Hildegarde, Inc. v. Wright

• Citation: 70 N.W.2d 257,244 Minn. 410
• Decision Date: 29 April 1955
• Docket Number: No. 36443,36443
• Parties: HILDEGARDE, Inc., Appellant, v. Ansel J. WRIGHT et al., Respondents.
• Court: Supreme Court of Minnesota (US)

Page 257

70 N.W.2d 257

244 Minn. 410

HILDEGARDE, Inc., Appellant, v. Ansel J. WRIGHT et al., Respondents.

No. 36443.

Supreme Court of Minnesota.

April 29, 1955.

Syllabus by the Court.

1. To constitute conversion, there must be an exercise of dominion over the goods which is inconsistent with and in repudiation of the owner's right to the goods or some act done which destroys or changes their character or deprives the owner of possession permanently or for an indefinite length of time.

2. A bailee's refusal to deliver goods upon the owner's demand for possession does not constitute a conversion if the refusal is qualified by conditions which are reasonable and not inconsistent with the rights of the owner.

3. A bailee's refusal to deliver on demand of the owner until the owner proves his title or right to possession does not constitute a conversion where the qualification annexed to the refusal is a reasonable one.

4. Rule 52.01 of Rules of Civil Procedure requiring the court to state separately its findings of fact and conclusions of law is not applicable to an action tried before a jury as a matter of right.

Fred Albert, Minneapolis, for appellant.

Warner, Ratelle & Hennessy, Minneapolis, for respondents.

CHRISTIANSON, Justice.

This is an action for conversion of restaurant fixtures. Plaintiff appeals from a judgment for defendants entered after answers by the jury to special interrogatories submitted by the trial court in accordance with the special verdict procedure authorized by Rule 49.01 of Rules of Civil Procedure. There was no motion for a new trial.

The defendant J.H. & W. Corporation is a Minnesota corporation which owns business property in St. Louis Park, Minnesota. In all of the events which are important here the J.H. & W. Corporation was represented by defendant Ansel J. Wright, its president and majority stockholder, who operates the Master Addressor Company in the rear portion of the J.H. & W. Corporation's building. In 1950, the J.H. & W. Corporation leased the front portion of its building to Harold Aved and Robert Haskvitz, a partnership doing business under the name of Park Plaza Cafe. The term of the lease was five years from May 1, 1950. The lease was in the standard form, and the lessee had no right to sublet the leased premises without the consent of the lessor.

Prior to the opening of the Park Plaza restaurant, the partnership sublet for $6,500 a part of its restaurant operation to the plaintiff herein, Hildegarde, Inc., a Minnesota corporation whose principal officer and stockholder is Hildegarde Bearman. A written contract was entered into defining the relationship between the partnership and Hildegarde, Inc. The defendant Wright had no knowledge of this agreement between the partnership and Hildegarde, Inc., and was of the opinion that Hildegarde Bearman was merely an employee of the partnership.

Three weeks after the Park Plaza restaurant was opened difficulties developed between the partnership and Hildegarde Bearman, and as a result Hildegarde, Inc., withdrew from active participation in the operation of the restaurant. To secure the repayment of the $6,500 which it had advanced to the partners, Hildegarde, Inc., took a chattel mortgage on the restaurant furniture and equipment, which was thereafter properly recorded. The partnership agreed to retire the mortgage by weekly payments of $100. After making ten payments, totaling $1,000, the partnership encountered financial difficulties. As a consequence, the restaurant was closed on September 7, 1950, and the partnership later filed a voluntary petition in bankruptcy.

After the Park Plaza restaurant closed, several conferences were held between Mrs. Bearman and Wright and their attorneys. At these conferences Wright first learned that Hildegarde Bearman was a creditor of the partnership. Hildegarde Bearman also informed Wright that she was considering the possibility of taking over operation of the restaurant and that her final decision was contingent upon the results of a survey to determine the economic feasibility of reopening the restaurant and also upon her being able to negotiate a satisfactory lease with Wright.

Mrs. Bearman retained the key to the premises given her by the partnership and entered the premises several times thereafter with Mr. Wright's approval for the purpose of cleaning up the restaurant. No lease was entered into between Mrs. Bearman and Wright, and she paid no consideration for the privilege of access to the premises for cleaning purposes or for having the survey made.

On October 11, 1950, Mrs. Bearman appeared at the premises with a truck and began to remove some of the restaurant fixtures. She was stopped by Wright, who demanded that she furnish some evidence of her ownership of the fixtures before he would permit her to remove them. Mrs. Bearman asserted the existence of documents evidencing her right to the property, but she never exhibited them to Wright. Wright also demanded and received Mrs. Bearman's key to the premises.

Following its general charge, the trial court instructed the jury to a return a special verdict and submitted to the jury the following questions:

'1. Did the defendants, on October 11, 1950, convert the property involved from the plaintiff?

'2. Without regard to your answer to Interrogatory No. 1, but assuming there was a detention of property against plaintiff's interest, was that detention by defendants conditional or qualified?

'3. If your answer to Interrogatory No. 2 is Yes, were the qualifications, conditions or condition imposed by defendants reasonable and justifiable?'

The fourth question dealt with the value of the property allegedly converted, an issue not raised in the appeal. The jury answered 'No' to No. 1 and 'Yes' to Nos. 2 and 3.

Plaintiff contends that Wright was guilty of at least a technical conversion of the restaurant fixtures on October 11 when he prevented her from removing the fixtures from the restaurant and that the trial court erred in submitting to the jury the question of whether a conversion had occurred.

1--3. To constitute conversion, there must be an exercise of dominion over the goods which is inconsistent with and in repudiation of...