GRUBER v. PACIFIC STATES SAVINGS LOAN CO

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District Court of Appeal, First District, Division 2, California.

GRUBER v. PACIFIC STATES SAVINGS & LOAN CO.†

Civ. 10467.

Decided: June 08, 1938

John L. Mace, of Los Angeles, and Roy D. Reese, of San Francisco, for appellant. Milo Ayer and Pierce & Sherwin, all of Oakland, for respondent.

Plaintiff sued for conversion of personal property and had a verdict. The defendant has appealed upon a typewritten transcript. The attack upon the judgment is on the ground that the evidence does not show a conversion as a matter of law. The defendant owned a tract of land upon which it maintained a quarry, a barn, and a corral. The plaintiff had been engaged in the grading business for which purpose he had acquired a stock of equipment.

On April 1, 1932, the parties entered into an oral agreement whereby the defendant let to the plaintiff the barn and corral located on these premises for the storage of plaintiff's plows, harness, and grading equipment, which was then unused because the plaintiff at that time, and for about two years prior thereto, was without work due to the business depression. Some of these articles were placed in the corral, and the remainder was placed in the barn. Similar articles belonging to a third party were also kept in the barn. Sometime after the plaintiff moved his property on the premises he nailed shut the only window and three of the four doors of the barn. On the fourth door he placed a padlock to which he had the only key. The defendant at all times kept a watchman on the premises whose duty it was to see that none of the personal property of either owner was illegally removed. This watchman was the only protection afforded to the property of plaintiff stored in the corral. What, if any, obligation the defendant assumed for the protection of the property under key does not appear.

The charge or rental for this storage was fixed at fifteen dollars a month. Plaintiff made one payment and, on July 25, 1932, the defendant notified him in writing that three months' payments being due it would hold the property “around the barn” as security and would notice the same for sale unless payment was made. Plaintiff called upon an agent of the defendant and told him that he had no money then, but that he would pay the claim as soon as he got work.

Some time later, the record does not fix the date, plaintiff called at the quarry and asked the watchman at the quarry if he might remove a plow from the corral. The watchman replied, “No, I cannot let you have it. When you want any thing you go down and see Mr. Hillback.” Plaintiff telephoned Mr. Hillback (defendant's agent) who refused to permit him to take the plow from the place.

Sometime in 1933 the defendant sold the real property and the barn and corral were razed by the vendee. Defendant's watchman testified that he and others broke into the barn in 1933 and removed a Keystone grader belonging to the Oakland Paving Co., which had been stored there, and that at that time plaintiff's property was in the barn. Plaintiff testified that he never recovered the property, but admitted that he made no attempt to remove any of the property which he had stored in the barn at any time after the notice was given, that he had no work to do during the period in controversy, and no present use for the equipment because of the business depression. The horse–collars and much of the other equipment was badly worn at the time of storage. He also admitted that he paid none of the storage charges other than the first, and that he visited the premises and saw his property under the care of the watchman after the receipt of the letter above mentioned.

The trial was had upon the theory that this was an action for the conversion of personal property. Viewing the evidence in the light most favorable to plaintiff, we are forced to conclude that plaintiff has failed to prove any conversion of his property.

