Title: KENYON v. ABEL

State: wyoming

Issuer: Wyoming Supreme Court

Document:

KENYON v. ABEL2001 WY 13536 P.3d 1161Case Number: 01-8Decided: 12/27/2001

OCTOBER TERM, A.D. 2001

                                                                                                
  

RICK 
KENYON, d/b/a

THE 
FIRST RESORT, 

Appellant(Defendant),

v.

CLAUDE 
ABEL, 

Appellee(Plaintiff).

Appeal 
from the District Court of Sheridan County

The 
Honorable John Brackley, Judge

Representing 
Appellant: 

            
Barbara A. Baker, Sheridan, Wyoming.  Argument by Ms. Baker.

 Representing 
Appellee: 

John 
Fenn and Kendal R. Hoopes of Yonkee & Toner, Sheridan, Wyoming.  Argument by Mr. 
Hoopes.

Before 
LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, JJ.

 

            
HILL, Justice. 

[¶1]      This dispute 
concerns the ownership of a painting by the noted Western artist Bill Gollings. 
Rick Kenyon (Kenyon) purchased the painting, valued between $8,000 and $15,000, 
for $25 at a Salvation Army thrift store.  
Claude Abel (Abel) filed suit against Kenyon seeking return of the 
painting, which had belonged to his late aunt.  Abel claimed that the Salvation Army 
mistakenly took the painting from his aunt's home when the box in which it was 
packed was mixed with items being donated to the thrift store.  Kenyon appeals the district court's 
decision awarding the painting to Abel.  
We affirm.

[¶2]      Kenyon frames the 
dispute in terms of five issues:

Does the 
Uniform Commercial Code apply to the sale of items from the Salvation Army 
Thrift store?

Did 
Defendant/Appellant Kenyon acquire title to the painting?

Was 
Defendant/Appellant Kenyon a good faith purchaser for value, thereby acquiring 
title to the painting?

Did the 
district court err as a matter of law by concluding that Plaintiff/Appellee Abel 
was entitled to possession and title to the painting even though Kenyon was a 
good faith purchaser for value?

Did Abel 
manifest donative intent?

Abel 
sets forth a statement of three issues:

I.                     
Is the 
Trial Court's factual determination that Abel did not intend to gift an original 
Gollings painting supported by the evidence?

II.                   
Without 
the requisite intent to gift, did title pass from Abel to the Salvation 
Army?

III.                  
Can the 
Salvation Army convey title to a subsequent purchaser when it had no title to 
begin with?

In his 
reply brief, Kenyon presents two issues in response to Abel's 
arguments:

Whether 
the Status of Good Faith Purchaser is a Defense to a Claim for 
Conversion.

Whether 
the painting was "lost" or "stolen" for purposes of Wyoming Statute Section 
34.1-2-403 of the Uniform Commercial Code.

FACTS

[¶3]      Abel's aunt, 
Rillie Taylor (Taylor), was a friend of the artist Bill Gollings, whose works 
were known for their accurate portrayal of the Old West.  Sometime before his death in 1932, 
Gollings gave a painting to Taylor depicting a Native American on a white horse 
in the foreground with several other Native Americans on horses in the 
background traveling through a traditional western prairie landscape.  The painting remained in Taylor's 
possession at her home in Sheridan until her death on August 31, 
1999.

[¶4]      After Taylor's 
death, Abel traveled from his home in Idaho to Sheridan for the funeral and to 
settle the estate.  Abel was the 
sole heir of Taylor's estate so he inherited all of her personal belongings, 
including the Gollings painting.  
Abel and his wife sorted through Taylor's belongings selecting various 
items they would keep for themselves.  
Abel and his wife, with the help of a local moving company, packed those 
items into boxes marked for delivery to their home in Idaho.  Items not being retained by Abel were 
either packed for donation to the Salvation Army or, if they had sufficient 
value, were taken by an antiques dealer for auction.  The scene at the house was apparently 
one of some confusion as Abel attempted to vacate the residence as quickly as 
possible while attempting to make sure all of the items went to their designated 
location.  The painting was packed 
by Abel's wife in a box marked for delivery to Idaho.  However, in the confusion and 
unbeknownst to Abel, the box containing the Gollings painting was inadvertently 
picked up with the donated items by the Salvation Army.  The painting was priced at $25.00 for 
sale in the Salvation's Army Thrift Store where Kenyon purchased the 
painting.

