CONVERSION

 CONTENTS

1.0       Introduction

2.0       Objectives

• Main content
• What is conversion?
• Differences between Conversion and Trespass
• Defences for Conversion of a Chattel
• The Remedies for Conversion

4.0       Conclusion

5.0       Summary

6.0       Tutor Marked Assignments

7.0       References and further reading

INTRODUCTION

The tort of detinue which is the wrongful detention of goods is also a part of the tort of conversion, where it is known as conversion of goods by detention. However, in the United Kingdom the Torts (Interference with Goods) Act 1977 has abolished the tort of detinue and merged it with the tort of conversion. This, however, is not the position in Nigeria as conversion and detinue are still separate torts, although a party may claim for both torts in a single action. In this unit, we shall consider conversion.

OBJECTIVES

By the end of this unit you should be able to:

• Define conversion;
• Differentiate between conversion and trespass; and
• Enumerate the defences and remedies for conversion.

MAIN CONTENT

What is Conversion?

According to Sir John Salmond, in his book the Law of Tort, 21^st ed. (1996) p. 97-98:

"A conversion is an act... of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it”. See also Ihenacho v Uzochukwu (1997) 2 NWLR pt 487. 257 SC.

Conversion is any inteference, possession or disposition of the property of another person, as if it is one's own without legal justification. In other words, conversion is dealing with another person's property as if it is one's own. Conversion is any dealing which denies a person of the title, possession, or use of his chattel. It is the assertion of a right that is inconsistent with the rights of the person who has title, possession or right to use the chattel.

It is dealing with a chattel which belongs to another person in a manner that is i inconsistent with the rights of the person. In other words, conversion is any intentional interference with another person's chattel which unlawfully deprives the person of title, possession or use of it. Conversion includes wrongful taking, wrongful detention, and or wrongful disposition of the property of another person. Therefore, conversion includes denying a person of the title or possession, or use of his chattel. It is not necessary to prove that the defendant had intention to deal with the goods. It is enough to prove that the defendant interfered with the goods. It is immaterial that the defendant does not know that the chattel belongs to another person, for instance, if he innocently bought the goods from a thief. See Lewis v Avery (1972) 1 QB 198. In criminal law, conversion is known as stealing or theft.

Essentially, conversion is:

1. Any inconsistent dealing with a chattel
2. To which another person is entitled to immediate possession
3. Whereby the person is denied the use
4. Possession; or
5. Title to it.

Thus, an owner can sue for conversion. Likewise, a person who has mere custody, temporary possession or caretakership can sue any third party who tries to detain, dispose, steal or otherwise convert such chattel.

In North Central Wagon & Finance Co. Ltd v Graham (1950) 1 All ER 780, the defendant hire purchaser sold the car in contravention of the terms of the hire purchase agreement. In the circumstances the court held that the plaintiff finance company was entitled to terminate the hire purchase agreement and sue the selling hire purchaser in the tort of conversion, for recovery of the car.

See also the following cases:

Chubb Cash v Crillery (1983) 1 WLR 599; Wilson v Lombank Ltd. (1963) 1 All ER 740; Greenwood v Bennet (1973) QB 195 CA; and Union Transport Finance v British Car Auctions (1978) 2 All ER 385 CA.

Differences between Conversion and Trespass

Conversion is different from trespass to chattels in two main respects. These are:

1. In conversion, the conduct of the defendant must deprive the owners of the possession of the chattel, or amount to a denial or dispute of the title of the owner. Conversion is known as stealing or theft in criminal law .Therefore, mere touching or moving of a chattel and so forth, only amount to trespass. See Fouldes v Willoughby (1841) 151 ER
2. To maintain an action in conversion, the plaintiff need not be in actual possession of the chattel at the time of the interference. It is enough if the plaintiff has right to immediate possession of the chattel, that is, the right to demand for immediate possession of the chattel.

Ashby v Tolhurst (1937) 2 KB 242.

The defendant car park attendant who negligently allowed a car thief to drive away the plaintiff's car from a car park under his watch was held: not liable in conversion. The driver had possession of the car which he had parked, for he has right to immediate possession. The defendant car park attendant is a bailee who only guarantees the safety of the car that is bailed in the car park as a bailee. The claimant should have sued in the tort of negligence for the loss of the car.

City Motor Properties Ltd v Southern Aerial Service (1961) CLR 477.