Conversion is any act of domination wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. 26 R.C.L. 1098, sec. 3; Poggi v. Scott, 167 Cal. 372, 139 P. 815, 51 L.R.A.,N.S., 925; Byer v. Canadian Bank of Commerce, 8 Cal.2d 297, 65 P.2d 67; Aronson v. Bank of America Nat. Trust & Savings Ass'n, 9 Cal.2d 640, 72 P.2d 548; Lindsey v. Commercial Discount Co., 12 Cal.App.2d 345, 55 P.2d 896; Vuich v. Smith, 140 Cal.App. 453, 35 P.2d 365. Conversion is a tort, and to establish it there must be a tortious act. Home v. Kramer, 7 Cal.2d 361, 60 P.2d 854; Steele v. Marsicano, 102 Cal. 666, 36 P. 920. It is not necessary that there be an actual manual taking of the property converted. Dodge v. Meyer, 61 Cal. 405, 421. However, mere words, unaccompanied by any act, cannot constitute a conversion. Herron v. Hughes, 25 Cal. 555, 559. If these fundamental rules be applied to the facts of this case, it is apparent that there was no conversion of plaintiff's property. The respondent relies upon the following circumstances as showing conversion, first, the letter of July 25, 1932, and second, the subsequent demand for permission to remove a plow and defendant's refusal to comply with said demand. The property remained at all times either in the corral or locked in the barn, to which plaintiff, at all times, retained the only key. There is no showing that plaintiff was ever refused access to the barn or that he ever attempted to remove any of the equipment stored by him therein. Both before and after the alleged conversion, plaintiff's only activity with respect to his property was to call at the quarry occasionally and inspect the property stored in the corral.

Plaintiff cites and relies upon Lowe v. Ozmun, 3 Cal.App. 387, 86 P. 729; Dodge v. Meyer, 61 Cal. 405; McCaffey, etc., Co. v. Bank of America, 109 Cal.App. 415, 294 P. 45; Poggi v. Scott, 167 Cal. 372, 139 P. 815, 51 L.R.A.,N.S., 925; Vagim v. Haslett Warehouse Co., 131 Cal.App. 197, 20 P.2d 992, and Hull v. Laugharn, 3 Cal.App.2d 310, 39 P.2d 478. None of these cases are in point. In all of them there was an actual interference with the plaintiff's ownership, either by an actual taking of the goods, or by dealing with a negotiable bill of lading representing the goods, or by the unlawful use of legal process to obtain possession of the goods. As the facts above stated clearly demonstrate, defendant in this case did not interfere with either plaintiff's possession of the goods or with plaintiff's ownership of the goods.

Our preliminary examination of the case satisfied us that there was no evidence of a conversion as that term is defined in authorities here cited. The submission was set aside, and the parties were asked to argue this point and particularly whether the relation was not that of bailor and bailee. Additional briefs were filed and the matter was thereafter argued orally. This relation stands admitted on the record. Throughout the trial plaintiff and his counsel contended that the barn and corral were rented for “storage purposes”. The undisputed evidence shows that that was the sole purpose of the contract, and that the plaintiff did not use the premises for any other purpose. The plaintiff testified that, when the contract was made, the defendant assured him that it maintained a watchman on the premises who would keep watch over his property. He testified that he visited the premises on many occasions and always saw the watchman there. He had not used this equipment for nearly two years before he moved it on to these premises. The defendant remained in sole and exclusive possession of all the property upon which the barn and corral were located, and the plaintiff at no time assumed any right of occupancy or possession of any portion of the property, other than the right to store his equipment as above stated.

The case is parallel to that where a garage keeper agrees to store a car of a customer at a monthly rate, and to permit the owner to take the car out and return it at his will. It has been held that, in the absence of statute, the keeper has no lien for storage charges. 6 Am. Jur., secs. 274, 278. But section 3051 of our Civil Code provides that “Every person who, while lawfully in possession of an article of personal property renders any service to the owner thereof, by labor or skill, employed for the * * * safekeeping, * * * thereof, has a special lien thereon, dependent on possession, for the compensation * * * for such service.” The conceded facts are that the defendant employed the watchman for the protection and “safekeeping” of the personal property stored by plaintiff and another on the premises. Throughout his brief the plaintiff has insisted that, notwithstanding his possession of a key to the barn, the defendant had actual and exclusive possession of the property. He testified at the trial that he took the premises solely for the purpose of storing his equipment. He made no use of the realty, other than the barn and corral for the purpose of storage. The watchman employed by the defendant gave the only protection and supervision given to his property while stored there. He insists that this put the defendant in legal and exclusive possession. The plow, which was stored in the corral, was the only piece of the entire equipment which the plaintiff sought to remove. It is conceded that defendant had exclusive possession over that portion of the equipment. Since the claim of lien was made upon the property “around the barn” it covered the property stored in the corral. For the reasons given there is no evidence of conversion of any portion of plaintiff's property. If plaintiff had a cause of action for some liability arising after the claim of lien, he has failed to prove it.

