This section is from the book "The Law Of Contracts", by Theophilus Parsons. Also available from Amazon: The law of contracts.
(p) In cases where a party has, under a contract with the owner, increased the value of goods by his labor, and then converted them to his own use, the value of the goods, before the labor has been expended, has been given in damages. Dresser Manuf. Co. v. Waterston, 3 Met. 9 See Green v. Farmer, 4 Burr 2214. But where goods have been wrongfully taken and their value increased by accession, the rule laid down in the Year-Book, 5 Hen. VII. fol. 15, is, that the owner can follow his property as long as the identity of the original material can be proved; but if the nature of the thing be changed, as grain into malt, or silver into money, so that the original material cannot be identified, the original owner loses his property, and can only claim damages for the article as originally taken. The first part of the rule, that the owner can follow his property as long as the identity of the original material can be shown, and take it without remunerating the wrong-doer for his trouble, has often been sanctioned. Betts v. Lee, 5 Johns. 349; Curtis v. Groat, 6 id. 168; Brown v. Sax, 7 Cowen, 95; Snyder v. Vaux, 2 Rawle, 427; Martin v. Porter, 5 M. & W. 351; Wood v. Morewood, 3 Q. B. 440, in notu. As regards the first part of the rule, no distinction has been taken in any of the adjudications between a case where;he wrongful taking was fraudulent, and where it was by mistake. But as regards the second part of the rule, in the late case of Silsbury p. McCoon, 3 Comst 379, a majority of the Court of Appeals overruled two previous decisions of the Supreme Court, in the same case, reported in 6 Hill, 425, and 4 Denio, 332, and decided, after a very able argument of the case, that a wilful wrong-doer can acquire no property in the goods of another, by any change whatsoever wrought in them by his labor or skill, provided it can be shown that the improved article was made from the original material; and consequently it was held, that the title to corn was not changed by its con1 In Wooden Ware Co. v. United States, 106 U. S. 432, where the defendant's Ten-dor had cut down the plaintiff's timber, and added to its value before selling it, the following rules were laid down for the measure of damages: I. Where the defendant is a wilful trespasser, he must pay the full value of the property at the time and place of demand or of suit brought, with no deduction for his labor and expense. 2, Where he is an unintentional or mistaken trespasser, or an innocent vendee from such trespasser, the value at the time of conversion, less the amount which he and his vendor had added to its value. 3. Where he is an Innocent purchaser from a wilful trespasser, the value at the time of the purchase, with no deduction for his vendor's labor. One who unintentionally cuts cordwood on another's land and hauls it away and piles it up for use. thereby not substantially changing the identity of the property or greatly increasing its value, is not entitled to remuneration for the cutting, hauling, and piling. Isle Royale Mining Co. v. Hertin, 37 Mich. 332. Wether bee v. Green, 22 Mich. 311, decided that an unintentional trespasser who took from another's land young trees worth S25 and converted them into hoops worth $700, thereby made them his own, though the identity of the trees could be traced. - K.
* There are strong reasons, and authorities of much weight, in favor of the doctrine that special damages may be recovered in the action of trover, that is, damages in addition to the value of the goods, for losses or expenses directly and naturally resulting from the conversion; but it would seem that these special damages should be specially alleged in the declaration, (q)l version into whiskey. The second part of the rule in the Year-Books was said to have no application in the case of a wilful wrong-doer. But where the improved property was not changed in its nature, so that it could be reclaimed by the original owner in all cases, no distinction was taken between the rights of a wrong-doer who has acted with a fraudulent purpose, and one who has acted by mistake. Rugqles, J., in delivering the opinion of a majority of the court, said: " So long as property wrongfully taken retains its original form and substance, or may be reduced to its original materials, it belongs, according to the admitted principles of the common law, to the original owner, without reference to the degree of improvement, or the additional value given to it by the labor of the wrong-doer. Jay more, this rule holds good against an innocent purchaser from the wrongdoer, although its value be increased an hundred fold by the labor of the purchaser. This is a necessary consequence of the continuance of the original ownership." But this rigid rule has been questioned, and the opinion expressed in the text approved by several authorities Brown v. Sax, 7 Cowen, 95, per Sutherland, J.; Silsbury v. McCoon, 4 Denio, 332, 337, per Bronson, J. See Benjamin v. Benjamin, 15 Conn. 347, 358.
(q) In Suydam v. Jenkins, 3 Sandf 614, 627, Duer, J., said: "In England, the law may be considered as settled, that addi1 It is obvious that the ordinary measure of damages for conversion, the value of the property at the time of the conversion with interest, does not fully indemnify the plaintiff in case there has been an increase of value after that time. This fact has induced some courts to depart from the general rule and allow damages based on a higher value subsequent to the time of the conversion. And similarly in analogous actions. "Where the article has fluctuated in price, it is by no means settled in England whether it is to be estimated at its value at the time of conversion, or at any later time." Mayne on Damages, 4th ed., p. 364. For failure to deliver stock, at least, it seems clear that the value at the time of the trial is allowed in England Owen v, Routh, 14 C. B. 27. Compare In re Bahia, etc. Ry. Co. L. R 3 Q. B. 584. In this country various rules have been suggested. In some States the highest value between the time of the conversion and the time of the trial is allowed, provided the suit was brought with reasonable diligence. Page v Fowler, 39 Cal. 412; Ellis v. Wire, 33 Ind. 127; Caunon v. Folsom, 2 la. 101; Kid v Mitchell. 1 N. & McC 334; Gregg v. Fita-hugh, 36 Tex. 127. See also Cal. Civ. Code, § 3336; Fromm v. Sierra Nevada, etc. Co. 61 Cal. 629; Dak. Comp. Laws, § 4603. In other States the same rule is applied with qualifications as to the kind of property, or with the qualification that the jury must be satisfied that, but for the conversion, a higher price would have been obtained for the goods. Street v. Nelson, 67 Ala. 504; Reufro's Adm. v. Hughes, 69 Ala. 581; Peterson v. Gresham, 25 Ark. 380; Moodv v. Caulk, 14 Fla. 50; BeaU v. Rust, 68 Ga. 774; Whitfield v. Whitfield, 40 Miss.:352; 44 Miss. 254; Bickell v. Colton. 41 Miss 368; Musgrave v. Beckeudorff, 53 Pa. 310; North v. Phillips, 89 Pa. 250; Hilliard Flume Co. v. Woods, I Wyo. 396. In New York the rule or the highest intermediate value was adopted to its fullest extent until recently. Markham v. Jaudon. 41 N. Y. 235; Iobdell v. Stowell, 51 N. Y. 70. But it becoming obvious to the court that this rule frequently gave the plaintiff merely speculative damages, these cases were overruled, and it is now held that at least in the case of stocks the plaintiff can only recover the highest value between the time of the conversion and a reasonable time after the plaintiff has learned of the conversion, and therefore had an opportunity to protect himself by replacing the property. Baker v Drake, 53 N. Y. 211 , 66 N Y 518; Wright v. Bank of the Metropolis, 110 N. Y. 237. This later rule has been adopted by the Supreme Court of the United States. Galigher v. Jones, 129 U. S. 193. In most jurisdictions, however, the plaintiff is confined to the value of the property at the time of the conversion, with interest, a rule which, while not invariably giving the plaintiff full compensation, commends itself on account of its certainty and ease of application.
 
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