LECTURE NOTES

Chapter 48. Personal Property and Bailments

Chapter Objectives
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:

Inter vivos gift transfers and gifts causa mortis

Mislaid, lost, and abandoned property

Ordinary bailments
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.

Elements of a bailment

diagram

Rights and duties of bailors and bailees

Type of bailment Duty of care
owed by bailee
Bailee liable to
bailor for
For sole benefit of bailor Slight Gross negligence
For sole benefit of bailee Great Slight negligence
For mutual benefit of bailor
and bailee
Ordinary Ordinary negligence

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 Liability Limitation on liability
Common carrier 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
Warehouse company Ordinary negligence 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
Innkeeper Strictly liable 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:

Terms

Internet Links
Bailments: www.forwarderlaw.com/Cases/bailment.htm
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