Case Name: H. B. SCUTT, Respondent, v. F. O. BASSETT, Appellant
Court: District Court of Appeal of the State of California
Jurisdiction: California
Decision Date: 1948-06-23
Citations: 86 Cal. App. 2d 373
Docket Number: Civ. No. 16331
Parties: H. B. SCUTT, Respondent, v. F. O. BASSETT, Appellant.
Judges: 
Reporter: California Appellate Reports, Second Series
Volume: 86
Pages: 373–379

Head Matter:
[Civ. No. 16331.
Second Dist., Div. Two.
June 23, 1948.]
H. B. SCUTT, Respondent, v. F. O. BASSETT, Appellant.
Ernest A. Tolin, W. Claude Fields, Jr., and Paul A. Mason for Appellant.
Newby, Holder & Newby and Dee Holder for Respondent.

Opinion:
McCOMB, J.
From a judgment in favor of plaintiff after a trial before the court without a jury in an action for damages (a) for conversion, (b) for unfair competition, and (c) to enjoin defendant from making automobile cranes or engine stands which are of the same construction as those heretofore manufactured under a contract by defendant for plaintiff, defendant appeals.
The evidence being viewed in the light most favorable to plaintiff (respondent), the essential facts are these:
Prior to March, 1945, plaintiff was a salesman for the Stuart Manufacturing Company, a manufacturer of automobile cranes. In the month just mentioned, plaintiff entered into a contract with defendant whereby defendant, who was the owner of a welding and iron working shop, agreed to build 13 automobile cranes similar to a Stuart crane. For this experimental work, defendant was paid the sum of $1,000. On September 1, 1945, plaintiff and defendant entered into a further contract by the terms of which defendant agreed to build 100 additional cranes for plaintiff at a cost of $60 each. By May 6, 1946, defendant had constructed 88 of these cranes and delivered 83 of them to plaintiff. About May 6, 1946, plaintiff and defendant had a dispute and defendant ordered plaintiff to leave his premises, which plaintiff had been using as his business headquarters. Plaintiff complied with defendant's request but left no forwarding address. He made no request or demand for delivery of the five additional cranes which had been completed, nor did he offer payment for them.
Plaintiff filed an application for a patent upon the cranes and in July, 1946, notified defendant of the fact that he had made such application.
In July, 1946, defendant sold the five cranes and some engine stands which he had constructed under his contract with plaintiff. In addition, defendant manufactured 75 more cranes and sold them to former customers of plaintiff. The cranes and stands thus manufactured were of the same design as those manufactured by defendant under his contract with plaintiff.
Plaintiff instituted the present suit predicated upon two causes of action; first, for conversion based upon defendant's selling five of the 88 cranes which he had manufactured for plaintiff under their contract; second, based upon unfair competition in that defendant had manufactured some 75 cranes and certain stands and sold them to plaintiff's former customers, which were of the same design as those manufactured by defendant for plaintiff under their contract.
Questions Presented for Determination
First: Did the evidence sustain the trial court's finding that defendant had converted personal property belonging to plaintiff?
This question must be answered in the negative and is controlled by this pertinent rule of law: In an action for conversion, plaintiff must prove either (1) ownership with the right of possession, or (2) actual possession of the article claimed to have been converted at the time of the alleged conversion. (Middlesworth v. Sedgwick, 10 Cal. 392, 393; National Lumber Co. v. Tejunga Valley Rock Co., 22 Cal.App. 726, 730 [136 P. 508] ; McCoy v. Northwestern C. & S. Co., 3 Cal.App.2d 534, 537 [39 P.2d 864].)
In the instant case the uneontradieted evidence disclosed that plaintiff did not have either ownership with the right to possession or the actual possession of the machines alleged to have been converted by defendant. Therefore, applying the foregoing rule, plaintiff failed to establish a cause of action for conversion.
Second: Did plaintiff establish a cause of action for unfair competitionf
This question must likewise be answered in the negative and is governed by this pertinent rule: To constitute unfair competition with respect to commodities or between persons there must be actual competition, and that cannot exist in the absence of some competing commodity or persons. (Raladam Co. v. Federal Trade Com., 42 F.2d 430, 436; Carroll v. Duluth Superior Milling Co., 232 F. 675, 681 [146 C.C.A. 601]. See, also, Federal Trade Com. v. Raladam Co., 283 U.S. 643, 647 [51 S.Ct. 587, 75 L.Ed. 1324], and cases cited in 63 C. J. (1923), p. 389, Trade-marks, Trade-names and Unfair Competition, § 100, footnote 11.)
In the instant case the uncontradicted testimony of plaintiff disclosed that he was not in business during the period when he claimed that defendant was engaged in unfair competition. Therefore, applying the foregoing rule to the present case, plaintiff failed to establish one of the essential elements of a cause of action for unfair competition.
There is no question presented in this case relative to defendant's using any of plaintiff's trade secrets for the reason that plaintiff's own testimony disclosed that he had no trade secrets.
Standard Parts Co. v. Peck, 264 U.S. 52 [44 S.Ct. 239, 68 L.Ed. 560]; Magnetic Mfg. Co. v. Ding's Magnetic Separator Co., 16 F.2d 739; Houghton v. United States, 23 F.2d 386; Dinwiddy v. St. Louis & O'Fallon Coal Co., 64 F.2d 303; Famous-Players-Lasky Corp. v. Ewing, 49 Cal.App. 676 [194 P. 65]; and Wireless Specialty Apparatus Co. v. Mica Condenser Co., 239 Mass. 158 [131 N.E. 807, 16 A.L.R 1170], relied on by plaintiff, are factually different from the present case. In each of the cases cited, the problem involved was the right of the employer to recover or secure ownership of certain patent rights which were acquired by an employee while employed in a master-servant relationship. Obviously, such a situation does not obtain in the present ease and therefore such cases are here not applicable.
In Goodyear Tire & Rubber Co. v. Miller, 22 F.2d 353, specific performance of an agreement by defendant to assign to plaintiff patents secured while defendant was in plaintiff's employ was the basis of the litigation. Such a situation is entirely different from that now presented to this court.
Holley v. Hunt, 13 Cal.App.2d 335 [56 P.2d 1240], also relied on by plaintiff, merely held that the superior court had jurisdiction of a cause of action for unfair competition and that upon proof of unfair competition, injunctive relief is appropriate.
Tobin Grocery Co. v. Spry, 204 Cal. 247 [267 P. 694], pertains to an employee who misappropriated funds of his employer and was ordered to account for the money and its use. The reason for the citation of such case by plaintiff is not apparent. Neither is section 2237 of the Civil Code defining the duty of a trustee to account to a beneficiary for profits derived from the use or disposition of trust property relevant to the questions here presented for determination.
In view of our conclusion, it is unnecessary to discuss other propositions presented by counsel. The trial court erred in granting a judgment in favor of plaintiff.
The judgment is reversed.
Moore, P. J., concurred.
Plaintiff's testimony on this subject was as follows:
. "Q. After you moved your place of business into your home, did you continue to sell to the same customers?
A. No.
Q. To whom you had previously sold?
A. No.
,Q. Did you solicit them?
A. I called on them and told them that I had had some trouble with Mr. Bassett and I didn't know when I could make deliveries after that.
Q. • Did you undertake to find someone else to manufacture your hoist ?
A. Yes.
Q. Did you find someone?
A. No.
Q. Did you solicit any business from your previous customers?
A. No, I didn't solicit any business from them because I couldn't fill their orders and there was no need of it."