Reason v. Payne

• Decision Date: 12 June 1990
• Docket Number: No. 56516,56516
• Citation: 793 S.W.2d 471
• Parties: Carrol D. REASON, Respondent, v. Dorris O. PAYNE, Sharon J. Payne, David Harline and Savings of America, Inc., a California Corporation, Appellants.
• Court: Missouri Court of Appeals

Page 471

793 S.W.2d 471

Carrol D. REASON, Respondent, v. Dorris O. PAYNE, Sharon J. Payne, David Harline and Savings of America, Inc., a California Corporation, Appellants.

No. 56516.

Missouri Court of Appeals,

Eastern District,

Southern Division.

June 12, 1990.

Motion for Rehearing and/or Transfer to Supreme Court

Denied July 11, 1990.

Application to Transfer Denied Sept. 11, 1990.

Benjamin F. Lewis, Cape Girardeau, for appellants.

Albert C. Lowes, Michael H. Maguire, Cape Girardeau, for respondent.

CRIST, Judge.

This appeal arises out of an action by respondent Carrol Reason against appellants Dorris and Sharon Payne, husband and wife, for the conversion of a bank account. A jury found for Carrol Reason, awarding her a total of $26,217.99 in actual damages and punitive damages of $2,500 against each appellant. The trial judge entered a judgment consistent with the verdict. As to the award of actual and punitive damages against husband, Dorris Payne, we reverse and remand. The award of actual and punitive damages against wife Sharon Payne is affirmed.

Lorenzo Payne (father) a long-time resident of Portageville, Missouri, died February 28, 1987. He was married to Cecil Rome who bore him two children, appellant Dorris Payne and George Payne. Cecil died in 1935. Father did not remarry but he cohabitated with Lorene White for eleven years. Respondent-plaintiff, Carrol Reason, was born to Lorene White in 1942 and father was named on the birth certificate as her natural father.

Father opened three accounts at what would become Home Savings of America in Portageville on August 31, 1979. These accounts are referred to in the transcript as savings accounts, money market accounts and certificates of deposit. These accounts were in the names of father and Dorris Payne; father and George Payne; and father and Carrol Payne Reason. In each account, the owners were joint tenants with right of survivorship with the child's social security number appearing thereon. Father deposited an equal amount in each of these three accounts. All of the money in the accounts was from father. Father gave the children money with which to pay the income taxes imposed on the interest earned.

In the years before father's death, Carrol Reason and her husband operated a bar in St. Louis. Father invested in this bar in the early to mid-seventies. His investment was lost when the liquor license expired in 1982 after Carrol's husband was killed and she was charged with capital murder. Father paid at least $5,000 of Carrol's legal fees. She was convicted of manslaughter and served one year in prison. Carrol repaid father $1,000.

Appellant Dorris Payne settled in the Cape Girardeau area. He is a heavy equipment operator. He is married to appellant Sharon Payne, a school teacher. Although Dorris had his own problems, father did not give him any money as he did Carrol. Father's other son, George, lives in Jefferson City.

In September 1986, Dr. Marvin diagnosed father as having a collapsed lung and cancer. He estimated that father would live another six months. Father left Portageville and went to live with Dorris and Sharon in Cape Girardeau. He received radiation treatments there five days a week for six weeks.

While at Sharon and Dorris' home, Sharon cooked, cleaned and washed for father. He had his own room and brought some of his own furnishings with him. During his stay, Carrol visited father once in November 1986.

Around February 17, 1987, the Portageville branch of Home Savings received a letter in the mail dated February 11, 1987, purportedly signed by Lorenzo Payne. This typewritten letter directed Home Savings to remove Carrol's name from the account and to add the name of appellant Sharon Payne. It also requested Carrol's name be removed from a joint checking account. The checking account is not in issue in this case. Home Savings mailed signature cards for the new accounts to father at Sharon and Dorris' home. The new signed signature cards were mailed back.

On February 14, 1987, father was admitted to St. Francis Hospital. He was comatose, unresponsive to stimuli and suffering from seizures. He died at Southeast Hospital February 28, 1987. On March 2, Carrol went to Home Savings in Portageville to withdraw the money so she could pay one-third of the funeral expenses. She was informed the account was closed. She was shown the letter from father, whereupon she pronounced it as a forgery and accused her brothers as the forgers.

Home Savings placed a hold on the account because of the questions raised by Carrol. No withdrawals had been made after the funds were transferred to the new account. The balance of the account was later paid into the court on February 28, 1989, on a stipulation which dismissed with prejudice defendants Savings of America and a bank officer, David Harline.

