Plunkett-Jarrell Grocery Co. v. Terry

• Decision Date: 14 December 1953
• Docket Number: PLUNKETT-JARRELL,No. 5-219,5-219
• Citation: 222 Ark. 784,263 S.W.2d 229
• Parties: , 44 A.L.R.2d 917 GROCERY CO. et al. v. TERRY.
• Court: Arkansas Supreme Court

Page 229

263 S.W.2d 229

222 Ark. 784, 44 A.L.R.2d 917

PLUNKETT-JARRELL GROCERY CO. et al. v. TERRY.

No. 5-219.

Supreme Court of Arkansas.

Dec. 14, 1953.

Rehearing Denied Jan. 11, 1954.

Moore, Burrow, Chowning & Mitchell and Townsend & Townsend, Little Rock, for appellants.

J. B. Milham, Eureka Springs, Kenneth C. Coffelt, Little Rock, for appellee.

McFADDIN, Justice.

Appellee, Terry, recovered judgment against appellants because of their conversion of his merchandise, book accounts, and other property. The appellants urge only one point for reversal: i. e., the instructions regarding damages for conversion of the book accounts.

For many years, appellee, A. O. Terry, was a country merchant in Saline County, operating a store and two sales trucks to adjacent rural areas. On November 22, 1949, Terry went from his store to Little Rock, for the announced purposes of buying merchandise and paying some bills from cash on his person. He visited one or two wholesale houses in Little Rock, and then suddenly disappeared. A diligent search by his family and friends failed to disclose any trace of Terry. It was thought that he had met with foul play; but it now develops that he suffered a claimed attack of amnesia. Some time the latter part of January, 1950, a former friend recognized Terry in a church meeting in Hattiesburg, Mississippi, and called him by name. Terry claims that this act restored his memory and the recollection of his real personality. He returned to his home and family, and later instituted this action against the appellants, Plunkett-Jarrell Grocery Co., Cameron Feed Mills, and Merchants Wholesale Grocery Co., ¹ because of the events that occurred while he was away.

Terry disappeared on November 22, 1949, and at that time owed the appellants, and other creditors, an aggregate of approximately $9,000. The Terry family and the clerks continued to operate the store and sales trucks without any advice from, or consultation with, anyone, until November 29, 1949. On the last mentioned date, Mrs. A. O. Terry and her daughter, Miss Doris Terry, went to Little Rock (whether voluntarily or on urgent request from appellants is disputed); and met with representatives of the three appellants and other creditors, to consider the status, and plans for the continued operation, of the Terry business. As a result of that meeting, Mrs. Terry and her daughter signed the following instrument:

'We, Mrs. A. O. Terry and Miss Doris Terry, wife and daughter respectively of A. O. Terry, do hereby agree to operate the A. O. Terry Store, Route 3, Benton, during the absence of A. O. Terry. We agree that we will retain all money received in the business, above the costs of operation, for the payment of the accounts owed by A. O. Terry.'

It is claimed that by this instrument, and subsequent conduct, the appellants took over the store and all of its assets, and made Mrs. Terry and her daughter the agents of the appellants at all times from and after November 29, 1949. That is the theory on which the plaintiff filed this action for damages.

The store continued to operate until January 10, 1950, when the appellants, as creditors, filed a petition in bankruptcy against A. O. Terry, alleging his insolvency and an act of bankruptcy. Terry returned from his amnesia trip in time to resist the bankruptcy petition. After several hearings, he established that he was not insolvent; and on December 1, 1951, the bankruptcy proceedings were finally dismissed by the Bankruptcy Court. Terry refused to accept a return of any of his assets held by the Receiver in Bankruptcy, and filed this action ² against the appellants, claiming damages for conversion.

Terry's theory--and confirmed by the Jury verdict herein--was, that the appellant creditors converted his entire stock of merchandise, equipment, notes and accounts, on November 29, 1949, when they placed Mrs. Terry and Miss Doris Terry in charge of the store as their agents. The appellants claim that they acted in entire good faith in an effort to help the Terry family and did not take over the Terry assets, but merely advised and counseled the wife and daughter. But the Jury accepted the theory of A. O. Terry, and rendered a verdict awarding Terry damages against the appellants in amounts as follows:

                'Merchandise            $3,412.29
                Open Accounts           $4,500.00
                Gault Note & Mortgage     $550.00
                Three Trucks           $1,500.00'
                

From the judgment on that verdict there is this appeal, and appellants frankly state in their brief herein that insofar as they are concerned: 'The only question involved in this appeal is whether there can be a conversion of an open account.' Thus, we do not consider whether the creditors actually converted the Terry Assets, or merely acted in an advisory capacity to the Terry family: that question is foreclosed by the Jury verdict and the concession of appellants' counsel, as above quoted.

