Castell v. Stephenson Finance Co.
| Decision Date | 16 March 1964 |
| Docket Number | No. 18184,18184 |
| Citation | 244 S.C. 45,135 S.E.2d 311 |
| Court | South Carolina Supreme Court |
| Parties | A. R. CASTELL, Jr., Respondent, v. STEPHENSON FINANCE COMPANY, and Superior Automobile Insurance Company, Defendants, of whom Stephenson Finance Company, is, Appellant. |
Leatherwood, Walker, Todd & Mann, Greenville, for appellant.
Carter & Hill, Greenville, for respondent.
The plaintiff A. R. Castell recovered judgment for both actual and punitive damages against the defendant Stephenson Finance Company for the alleged conversion of his motor truck. The defendant has appealed from this judgment and, under our view of the record, the only question for decision is whether there was any evidence, viewed in the light most favorable to the plaintiff, to sustain the conclusion that there was a conversion of the property of the plaintiff by the defendant.
The plaintiff purchased a truck on May 16, 1959 and, in consideration of the sale, gave as security his conditional sale contract to the seller, providing for the payment of $8,028.00 in monthly installments of $334.50 over a two year period. This contract was thereupon assigned to the defendant Stephenson Finance Company, hereafter called Stephenson. At the time of the sale, a collision insurance policy covering the truck, with a $500.00 deductible clause, was issued by the Superior Automobile Insurance Company, a defendant in the lower court but not a party to this appeal. Thereafter, the plaintiff made payments in the months of June, July, September, October, November and December of 1959, in February 1960 and two payments in April, 1960. No other installments were paid on the contract.
The plaintiff was delinquent in his payments and, on June 8, 1960, Stephenson wrote to him demanding payment by June 12, 1960 of the entire balance due. Unknown to the parties at that time, he vehicle had been involved in an accident in the State of Tennessee on June 7, 1960. Subsequently, pursuant to written authority of the plaintiff, the wrecked truck was brought back to a garage in Greenville, South Carolina, where it remained, unrepaired, until sold at public auction on November 3, 1960, by Stephenson.
Following the return of the truck to Greenville, the plaintiff filed claim with the insurance company for the collision loss. Considerable negotiations followed between the plaintiff and the insurance company relative to a settlement of the insurance claim, and between the plaintiff and Stephenson concerning the past due indebtedness of the plaintiff under the conditional sale contract. Agreement between the plaintiff and the insurance company was not reached and, finally, Stephenson and the insurance company agreed upon a settlement of the collision loss, which was paid directly to Stephenson on August 29, 1960 and credited, less certain undisputed charges, to plaintiff's indebtedness. Further negotiations followed between the plaintiff and Stephenson in an attempt to satisfactorily adjust the indebtedness of the plaintiff, without success. Finally, Stephenson, claiming that the plaintiff was in default in his payments, sold the truck at public action on November 3, 1960. The truck was bid in by Stephenson at the sale for the sum of $900.00 which was credited on the indebtedness of plaintiff. After all credits, there remained a balance due under the contract and remand was made upon the plaintiff to pay such deficiency, which was refused.
Thereafter, this action was brought by the plaintiff against the defendant Stephenson Finance Company and Superior Automobile Insurance Company. The complaint alleged three causes of action. Under the first and second, it was alleged that Stephenson and Superior, pursuant to a conspiracy between them, settled the claim of the plaintiff for the collision loss for an improper amount and thereby fraudulently breached their contractual obligations to the plaintiff. In the third cause of action it was alleged that Stephenson had fraudulently converted the plaintiff's truck to its own use by wrongfully selling the same at an invalid public sale and bidding the property in at an unconscionably low price. The answer of Stephenson denied the material allegations of the complaint and alleged that its actions in the matter were taken after default by the plaintiff in the payment of the indebttedness due it and pursuant to the terms and conditions of the conditional sale contract executed by the plaintiff.