Since the above disposes of the appeal, it is unnecessary to pass upon the merits of the other points raised by defendant.

The judgment is reversed.

I dissent. This cause was tried upon the theory that the relationship established between the parties by their agreement was solely that of landlord and tenant. Such relationship was alleged in the amended complaint and was expressly admitted by the answer. The jury was instructed only upon this theory and no exception has been taken to any instruction given by the trial court. Appellant filed its opening and reply briefs on this appeal and at all times conceded that this was the only relationship created by the agreement. It claimed “this tenancy was never terminated”. It was never suggested in the trial court or in the briefs that the agreement constituted a deposit for hire resulting in the establishment of the relationship of bailor and bailee. Nor was it ever suggested that appellant, by virtue of the agreement, took possession of the equipment and was entitled to a lien “dependent on possession” for any service rendered while “lawfully in possession” as provided in section 3051 of the Civil Code.

The issue between the parties was whether appellant had converted the equipment by the acts shown by the evidence, it being agreed by all parties that respondent was in possession of the equipment at all times prior to the alleged conversion. Appellant did not defend upon the ground that it previously had possession as bailee and was entitled to retain the same to satisfy a lien. On the contrary, it admitted that its written threat to sell the equipment “on account of unpaid rental” was unwarranted and constituted a “threat to convert” said equipment, but it insisted that there was no actual conversion. It argued that this was true “because access to and control over the property at all times remained not in appellant but in respondent.” It further argued that the evidence failed “to establish any shadow of possession of the chattels in appellant at any time”.

With the issue thus defined, the cause was argued and submitted on appeal. This court was divided on the question of whether the acts of appellant constituted a conversion. The submission was set aside and it was suggested by the majority members of the court that argument was desired on the question of whether the evidence was sufficient to show “that the contract between the parties was one of storage for hire”. Further briefs were filed in which appellant stated: “This proposition is inconsistent with the argument heretofore advanced by the appellant to the effect that appellant had no possession or control over the respondent's goods, and therefore that the threats to convert did not in law amount to a conversion.” Appellant nevertheless argued the cause in line with the suggestion but expressly stated that “appellant does not relinquish its position set forth in the briefs heretofore filed, which assumes the existence of the relationship of landlord and tenant. * * *”

The majority opinion proceeds upon the theory the parties entered into an agreement for storage for hire rather than an agreement for the rental of a portion of the real property. In other words, the theory is that the relationship of bailor and bailee was established rather than the relationship of landlord and tenant. The result of the majority opinion is to reverse the judgment of the trial court upon a theory never suggested to the trial court and upon a theory which, in my opinion, finds no support either in the pleadings or the evidence.

I cannot agree with the majority opinion where it says that the relationship of bailor and bailee “stands admitted on the record”. It is the relationship of landlord and tenant which stands admitted. I believe that the confusion results from the failure to distinguish between (1) an agreement for storage for hire which establishes the relationship of bailor and bailee and (2) an agreement for the rental of real property which establishes the relationship of landlord and tenant even though it may be contemplated that the property will be used by the tenant solely for storage purposes. The facts here are not analogous, as suggested in the majority opinion, to those in the ordinary case of a garage keeper who enters into the ordinary agreement for the storage of a customer's automobile at a monthly rate. The facts before us are analogous to those in the ordinary case of a landlord who enters into the ordinary agreement in the rental of a private garage to a tenant at a monthly rental, it being contemplated that such garage will be used by the tenant for the purpose of storing his automobile. In the latter case the relationship of landlord and tenant is established, the tenant retains possession of the automobile at all times and the landlord acquires no lien for his rent. In the former case, the relationship of bailor and bailee is established, the garage keeper is given possession of the automobile for the purpose of safekeeping, and he acquires a lien “dependent on possession” for services rendered “while lawfully in possession”. Civ.Code, § 3051. Where, as in the present case, it is admitted by the pleadings and otherwise that the relationship of landlord and tenant was the sole relationship established by the agreement of the parties, the mere fact that it was contemplated that the tenant would use the property solely for “storage purposes” is wholly immaterial. Such evidence could only be material in the event that the relationship established was in dispute and an issue was made by the pleadings with respect thereto.