An owner of a chattel was held liable in conversion for dispossessing the plaintiff bailee of it, during the subsistence of the bailment, which was not unilaterally determinable at will by the plaintiff owner.

Youl v Harbottle (1791) 170 ER 81.

The defendant carrier of goods by mistake delivered the plaintiffs goods to a wrong person. He was held liable in conversion, for the loss of the goods. Therefore, it follows that, if an act of interference with a chattel is intentional or willful, it is not a defence, that the tort was done by mistake, even if the mistake is honest, that is, in good faith or innocently. See also Perry v BRB (1980) 1 WLR 1375.

Consolidated Co. Ltd v Curtis & Son (1892) 1 QB 495.

A certain client instructed an auctioneer to sell goods which did not belong to him, and which he has no right to instruct the auctioneer to sell. Upon sale of the goods the true owner of the goods sued the auctioneer for conversion, the court held: that the auctioneer was liable to the owner of the goods for conversion. The court further held that the auctioneer was entitled to be indemnified by the client who instructed him for the damages he suffered at the suit of the owner of the goods. See also Jerome v Bentley &. Co (1952) 2 All ER 114.

Adamson v Jarvis (1827) 130 ER 693.

An auctioneer was held entitled to be indemnified by a client who had instructed him to sell goods, to which as it was later discovered the client had no title.

In Hollins v Fowler (1875) LR 7 HL 757,

A cotton broker acting on behalf of a client, for whom he often made purchases, bought cotton from a fraudster who had no title to the cotton. The broker then sold it to his client and received only his commission. At the suit of the true owner for conversion sale, and loss of the goods, the court held: that the broker was liable in conversion for the full value of the goods.

Examples of Conversion

Conversion of a chattel, belonging to another person may be committed in many different ways. Examples of conversion include:

1. Taking
2. Using
3. Alteration
4. Consumption
5. Damaging, or destroying it
6. Receiving
7. Detention
8. Wrongfully refusing to return a chattel
9. Wrongful delivery
10. Wrongful sale or disposition and so
11. Wrongful sale,

We shall examine these briefly.

Taking

Where a defendant takes a plaintiffs chattel out of the plaintiff s possession without lawful justification with the intent of exercising dominion over the goods permanently or even temporarily, there is conversion. Constrast this proposition with the decisions in the cases of Fouldes v Willoughby (supra) and Davies v Lagos City Council (supra). On the other hand, a defendant may not be liable; if he merely moves the goods without denying the plaintiff of title.

Using

Using a plaintiff’s chattels as if it is one's own, such as, by wearing the plaintiff’s jewellery, as in the case of Petre v Heneage (1701) 88 ER 149, or using the plaintiff’s bottle to store wine as was the case in Penfolds Wine Ltd v Elliot (supra) is a conversion of such chattel.

Alteration: By changing its form howsoever.

Consumption: By eating or using it up.

Destruction: By damaging or obliterating it.

Mere damage of a chattel is not sufficient to make one liable for conversion. As a general rule of law, mere damage or destruction of a chattel without more, is a trespass to chattel in tort and also a malicious damage in criminal law. See Simmons v Lillystone (1853) 155 ER 1417.

Receiving

Involuntary receipt of goods is not conversion. However, the receiver must not willfully damage or destroy the goods unless the goods constitute a nuisance. Receiving a chattel from a third party who is not the owner is a conversion. This is wrongful, for it is an act of assisting the other person in the conversion of the chattel, or the receiving of stolen goods.

By Detention

Armory v Delamirie (1722) 93 ER 664.

A chimney sweep's boy found a jewel and gave it to a jeweler for valuation. The jeweler knowing the circumstances, took the jewel, detained and refused to return it to the boy. They boy then sued the jeweler for conversion and for an order for return of the jewellery to him. The court held: that the jeweler was liable for conversion. A finder of a property has a good title, and he has a right or interest, to keep it against all persons, except the rightful owner of the property or his agent. See also Moorgate Mercantile Co v Finch (1962) 1 QB 701.

However, a temporary reasonable refusal by the finder or custodian of a property to hand it over to a claimant, in order to verify the authenticity of the title of the claimant. is not actionable, except where the refusal is adverse to the owner's better title. .

By Wrongful Delivery

Wrongfully delivery of a person's chattel to another person who does not have title or right to possession without legal justification is a conversion.

