, and Columbus has to swim the rest of the way. Is Columbus liable for conversion?
Yes. Conversion is an intentional interference with P's personal property that is so substantial that it's fair to require D to pay the property's full value. Destruction of the item will always be a sufficiently great interference that it will qualify for conversion. So Columbus will have to pay the full value of the boat. (This value would be measured as of the time Columbus first set sail for America, not the value at the time of sinking.) NOTE: It doesn't matter that the initial entrustment of possession to D was with P's consent; so long as D's interference with P's possessory rights intentionally went beyond what was consented to (P consented to D's use of it "to run a couple of errands," not to go on a lengthy voyage), there will be a conversion if great damage occurs during the portion of use that went beyond the consent. NOTE: Columbus also committed a trespass to chattels (interference with a right of possession in a chattel) because all conversions are also trespasses to chattels. However, because there are greater damages in a conversion claim, it's more attractive to plaintiffs. D § 62, pp. 128-30.
Ima Pigeon goes to a garage sale at Blacque Jacques Shellacque's house. Among the "hotel" art and nonworking appliances offered for sale is a painting of a lady with a mysterious smile. Ima reasonably assumes the painting is a cheap handmade copy of the Mona Lisa. Ima buys the painting for $10 from Blacque Jacques and takes it home, where it is accidentally burned beyond recognition in a house fire. The painting turns out to be the real Mona Lisa—unbeknownst to Ima, Blacque Jacques had recently stolen it from the Louvre. Had Ima been notified of the painting's real provenance before the fire, she would have immediately returned it to the Louvre without seeking compensation. Is Ima liable for conversion?
Yes. Conversion is an intentional interference with the plaintiff's personal property that is so substantial that it's fair to require the defendant to pay the property's full value. So long as the defendant intended the act of dominion over the item, her state of mind about the surrounding circumstances (e.g., who has title) is irrelevant. Therefore, a mistake of fact, no matter how reasonable, is no defense to conversion. As a result, a bona fide purchaser like Ima, even acting with perfect reasonableness, can be liable for conversion! Ima's act in intentionally buying the painting and taking it home satisfied the intent requirement. RELATED ISSUE: Had Ima returned the painting on demand from the Louvre three days after she bought it, she probably would not be liable for conversion, as she bought the painting in good faith, didn't harm it, and possessed it for a very brief period of time. As such, her interference with the Louvre's rights wouldn't be "sufficiently serious" to support a conversion claim. (Had she kept it for a couple of months, it might well be conversion, which her good faith alone would not negate.) MINORITY RULE: In a minority of courts, a bona fide purchaser of stolen goods, who returns them to the rightful owner on demand (even much later), cannot be a converter. D § 62, pp. 128-30; E Ch.3-III(E)(1)(a).
Hayworth runs a parcel service. She is supposed to hold a sled to be picked up by Charles Foster Kane. Welles presents himself to Hayworth's counter, shows convincing (but false) identification indicating that he is Kane, and demands the sled. Hayworth, believing that she's dealing with Kane, gives Welles the sled. Is Hayworth liable for conversion?
Yes. Conversion is an intentional interference with the plaintiff's personal property that is so substantial that it's fair to require the defendant to pay the property's full value. The misappropriation can take the form of wrongful transfer by a bailor, as here. Hayworth's mistake—even if reasonable—is no defense. D Section 65, pp. 141-42. RELATED ISSUE: Say that Hayworth borrowed the sled from Welles, not realizing it belonged to Kane. Kane demands its return, but Hayworth returns it to Welles instead, mistakenly believing Welles owns it. Hayworth would be liable for conversion here too, because conversion can take the form of a refusal to surrender the chattel on demand of one with a right to possession at the time of the demand. D § 65, pp. 142-43.