Let’s explore the practical application of the general rule that a finder of lost property has greater rights to the property than the entire world except the true or rightful owner. First, the easy case: TO (true owner) loses her watch; F1 finds the watch. F1 lays the watch on a table surrounded by a group of people. While F1 is standing there, F2 picks up the watch. F1 demands F2 return the watch. F2 refuses. Which of the two has the right to leave with the watch? Answer: F1. F1 has greater rights to the watch than the entire world except the rightful owner. F2’s only argument is that F1 is not the true owner, but that argument does F2 no good. F1 as finder has greater rights to the watch than does F2 and all other persons except the true owner.
The result is a good one as a practical matter since it would be very difficult for a person to prove he or she owns that which he or she possesses. For example, you probably do not carry “proof” that you own your casebook, your laptop, or your backpack.
Now a more difficult scenario: TO loses her watch; F1 finds the watch. A week later F1 loses the watch in the park. Four days later F2 walks into a room, with F1 present, and announces that she found a watch in the park. F1 asks if the watch has certain characteristics. The watch does. F1 claims the watch. F2 does not want to give the watch to F1. Question: Who should get the watch? F1or F2?
The answer is that F1 has greater rights to the watch than the whole world except the rightful owner, and thus F1 gets the watch. F1 and F2 are both finders. The common law rule as stated does not anticipate our scenario. The rule must be modified to say a finder of lost property has greater rights to the found property than the whole world except the rightful owner, a prior or rightful possessor, or a person holding through the rightful owner or rightful possessor. F2 has greater rights than everyone except TO and F1. Once F1 appears, however, F1 gets the watch. This is another application of the first possession rule.
Generally, a finder will return found property to the rightful owner if the rightful owner appears. But what happens if the finder, a borrower, or another person to whom the property has been entrusted refuses to return the property, has sold or given it to another person, or has modified the property such that it may not be acceptable to the true owner? When a person wrongfully exerts control over property inconsistent with the true owner’s rights to the property, that person has engaged in an act of conversion.
Conversion is a common law tort of using another’s property inconsistent with the rights of the true owner or rightful possessor. The true owner or rightful possessor can recover the property. The action or remedy to recover the asset itself (plus money damages for injury to the asset) is called replevin. Alternatively, the rightful owner or rightful possessor can seek monetary damages for the asset. The action for monetary compensation for conversion of personal property is called trover. In effect, trover is a forced sale. A person who is compensated pursuant to a trover action loses his rights to have the asset returned. The decision whether to seek trover (compensation) or replevin (the return of the property) lies with the true owner or rightful possessor, not with the present possessor. Actions for conversion, replevin, and trover most often are brought by true owners, but as the following case indicates, may be brought by finders and other prior possessors.