218 Conn. 749 | Conn. | 1991
This is an action in conversion. The plaintiff, B. A. Ballou and Company, Inc., alleges that the defendant, Citytrust, wrongfully appropriated the plaintiff’s scrap metal while it was in the possession of a third party, Bridgeport Rolling Mills Company. The issues on appeal are: (1) who has the burden of proving whether a bailment exists; (2) whether under the circumstances presented a bailment existed; and (3) whether damages for conversion were properly calculated. We conclude that (1) the burden of proving a bailment lies with the party whose claim to ownership relies upon such a relationship, and (2) no bailment existed here.
The parties stipulated as follows: the plaintiff B. A. Ballou and Company, Inc. (Ballou), manufactures jewelry. Bridgeport Rolling Mills, Inc. (Brimco), was a metal fabricator. Brimco supplied Ballou with sheets of stock brass, an alloy that Ballou used to manufacture jewelry.
On May 22, 1981, Brimco entered into a security agreement with the defendant Citytrust for a revolving line of credit. The loan was secured by an interest in “[a]ll inventory of the Borrower, now owned or hereafter acquired .... All goods ... or other property ... in which Borrower has an interest ... or come[s] into possession.” Unknown to Ballou, Brimco consistently represented to Citytrust that it owned all the scrap metal in its possession. In June, 1987, Citytrust, as a secured creditor, took possession of Brimco’s assets pursuant to the security agreement, including all metal on site.
Ballou thereafter brought an action against Citytrust for its alleged conversion of Ballou’s scrap metal and
Citytrust first claims that the trial court improperly placed the burden of proving a necessary element of Ballou’s case upon Citytrust. In order for Ballou to prevail on its conversion claim, it must demonstrate that it continued to own the scrap. Gilbert v. Walker, 64 Conn. 390, 394, 20 A. 132 (1890). Since Brimco had possession, Ballou was required to prove the existence of a bailment. It is an “ ‘elementary rule that whenever the existence of any fact is necessary in order that a party may make out his case . . . the burden is on such party to show the existence of such fact.’ ” Nikitiuk v. Pishtey, 153 Conn. 545, 552, 219 A.2d 225 (1966); Eichman v. J & J Building Co., 216 Conn. 443, 451, 582 A.2d 182 (1990). This rule holds true for bailment cases as well. See Wells v. Active Automobile Exchange, Inc., 99 Conn. 523, 527, 121 A.883 (1923); C. McCormick, Evidence (3d Ed.) § 337; C. Tait & J. LaPlante, Connecticut Evidence (2d Ed.) § 4.2.1. While the trial court arguably assigned the burden of proof of this issue to Citytrust we need not take up Citytrust’s claim in this regard because we find that, under the facts as stipulated, a bailment could not have existed.
Ballou claims that the toll metal account between itself and Brimco constituted a bailment. Ballou argues
A bailment “ ‘involves a delivery of the thing bailed into the possession of the bailee, under a contract to return it to the owner according to the terms of the agreement.’ ” Seedman v. Jaffer, 104 Conn. 222, 226, 132 A. 414 (1926), quoting Murray v. Paramount Petroleum & Products Co., 101 Conn. 238, 242, 125 A. 617 (1924).
In a bailment of this type, “the question of [whether a transaction constitutes a] bailment or not is determined by whether the identical article delivered to the manufacturer is to be returned to the party making the advance. Thus, where logs are delivered to be sawed into boards, or leather to be made into shoes, rags into paper, olives into oil, grapes into wine, wheat into flour, if the product of the identical articles delivered is to be returned to the original owner in a new form, it is said to be a bailment, and the title never vests in the manufacturer. If, on the other hand, the manufacturer is not bound to return the same wheat or flour or paper, but may deliver any other of equal value, it is said [not to be a bailment] . . . .” (Emphasis added.) Powder Co. v. Burkhardt, 97 U.S. 110, 116, 24 L. Ed. 973 (1877); see Clark v. Rosen, 126 Conn. 707, 708-10, 14 A.2d 39 (1940); Douglass v. Hart, supra, 687-88; Johnson v. Allen, 70 Conn. 738, 744-45, 40 A. 1056 (1898).
In order for the instant transaction to constitute a bailment, therefore, it is necessary that the final product be composed of the identical property originally
The judgment of the trial court is reversed and the matter is remanded with direction to render judgment for the defendant.
In this opinion the other justices concurred.
