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NORRITON EAST REALTY CORPORATION v. CENTRAL-PENN NATIONAL BANK (06/27/69)

decided: June 27, 1969.

NORRITON EAST REALTY CORPORATION
v.
CENTRAL-PENN NATIONAL BANK, APPELLANT



Appeal from judgment of Court of Common Pleas No. 9 of Philadelphia County, Sept. T., 1966, No. 1704, in case of Norriton East Realty Corporation v. Central-Penn National Bank.

COUNSEL

C. Laurence Cushmore, Jr., with him LeRoy E. Perper, and White and Williams, for appellant.

Samuel Kravitz, with him Ronald Kravitz, Harry Fuiman, and Kravitz & Kravitz, for appellee.

Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Cohen. Mr. Chief Justice Bell took no part in the consideration or decision of this case.

Author: Cohen

[ 435 Pa. Page 58]

The appellee in this action of conversion is a corporation which was formed to build and operate an

[ 435 Pa. Page 59]

    apartment building. In order to accomplish this purpose, it obtained several loans from appellant which were secured by three mortgages. Appellee experienced financial difficulties and at appellant's request assigned all leases and directed its rental agent to turn over all rents to the appellant-mortgagee. Appellant eventually instituted foreclosure proceedings and purchased the property at sheriff's sale satisfying its claim out of the proceeds of the sale. The bid however was assigned to a third party to whom the sheriff conveyed the premises. The appellee's officers then requested and obtained the return of the obligation notes. Subsequently this action for conversion of the gas ranges, air conditioners, refrigerators, and carpeting that remained on the premises was instituted. The court below held that these items were personalty rather than fixtures and that appellant had converted them and thus entered judgment for their stipulated worth of $30,140.00. We must reverse.

Appellee contends that these items were not fixtures and hence did not become part of the realty. Had they been part of the real estate they could not be the subject of an action for conversion, 18 Am. Jur. 2d Conversion ยง 20 (1965). Because of the basis upon which we reverse we do not determine whether these items are fixtures under the "assembled industrial plant" doctrine, or are in some other way covered by the wording of the mortgage agreement. It is apparent that if they were part of the real estate they passed with the real estate at the sheriff's sale.

If, as contended, these items were personalty, appellant had neither possession nor dominion over this personalty and an action for conversion does not lie. When appellant, with the consent of appellee, took over the rental activities and received the rent proceeds, it was, at most, exercising the rights of a mortgagee

[ 435 Pa. Page 60]

    in possession. As such, appellant obtained control over the realty only. When the writ was executed, it was executed on the realty only. The bid that was assigned was on the realty only. When the third party took possession, it took the realty only. However, even if there were possession of the personalty, the record is barren of the elements that are required to substantiate a conversion.

Salmond defines conversion as an act of willful interference with a chattel, done without lawful justification, by which any person entitled thereto is deprived of use and possession. Salmond, Torts (10th ed. 1945) at 286. Prosser describes the following ways in which a conversion can be committed: "(a) Acquiring possession of the goods, with an intent to assert a right to them which is in fact adverse to that of the owner. (b) Transferring the goods in a manner which deprives the owner of control. (c) Unreasonably withholding possession from one ...


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