Purchase:

At common law, conversion is committed by a person who bought and took delivery of goods from a seller who has no title to the chattel nor right to sell them. Such as when a thief, steals and sells a chattel. A buyer in such a situation takes possession at his own risk, in accordance with the rule of law that acts of ownership are exercised at the owner’s peril.

By Wrongful Disposition: Such as by sale, transfer of title or other wrongful disposition.

In Chukwuka v C.F .A.O. Motors Ltd (1967) FNLR 168 at 170,

The plaintiff sent his car to the defendant motor company for repairs. Thereafter, he failed to claim the car. Nine months later the defendants sold the car to a third party who re- registered it in his own name. The plaintiff sued for conversion. The High Court held: that the defendant was liable to the plaintiff for conversion of the car. See also The Arpad (1934) p. 189 at 234 and Hollins v Fowler (1875) LR 7 HL 757.

SELF ASSESSMENT EXERCISE 1

List the examples of conversion.

Innocent Receipt or Delivery Is Not Conversion

Generally, innocent delivery, or innocent receipt are not torts, nor criminal offences. Thus, innocent delivery is not conversion. Therefore, where an innocent holder of goods, such as, a carrier, or warehouseman, receives goods in good faith from a person he believes to have lawful possession of them, and he delivers them, on the person's instructions to a third party in good faith, there would be no conversion. Similarly, innocent receipt of goods is not conversion. However the receiver must not willfully damage or destroy the goods unless the goods constitute a nuisance.

Unipetrol v Prima Tankers Ltd (1986) 5 NWLR pt 42 p. 532 CA.

The defendant oil tanker owners had a contract to carry Unipetrol's cargo of fuel from Port Harcourt. The captain of the vessel allegedly went elsewhere with the cargo of fuel. The plaintiff appellant Unipetrol sued for the conversion and loss of the cargo. The Court of Appeal held: that the respondents were liable in conversion. The word "loss" is wide enough to include a claim for conversion against a carrier. It is elementary law that in a claim for conversion, the claimant is entitled to the return of the article seized, missing, or in the possession of the other party, or reimbursement for its value. See also FHA v Sommer (1986) 5 NWLR pt 17, p. 533 CA.

In Owena Bank Nig. Ltd v Nigerian Sweets & Confectionery Co. Ltd (1993) 4 NWLR pt. 290, p. 698 CA,

The 1^st respondent was granted an import licence by the Federal Ministry of Trade to import granulated sugar. However, the 2nd respondent opened a letter of credit and imported the sugar. The 1st respondent sued for damages for the wrongful conversion of the import licence. On appeal by the bank, the Court of Appeal held: That the defendants were liable for conversion of the import licence papers.

Thus, an action for conversion will lie in conversion for any corporeal personal property, including papers and title deeds.

Conversion is any dealing with a chattel in a manner inconsistent with another person's right whereby the other is deprived of the use and possession of it. To be liable, the defendant need not intend to question or deny the right of the plaintiff. It is enough that his conduct is inconsistent with the rights of the person who has title, or right to possession, or use of it. Conversion is an injury to the plaintiff’s possessory rights in the chattel converted. Whether an act amounts to conversion or not depends on the facts of each case, and the courts have a degree of discretion in deciding whether certain acts amount to a sufficient deprivation of possessory or ownership rights as to constitute conversion.

In conversion, negligence or intention is not relevant, and once the dealing with the chattel of another person is in such a circumstance that the owner is deprived of its use and possession, the tort of committed.

Possession Is Title against a Wrongdoer or Stranger

At common law, mere de facto possession is sufficient title to support an action for conversion against a wrongdoer.

C.O.P v Oguntayo (1993) 6 NWLR pt 299, p. 259 SC.

The plaintiff respondent brought action against the defendant appellant police, for the wrongful detention and conversion of his Mitsubishi van, which he drove to a police station on a personal visit to a police officer. The police impounded the vehicle on the allegation that it was a lost but found vehicle. The respondent asserted that he brought the van from a third party who was now deceased. The respondent sued the police claiming for the return of the van. On appeal, the Supreme Court held: that the plaintiff respondent was entitled to the release of the vehicle to him.