Because we conclude that no bailment existed, we do not address Citytrust’s claim that damages were not properly calculated.
According to Blackstone, and others, a bailment “is a delivery of goods in trust, upon a contract, expressed or implied, that the trust shall be faithfully executed on the part of the bailee.” 2 Blackstone’s Commentaries p. 452; see I. Edwards, A Treatise on the Law of Bailments p. 33; Black’s Law Dictionary (4th Ed.). At one time we also adhered to this definition. Zeterstrom v. Thomas, 92 Conn. 702, 704, 104 A. 237 (1918); Samelson v. Harper’s Furs, Inc., 20 Conn. Sup. 37, 39, 120 A.2d 419 (1955), aff’d, 144 Conn. 368, 131 A.2d 827 (1957). In a trust, however, the trustee has legal title to the res of the trust. G. Bogert, Trusts (5th Ed.) § 1. In a bailment, on the other hand, the bailee does not have legal title to the thing bailed, but mere possession. Sturm v. Boker, 150 U.S. 312, 330, 14 S. Ct. 99, 37 L. Ed. 1093 (1893); McKesson & Robbins, Inc. v. Walsh, 132 Conn. 158, 162, 42 A.2d 841 (1945). We prefer, therefore, the definition established in Seedman v. Jaffer, 104 Conn. 222, 226,132 A. 414 (1926). See generally 1 Restatement (Second), Trusts § 5; A. Dobie, Handbook on the Law of Bailments and Carriers § 1.
The trial court relied primarily upon Public Service Electric & Gas Co. v. FPC, 371 F.2d 1 (3d Cir.), cert. denied, 389 U.S. 849, 88 S. Ct. 33, 19 L. Ed. 2d 119 (1967). In Public Service Electric & Gas Co., a company arranged to have gas transported through a pipeline. The court found that a bailment existed even though the company was by no means entitled to have the identical gas delivered back to it. Id., 4. Because the gas was only transported, and not altered in any form, that case is distinguishable from the type of bailment alleged here.
The trial court also cited In re Sitkin Smelting & Refining, Inc., 639 F.2d 1216 (5th Cir. 1981). In Sitkin, the court found that a bailment existed when Kodak delivered film waste to Sitkin for waste processing and to extract the silver. Id., 1217. The court emphasized the facts that: (1) Sitkin did not carry the film as inventory; (2) the film was clearly imprinted with Kodak’s name; and (3) the film was stored in its original cartons and kept separate from other products. Id. Sitkin, therefore, is distinguishable from the present case because there was no evidence of commingling.
The trial court also relied upon General Motors Corporation v. Bristol, 690 F.2d 26, 30-31 (2d Cir. 1982), in which Judge Mansfield, in a concurring opinion, found that a bailment existed when GM Corporation shipped scrap metal to a manufacturer for processing into alloy strips under a “tolling arrangement. ’ ’ In Bristol, however, the written agreement clearly stated that GM Corporation retained title to the scrap in the manufacturer’s possession until it was remanufactured into alloy. Id., 27. In addition, the bailee was required to return the identical scrap to GM Corporation if not processed into alloy strips. Judge Mansfield, concurring in Bristol, stated that a bailment may exist when goods are commingled and remanufactured. As support for this statement, however, he cites Public Service Electric & Gas Co. v. FPC, supra, and 8 Am. Jur. 2d, Bailments § 51. As noted above, Public Service Electric & Gas Co. stands only for the proposition that commingling alone does not defeat a bailment.
A change in the character or nature of personalty can affect a right of ownership. Under the doctrine of accession, if the labor of one person is combined with material belonging to another, the owner of the original raw material can retain title to, and ownership of, the finished product. Atlas Ins. Co. v. Gibbs, 121 Conn. 188, 192-93, 183 A. 690 (1936); Mather v. Chapman, 40 Conn. 382, 397 (1873). If, however, the identity of the item has been destroyed, its nature substantially changed, or value greatly enhanced, as between the manufacturer and the original owner, the owner loses his right of ownership and retains only an action for the value of the goods lost. Atlas Ins. Co. v. Gibbs, supra, 192-93. Similarly, in a bailment locatio operis faciendi, changes in the nature of the property bailed have the potential to affect the property interest of the bailor. The law of bailments has responded, in a manner similar to the law of property, by finding that a bailment will still exist if, as noted above, the identity of the item has not been destroyed.