[¶5]      After returning 
to Idaho, Abel discovered that the box containing the painting was not among 
those delivered by the moving company.  
Through local sources, Abel learned that the painting had gone to the 
Salvation Army and was then purchased by Kenyon.  Unsuccessful in his attempts to talk 
with Kenyon about the painting, Abel filed this action.  Abel sought possession of the painting 
through two causes of action: replevin and conversion.  Kenyon countered that he was a "good 
faith purchaser" of the painting under the Uniform Commercial Code (UCC).  The district court concluded that Abel 
was entitled to possession of the painting under either the common law doctrines 
of gift or conversion or the statutory provisions of the UCC.  Kenyon now 
appeals.

STANDARD OF 
REVIEW

[¶6]      This matter was 
the subject of a bench trial before the district court.  "When a trial court in a bench trial 
makes express findings of fact and conclusions of law, we review the factual 
determinations under a clearly erroneous standard and the legal conclusions de 
novo." Rennard v. Vollmar, 977 P.2d 1277, 1279 (Wyo. 1999) (citing 
Stansbury v. Heiduck, 961 P.2d 977, 978 (Wyo. 1998) and Springer v. 
Blue Cross and Blue Shield of Wyoming, 944 P.2d 1173, 1176 (Wyo. 
1997)).

DISCUSSION

Donative 
Intent

[¶7]      The key to 
resolving this dispute, under either common law or the UCC, is determining 
whether or not the painting was voluntarily transferred from Abel to the 
Salvation Army.  The district court 
concluded that Abel had no intent to give the painting to the Salvation 
Army.  This is a factual conclusion 
that we will reverse only upon a showing that it is clearly erroneous.  Our review convinces us that the 
district court's conclusion that Abel did not voluntarily transfer the painting 
to the Salvation Army is supported by the record and is not, therefore, clearly 
erroneous.

[¶8]      Abel's testimony 
during the trial disclosed the following facts.  Abel's aunt received the painting as a 
gift from the artist.  Abel 
testified that his aunt often expressed to him the importance of the painting to 
her and her desire that it remain in the family's possession.  He indicated that the painting had a lot 
of value to him and the family beyond its monetary worth because of his family's 
personal relationship with the artist.  
The aunt rejected at least one offer to buy the painting for about 
$5,000.  After inheriting the 
painting, Abel's wife packed it in a box marked for delivery to their home in 
Idaho.  On the day the painting was 
packed for moving, there was much confusion around the house as Abel and his 
wife tried to sort through all of the items and designate them for delivery to 
the appropriate location.  In that 
confusion, the Salvation Army came to the house to pick up various items.  The Salvation Army apparently took the 
painting, along with the items specifically donated to it.  Abel testified that he did not intend to 
include the painting with the goods that were meant to go to the Salvation Army 
and, at that time, he had no idea that the painting had been taken by them.  According to Abel, he did not learn that 
the painting was missing until after the moving company had delivered all of the 
boxes to Idaho.  Upon finding that 
the painting was missing, Abel testified that he immediately contacted an 
acquaintance in Sheridan who was able to trace the painting from the Salvation 
Army to Kenyon.  Thereupon, Abel 
attempted to contact Kenyon about the painting's return.  Kenyon rebuffed Abel's attempts to 
discuss the painting thus leading to this action.

[¶9]      The testimony of 
Abel is sufficient to support the district court's conclusion that the transfer 
of the painting to the Salvation Army was involuntary.  Abel specifically denied any intent to 
make such a transfer.  That denial 
is supported by reasonable inferences that could be drawn from the painting's 
acknowledged sentimental value to Abel and his family and from Abel's actions in 
attempting to recover the painting immediately upon discovery of its loss.  Under these circumstances, the district 
court's conclusion was not clearly erroneous.

