Summary of a Recent
Judicial Development in
Commercial Transactions

Granary's Failure to Release Soybeans
Not Conversion

Gaby R. Jabbour
National AgLaw Center Research Assistant

Summary of Decision

A Missouri granary filed an action in interpleader against a landowner and a farmer to determine ownership of soybeans that were stored at the granary. Green Valley Seed, Inc. v. Plenge, 72 S.W.3d 601, 603 (Mo. Ct. App. 2002). The landowner filed a counterclaim against the granary, asserting that the granary's refusal to release the soybeans to the landowner constituted a conversion. See id. The Missouri Court of Appeals ruled that the granary's failure to release the soybeans did not constitute a conversion. See id. at 605.

Background

Diana Bickford and Hugh Plenge deposited "4,603 bushels of transitional soybeans at Green Valley Seed, Inc. ("Green Valley"), for cleaning, bagging, and storage until such time as the beans were to be shipped to a buyer." Id. at 603. Bickford was a landowner and Plenge farmed the land that Bickford owned. See id. Green Valley later became aware of competing claims of ownership of the soybeans by Bickford and Plenge. See id. It brought an interpleader action naming Bickford and Plenge, among others, as the defendants. See id. Bickford filed a counterclaim against Green Valley "claiming its previous failure to release the beans to her constituted conversion." Id. The trial court entered a judgment in favor of Green Valley, and Bickford appealed the trial court's decision to the Missouri Court of Appeals. See id.

Arguments

Bickford argued that the trial court erred in entering a judgment in favor of Green Valley "because the judgment was against the weight of the evidence in that the trial court misapplied the law to the facts." Id. She also argued that the trial court erred in granting Green Valley's request for attorney's fees and other damages because it "converted her property and its interpleader action was unnecessary." Id.

Analysis and Holdings

The appeals court explained that conversion is "the 'unauthorized assumption of the right of ownership over the personal property of another to the exclusion of the owner's rights.'" Id. (citations omitted). It added that

[c]onversion can occur in three ways: "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] owner's rights; or 3) by refusal to give up possession to the owner on demand, even though the defendant's original possession of the property was proper."

Id. (citations omitted).

Noting that Bickford "pleaded the last type of conversion in her counterclaim," the court explained that to prevail Bickford needed to demonstrate that "(1) she was the owner of the beans; (2) . . . [Green Valley] had possession of the beans; (3) she made a demand to . . . [Green Valley] for possession of the beans; and (4) . . . [Green Valley] thereafter intentionally failed to return possession of the beans to her." Id. (citation omitted). It also explained that "an action in interpleader is appropriate when the party seeking it avers that persons have competing claims against that party of such a nature so as to expose it to double liability." Id. at 603-04 (citations omitted).

The court stated that the evidence clearly demonstrated that ownership of the beans was contested by Bickford and Plenge when Green Valley filed its interpleader action. See id. at 604. It added that Bickford "originally tried to sell all of the beans to a buyer, but when . . . [Green Valley] confronted her with . . . [Plenge's] ownership claims, she attempted to sell half of the beans instead." Id.

The court also stated that had Green Valley "released the beans to someone who was not their true owner, it would have been subject to liability for conversion and for breach of the bailment contract regardless of whether the 'misdelivery was the result of innocent mistake or was induced by fraud or trick.'" Id. (citation omitted). It added that the evidence at trial was sufficient to support the denial of the conversion claims by the trial court "since the owner of the beans was in question." Id.

Next, the court stated that "we consider . . . [Mo. Rev. Stat. §] 400.7-603 to be persuasive authority, although it was not cited by the parties or the trial court, predicting the same result on these facts." Id. It added that § 400.7-603 provides that

[i]f more than one person claims title or possession of the goods, the bailee is excused from delivery until he has had a reasonable time to ascertain the validity of the adverse claims or to bring an action to compel all claimants to interplead and may compel such interpleader, either in defending an action for nondelivery of the goods, or by original action, whichever is appropriate.

Id. (citation omitted).

The court determined that § 400.7-603 was "a further indication of the appropriateness of . . . [Green Valley's] actions in the case at hand" and therefore denied Bickford's argument. Id. at 605.

The court also considered Bickford's argument that the trial court erroneously granted Green Valley's request for attorney's fees and other damages. See id. It noted that "[n]o authority [was] cited by . . . [Bickford] to support her claim for error." Id. It concluded that "[i]f the appellant does not cite to authority or explain why it fails to do so, then the appellant is deemed to have abandoned that point," and dismissed Bickford's second argument. Id. (citation omitted).

The case was decided on April 9, 2002; this summary was posted Apr. 6, 2004.