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BUSINESS LAW Today STANDARD EDITION TEXT & SUMMARIZED CASES, 12e

Roger LeRoy Miller

Miller, Business Law Today, Comprehensive Edition: Text & Cases, 12th Edition. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Personal Property and Bailments

Chapter 41

Chapter Outline

41-1 Personal Property versus Real Property

41-2 Acquiring Ownership of Personal Property

41-3 Mislaid, Lost, and Abandoned Property

41-4 Bailments

Learning Objectives

What is real property? What is personal property?

What are the three necessary elements for an effective gift?

How does lost property differ from mislaid property? Does a finder of such property acquire title to it?

What are the three elements of a bailment?

41-1 Personal Property versus Real Property

Real property: Land and everything permanently attached to it, such as trees and buildings.

Personal property (or chattel): Property that is movable. Any property that is not real property.

41-1a Why Is the Distinction Important?

Taxation

Acquisition

41-1b Conversion of Real Property to Personal Property

41-2 Acquiring Ownership of Personal Property

41-2a Possession

41-2b Production

41-2c Gifts

Gift: A voluntary transfer of property made without consideration, past or present.

41-2c Gifts (slide 1 of 2)

Donative Intent

Spotlight Case Example 41.3 Goodman v. Atwood (2011)

Delivery

Constructive Delivery: A symbolic delivery of property that cannot be physically delivered

Relinquishing Dominion and Control: An effective delivery also requires giving up complete control and dominion (ownership rights) over the subject matter of the gift.

41-2c Gifts (slide 2 of 2)

Acceptance

Gifts Inter Vivos and Gifts Causa Mortis

Gift inter vivos: A gift made during one’s lifetime and not in contemplation of imminent death, in contrast to a gift causa mortis.

Gift causa mortis: A gift made in contemplation of imminent death. The gift is revoked if the donor does not die as contemplated.

Automatically Revoked if Donor Recovers

Automatically Revoked if Donee Dies

Classic Case 41.1

In re Estate of Piper (1984)

Illustrates the delivery requirement when making a gift—to protect property owners and their heirs from fraudulent claims based solely on parol evidence

41-2d Accession

Accession: The addition of value to personal property by the use of labor or materials.

41-2e Confusion

Confusion: Mixing together of goods to such an extent that one person’s personal property cannot be distinguished from another’s.

41-3 Mislaid, Lost, and Abandoned Property

41-3a Mislaid Property

Mislaid property: Property that the owner has voluntarily parted with and then has inadvertently forgotten.

41-3b Lost Property

Lost property: Property that the owner has involuntarily by the owner.

Conversion of Lost Property

Estray Statutes

Estray statute: A statute defining finders’ rights in property when the true owners are unknown.

Spotlight Case Example 41.12 United States v. One Hundred Sixty-Five Thousand Five Hundred Eighty Dollars ($165,580) in U.S. Currency (2007)

41-3c Abandoned Property

Abandoned property: Property that has been discarded by the owner, who has no intention of reclaiming it.

41-4 Bailments

A bailment is formed by the delivery of personal property without transfer of title by one person (a bailor) to another (a bailee).

41-4a Elements of a Bailment

Personal Property Requirement

Delivery of Possession

Physical versus Constructive Delivery

Involuntary Bailments

Bailment Agreement

A bailment agreement can be express or implied.

41-4b Ordinary Bailments (slide 1 of 3)

Bailment for the sole benefit of the bailor.

Bailment for the sole benefit of the bailee.

Bailment for the mutual benefit of the bailee and the bailor.

Rights of the Bailee

Right of Possession

Right to Use Bailed Property

Right of Compensation

Right to Limited Liability

41-4b Ordinary Bailments (slide 2 of 3)

Duties of the Bailee

Take appropriate care

Surrender property or dispose in accordance with bailor’s instructions at end of bailment

The Duty of Care

Duty to Return Bailed Property

Lost or Damaged Property

Case Example 41.29 National Liability & Fire Insurance Co. v. R&R Marine, Inc. (2014)

Exhibit 41–2 Degree of Care Required of a Bailee

Miller, Business Law Today, Standard Edition: Text & Summarized Cases, 12th Edition. © 2020 Cengage. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

41-4b Ordinary Bailments (slide 3 of 3)

Duties of the Bailor

Bailor’s Duty to Reveal Defects

Warranty Liability for Defective Goods

41-4c Special Types of Bailments

Common Carriers

Common carriers are publicly licensed to transport goods or passengers on regular routes at set rates.

Strict Liability Applies

Limitations on Liability

Warehouse Companies

Limitations on Liability

Warehouse Receipts

Hotel Operators

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