C. Elements Defined
1. An Interest by the Plaintiff in the Thing Converted
To establish the tort of conversion, it is essential that the plaintiff show either title or right to the possession of the personal property.15 For example, where online sellers of hotel accommodations collected more in accommodations taxes from purchasers than they remitted to the municipalities that levied the taxes, a federal court said that if the sellers had an obligation to deliver the taxes to the municipalities, then the municipalities had a right to possession and, thus, an action for conversion.16 Failure to award a contest prize has been held not to be a basis for a cause of action in conversion.17 When the defendant has an interest in the property that is superior to that of the plaintiff, the plaintiff cannot maintain an action for conversion.18 Where the appellant pledged a certificate of deposit she owned as collateral on a loan, she had no right to possession, the lender had a right to liquidate it once the balance on the loan was due and payable and an action against the lender for conversion would not lie.19 On the other hand, plaintiffs may bring a conversion claim for fees that are alleged to have been wrongfully assessed.20
The issue is whether the defendant exercised unauthorized control over the plaintiff's personal property. Thus, while ownership of the real property where the personal property is located may be relevant, a conversion action does not depend on who owns that real property.21
2. The Defendant Converted the Property to His or Her Own Use
The defendant must exercise some control over the property for the second element to be satisfied.22 The illegal use or misuse or illegal detention of another's chattel may give rise to a cause of action for conversion.23 For example, an action for conversion has been permitted where a stock certificate or the payment of the stock's value has been wrongfully retained.24 It must, of course, have been the defendant who converted the property to his own use.25 Thus, where an employee made use of property allegedly converted by his corporate employer and did so in his capacity as a surveyor for his employer, he was not liable for any conversion by the corporation.26 In Moore v. Weinberg,27 an attorney's client borrowed money from the plaintiff and assigned to the plaintiff his interest in funds held in escrow with the clerk of court pending resolution of unrelated litigation. Even though the attorney prepared the written assignment, when the funds in escrow were transferred to him, he disbursed most of the money to his client and retained some of it as his fee. The plaintiff sued the attorney for conversion, alleging he owned an interest in the proceeds from the litigation pursuant to the assignment, that the defendant attorney was aware of his interest in the proceeds, and that the attorney wrongfully disbursed those proceeds. The South Carolina Supreme Court said that the trial court erred in granting summary judgment for the defendant on the conversion claim.
A property owner cannot convert his or her own property. In American Credit of Sumter, Inc. v. Nationwide Mut. Ins. Co.,28 a car on which the appellant was the lienholder was insured by the appellee. The car was damaged in an accident and the owner received compensation from the insurer of the at-fault driver. However, she did not use the funds to repair the car. It was subsequently repossessed by the appellant — in the damaged condition — who then sued the appellee insurer for the diminution in value. The court decided that the insured's failure to use the insurance proceeds to repair the car was not a conversion. The insured owned the car at the time she retained the funds, had not defaulted on the installment contract, and the car had not been repossessed. Thus, she was still the owner.
In Jenkins v. Few,29 the defendant paid a third party to put sugar in the gas tank of the plaintiff's truck. The plaintiff argued the damage to his truck so altered its condition that the defendant "wrongfully assumed and exercised the right of ownership." The court noted that under the Restatement of Torts intentionally destroying a chattel or materially altering its physical condition so as to change its identity or character may constitute conversion,30 but said no South Carolina case has...