Common Law

[¶10]   The district court awarded Abel 
possession of the painting on the basis of two common law doctrines: the law of 
gifts and the law of conversion.  A 
valid gift consists of three elements: (1) a present intention to make an 
immediate gift; (2) actual or constructive delivery of the gift that divests the 
donor of dominion and control; and (3) acceptance of the gift by the donee. 
Rose v. Rose, 849 P.2d 1321, 1324 (Wyo. 1993).  The pivotal element in this case is the 
first one: whether an intention to make a gift existed.  As we noted above, we have upheld the 
district court's conclusion that Abel did not have any intent to donate the 
painting to the Salvation Army.  Therefore, the district court correctly 
ruled that the transfer of the painting to the Salvation Army did not constitute 
a valid gift.

[¶11]   Conversion occurs when a person 
treats another's property as their own, denying to the true owner the benefits 
and rights of ownership.  
Ferguson v. Coronado Oil Company, 884 P.2d 971, 975 (Wyo. 
1994).  To establish a conversion, a 
plaintiff must show:

(1) he had legal title to the converted property; (2) 
he either had possession of the property or the right to possess it at the time 
of the conversion; (3) the defendant exercised dominion over the property in a 
manner which denied the plaintiff his rights to use and enjoy the property; (4) 
in those cases where the defendant lawfully, or at least without fault, obtained 
possession of the property, the plaintiff made some demand for the property's 
return which the defendant refused; and (5) the plaintiff has suffered damage by 
the loss of the property.

Ferguson, 884 P.2d  at 975 (quoting Frost v. Eggeman, 638 P.2d 141, 144 (Wyo. 
1981)).  The district court held 
that the sale of the painting constituted conversion by the Salvation Army.1  The record supports the district court's 
decision: (1) as the heir to his aunt's estate Abel had legal title to the 
painting; (2) Abel possessed the painting at the time it was removed from his 
aunt's residence; (3) the Salvation Army exercised dominion over the property in 
such a manner that denied Abel the right to enjoy and use the painting, 
i.e., it sold the painting; (4) Abel demanded the return of the painting 
from Kenyon, who effectively refused by denying any knowledge of it; and (5) 
Abel has suffered damages through the loss of a valuable asset without 
compensation.  As a good faith 
purchaser of converted property, Kenyon is also a converter and must answer in 
damages to the true owner.  
Underhill Coal Mining Company v. Hixon, 652 A.2d 343, 345 
(Pa.Super. 1994).  This is true 
because a converter has no title whatsoever (i.e., his title is void) 
and, therefore, nothing can be conveyed to a bona fide purchaser for value.  Underhill Coal Mining Company, 
652 A.2d  at 346.

UCC

[¶12]   Kenyon seeks to escape the 
consequences of the common law doctrines of gifts and conversion by arguing that 
the UCC is the applicable law in this instance.  For purposes of resolving this case, we 
will assume that the UCC applies to the transaction between Kenyon and the 
Salvation Army because, as we shall see, it does not provide the benefit to 
Kenyon he claims it will.  

[¶13]   The district court correctly noted 
that a distinction exists between a "void" and a "voidable" 
title.

    Section 2-403(1)(d) [of the 
UCC] provides, in effect, that a voidable title is created whenever the 
transferor voluntarily delivers goods to a purchaser even though that delivery 
was procured through fraud punishable as larcenous under the criminal law.  Like the other provisions of Section 
2-403(1) dealing with voidable title in cases of imposture and worthless checks 
and cash sales, this subsection is predicated on the policy that where a 
transferor has voluntarily delivered the goods to purchaser, he, the transferor, 
ought to run the risk of the purchaser's fraud as against innocent third 
parties.  Like the other voidable 
title rules of Section 2-403(1), this new rule is more easily enforced than its 
common-law counterpart, and also has the merits of placing the risk of fraud on 
the party best able to protect against it and promoting 
trade.

