Chapter 48. Personal Property and Bailments
Define personal property.
Describe the methods for acquiring ownership in personal property.
Explain how ownership rights are transferred by inter vivos gift and gift causa mortis.
Describe and apply rules regarding ownership rights in mislaid, lost, or abandoned property.
Define ordinary bailments.
List and describe the elements for creating a bailment.
List and describe the rights and duties of bailees and bailors.
Explain the liability of bailees for lost, damaged, or destroyed goods in ordinary bailment situation.
Explain the liability of bailees in special bailment situations.
Describe the use of documents of title.
Definition of personal property
Personal property is property that consists of tangible property, such as automobiles, furniture, and jewelry, and intangible property, such as securities, patents, and copyrights.
Methods of acquiring ownership in personal property
There are a number of ways to acquire ownership in personal property:
- Taking possession.
- Purchasing or producing property.
- Receiving a gift.
- Receiving by will or inheritance.
- Receiving by accession (when the value of personal property increases because it is added to or improved by natural or manufactured means).
- Receiving by confusion (where two or more persons commingle fungible goods).
- Receiving by divorce.
Inter vivos gift transfers and gifts causa mortis
- An inter vivos gift is a gift made during a person's lifetime that is an irrevocable present transfer of ownership.
- A gift causa mortis is a gift that is made in contemplation of death.
Mislaid, lost, and abandoned property
- Property is mislaid when an owner voluntarily places property somewhere and then inadvertently forgets it.
- Property is lost when the owner leaves property somewhere because of negligence, carelessness, or inadvertence.
- Property is abandoned if the owner discards the property with the intent to relinquish his or her rights to it or an owner of mislaid or lost property gives up any further attempts to locate it.
A bailment is a transaction where an owner transfers his or her personal property to another to be held, stored, delivered, or for some other purpose. Title to the property does not transfer.
- The owner of property in a bailment is the bailor.
- The holder of goods who is not a seller or a buyer is the bailee.
Elements of a bailment
Rights and duties of bailors and bailees
|Type of bailment
||Duty of care
owed by bailee
|Bailee liable to
|For sole benefit of bailor
|For sole benefit of bailee
|For mutual benefit of bailor
Liability of bailors for lost, damaged, or destroyed goods in an ordinary bailment situation
Bailors owe a duty to pay the agreed upon compensation to the bailee and not interfere with the bailee's possessory interest during the bailment. The bailor must notify the bailee of any defects in the bailed property that could cause injury to the bailee or others. A bailor who fails to do this is liable for damages caused by the defects.
Liability of bailees in special bailment situations
Special bailees are common carriers, warehouse companies, and innkeepers.
|Type of bailee
||Limitation on liability
||Strictly liable except for:
Act of God
Act of public enemy
Order of the government
Act of the shipper
Inherent nature of the goods
|May limit the dollar amount of liability by offering the bailor the right to declare a higher value for the bailed goods for an additional charge
||May limit dollar amount of liability by offering the bailor the right to declare a higher value for the bailed goods for an additional charge
||State statutes may limit the liability of an innkeeper for others' negligence
Documents of title
Documents of title are negotiable instruments developed to represent the interests of different parties in a transaction that uses storage or transportation between the parties. Some examples include:
- Warehouse receipta written document issued by a person who is engaged in the business of storing goods for hire.
- Bill of ladinga document of title that is issued by a carrier when goods are received for transportation.
- abandoned propertyProperty that an owner has discarded with the intent to relinquish his or her rights in it and mislaid or lost property that the owner has given up any further attempts to locate.
- accessionOccurs when the value of personal property increases because it is added to or improved by natural or manufactured means.
- Article 7 of the UCCAn article of the Uniform Commercial Code that provides a detailed statutory scheme for the creation, perfections, and foreclosure on common carriers' and warehouse operators' liens. Also governs documents of title.
- bailee's rightsDepending on the type of bailment, bailees may have the right to (1) exclusive possession of the bailed property, (2) use of the bailed property, and (3) compensation for work done or services provided.
- baileeA holder of goods who is not a seller or a buyer (e.g., a warehouse or common carrier).
- bailmentA transaction where an owner transfers his or her personal property to another to be held, stored, delivered, or for some other purpose. Title to the property does not transfer.
- bailment at willA bailment without a fixed term; can be terminated at any time by either party.
