Case Name: Lester GISSEL, Conrad Gissel and Dave Lewis, Plaintiffs-Respondents, v. STATE of Idaho, Defendant-Appellant
Court: Idaho Supreme Court
Jurisdiction: Idaho
Decision Date: 1986-09-26
Citations: 111 Idaho 725
Docket Number: No. 16107
Parties: Lester GISSEL, Conrad Gissel and Dave Lewis, Plaintiffs-Respondents, v. STATE of Idaho, Defendant-Appellant.
Judges: BISTLINE J., concurs.
Reporter: Idaho Reports
Volume: 111
Pages: 725–733

Head Matter:
727 P.2d 1153
Lester GISSEL, Conrad Gissel and Dave Lewis, Plaintiffs-Respondents, v. STATE of Idaho, Defendant-Appellant.
No. 16107.
Supreme Court of Idaho.
Sept. 26, 1986.
Rehearing Denied Nov. 21, 1986.
Jim Jones, Atty. Gen., Boise, and William A. McCurdy, Esq., of Quane, Smith, Howard & Hull, Boise, for defendant-appellant.
Thomas A. Mitchell, Coeur d’Alene, for plaintiffs-respondents.

Opinion:
DONALDSON, Chief Justice.
In 1979, officials from the Idaho Department of Fish & Game observed the respondents Lester and Conrad Gissel and Dave and John Lewis harvesting wild rice on land jointly owned by the state and the National Forest Service. After further observations, the department notified the county prosecutor who obtained a warrant to search Lester Gissel's residence. The search revealed 180 bags of wild rice weighing approximately 50 pounds each which the state seized. David Lewis and Lester and Conrad Gissel were subsequently charged and convicted of trespass. The case against John Lewis, a juvenile, was dismissed. The district court set aside the jury verdict against the respondents, but was reversed on appeal by the Idaho Court of Appeals. State v. Gissel, 105 Idaho 287, 668 P.2d 1018 (Ct.App.1983). On remand, the prosecutor dismissed the charges against the respondents.
Prior to the criminal trial, the respondents' attorney and the county prosecutor stipulated that the wild rice itself need not be entered into evidence and agreed to the sale of the rice in order to keep it from perishing. The rice was sold, although the record is inconsistent as to whether the sale price was $9,000 or $16,000.
On December 24, 1979, respondents filed a Notice of Claim to the wild rice or its proceeds against the State of Idaho. The state denied liability. On February 24, 1981, the respondents filed a complaint against the state alleging the state negligently seized and disposed of the rice and had failed to account to the respondents for the proceeds thereof.
A civil trial before Judge Prather was held on December 18,1984. The court took judicial notice of the evidence adduced at the criminal trial and heard additional testimony and arguments. On March 8, 1985, the district court issued its Memorandum Opinion in which respondents were awarded one-half of the stipulated value of the rice ($10,500). Judgment was entered and the state's subsequent motion to amend the Memorandum Opinion, which constituted the court's findings of fact and conclusions of law and the judgment, was denied on June 4, 1985. The state now appeals.
The defendant-appellant, State of Idaho, raises two issues on appeal: (1) whether the district court erred in finding a factual basis for a 50/50 division of ownership of the wild rice between the State of Idaho and the United States Forest Service; and (2) whether the district court erred in holding that the plaintiffs-respondents the Gissels, were entitled to recover the proceeds of the sale of the wild rice they harvested from the U.S, Forest Service land.
I
The state argues that the district court's factual finding of a 50/50 division of ownership of the land from which the rice was gathered and, therefore, a 50/50 division of the proceeds of the sale of the rice, is not supported by the facts produced at trial. Factual findings of a trial court "will not be reversed unless the finding is clearly erroneous or not supported by substantial and competent evidence." I.R.C.P. 52(a). Jensen v. Bledsoe, 100 Idaho 84, 593 P.2d 988 (1979); Courtright v. Robertson, 99 Idaho 575, 586 P.2d 265 (1978); Shrives v. Talbot, 91 Idaho 338, 421 P.2d 133 (1966). Evidence produced at trial clearly indicates that the wild rice was gathered from land belonging to both the U.S. Forest Service and the State of Idaho. The Gissels testified that they knew the land where they gathered the rice belonged to the Forest Service and the State. A1 Brunner, a former employee of the Department of Fish and Game, who worked in that area and had knowledge of the lands and its ownership, testified that he believed the rice was gathered from Forest Service land and state land in quantities amounting to the 50/50 split. Based on this evidence, the district court concluded that the respective share of ownership was 50/50. The findings of the trial court are not clearly erroneous and are supported by substantial and competent evidence.
