Conversion Flashcards
Conversion Definition
Defendant is liable for conversion when the defendant voluntarily acts with the intent to exercise dominion or control over the property of another and so seriously interferes with the plaintiff’s right of possession that the plaintiff may be justified in having them pay for the full value of the chattel.
(There does not have to be actual damage, only has to disregard plaintiff’s rights.)
Conversion is complete interference with another’s chattel. It deprives the possessor of their possessory rights
Elements of Conversion
- Acts: external manifestation of actor’s will
- Voluntary: without outside influence; of one’s own free will
- Intent:
o Specific: purpose or desire to produce the consequences
o General: if the defendant sets in motion a chain of events knowing with substantial certainty the outcome is likely to occur
o Transferred: trying to commit a tort against one person, but accidentally committing it against another person - Exercise dominion OR
- Exercise control
- Over another’s property
- Serious interference over right of possession
Ways to commit conversion
- Receiving the chattel—obtaining possession of the property after purchase from a thief
- Acquiring possession of chattel
o Example: stealing it - Misdelivering it
- Refusing to surrender it
- Using a chattel
- Damaging or altering the chattel
- Disposing of it
o Example: wrongfully selling it
When does conversion occur
- Majority jurisdictions: conversion occurs as soon as defendant takes dominion or control over the goods
o 2 causes of action:
One for the taking of goods
One for refusing to return them
Conversion Sub rules
o If defendant offers to return, the plaintiff does not have to accept the return of the chattel
o If plaintiff accepts the return of goods, it does not negate the conversion but it might reduce the amount of damages the plaintiff can recover
o The defendant cannot force the plaintiff to take the goods back so that the defendant can pay less damages
- Majority jurisdictions: if defendant is an innocent converter, it is not deemed to be a serious interference with the owner’s rights
o Defendant is liable only for refusing to return chattel upon demand - Where one intends to affect chattel inconsistent with another’s right to control it, goo faith under reasonable mistake does not prevent liability for conversion
o Applies to:
Physical property that can be moved
Documents in which title is merged
Intangible rights when merged & identified with a specific instrument - Example: promissory note
- Cheques
- Stock certificates
- Bills of lading
Other: - Literary property
- Scientific intervention
- Secret plans
Data on computer
o Does not apply to:
Land
Items attached to something that is attached to the ground (this is trespass to land) - Once severed, deposited elsewhere—it becomes chattel
o Example: apple growing on tree (land)—apple falls off the tree (chattel)—apple pie (conversion)
Body parts
Intangible rights: - Stockholders in corporation
Intellectual property
Real property (mineral, oils, timber)
Good faith purchasers
o Defendant intends to affect the chattel in a manner inconsistent with plaintiff’s right of control, good faith, and mistake don’t prevent liability
o Public policy: purchasers act at their own peril
o Negated when:
If good faith purchaser has obtained title but it was fraudulent
It’s a body part
Conversion overview (What to look for)
o Look for complete deprivation
o When an innocent party deals with or negotiates goods, they become a converter because they’re a more active participant in the conversion
Example: you substantially interfered with my right to possess it
- Conversion: taking a car for a joyride and scratching it
- Trespass to chattel: just scratching the car
Rules of Commercial Convenience (RCC)
o Permits someone to receive goods for storage or safekeeping or transportation without inquiring into the title of the person from whom one received the goods
if you actively sell stolen goods, does it matter if you know they were stolen or not?
No, this is still conversion.
Theft vs. Fraud
o GFB: good faith/innocent purchaser
o BFP: bona fide purchaser
o Theft: no intent to part with title & possession
o Fraud: intent to depart with title as circumstances were as you supposed them to be
Intent to put item into the stream of commerce
Conversion by theft
A is an innocent party. B steals items from A and passes goods to C = Conversion. C is a converter b/c he bought stolen goods (aware or unaware). A has a right to get those goods back. A thief can never pass a good title. C is not protected by law b/c no good title & stolen goods
Conversion by fraud
B fraudulently (tricked), passes goods to C. Is it a conversion? If A acts quickly and equitably she can recover fraudulently taken goods. If she doesn’t act fast enough and B passes title to C—it is a good pass of title. Action against B, not C. C protected if he’s a good faith purchaser in fraudulent situation