- bailment for a fixed termA bailment that terminates at the end of the term or sooner by mutual consent of the parties.
- bailment for the sole benefit of the baileeA gratuitous bailment that benefits only the bailee. The bailee owes a duty of utmost care to protect the bailed property.
- bailment for the sole benefit of the bailorA gratuitous bailment that benefits only the bailor. The bailee owes only a duty of slight care to protect the bailed property.
- bailorThe owner of property in a bailment.
- bill of ladingA document of title that is issued by a carrier when goods are received for transportation.
- common carrierA firm that offers transportation services to the general public. The bailee owes a duty of strict liability to the bailor.
- confusionOccurs if two or more persons commingle fungible goods; title is then acquired by confusion.
- consigneeThe person shipping the goods. The bailor.
- consignorThe person shipping the goods. The bailor.
- document of titleA negotiable instrument developed to represent the interests of the different parties in a transaction that uses storage or transportation between the parties.
- doneeA person who receives a gift.
- donorA person who gives a gift.
- duty of reasonable careThe duty that a reasonable bailee in like circumstances would owe to protect the bailed property.
- duty of slight careA duty not to be grossly negligent in caring for something in one's responsibility.
- duty of strict liabilityA duty that common carriers owe that says if the goods are lost, damaged, destroyed, or stolen, the common carrier is liable even if it was not at fault for the loss.
- duty of strict liabilityCommon law duty that says innkeepers are liable for lost, damaged, or stolen goods of guests even if they were not at fault for the loss.
- duty of utmost careA duty of care that goes beyond ordinary care.
- elements of a bailmentThe following three elements are necessary to create a bailment: (1) personal property, (2) delivery of possession, and (3) a bailment agreement.
- giftA voluntary transfer of title to property without payment of consideration by the donee. To be a valid gift, three elements must be shown: (1) donative intent, (2) delivery, and (3) acceptance.
- gift causa mortisA gift that is made in contemplation of death.
- gift inter vivosA gift made during a person's lifetime that is an irrevocable present transfer of ownership.
- innkeeper's statutesState statutes that limit an innkeeper's common law liability. An innkeeper can avoid liability for loss caused to a guest's property if (1) a safe is provided in which the guest's valuable property may be kept and (2) the guest is notified of this fact.
- intangible propertyRights that cannot be reduced to physical form such as stock certificates, certificates of deposit, bonds, and copyrights.
- lost propertyWhen a property owner leaves property somewhere because of negligence, carelessness, or inadvertence.
- mislaid propertyWhen an owner voluntarily places property somewhere and then inadvertently forgets it.
- mutual benefit bailmentA bailment for the mutual benefit of the bailor and bailee. The bailee owes a duty of ordinary care to protect the bailed property.
- ordinary bailments(1) Bailments for the sole benefit of the bailor, (2) bailments for the sole benefit of the bailee, and (3) bailments for the mutual benefit of the bailor and bailee.
- personal propertyProperty that consists of tangible property such as automobiles, furniture, and jewelry, and intangible property such as securities, patents, and copyrights.
- possessory lienLien obtained by a bailee on bailed property for the compensation owned by the bailor to the bailee.
- purchasing propertyThe most common method of acquiring title to personal property.
- real propertyThe land itself as well as buildings, trees, soil, minerals, timbre, plants, and other things permanently affixed to the land.
- special baileesIncludes common carriers, warehouse companies, and innkeepers.
- taking possessionA method of acquiring ownership of unowned personal property.
- tangible propertyAll real property and physically defined personal property such as buildings, goods, animals, and minerals.
- through bill of ladingA bill of lading that provides that connecting carriers may be used to transport the goods to their destination.
- Uniform Gift to Minors Act and Revised Uniform Gift to Minors ActActs that establish procedures for adults to make gift of money and securities to minors.
- warehouse companyA bailee engaged in the business of storing property for compensation. Owes a duty of reasonable care to protect the bailed property.
- warehouse receiptA written document issued by a person who is engaged in the business of storing goods for hire.
- will or inheritanceA way to acquire title to property that is a result of another's death.
Agreement to sell personal property: www.ilrg.com/forms/sellprop.html
Buying used federal personal property: www.pueblo.gsa.gov/cic_text/fed_prog/usedprop/usedprop.htm