At trial, Carrol's expert, William Storer, testified the Lorenzo Payne signature on the letter, the signature card for the checking account and a check for $45 payable to Shoss Radiology were written by someone other than Lorenzo Payne. He testified these signatures could have been made by the same person. He examined the signatures of Dorris and Sharon Payne and Carrol Reason but could not say if any of them had made the questioned signatures. Storer did not examine the new signature card for the new account. Neither he nor any other witnesses testified the signature of Lorenzo Payne on that card was a forgery.

Carrol called a witness at trial who said she had known father for over forty years. She testified the signature on the letter was not father's. She also stated how father had always treated Carrol, George and Dorris equally, never showing favoritism to any one. Finally, she told how father had told her the benefits of opening joint certificates of deposit in order to pass money on to loved ones without going through probate.

Carrol testified father had never denied, at least to her that he was indeed her natural father. She also claimed father had always treated the three children equally. Upon reading the letter, she immediately noticed that her name was twice misspelled C-A-R-O-L. Such a spelling did appear on the original Carrol and father account prepared by the bank in 1979. However, the evidence showed father had consistently spelled her name C-A-R-R-O-L throughout his life.

The jury returned a verdict for Carrol. Sharon and Dorris now appeal. The first issue is whether conversion was the proper cause of action under which Carrol could recover the money.

A conversion is "any distinct act of dominion wrongfully exerted over one's property, in denial of his right or inconsistent with it." Kansas City Casualty Co. v. Westport Avenue Bank, 191 Mo.App. 287, 177 S.W. 1092, 1093-94 (1915). It may be proved "(1) by tortious taking; (2) by any use or appropriation to the use of the person in possession indicating a claim of right in opposition to the rights of the owner, (3) by a refusal to give up possession to the owner on demand." Arnold v. Prange, 541 S.W.2d 27, 30 (Mo.App.1976). Money represented by a general debt is not subject to a claim for conversion. Brandhorst v. Carondelet Savings and Loan Association, 625 S.W.2d 696, 699 (Mo.App.1981). However, misappropriated funds placed in the custody of another for a definite purpose may be subject to a suit for conversion. Boyd v. Wimes, 664 S.W.2d 596, 599 (Mo.App.1984). Monies in a fund secured by a creditor's security agreement over a bankruptcy debtor's accounts receivables can also be collected by an action in conversion. In the Matter of Koran Enterprises, 61 B.R. 321, 327 (Bankr. W.D.Mo.1986).

Appellants, the Paynes, argue the original Carrol and Lorenzo account was not a specific chattel because it was a savings account and is not subject to conversion. Carrol argues the money was in a certificate of deposit or a money market account. The testimony on this point is inconsistent.

The attorneys in this case both referred to "the C.D." during trial. An employee of the savings and loan referred to "the C.D." but later said it must have been a savings account because no penalties were assessed when the names were changed. Carrol's verdict-directing instruction posed the question whether "Account No. 217-000168-5" was converted. The signature card implies what was involved was some form of savings account.

The question becomes whether we are to be controlled by the mere form of the sum involved; a C.D., an account or cash. In substance, Sharon Payne benefited equally whether she possessed a C.D. worth $26,217.99; became the surviving joint tenant of a $26,217.99 account; or acquired currency tucked away in a mattress totaling $26,217.99. In Brandhorst, 625 S.W.2d at 698, funds given to a savings and loan by a debtor were not applied to the debt. The monies were placed in the custody of the savings and loan for a definite application and were misappropriated. Id. at 699. The plaintiff sought an amount in damages equal to the amount given to the teller, not the same currency as if it were a chattel. Neither did the plaintiff try to reclaim a specific representation of money, like a check or certificate of deposit. Id. In substance, an identifiable sum was involved.

In cases from other states, a savings account may be the subject of a conversion action if the money can be specifically described or identified. Erhardt v. Leonard, 104 Idaho 197, 657 P.2d 494, 498 (1983). In Republic of Haiti v. Crown Charters, Inc., 667 F.Supp. 839, 845 (S.D.Fla.1987) money diverted from the Government of Haiti's treasury and deposited in a Florida bank was recovered through a conversion action. When the money was withdrawn from the treasury's account, it took on an identifiable character. Id. at 846. When deposited in Florida, the only funds in the new account were from the Haitian government. The money never lost its identity. Id.

In the case at bar, the father and Carrol account was opened for...