Court Opinion

ID: 3417365
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:44:43.275951+00
Date Added: 2024-06-11T09:35:57.950680
License: Public Domain

The action in this case was to recover damages for conversion of certain bonds owned by the banks represented *Page 563 
by the plaintiff. To constitute conversion, there must be a wrongful taking or a wrongful detention, or an illegal assumption of ownership, or an illegal user or misuser. There is no doubt but that the defendant park district illegally assumed ownership of the bonds when its agent, the First National Bank of Chicago, sold the bonds owned by the banks. This sale took place fewer than five years prior to the filing of the complaint in this action, and, therefore, the action against the park district is not barred by the Statute of Limitations unless a cause of action for the recovery of the bonds arose independently of the sale more than five years prior to the filing of this action.(Parmalee v. Price, 208 Ill. 544.) Whether one did so arise is the critical question in this case.
It seems clear that the defendant park district did not wrongfully take the bonds and, therefore, did not commit the first type of conversion mentioned above. It is true, as the majority opinion holds, that the pledge of bonds was entirely void and of no legal effect. (People v. Wiersema State Bank,361 Ill. 75.) It could not be ratified and could never become the foundation of a right of action. But possession of the bonds was, in fact, delivered to the park district in accordance with this void pledging contract. This possession was voluntarily delivered in spite of the banks' lack of authority to deliver the bonds for the purpose of securing the private deposit. Since it was so delivered it seems clear that there was no "taking" of the banks' property, and consequently no wrongful taking which would support an action of conversion. (Strauss  Sons v. Schwab, 104 Ala. 669. ) Likewise, there was no wrongful detention of the banks' property, since they never demanded the return of their securities. There was an illegal assumption of ownership, and an illegal user, as pointed out above, but the cause of action based on those grounds did not arise until the date of the sale, which was fewer than five years prior to the filing of the complaint, and, *Page 564 
therefore, is not barred. This conclusion is supported by Strauss Sons. v. Schwab, supra, and City of Fort Worth, v. McCamey,93 F.2d 964, in which certiorari was denied by the United States Supreme Court. (304 U.S. 571.) In the last cited case, the Circuit Court of Appeals for the Fifth Circuit said: "We are of opinion that whether the pledge was valid or not, there was no conversion of the securities by merely holding them with the consent of the bank. The city could not have been sued for the value of the securities unless it refused to return them on demand or did something with them beyond keeping them safe. Mere adverse possession of property belonging to another may sometimes be treated as a conversion of it, but not possession bestowed by the owner, even though the bestowal be revocable at will." This conclusion is also supported by 65 Corpus Juris, (Trover and Conversion) page 14, section 5, where it is said: "To constitute conversion, non-consent to the possession and disposition of the property by defendant is indispensable. If the owner expressly or impliedly assents to or ratifies the taking, use, or disposition of his property, he cannot recover as for a conversion thereof; and this is so although defendant exceeded the power given him." It is true that the banks could not ratify the void pledge, but they did have power to consent to the park district's taking possession. Since it had this power, and exercised it, there was no conversion at the time of the delivery of the bonds to the park district. The cause of action for conversion first arose when the bonds were sold by the defendant bank as agent for the park district, and that action is not barred by the Statute of Limitations. From a careful reading of the majority opinion it will be noted that it does not expressly disagree with this position.
