Chapter 43 Personal Property and Bailments

1. Chapter 43Personal Propertyand Bailments

2. Learning Objectives • What is real property? What is personal property? • What is the difference between a joint tenancy and a tenancy in common? • What are the three elements necessary for an effective gift? • What are the three elements of a bailment?  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

3. Learning Objectives • What are the basic rights and duties of a bailee? What are the rights and duties of a bailor? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

4. Introduction • Definition: Property consists of legally protected rights and interests a person has in anything with an ascertainable value that is subject to ownership. • Difference Between Real and Personal Property. • Ownership rights in each. • Acquiring Ownership of Personal Property. • Laws Governing Mislaid, Lost, or Abandoned Property. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5. Property Ownership • Property ownership is viewed as a “bundle of rights”, including the: • Right to possess. • Right to sell. • Right to give. • Right to lease. • Right to destroy. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

6. Property Ownership • Fee Simple. • Owns the entire “bundle of rights”. • Fee simple gives the owner the maximum possible estate or right of ownership of real property, continuing forever. • Chapter 44 will deal with realty estates. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

7. Property Ownership A B C • Concurrent Ownership. • Tenancy in Common: A and B own an undivided interest in the property. Upon B’s death her interest passes to her heir, “C”. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

8. Property Ownership A B • Concurrent Ownership (cont’d). • Joint Tenancy. A and B own an undivided interest but upon B’s death, B’s interest passes to A, the surviving joint tenant. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9. Property Ownership • Concurrent Ownership (cont’d). • Tenancy by the Entirety (not common): usually between husband and wife. • Community Property (limited # of states): acquired by couple during their marriage is owned as an undivided ½ interest in property (real and personal). © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10. Acquiring Ownership of Personal Property • Possession. • Capture of wild animals (wild animals belong to no one). • Finding of abandoned property. • Adverse Possession. • Production. • Writers, inventors, manufacturers, and others who produce personal property acquire title to it. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11. Acquiring Ownership of Personal Property • Gifts: voluntary transfer of property ownership from Donor (owner) to Donee (recipient) for no consideration. • Three Requirements For a Valid Gift: • Donative Intent: if challenged, court will look at language and circumstances.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12. Acquiring Ownership of Personal Property • Gifts (cont’d). • Three Requirements For a Valid Gift: • Delivery —actual or “constructive” (symbolic, such as keys to car). Donor must give up complete control or dominion. Delivery by a 3rd party is OK. • CASE 43.1 In re Estate of Piper (1984). • Acceptance by the Donee. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

13. Acquiring Ownership of Personal Property • Gifts (cont’d). • Gifts Intervivos and Gifts Causa Mortis. • Intervivos: gift while donor is living. • Causa Mortis: gift is made in contemplation of imminent death; if donor survives, gift is automatically revoked by law. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

14. Acquiring Ownership of Personal Property • Accession. • Someone adds value to a piece of personal property by use of either labor or materials. • Confusion. • Commingling so that a person’s personal property cannot be distinguished from another’s. Fungiblegoods consists of identical particles such as oil or grain. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

15. Mislaid, Lost, and Abandoned Property • Mislaid Property: Voluntary placed somewhere, then inadvertently forgotten. Finder is steward for true owner. • Lost Property: Involuntarily left. Property owner acquires title against whole world, except for true owner. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16. Mislaid, Lost, and Abandoned Property • LostProperty: Involuntarily left. • Finder must return to true owner or be liable for conversion. • Conversion of Lost Property: when finder of lost property knows the true owner and fails to return property. • Estray Statutes: facilitate return of property and incentive to finders.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17. Mislaid, Lost, and Abandoned Property • AbandonedProperty: Discarded by true owner with no intention of recovering. • Acquires title against all the world, including the original owner. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

18. Bailments • A bailmentis: • Formed by the delivery of personal property, without transfer of title, by one person (Bailor) to another (Bailee), usually under an agreement for a particular purpose. • Bailed property must be returned by the Bailee to the Bailor in the same or better condition. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

19. Bailments • Elements of a Bailment. • Personal Property. (Tangible or Intangible--but not persons or realty.) • Delivery of Possession Without Title: bailee given exclusive control or possession. • May be actual (physical) or constructive. • Bailee must knowingly accept (Bailee must intend to exercise control over chattel). • What about “Involuntary” Bailments?  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20. Bailments • Elements of a Bailment. • Bailment Agreement: express or implied. • Ordinary Bailments. • For the Sole Benefit of Bailor: known as a gratuitous Bailment; Bailee owes Bailor a low duty of care, liable only for gross negligence. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

21. Bailments • Ordinary Bailments(cont’d). • For the Sole Benefit of Bailee: Bailee owes Bailor a high duty of care and is liable for even slight negligence. • Mutual Benefit Bailment: most common. Each party owes the other a reasonable duty of care. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

22. Ordinary Bailments: Duty of Care Benefit of Bailor Benefit of Bailee Mutual Benefit Reasonable Care High Duty of Care Low Duty of Care © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

23. Bailments • Ordinary Bailments (cont’d). • Rights of the Bailee. • Right To Possess. • Right to Use: Bailee may acquire or use property temporarily. Title does not pass. • Rights of Compensation: reimbursed for costs or services as provided in the agreement. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

24. Bailments • Ordinary Bailments (cont’d). • Rights of the Bailee. • Right to Limit Liability. • Duties of the Bailee. • Duty to Return bailed property in same condition to Bailor. Bailee may liable for conversion and/or negligence. • CASE 43.2 LaPlace v. Briere (2009). Why wasn’t Briere liable for the horse’s death? © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

25. Bailments • Ordinary Bailments (cont’d). • Duties of the Bailor. • Right to have property protected and used as agreed. • Right to have property back at end of bailment with service or repair done properly. • Right to have the Bailee not convert. • Right to not be bound to limitation of liability unless Bailor knows.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

26. Bailments • Ordinary Bailments (cont’d). • Duties of the Bailor (cont’d). • Duties to Reveal Defects: • Mutual Benefit Bailment: bailor has duty to notify bailee of all known defects and hidden defects the bailor knew or should have known about. • Bailment for Bailee’s Sole Benefit: duty to notify of any known defects.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

27. Bailments • Ordinary Bailments (cont’d). • Duties of the Bailor (cont’d). • Warranty Liability for Defective Goods. • Special Types of Bailments. • Publicly licenses to provide transportation services to general public. • Common Carriers are strictly liable for damages except if the damages caused by: • An act of God.  © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

28. Bailments • Special Types of Bailments. • Common Carriers are strictly liable for: • An act of the public enemy. • An order of the public authority. • An act of the shipper. • The inherent nature of the goods. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

29. Bailments • Special Types of Bailments. • Warehouse Companies: • Owe duty of reasonable care. • Can’t exculpate, can limit. • Innkeepers: • Owe duty of strict liability, modified by state statutes; if innkeeper provides safe and notifies guests. • If parking area provided and innkeeper accepts bailment, then may be liable. © 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.