To establish conversion, the law is that what is required is proof of de facto possession and not proof of ownership. In the instant case, the impounding of the vehicle by the appellants police was unlawful and their failure to deliver it to the plaintiff respondent after demands for it constituted a conversion. The plea of jus tertii that is, the plea of the better title of a third party to, was not open to the police as it was not proved. In this case, the court approved the statement of the law as to possession made by LORD CAMBELL CJ in Jeffries v Great Western Ry Co. (1856) 119 ER 680 at 681:

"The law is that a person possessed of goods as his property has a good title against every stranger, and that one, who

take them from him ~ having no title in himself is a wrongdoer, and cannot defend himself by showing that there was title in some third party. For against a wrongdoer, possession is title.”

In Danjuma v Union Bank Nig. Ltd (1995) 5 NWLR pt 395, p. 318 CA,

The plaintiff appellant sued the defendant respondent bank claiming for an injunction restraining the defendant from conversion of the plaintiffs share certificates and dividends or from the wrongful seizure of same. On appeal the Court of Appeal held: that right of action does not lie as it had not been established that the action of the respondent bank amounted to the tort of conversion. The respondent bank did not deny the appellant's right to take his share certificates, or the dividends on the share certificates and the appellant did not at any time demand the return of the certificate and the respondent refused. There is no evidence that the respondent without authority took possession of the certificates with the intention of asserting a right inconsistent with the rights of the plaintiff appellant. See also Bute v BarcIays Bank (1955) 1 QB 202; and International Factors Ltd v Rodriguez (1979) 1 QB 351 CA.

The Rules Regarding Finding Lost Property

The rules of law applicable to finding a lost property were authoritatively settled by the English Court of Appeal in the case of Parker v British Airways (1982) 1 AllER 834 CA. However, the rules are not often easy to apply. The rules applicable to finding lost property may be summarized as follows: -

1. A finder of a chattel acquires no rights over it, unless it has been abandoned, or lost, and he takes it into his care and control. He acquires a right to keep it against all persons, except the true owner; or a person who can assert a prior right to keep the chattel, which was subsisting at the time when the finder took the chattel into his care and control.
2. Any servant, or agent who finds a lost property in the course his employment, does so on behalf of his employer, who by law acquires the rights of a finder.
3. An occupier of land or a building has superior rights to those of a finder, over property or goods in, or attached to the land, or building. Based on this rule, rings found in the mud of a pool in the case of South Staffordshire Water Co. v Sharman (1896) 2 QB 44 and a pre-historic boat discovered six feed below the surface were held as belonging to the land owner in the case of Elwes v Briggs Gas (1886) 33 Ch D 562.
4. However, an occupier of premises does not have superior rights to those of a finder in respect of goods found on or in the premises, except before the finding, the occupier has manifested an intention to exercise control over the premises, and things on it.

In Parker v British Airways (supra),

The plaintiff was waiting in the defendant airways lounge at Heathrow Airport, London, England when he found a bracelet on the floor. He handed it to the employees of the defendant, together with his name and address, and a request that it should be returned to him if it was unclaimed. It was not claimed by anybody and the defendants failed to return it to the finder and sold it. The English Court of Appeal held: that the proceeds of sale belonged to the plaintiff who found it. See also South Staffordshire Water Co v Sharman (1896) 2 QB 44 and Waverley Borough Council v Fletcher (1995) 3 WLR 772 CA.

Bridges v Hawkesworth (1851) 21 LJ QB 75.

The plaintiff finder of a packet of bank notes lying on the floor, in the public part of a shop was held entitled to the money instead of the shop owner, upon the failure of the rightful owner to come forward to claim the money. See also Hannah v Peel (1945) KB 509 and Moffatt v Kazana (1969) 2 QB 153.

As a general rule of law, anybody who has a finder's right over a lost property, has an obligation in law to take reasonable steps to trace the true owner of the lost property, before he may lawfully exercise the rights of an owner over the property he found.

Who May Sue For Conversion?

The tort of conversion, like other trespass to chattel, is mainly an interference with possession. Those who may sue in the tort of conversion include:

Owners

An owner in possession, or who has right to immediate possession may sue another person for conversion.

Bailees

A bailee of a chattel may sue another person for conversion of a chattel or goods bailed with him. However, a bailor at will has title to immediate possession of a chattel he has deposited with a bailee and can maintain action against a bailee for conversion.

See The Winkfield (1902) P. 42 at 60.