We come then to the issue of the legal possibility of the conversion of Terry's book accounts; because the Trial Court, over the objection and exception of the appellants, instructed the Jury that if the verdict should be for the plaintiff, then the Jury would fix as an element of damages 'the fair market value of the accounts owing plaintiff by store customers not to exceed $9,000.00, the amount sued for, plus 6% interest per annum from date of conversion to date'. ³

In their brief, appellants state their contention as follows:

'Appellants respectfully contend that there can be no action for trover or conversion of an open account. There is not one scintilla of evidence that the books of accounts ⁴ or accounts receivable were not in Terry's store from the time of his disappearance until January 10, 1950. They were there for collection by Terry had he been there. The alleged seizure of the accounts receivable by the appellants through their agents, Doris Terry and Mrs. Terry, could in no manner affect the appellee's title to his claims against his customers. They were still claims owing Terry and not the appellants. They could still be collected by Terry and not the appellants. Appellants did not gain title to them by any such alleged seizure or conversion.'

Appellants frankly state that they have been unable to find any Arkansas cases directly in point; but to sustain their views of the applicable law, appellants cite us to Knox v. Moskins Stores, 241 Ala. 346, 2 So.2d 449; Vogedes v. Beakes, 38 App.Div. 380, 56 N.Y.S. 662; and Illinois Minerals Co. v. McCarty, 318 Ill.App. 423, 48 N.E.2d 424. Typical of these cases is the quotation from Knox v. Moskins, 241 Ala. 346, 2 So.2d 449, 450, as contained in appellants' brief:

'Trover lies only for wrongful appropriation of personal property specific enough to be identified. 38 Cyc. 2011; Cooley on Torts (4th Ed.), p. 496. The term 'accounts,' as here used, means a demand or claim or right of action. It is a mere incorporeal right to a certain sum, or to the collection of a debt. In this sense, it has no tangible entity and will not support an action of trover. 1 C.J., 596, § 1. 1 C.J.S., Account, page 571."

The trouble with the appellants' argument is, that the quotations and statements are borrowed from old cases that were based on the common-law forms of action. At common law, every action had to go within the well-defined groove prescribed for it, and if the action failed to fit within such groove, then the cause was lost. Some of the old common-law actions ⁵ were trespass, detinue, assumpsit and trover; and trover was the name of the tort action that a plaintiff was required to pursue whenever he claimed anyone had taken or converted his property. Unless the plaintiff could fit his evidence into the form of the trover action, then he could not maintain trover, and would be required to file some other form of action. As to trover, 2 Bouvier's Law Dictionary, Rawles 3rd Rev. 3326, says:

'A form of action which lies to recover damages against one who has, without right, converted to his own use goods or personal chattels in which the plaintiff has a general or special property. In form it is a fiction: in substance, a remedy to recover the value of personal chattels wrongfully converted by another to his own use.'

From this definition of trover, it is easy to see why the old common-law cases would hold that trover could not be maintained as the proper action for damages for conversion of open accounts; because open accounts were not 'personal chattels', and trover could be maintained only for 'goods or personal chattels'. An account receivable was intangible, and not susceptible of that possession essential for manual delivery or manual seizure. An account receivable was personal property, but not a 'personal chattel'. Even in Arkansas today, except insofar as may possibly be modified by Act No. 118 of 1945, on open account cannot be assigned so as to allow the assignee to bring action against the debtor without joining the assignor. ⁶ But even so, an account receivable is property and the owner possesses a property right in it. Our tax assessing laws require that accounts receivable be assessed as property. § 84-430, Ark.Stats. So when we concede that trover would not lie at common law ⁷ for damages for conversion of open accounts, we have not answered the question in this case. This is true because of the matters now to be mentioned.

The old common-law form of actions,--i. e., trover and the others--have long since been abolished in Arkansas. In 1869 we adopted the Code of Civil Procedure, and the first section of that Code (now found in § 27-201, Ark.Stats.) says:

'The forms of all actions and suits heretofore existing are abolished; and hereafter there shall be but one form of action for the enforcement or protection of private rights, and the redress or prevention of private wrongs; which shall be called a civil action.'

So, even if damages could not be recovered in a trover action at common law...