The trial court's acceptance of the stipulated valuation of the rice at $21,000 is also supported by substantial and competent testimony. The harvest produced 180 bags of rice, 50 pounds green weight, and when dried the weight was reduced to 25 pounds. The selling price was $5.15 a pound, which totals $23,175. Excluding costs, and other factors, the parties stipulated the value to be $21,000. The record presents no evidence to mistrust the $21,-000 amount agreed by the parties. The fact that the amount received from the sale is disputed to be either $9,000 or 16,000 has no bearing upon the valuation of the rice for purposes of this appeal.
The district court correctly held that the Gissels were entitled to recover only the amount of $10,500 attributable to National Forest Service land, since the other $10,500 was gathered from state land and rightfully belonged to the state.
II
The second issue raised on appeal by the state is whether the district court erred in permitting the Gissels to recover from the state the value of the rice attributable to the National Forest Service land.
The district court found that the Gissels are entitled to recover from the state because it unlawfully converted part of the proceeds from the sale of the rice when it refused to account for the amount it received for the rice attributable to the U.S. Forest Service land. Conversion is "any distinct act of dominion wrongfully exerted over another's personal property in denial or inconsistent with his rights therein, such as a tortious taking of another's chattel, or any wrongful exercise . over another's goods, depriving him of the possession, permanently or for an indefinite time." Klam v. Koppel, 63 Idaho 171, 118 P.2d 729 (1941). Conversion is an intentional exercise of dominion or control over a chattel which so seriously interferes with the rights of another to control it that the actor may justly be required to pay the other the full value of the chattel. Restatement (Second) of Torts, § 222A, (1965). The state's refusal to account for the money received unlawfully interferred with the Gissels' possessory rights.
The state argues that it is not required to account for the proceeds of the sale as the Gissels could never have acquired any possessory right to entitle them to the proceeds. The state correctly points out that "one who steals or converts property to his own use does not thereby acquire title thereto." Stewart v. People, 193 Colo. 399, 566 P.2d 1069 (1977); First National Bank and Trust Company of Lincoln v. Ohio Casualty Insurance Company, 196 Neb. 595, 244 N.W.2d 209 (1976); Northern Insurance Company of New York v. Miller, 129 N.W.2d 28 (Iowa 1964). But these cases are not controlling here. In each of the cited cases, the parties alleging the conversion were the true owners or assignees. Therefore, it was held that the thief or the party who had converted the property to his own use or someone who had acquired property from the thief or converter of the property, could not gain title or retain possession of the property as against the true owner, and in each case the property was returned to the true owner or assignee.
By contrast, in the case at bar, the Gissels do not seek the return of property which rightfully belonged to the state — but only that portion which belonged to the Forest Service. The Gissels, as prior possessors, have a superior right as against the state to possession of the proceeds attributable to Forest Service land. In Restatement (Second) of Torts § 895, (1965), it states, "One who is otherwise liable to another for harm to or interference with land or chattel is not relieved of the liability because a third person has a legally protected interest in the land or chattel superi- or to that of the other." See also, Thomsen v. State, 70 Wash.2d 92, 422 P.2d 824 (1966). Mere possession alone is sufficient to sustain a trespassor's cause of action for conversion against all but the true owner. New England Box Co. v. C & R Const. Co., 313 Mass. 696, 49 N.E.2d 121 (1943); Welke v. Davenport, 309 N.W.2d 450 (Iowa 1981); Associates Discount Corporation v. Gillineau, 322 Mass. 490, 78 N.E.2d 192 (1948); Adams v. Queen Insurance Company of America, 88 So.2d 331 (Ala.1956); Novak v. State, 195 Md. 56, 72 A.2d 723 (1950). See also, Northern Pac. R. Co. v. Lewis, et al., 162 U.S. 366, 16 S.Ct. 831, 40 L.Ed. 1002 (1896).
The Gissels trespassed upon land belonging to the state and the U.S. government. Idaho Fish and Game officers seized the rice with a valid search warrant when the Gissels were arrested for trespassing. The state, under stipulation of both parties, then sold the rice and retained possession of the share attributable to U.S. land. This share of the proceeds belongs to the U.S. government and not to the state. The failure of the state to account for the proceeds of the sale constitutes a conversion by the state. The Gissels, though trespassors and without legal title, which title rests with the Forest Service, still by mere possession have greater rights superior to that of the state, and the Gissels are, therefore, entitled to recover that share of the money, $10,500, which belongs to the Forest Service.
The state has brought to the attention of this Court the statutory provisions regarding the disposal of property stolen or embezzled and not claimed by the owner. 1.C. § 19-3805. As previously discussed, the owner of the lands and the rice gathered from those lands belongs to the State and the Forest Service. However, the Forest Service never put in a claim for the rice grown on its land, and the Gissels were never convicted of stealing or embezzling the rice. The Gissels made a timely claim for the return of the proceeds of the sale from the Forest Service lands and, the State cannot rely upon I.C. § 19-3801 through I.C. § 19-3805 to justify its actions in not accounting for the proceeds of the sale and returning that share which, for the purposes of this appeal, belongs to the Gissels.
