Bài giảng Business Law - Chapter 23: Personal Property and Bailments

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin5Personal Property and BailmentsReal PropertyLandlord and TenantEstates and TrustsInsurance LawPropertyPARTPersonal Property and BailmentsPAETRHC23Few rich men own their own property. The property owns them.Robert Green IngersollIn an address to the McKinleyLeague, New York City (October 29, 1896)Learning ObjectivesUnderstand concept of property ownership as bundle of rights recognized by law Differentiate types of propertyExplain bailments, including creation, rights and dutiesIdentify various documents of titleProperty refers to (a) something that may be owned, or (b) a right or interest that allows a person to exercise dominion over a thing that may be owned or possessedProperty ownership is a bundle of rights that the law recognizes and enforces, including the rights to use, transfer, or destroy the propertyProperty OverviewProperty is classified as real or personalPersonal property may be classified as:Tangible – has a physical existenceExamples: cars, clothing, animals, furnitureIntangible -- has no physical existenceExamples: intellectual property (patent, copyright, trademark), stocks, and bondsClassifying PropertyOwnership of personal property may be acquired by:ProductionPurchaseLeasingGiftWill or inheritanceConfusionAccessionTaking possession of unowned propertyAcquiring OwnershipPossession of Unowned PropertyTwo major examples of unowned property that may be acquired by possession are wild animals and abandoned propertyThe first person to take possession of a wild animal normally becomes the ownerIf a captured wild animal escapes and is caught by another person, that person becomes the owner unless s/he knew the animal had escaped from the first personAbandoned or Lost PropertyA person who finds abandoned, mislaid, or lost property may – or may not – be the ownerProperty is considered abandoned if owner intentionally placed property out of his/her possession with intent to give up ownershipProperty is lost when the owner did not intend to part with possession of the propertyFinder does not acquire ownership of property, but acquires better rights to the lost property than anyone other than the true ownerMislaid PropertyA person who finds mislaid property acquires no rights to the property, but has the right to hold property for the true owner and has better rights to the property than anyone other than the true ownerProperty is mislaid when owner voluntarily leaves the property, but forgets to retake possessionFinder must return the property when real owner asks for the propertyEstray Statutes and Embedded PropertyEstray statutes allow finders of property to clear their title to the property through court action after giving public noticeEmbedded property refers to property found underwater or in the groundExample: Corliss v. Wenner and AndersonCourt: “We hold that the owner of the land has constructive possession of all personal property secreted in, on, or under his or her land.”LeasingA lease of personal property is not a transfer of ownership, but a transfer of the right to possess and use personal property belonging to another; common in business settingsExample: lease of harvesting combineInheritance & GiftOwnership of personal property may transfer through inheritance upon the death of the former ownerProperty passes by terms of a will or state lawA gift is a voluntary transfer of property to the donee (the person who receives a gift), for which the donor (the person who gives the gift) gets no consideration in returnA Conditional Gift is Not a GiftIf a person conditions a gift by requiring that the donee comply with certain rules or perform certain actions, the conditional gift is not a completed giftExample: Lindh v. Surman about gift in contemplation of marriageConfusion & AccessionOwnership of personal property may be acquired by confusion, or the intermixing of different owners’ goods in such a way that they cannot later be separatedAccession means increasing property value by adding materials, labor, or both. In general, owner of original property is owner of improvements, but person(s) adding value may claim an ownership interest until paidBailmentsBailment occurs when a bailor who owns personal property (or someone holding the right to possess it) delivers it to another (the bailee) who accepts it and is under an express or implied agreement to return it to the bailor or someone designated by the bailorExample: bailment of car to valetCreation of a BailmentExpress or implied contractBailor (owns or has right to possess property)Bailee (knowingly acceptsproperty withunderstanding thats/he must return it)Delivery of, exclusivepossession of, andcontrol over propertyBailee has duty to return property upon termination of bailmentDuties & Rights of The Bailee A bailee has two basic duties:To take care of the entrusted propertyTo return property at the bailment’s termination A bailee may have right to compensationDepends on the bailment agreementA person who finds lost or misplaced property may be considered the involuntary bailee or constructive bailee of the propertyBailee’s Duty of CareDegree of care required of bailee to protect the property depends on the type of bailmentBailment for the benefit of the bailorOnly minimal, or slight, degree of careBailment for mutual benefitOrdinary or reasonable careBailment for the benefit of the baileeHigh degree of careProfessional bailees, such as innkeepers and common carriers, are held to a higher duty of care than the ordinary baileeBailees may try to limit or relieve themselves of liability for bailed propertyAttempt by bailee to avoid liability for intentional wrongful acts is against public policy and will not be enforcedBailee’s Duty of CareIf Bailee Fails to Satisfy DutyA bailee is obligated to return property to the bailor in the same or similar condition as when bailed, subject to the degree of careThus, if a bailee with an ordinary or high duty of care damages or fails to return the property, bailee may be liable to the bailor for compensation or conversionSome types of bailees are held to a higher level of responsibility than normally required by bailees, making these bailees almost an insurer of the bailed goodsCommon carriersInnkeepersSafe-deposit boxesDocument of title refers to the document that identifies ownership of propertySpecial BailmentsThe warehouse receipt or the bill of lading may be either negotiable or non-negotiableA person who acquires a negotiable document of title generally acquires both title to the document and title to the goodsTo be negotiable, a warehouse receipt, bill of lading, or other document of title must provide that the goods are to be delivered to the bearer or to the order of a named personNegotiability Thought QuestionsHave you ever been a bailee? A bailor? What type of problems may arise in a bailment situation?