Instead, the majority opinion holds that the pledgee was under a duty to return the bonds immediately after the illegal pledge, and the violation of that duty sounded in *Page 565 
tort. In support of this proposition is cited 6 American Jurisprudence, (Bailments) page 207, section 82. That section provides that the "illegality of the contract does not work a forfeiture thereof or make the party who received the property any less a bailee under obligation to return the thing bailed in good condition." This excerpt expressly states that the person obtaining the property by virtue of the illegal contract is a bailee; it does not state that he is a converter under a duty, immediate or otherwise, to return the property to the pledgor. The section continues: "Under such circumstances the obligation [to return the thing bailed in good condition] may be regarded as one imposed by law, springing out of the fact of possession of another's property, and its violation sounds in tort, or in quasi-contract upon a contract implied in law, and not upon the illegal transaction between the parties." The gist of this statement is that the bailment is imposed by law, and is not based upon the illegal contract. But it is apparent that there is nevertheless a bailment. The antecedent of "its" in the phrase "its violation" is the obligation to return the thing bailed in good condition, and not an obligation to return the bailed article immediately, as held in the majority opinion. It is to be noted that once again there is no statement that there is an immediate duty on the part of the bailee to return the property to the bailor in order to escape liability as a converter. The opinion also cites in support of its statement, Texas and PacificRailway Co. v. Pottorf, 291 U.S. 245, Knass v. Madison and KedzieState Bank, 354 Ill. 554, and People v. Wiersema State Bank,supra. The first case cited involved a claim by the pledgee of the bank's securities that it was a secured creditor of the bank, and the court held that the claimant was not a secured creditor, since the bank did not have authority to make the pledge to secure a private deposit. The court also stated that the bank itself could have set the contract aside, but it does not say in *Page 566 
what manner. From all that appears from the opinion, a demand to establish a conversion would have been necessary before an action to recover the bonds and other securities or their value could have been maintained by the bank. In the Knass case, the holding was that a bank had no authority to contract to repurchase securities, and in the Wiersema case the action filed by the bank was to set aside the pledging contract. Neither of these cases was an attempt to recover damages for conversion of the securities, and the Statute of Limitations was not involved in any of them.
On these authorities, the majority opinion holds that an immediate duty to return the securities fell upon the pledgee park district as soon as the bonds were delivered to it, and that the park district was guilty of some unnamed tort when it violated that duty. It is obvious that none of the cited authorities fully support the above holding. As stated above, the majority opinion does not expressly hold that there was a conversion by "taking" when the property was voluntarily delivered to the park district. Indeed the nature of the tort is not explained. But it seems evident that conversion is the only tort the majority could have had in mind for otherwise the holding would be that you could tack together the limitation of action for one tort, that of the park district, and the limitation on the right of action against the selling bank. The selling bank's tort is admitted to be a conversion.
This leads to the second proposition advanced in the majority opinion, that the possession of the second tort feasor can be tacked to that of the first tort feasor in order to attain the five-year period of the appropriate Statute of Limitations. On this point, the doctrine laid down by Professor Ames, that the rule of tacking possessions of adverse holders is applicable to personal property as well as to real, is adopted by the court, and the rule laid down by Salmond in his work on Torts is rejected. It would seem that the rule laid down by Salmond is the preferable *Page 567 
one, and this is so for several reasons. In the first place, real property is immovable and has a fixed location, so that the person disseized of his property has no difficulty in discovering the adverse claimant or in recovering the property in an action at law, if he so desires. This is not true of personal property. Such property may be moved from place to place by successive converters so that the true owner may never have an opportunity to have his rights adjudicated in a court of law. In such case, he should not be deprived of his right to recover his property by the judicial engrafting of an exception to the Statute of Limitations providing for tacking of possessions in the case of conversions of personal property. Moreover, the doctrine of tacking conflicts with the rule laid down in the majority opinion that the Statute of Limitations runs against the right of action and not against the holder thereof. In this case, according to the majority opinion, there were two conversions. If the holder of the right of action is to be barred from recovering five years after the first conversion, it is obvious that the Statute of Limitations is running against him, the holder of the action, and not against the action itself. If the statute ran against the action and not against the holder, the holder would have five years to sue from the time of the second conversion, for that conversion was a separate and distinct tort. Such is the better rule, and would entitle the plaintiff to recover damages from the First National Bank of Chicago for its conversion of the bonds by the sale thereof. As stated in the majority opinion, the bank could not defend on the ground that it converted as an agent, since the law charged it with knowledge that its principal had no right to dispose of the bonds. 3 C.J.S. (Agency) sec. 221; Knass
v. Madison and Kedzie State Bank, supra.
The case of Parmalee v. Price, supra, is relied on in the majority opinion as authority for holding that if two rights of action exist against the same defendant for the same debt and the Statutes of Limitations are different, *Page 568 
the termination of the first period of limitation will bar the second action. It is sought to make this authority for a holding that the five-year Statute of Limitations that would be a defense for one tort feasor is available to a second tort feasor who has only the five-year Statute of Limitations as a defense, but whose tort was committed less than five years ago. There is no similarity between the two cases, and the Parmalee case is not in point because there both rights of action were against the same defendant, whereas in the instant case, the rights of action were against different defendants.
For the reasons stated, I am forced to dissent.