The state's second argument is based upon the theory that it was acting as an agent for the Forest Service and was thereby authorized to sell the rice and retain possession of the proceeds for the benefit of the Forest Service.
Agency is a fiduciary relationship in which the principal confers authority upon the agent to act for the principal. Restatement (Second) of Agency § 1 & 7 (1957). Agency can be established in three ways. First, real authority — an expression by the principal, either written or oral, granting authority to the agent to act, Clark v. Gneiting, 95 Idaho 10, 501 P.2d 278 (1972); Thornton v. Budge, 74 Idaho 103, 257 P.2d 238 (1953); Gorton v. Doty, 57 Idaho 792, 69 P.2d 136 (1937). Second, implied authority — the principal acts in such a manner which leads the agent to believe that he has authority to act for the principal. Adkinson Corp. v. American Bldg. Co., 107 Idaho 406, 690 P.2d 341 (1984); State v. DeBaca, 82 N.M. 727, 487 P.2d 155 (1971). Third, apparent authority — acts by the principal involving third parties who are conversant with the business practices of the principal, whereby a reasonable person would be lead to believe that the agent has authority to act for the principal. Clements v. Jungert, 90 Idaho 143, 408 P.2d 810 (1965); Commercial Insurance Co. v. Hartwell Excavating Co., 89 Idaho 531, 407 P.2d 312 (1965); Anderson v. Smith Frozen Foods of Idaho, Inc., 83 Idaho 494, 365 P.2d 965 (1961).
The party alleging the existence of an agency relationship carries the burden of proof. Transamerica Leasing Corp. v. Van's Realty Co., 91 Idaho 510, 427 P.2d 284 (1967); Hayward v. Yost, 72 Idaho 415, 242 P.2d 971 (1952). "Where the existence of an agency relationship is disputed, it is a question for the trier of fact to resolve from the evidence." Clark v. Gneiting, 95 Idaho 10, 501 P.2d 278 (1972).
The state points to a document which it alleges supports its position that an agency relationship existed. That document is a Memorandum of Understanding between the Idaho Department of Fish and Game and the Forest Service. The memorandum does not contain any express references conferring authority upon the state indicating an agency relationship. Nor is there any evidence of actions between the Forest Service and the state which could lead to an inference that the state had implied authority to act for the Forest Service. And finally, the record does not show any activities by the Forest Service which would indicate to the Gissels that the state was acting as an agent for the Forest Service. The memorandum only outlines policies of cooperation between the Forest Service and the Department of Fish and Game. It does not expressly or inferentially confer any authority upon the state to act as an agent.
The final piece of evidence upon which the state relies to support its agency argument is a signed stipulation between the state and the Gissels. The stipulation states, "2. The U.S. Forest Service, claiming an interest in approximately one-half of the wild rice, refuses to release its interest to other than the Idaho Department of Fish and Game." (Emphasis added.) Stipulation and Order, at 1, (Tr. on Appeal, Yol. 1, at 14-15, Supreme Court No. 13921), State of Idaho v. Gissel, Nos. M26354, M26357, M26356, M26355, (1st D. Idaho, October 2, 1979), reprinted in Gissel v. State, Supreme Court No. 16107. The stipulation merely states that the Forest Service would not release its claim to anyone but the state; it does not confer any authority, real or implied, upon the state to act for the Forest Service. The state has failed to meet the burden of showing the existence of an agency relationship and the record supports the district court's finding that no agency relationship existed. The district court heard the evidence, assessed the reliability and the weight of the witnesses' testimony, and found that the state was not the agent of the Forest Service. We, therefore, affirm the district court's decision.
Costs to respondent.
No attorney fees on appeal.
BISTLINE J., concurs.
SHEPARD and HUNTLEY, JJ., concur in result.
. When the Gissels were tried for criminal trespass in 1979, the rice was sold by agreement of the parties to prevent the loss of the rice. See State v. Gissel, 105 Idaho 287, 668 P.2d 1018 (Ct.App.1983). The decrease in the valuation can probably be attributed to some loss due to spoilage or some other factor which affected the amount of rice actually sold.
. The statute requires the owner to make claim for the return of the property or in this case their possession within six months or the possession will be forfeited to the county treasury. The trespass and seizure by the Fish and Game officials occurred in September of 1979. (The date of the complaint was September 5, 1979.) The Gissels filed a Notice of Claim on December 24, 1979. Hence, the claim was filed within the six-month period.