Chapter 27: Personal Property and Bailments

1. Chapter 27: Personal Property and 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? • What are the basic rights and duties of a bailee? Of a bailor?

3. Introduction • Property consists of legally protected rights and interests a person has in anything with an ascertainable value that is subject to ownership.

4. Introduction • Property is divided into real and personal property. • Real property includes land everything permanently attached to it. • Personal property is both tangible and intangible.

5. Property Ownership • Introduction. 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.

6. Property Ownership • Fee Simple. • Owns the entire “bundle of rights”. • Gives the owner the maximum possible estate or right of ownership of real property, continuing forever. • Chapter 28 will deal with realty estates.

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 interest passes to B’s heir, “C”.

8. Property Ownership A B • Concurrent Ownership. • Joint Tenancy: A and B own an undivided interest in property but, upon B’s death, B’s interest passes to A, the surviving joint tenant.

9. Property Ownership • Concurrent Ownership. • Community Property (limited # of states) • Property acquired by couple during their marriage is owned as an undivided ½ interest in property (real and personal).

10. Acquiring Ownership of Personal Property • Personal property can be acquired through: • Possession.  • Production.  • Gift.  • Will or Inheritance.  • Accession.  • Confusion. 

11. Acquiring Ownership of Personal Property • Possession: • Capture of wild animals (wild animals belong to no one). • Finding of abandoned property. • Adverse Possession.

12. Acquiring Ownership of Personal Property • Production: • Writers, inventors, manufacturers, and others who produce personal property acquire title to it.

13. Acquiring Ownership of Personal Property • Gifts. • Voluntary transfer of property ownership from Donor (owner) to Donee (recipient) for no consideration. Three elements: • Donative Intent: based on circumstances, or relationship between the parties. • CASE 27.1 Goodman v. Atwood (2011). What factors indicated capacity?

14. Acquiring Ownership of Personal Property • Gifts. • Three elements: • 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 27.2 In Re Estate of Piper (1984). Why was the gift ineffective? 

15. Acquiring Ownership of Personal Property • Gifts. • Three elements: • Acceptance. • Gifts Intervivos and Gifts Causa Mortis. • Intervivos: while the donor is living. • Causa Mortis: while the donor is living but made with an expectation of imminent death. Gift is revocable if the donor lives.

16. Acquiring Ownership of Personal Property • Accession. • Some value added to another’s personal property by use of either labor or materials. • With owner’s consent. • Without owner’s consent.

17. Acquiring Ownership of Personal Property • Confusion. • Commingling so that a person’s personal property cannot be distinguished from another’s. • Fungible goods consists of identical particles such as oil or grain.

18. Mislaid, Lost, and Abandoned Property • Mislaid Property: Voluntarily placed somewhere, then inadvertently forgotten. Finder is caretaker for true owner.

19. Mislaid, Lost,and Abandoned Property • Lost Property: Involuntarily left. Property owner acquires title against whole world, except for true owner. • Conversion of Lost Property: finder may be liable. • Estray Statutes.

20. Mislaid, Lost, and Abandoned Property • Abandoned Property: Discarded by true owner with no intention of recovering. Acquires title against all the world, including the original owner. • Trespassers: no title. • Treasure Trove: Title against all world except true owner.

21. Bailments • A bailment is 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.

22. Bailments • Differs from sale or gift because property is transferred without passage of title. • Elements of a Bailment: • (1) personal property, (2) delivery of possession, and (3) agreement to return or dispose of property. 

23. Bailments • Elements of a Bailment. • Personal Property. (Tangible or Intangible--not persons or realty.) • Delivery of Possession. • Bailee given physical or constructive possession, and knowingly accept. • Involuntary Bailments: bailee is responsible to safeguard property for true owner.

24. Bailments • Elements of a Bailment. • Bailment Agreement. • Bailments for less than a year do not require a writing under the Statute of Frauds. • Agreement can be express or implied. • Agreement provides for return of property to bailor, a third party or disposal by bailee.

25. Bailments • Ordinary Bailments. • Bailment for the Sole Benefit of the Bailor (Gratuitous Bailment): Bailee owes Bailor a low duty of care, liable only for gross negligence. • Bailment for the Sole Benefit of the Bailee: Bailee owes Bailor a high duty of care and is liable for even slight negligence. 

26. Bailments • Mutual Benefit Bailment (most common): Each party owes the other a reasonable duty of care. Bailor’s Sole Benefit Mutual Benefit Bailee’s Sole Benefit Slight Care Reasonable Care Great Care

27. Bailments • Ordinary Bailments. • Rights of the Bailee. • Right of Possession. • Right to Use Bailed Property. • Right to Compensation: gratuitous bailment, bailee’s lien. • Right to Limit Liability.

28. Bailments • Ordinary Bailments. • Duties of the Bailee. • Duty of Care. • Duty to Return Bailed Property. Bailee may be liable for breach of contract, conversion and/or negligence. • CASE 27.3 LaPlace v. Briere (2009). In your view, was the bailee negligent?

29. Bailments • Ordinary Bailments. • Duties of the Bailor. • Bailor’s Duty to Reveal Defects. • Mutual Benefit Bailment: bailor must notify bailee of all known defects and hidden defects the bailor knew about or could have discovered with reasonable inspection. • Warranty Liability for Defective Goods.

30. Bailments • Special Types of Bailments. • Common Carriers. Publicly licensed to provide transportation services to general public. • Common Carriers are strictly liable for damages, unless damages caused by: • An act of God. • An act of a public enemy. • An order of a public authority. 

31. Bailments • Special Types of Bailments. • Common Carriers. • Common Carriers are strictly liable unless damages caused by: • An act of the shipper. • The inherent nature of the goods. • Not permitted to contract away their liability, but can limit dollar liability.

32. Bailments • Special Types of Bailments. • Warehouse Companies. • Can issue documents of title. • Owe duty of reasonable care. • Can’t exculpate, can limit. 

33. Bailments • Special Types of Bailments. • 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.