The Winkfield, a ship ran into another ship, a mailship which sank. The Post-Master General though not the owner of the mails in the ship that sank was held entitled to sue the owners of the Winkfield, as a bailee in possession for the value of the mails that were lost in the sunk ship. COLLINS MR in the English Court of Appeal held: that the owners of the Winkfield were liable and that “As between a bailee and a stranger, possession gives title”. See also Kahler v Midland Bank Ltd (1950) AC 24 at 59 and Cooper v Willomatt (1843-60) All ER 556.

Other persons who may have right to immediate possession and therefore, may be able to sue another person for conversion of a chattel include:

Holders of lien and pledge

Finders, see Armory v Delamirie (1722) 93 ER 664; London Corp v Appleyard (1963) 2 All ER 834 and Hannah v Peel (1945) KB 509.

Buyers

Assignees

Licensees

Trustees

Defences for Conversion of A Chattel

In an action for conversion of a chattel, the defendant may plead:

1. Jus tertii, that is, the title or better right of a third party
2. Subsisting bailment
3. Subsisting lien
4. Temporary retention; to enable steps to be taken to check the title of the claimant. A defendant may temporarily, refuse to give up goods, while steps are taken to verify the title of the plaintiff who is claiming title before the chattel is handed over to the plaintiff if he is found to be the owner, or has right to immediate possession.
5. Limitation of time.

Who May Plead Jus Tertii?

Jus tertii is the right of a third party. It is the title or better right of a third party to the chattel, goods, or property in dispute. As a general rule, a defendant cannot plead that a plaintiff is not entitled to possession as against him, because a third party is the true owner of the chattel. A defendant can only plead jus tertii, that is, the better right of the true owner or third party only when he is acting with the authority of the true owner.

In C.O.P v Oguntayo (supra at 271), OGBUEGBU JSC stated the law clearly that:

“A person cannot plead jus tertii of a third party, unless the person is defending on behalf of, or on the authority of the true owner. In the instant case, the appellant claims title on behalf of an unknown owner, but as the third party is not discoverable and the respondent has made out a good prima facie case of title by possession, the respondent has title as against all other persons including the appellants.”

Therefore, for a defendant to successful plead jus tertii, that is, the better right of a third party who has right to immediate possession, the identity of such true owner, or third party must be disclosed, his title or better right to immediate possession must be established, and the defendant must be claiming for, on behalf, or under the title. of the alleged true owner, or third party who has a better right to immediate possession.

The Remedies for Conversion

In a claim for the conversion of a chattel several remedies are available to a plaintiff. The court in its judgment may order any, or a combination of any of the following reliefs:

1. Order for delivery, return or specific restitution of the goods; or
2. Alternative order for payment of the current market value of the chattel
3. An order for payment of any consequential damages. However, allowance may be made for any improvement in the goods, such as, where a person honestly in good faith buys and improves a stolen car and is sued by the true owner; the damages may be reduced to reflect the improvements.
4. Recovery of special and general damages. Special damage is recoverable by a plaintiff for any specific loss proved.
5. General Damages: Furthermore, where for instance, a plaintiff whose working equipment or tools are converted by another person, a plaintiff may sue for the loss of profit, or existing contract or wages for the period of the conversion of the work tools or equipments.

CONCLUSION

Conversion in tort, the central thought of this is the wrongful appropriation of the goods of another as ones own, or wrongful depriving the other of the use and possession of the good permanently or for a substantial time by destroying them or changing their quality.

Conversion can be by taking by disposing, by detention, by using, by destruction or by alteration of the quality of a given chattel.

SUMMARY

In this unit, we discussed:

1. What is conversion
2. The difference between conversion and
3. The differences trespass and remedies for conversion

TUTOR MARKED ASSIGNMENT

Account for the differences between Conversion and Trespass.

REFERENCES

1. Bodunde Bankole Tort: Law of Wrongful Conduct: Lipservice Punishment (1998),
2. Fidelis Nwadalo: the Criminal Procedure of the Southern States of Nigeria, Mij Publisher, Ltd, Lagos (1996).
3. John G. Fleming: The Law of Torts (1977), The Law Books Co. Ltd publisher, London. Sweet &
4. Street: The Law of Torts Sweet & Maxwell (1977), London
5. KODILINYE & Oluwole Aluko: Nigeria Law of Torts. Spectrum Law Publishers, 1999.

: The Criminal Procedure of the Northern States of Nigeria.