The majority opinion construes the threat to sell the equipment as covering only the equipment in the corral. This construction does not appear to be justified and it is contrary to appellant's construction of its own letter. Appellant concedes that it “notified plaintiff by letter that unless the delinquent rental were paid on July 27, 1932, all personal property owned by plaintiff, located in the demised premises, would be advertised and sold to satisfy the rental charges then due”.

The majority opinion further lays stress upon the fact that there was a watchman in the employ of appellant. This fact does not appear significant as the evidence merely shows that respondent was informed that appellant had a watchman who “was coming there and watching and taking care of the whole place”, of which place respondent rented but a part. But in any event, the relationship established by the agreement was not in issue. It was admittedly that of landlord and tenant. When said opinion states that respondent has insisted throughout his brief that appellant “had actual and exclusive possession of the property”, said opinion can only refer to the time after the alleged conversion of the property. Respondent has at all times insisted that the equipment was in his own possession until converted by appellant, and that such conversion consisted of the wrongful interference by appellant with respondent's possession by the wrongful assumption of dominion over the equipment and the refusals to permit respondent to remove the same. On the other hand, appellant has insisted that it never had the equipment in its possession at any time for safekeeping or otherwise.

There were but two points raised by appellant on this appeal. It first contended that while the uncontradicted evidence showed a threat to convert, the evidence was insufficient to sustain the implied finding that appellant was guilty of conversion. In my opinion, this contention is without merit.

The evidence was sufficient to show not only the written threat of appellant to convert the property, but also to show the refusals of appellant's agents, including the watchman and Mr. Hillback, in the immediate proximity of the equipment and elsewhere, to permit respondent to remove the equipment from the premises. These refusals were in line with appellant's statements in its written threat wherein respondent was informed that “the only way in which you can have your equipment released is by the payment of your rental in full”. I believe this evidence was sufficient to show a conversion and to sustain the judgment.

The rule is stated in 2 Tiffany, Landlord and Tenant, page 1673, as follows: “The landlord is, it has been held, guilty of conversion if he refuses to allow the tenant to remove his goods during the tenancy, or at a subsequent time when the latter has a legal right to do so. * * *”

While there appears to be no authority directly in point in this jurisdiction, the language of the authorities clearly indicates that respondent was entitled to recover. Poggi v. Scott, 167 Cal. 372, 139 P. 815, 51 L.R.A.,N.S., 925; Dodge v. Meyer, 61 Cal. 405, 420; Hull v. Laugharn, 3 Cal.App.2d 310, 314, 39 P.2d 478; McCaffey Canning Co. v. Bank of America, 109 Cal.App. 415, 424, 294 P. 45; Lowe v. Ozmun, 3 Cal.App. 387, 86 P. 729; Vilas v. Mason, 25 Wis. 310; Debobes v. Butterly, 210 App.Div. 50, 205 N.Y.S. 104; Smith v. Boyle, 66 Neb. 823, 92 N.W. 1018, 103 Am.St.Rep. 745; Watts v. Lehman, 107 Pa. 106; Morris v. Pratt, 114 La. 98, 38 So. 70; 65 Cor. Jur., p. 30, sec. 37.

Appellant also contended that the verdict was excessive, but there was ample evidence relating to value to sustain the verdict in the amount awarded.

I am therefore of the opinion that the judgment should be affirmed.

NOURSE, Presiding Justice.

I concur: STURTEVANT, J.