Landfield Finance Co. v. Feinerman

• Decision Date: 06 January 1972
• Docket Number: Gen. No. 54683
• Citation: 279 N.E.2d 30,3 Ill.App.3d 487
• Parties: LANDFIELD FINANCE COMPANY, Plaintiff-Appellee, v. Albert H. FEINERMAN and Lula E. Feinerman, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 30

279 N.E.2d 30

3 Ill.App.3d 487

LANDFIELD FINANCE COMPANY, Plaintiff-Appellee, v. Albert H. FEINERMAN and Lula E. Feinerman, Defendants-Appellants.

Gen. No. 54683.

Appellate Court of Illinois, First District, Third Division.

Jan. 6, 1972.

Aplon, Bennett, Alexander & Levine, Harold I. Levine, Chicago, for defendants-appellants.

Fishleder & Adler, Joseph I. Adler, Chicago, for plaintiff-appellee.

DEMPSEY, Justice.

The Landfield Finance Company filed suit against Albert and Lula Feinerman alleging that they converted items of personal property in which the plaintiff had a prior and perfected security interest. Following a trial without a jury the court found for Landfield and entered judgment in the sum of $4,115.63, from which the defendants appeal. They contend that Landfield failed to prove that a conversion had taken place and that the testimony of the company's president, concerning the market value of the collateral, should have been excluded.

In 1955 the Feinermans entered into an agreement with Arthur and Anna Rossmiller, husband and wife, under which the Rossmillers contracted to purchase The Carroll House, a hotel in Macomb, Illinois, together with all its furnishings. Under a 1959 refinancing arrangement the Feinermans became holders of a chattel mortgage upon the furnishings and equipment of the hotel. In a pleading filed by them the Feinermans indicated that the chattel mortgage had been recorded, but the mortgage was not introduced into evidence and, in any event, it had expired prior to the onset of the events which resulted in the present litigation.

Subsequently, during the latter months of 1966, the Rossmillers applied for a loan from Landfield, and in November 1966 the company's president, George Landfield, traveled to Macomb to arrange the loan. Before making the loan he made a title search on the property, and he thereby confirmed the Rossmillers' statements that they were purchasing the hotel from the Feinermans. The loan was secured by a promissory note from the Rossmillers and a security agreement listing as collateral over 12,000 items of personal property located in The Carroll House. The documents were properly recorded as provided in the Uniform Commercial Code. The Rossmillers gave Landfield an affidavit stating that the Feinermans had no interest in the items of collateral listed in the security agreement. At the trial Feinerman testified that he had a conversation with Landfield at the time of the loan in which he told Landfield that he had a mortgage on the furnishings and the equipment in the hotel. Landfield denied that this conversation took place.

In October 1967 the Rossmillers decided that they would no longer operate The Carroll House, and at a meeting with Mrs. Feinerman on October 26th, they signed an agreement in which they surrendered all their rights to the hotel and consented to give up possession of the premises in 30 days. The Rossmillers moved their belongings to a new location during the weekend of November 11, 1967. Virgil Payne, who supervised the Feinermans' real estate holdings in Macomb, informed Feinerman that the Rossmillers were taking many items of personal property out of the hotel. Upon receiving this information, Feinerman decided to transfer all the movable property in The Carroll House to a building he owned in Macomb. Although the 30 days in which the Rossmillers were entitled to vacate the premises had not expired and although they had not surrendered the keys to The Carroll House, the chattels were removed on November 13th at Payne's direction. On several occasions George Landfield telephoned Payne and demanded possession of the collateral, but to no avail. Thereafter, the Landfield company instituted the present action for conversion against the Feinermans.

The Feinermans assert that the trial court erred in holding that a conversion took place. They admit that their chattel mortgage on the property in dispute had expired at the time Landfield took a security interest in the property. They contend, nevertheless, that Landfield did not prove any action on their part which wrongfully deprived it of possession; that no demand for the goods was made and the items in Landfield's security agreement were fixtures, to which they had a prior right.

The essence of conversion is the wrongful deprivation of property to the owner or the person entitled to possession. First Finance Co. v. Ross, 75 Ill.App.2d 403, 221 N.E.2d 37 (1966); Genslinger v. New Illinois Athletic Club, 229 Ill.App. 428 (1923). In an action for conversion relief may be had without establishing malice, culpability or conscious wrongdoing. All that is required is the exercise of control by the defendant over the chattel in a manner inconsistent with the plaintiff's right of possession. Associates Discount Corp. v. Walker, 39 Ill.App.2d 148, 188 N.E.2d 54 (1963). However, one who knowingly takes possession of personal property which belongs to another is liable to the person whose property has been appropriated whether or not a demand is made for the return of such property. Puerto Rico Industrial Development Co. v. J. H. Miller Mfg. Co., 173 F.Supp. 596, D.C.S.D.Ill. (1959). In the present case Landfield made a sufficient demand for the return of the property and, therefore, it need not be determined whether failure to make such a demand would have been fatal to its case.

In his testimony Feinerman identified Payne...