Prosser, p. 78-87: Conversion

(A)            Nature of the Tort

Case: Pearson v. Dodd

The Restatement tries to spell out what makes a particular interference with chattels into a conversion:

·        One way to smell a conversion is the “serious interference” test.  How serious does the interference have to be?  It must be serious enough that damages for the full market price of the chattel should be awarded.  That seems like a suspiciously circular definition.

·        Some other criteria for identifying a conversion include how long the actor had control of the chattel, how long the interference lasted, the actor’s good faith, how much harm was done to the chattel, and how inconvenience was caused to the other person.


The Restatement also lists ways that a chattel may be converted:

1.     Stealing it

2.     Damaging it

3.     Using it

4.     Buying it from a thief

5.     Selling it to somebody else

6.     Delivering it to the wrong person

7.     Refusing to return it


(B)Effect of Good Faith


If you deliver goods to the wrong person (like someone in disguise) or buy something from a thief, you may still be liable for conversion even if you acted in good faith.


(C)            Necessity of Demand; Return of Chattel


In a few jurisdictions, the owner of a chattel must demand their property back from the possessor and be rejected.  In most jurisdictions, conversion happens as soon as someone unlawfully takes possession of the chattel.


If the possessor gives the chattel back to the owner, it doesn’t bar an action for conversion, but the damages will be mitigated.  The owner doesn’t have to accept the return of the goods, except that in some jurisdictions, if the conversion was innocent and the chattel wasn’t damaged, the owner must take back the goods and won’t have an action for conversion.


(D)            Damages


If something gets converted from yours to theirs, you’re due the full value of the property converted.  How this is calculated can very, but usually it’s done by market price.  It’s kind of analogous to the rule in contracts that the owner ought to mitigate damages by buying a suitable replacement soon after the conversion.


Though the property may have special value to the owner, only market price may be recovered unless the defendant’s conduct is outrageous, in which case the plaintiff may be able to get damages for emotional harm.


Hypothetical: Bush v. Simpson


(E)     What May Be Converted


Conversion originated from trover, which applied to things that can be “lost and found”.  However, conversion has now been extended to apply to intangibles such as stock holdings.


(F)     Who May Maintain the Action


Anyone who has the chattel when it’s converted can sue for conversion.  One converter can even recover from another.  Usually, the plaintiff can show some right to the converted good.


Back to Casebook Notes