Tort Law

Poggi v. Scott

167 Cal. 372, 139 P. 815

Facts

• Poggi stored approximately 200 barrels containing wine in the basement of a building.
• He occupied the storage space with the knowledge of the persons controlling the building and paid rent for its use.
• Scott subsequently acquired control or ownership of the premises.
• Scott was informed that Poggi had stored wine barrels in the basement, but he later claimed that he did not properly appreciate their contents or ownership.
• Believing that the barrels were abandoned, empty or of little value, Scott sold them for a nominal amount to persons who removed them.
• The purchasers discovered that the barrels contained valuable wine and took possession of it.
• Poggi did not authorise Scott to sell, remove or dispose of the barrels or their contents.
• Poggi sued Scott for conversion, seeking the value of the wine.
• Scott argued that he had acted honestly and mistakenly. He claimed that he did not intend to appropriate Poggi’s property or knowingly violate Poggi’s rights.

• Whether a person commits conversion when he intentionally disposes of another’s property while honestly believing that he has authority to do so.
• Whether conversion requires fraud, conscious wrongdoing or an intention to deprive the true owner.
• Whether Scott’s sale of the barrels amounted to an exercise of dominion inconsistent with Poggi’s ownership.

• Conversion is an intentional exercise of dominion or control over a chattel that seriously interferes with the right of another person to control it.
• The intention required relates to the act of control, possession, sale or disposal.
• The defendant does not need to:
o know that the property belongs to another person;
o intend to steal it;
o act dishonestly; or
o intend to cause financial injury.
• A good-faith mistake concerning ownership or authority is generally not a defence.
• Selling or delivering another person’s property to a third party is a serious interference ordinarily amounting to conversion.
• Liability may require the defendant to pay the full value of the property converted.

• Scott intentionally arranged the sale and removal of the barrels.
• His conduct was not accidental. He deliberately exercised authority over the goods by deciding that they could be sold and transferred to other persons.
• That authority belonged to Poggi, who owned the wine and had not consented to its disposal.
• The sale deprived Poggi of possession and made recovery of the wine difficult or impossible.
• Scott’s conduct therefore went beyond temporary handling or a minor interference. It amounted to an assertion of control inconsistent with Poggi’s ownership.
• Scott’s honest belief that the barrels were abandoned or worthless did not change the nature of the act.
• Conversion protects the owner’s control over property. It would provide inadequate protection if liability depended upon proving that the defendant knew the precise legal ownership of the goods.
• A person who intentionally sells property must bear the risk that he lacks authority to sell it.
• Scott could have investigated the identity of the owner before disposing of the barrels, particularly because he had information indicating that Poggi had stored property in the basement.
• The absence of fraud could affect the moral description of Scott’s behaviour, but it did not remove civil liability for conversion.

• The Supreme Court of California held that Scott could be liable for conversion.
• His intentional sale and disposal of Poggi’s barrels constituted an exercise of dominion inconsistent with Poggi’s ownership.
• Conversion did not require proof that Scott acted fraudulently, maliciously or with knowledge of Poggi’s title.
• An honest mistake concerning ownership was not a defence to the intentional disposal of the goods.
• The lower ruling favourable to Scott was reversed so that Poggi’s conversion claim could succeed.