Upon the trial of the case, after the refusal by the trial judge of timely motions of the defendants for a non-suit and directed verdict in their favor, the jury returned a verdict in favor of both defendants on the first and second causes of action, thereby exonerating both Stephenson and Superior of any wrongdoing in connection with the settlement of the insurance claim of the plaintiff for collision damage, but rendered a verdict for the plaintiff under the third cause of action against Stephenson in the sum of $2,200.00, actual damages, and $11,000.00, punitive damages for the alleged conversion of plaintiff's property. The subsequent motions of Stephenson for judgment notwithstanding the verdict and, in the alternative, for a new trial were denied by the lower court, except to require the remission by the plaintiff of the sum of $500.00 of the actual damages awarded. This ppeal by Stephenson followed and relates solelby to the cause of action for conversion.
The jury found that Stephenson was guilty of a conversion of the plaintiff's property, which has been defined as '[a]n unauthorized assumption and exercise of the right of ownership over goods or personal chattels belonging to another or the alteration of their condition or the exclusion of an owner's rights.' Commercial Credit Co. v. Cook, et al., 165 S.C. 387, 164 S.E. 17, 19. Conversion is a tortious act and 'may arise either by a wrongful taking of the chattel or by some other illegal assumption of ownership, by illegally using or misusing it, or by wrongful detention.' Young v. Corbitt Motor Truck Co., 148 S.C. 511, 146 S.E. 534, 542.
Since conversion is a wrongful act, it cannot arise from the exercise of a legal right. General Motors Acceptance Corporation v. Hanahan, 146 S.C. 257, 143 S.E. 820.
The alleged conversion in this case arose out of the assertion by Stephenson of the claimed legal right, upon default in the payments due it under the conditional sale contract, to take possession of and sell the mortgaged property. The plaintiff bases his charge, that Stephenson was guilty of a conversion of his property upon the grounds (1) that at the time Stephenson sold the property it had no legal right to do so due to an alleged agreement by the defendant to defer payments, and (2) that the property was wrongfully sold for less than its value by the defendant without giving proper notice of such sale.
While the instrument involved here is a conditional sale contract, it is in legal effect a chattel mortgage. Johnson Cotton Company v. Cannon, 242 S.C. 42, 129 S.E.2d 750.
There can be no doubt that, upon default in the terms of a chattel mortgage, the mortgagee has the right to take possession of the property, either peaceably or by claim and delivery proceedings, and sell the same, applying the proceeds of sale to his debt and paying the surplus, if any, to the mortgagor. Speizman v. Guill, 202 S.C. 498, 25 S.E.2d 731. As stated in the case of Lee v. National Furniture Stores, Inc., 163 S.C. 204, 161 S.E. 450, 451:
The right of the mortgagee to possession of the mortgaged property depends upon whether or not there has been default or condition broken in the terms of the mortgage; and a mortgagee is guilty of a conversion when he takes possession of the property and sells it before he is entitled to under the terms of the mortgage or...
To continue reading
Request your trial
-
Moore v. Weinberg
...(Ct.App. 2003) (citing Owens v. Andrews Bank Trust Co., 265 S.C. 490, 496, 220 S.E.2d 116, 119 (1975); Castell v. Stephenson Fin. Co., 244 S.C. 45, 50-51, 135 S.E.2d 311, 313 (1964)). A plaintiff may prevail upon a claim for conversion by showing the unauthorized detention of property, afte......
-
Regions Bank v. Schmauch
...personal property. Owens v. Andrews Bank & Trust Co., 265 S.C. 490, 496, 220 S.E.2d 116, 119 (1975); Castell v. Stephenson Fin. Co., 244 S.C. 45, 50-51, 135 S.E.2d 311, 313 (1964). Conversion is a wrongful act which emanates by either a wrongful taking or wrongful detention. Castell, 244 S.......
-
In re TD Bank, N.A. Debit Card Overdraft Fee Litig.
...rights because the underlying taking is by definition not “wrongful” in that scenario. See, e.g., Castell v. Stephenson Fin. Co. , 244 S.C. 45, 135 S.E.2d 311, 313 (1964) (“Since conversion is a wrongful act, it cannot arise from the exercise of a legal right.”). In the Bank's view, because......
-
Williams-Garrett v. Murphy
...some other illegal assumption of ownership, by illegally using or misusing it, or by wrongful detention." Castell v. Stephenson Finance Co., 244 S.C. 45, 135 S.E.2d 311, 313 (1964) (citation omitted). The tort of conversion consists of a party who assumes and exercises an owner's rights in ......