    It 
should be noted that Section 2-403(1)(d) does not create a voidable title where 
the goods have been wrongfully taken, as by theft or robbery.  If the goods have been stolen, the thief 
acquires no ownership and has no power, except in rare cases of estoppel, to 
pass a good title to a bona fide purchaser.  Nothing in Section 2-403 changes this 
common-law rule.  Section 
2-403(1)(d) does not create a voidable title in the situation where the goods 
are wrongfully taken, as contrasted with delivered voluntarily because of the 
concepts of "delivery" and "purchaser" which are necessary preconditions.  "Delivery" is defined by Section 
1-201(14) "with respect to instruments, documents of title, chattel paper or 
securities" to mean "voluntary transfer of possession."  By analogy, it should be held that goods 
are not delivered for purposes of Section 2-403 unless they are voluntarily 
transferred.  Additionally, Section 
2-403(1)(d) is limited by the requirement that the goods "have been delivered 
under a transaction of purchase." "Purchase" is defined by Section 1-201(32) to 
include only voluntary transactions.  
A thief who wrongfully takes goods is not a purchaser within the meaning 
of this definition, but a swindler who fraudulently induces the victim to 
voluntarily deliver them is a purchaser for this purpose.  This distinction, reminiscent of the 
distinction between larceny and larceny by trick made by the common law, is a 
basic one for the understanding of the meaning of Section 
2-403(1)(d).

1 William D. Hawkland, Uniform Commercial Code 
Series § 2-403:04 (2000) (footnotes omitted); see also Wyo. Stat. 
Ann. §§ 34.1-1-201(a)(xiv) & (xxxii) and 34.1-2-403 (Lexis/Nexis 2001).  The Salvation Army, of course, did not 
steal the painting from Abel.  
However, the key here is the voluntariness of the transfer from the 
original owner as expressed in the definitions found at Wyo. Stat. Ann. §§ 
34.1-1-201(a)(xiv) and (xxxii).  

Without attempting to specify all the situations 
which could give rise to a voidable title under § 2-403 of the Uniform 
Commercial Code, we refer to the above authorities to support our conclusion 
that voidable title under the Code can only arise from a voluntary transfer or 
delivery of the goods by the owner.  
If the goods are stolen or otherwise obtained against the will of 
the owner, only void title can result.

Inmi-Etti v. Aluisi, 492 A.2d 917, 923 (Md. App. 1985) (emphasis added); 
see also Underhill Coal Mining Company, 652 A.2d  at 346 ("[S]ince 
the U.C.C. gave a purchaser only that title which the seller had power to 
convey, and since the seller was a converter who, under the common law, had no 
title at all, the purchaser took nothing.").

[¶14]   
Abel did not voluntarily transfer the painting to the Salvation 
Army.  Therefore, the Salvation Army 
had no title to convey to Kenyon.  
Kenyon attempts to avoid the consequences of this fact by arguing that he 
was a good faith purchaser under the UCC.  
However, the good faith of a purchaser is not a defense to an action for 
conversion under the common law or the UCC if the true owner never consented to 
the transfer of the goods to the person from whom the good faith purchaser 
bought them. Underhill Coal Mining Company, 652 A.2d  at 346; 
Inmi-Etti, 492 P.2d  at 423-24.  
Since no title passed from Abel to the Salvation Army, Abel is entitled 
to possession of the painting.2

CONCLUSION

[¶15]   
The Salvation Army did not acquire the painting in a voluntary 
transaction from Abel.  A third 
party purchaser could only acquire rights in the painting to the extent of the 
interest possessed by the Salvation Army.  
Since the Salvation Army possessed a void title, the original owner was 
entitled to recover the painting from the third party purchaser.  Accordingly, the district court's order 
granting possession of the painting to Abel is affirmed.

FOOTNOTES

  1This is not to 
imply any wrongdoing on the part of the Salvation Army, which the record 
indicates acted entirely in good faith.  
A conversion is predicated on a deprivation of an owner's right to 
exercise dominion over his property and not on any specific intent to commit a 
wrongful act.  Underhill Coal 
Mining Company v. Hixon, 652 A.2d 343, 345 (Pa.Sup. 
1994).

  
2This should not 
be construed to mean that people who buy "bargains" at antique stores, flea 
markets or garage sales would face the prospect of having someone claiming 
ownership in an item seeking their return at some future time.  If the sale is "voluntary" then the 
original owner has no claim.