Bailments and Gifts

Question 1

Bailment

Answer 1

• any rightful possession of an item of personal property by someone other than its owner
• usually involves transfer of possession for limited purposes by owner or other interest holder (bailor) to another (bailee)
• if there’s no transfer of possession, no bailment

Question 2

General Rights of Bailee

Answer 2

• rest of world interacts w/ bailee as it would w/ true owner -> bailee has possessor’s rights against third parties + some power to create rights
• bailment usually involves some sort of contract -> rights + duties of bailor and bailee have strong contractual element + can be modified by agreement of parties
• bailee also has some power to create rights (apparent authority)

Question 3

Bailee’s Duty of Care

Answer 3

Bailee generally has a higher duty of care than the general public, but specific duty depends on context (Justice Story’s treatise):

• reasonable care when both benefit
• higher than that if bailee primarily benefits
• lower than that if bailor primarily benefits

Question 4

Allen v. Hyatt Regency Nashville Hotel

Answer 4

• Allen parks in self-serve parking garage -> takes ticket from automatic dispensing machine
• when people leave the garage, they present the ticket to the agent at the gate (computes charge based on duration of stay according to ticket) + raises the gate
• ticket doesn’t identify particular car, just time + charge
• parking garage also has guards
• car gets stolen (ticket agent said didn’t pass through gate, + guards said they heard about potential theft but investigated and didn’t see anything)

Question 5

Bailments and Parking

Answer 5

• valet parking typically considered bailment
• open air parking lot w/o attendants not likely bailment
• parking garages like that in Allen tricky

Question 6

Bailment and Numbered Tickets

Answer 6

• if ticket has number corresponding to particular item, bailee usually not liable if they give the item to whoever presents the ticket, even if it’s not the owner

Question 7

Bailment and Knowledge

Answer 7

• must know what you’re taking possession of in order to have bailment - if you valet park a car w/ diamonds in the trunk, they’d be responsible for the car but not the diamonds

Question 8

Allen v. Hyatt Regency - Decision

Answer 8

• court says bailment for hire by implication -> says operator assumes control + custody of cars by limiting access to garage + requiring ticket for exit
• also points out garage is enclosed + indoor w/ attendant at gate + security guards

Question 9

Allen v. Hyatt - Dissent

Answer 9

Says element of delivery + sole custody + control lacking -> no bailment b/c:

• owner keeps keys
• attendant not always present (when on break, gate left open + people can drive out)
• ticket automatically dispensed for purpose of calculating charge (doesn’t correspond to particular vehicle)

Question 10

Winkfield- Facts

Answer 10

• Winkfield crashes into another ship that’s carrying mail -> the other ship + the mail sink -> Postmaster General (bailee) files claim on behalf of the owners of the lost mails
• lower court denies recovery b/c says Postmaster isn’t actually liable to bailors (they can’t sue him b/c of sovereign immunity-> therefore he has no right to recover)

Question 11

Winkfield - Decision

Answer 11

• Court of Appeals reverses lower court’s decision -> wrongdoer must treat bailee as possessor (bailee’s right to recover founded in possession, not based on liability to bailor)
• rejects jus tertii defense (which would’ve said can’t recover b/c property belongs to third-party, ie. bailor)

Question 12

Bailment and Possession

Answer 12

• established in Winkfield
• bailee has limited possession - cannot sell the good, transform it (unless contract allows), consume it, etc., BUT bailee has same status as an owner w/ respect to third-parties b/c in possession

Question 13

Gifts - Basic Elements

Answer 13

• intent to give (by exercising the power to shift ownership to another)
• delivery (deed of gift also enough)
• acceptance (usually easy to find - suits generally focus on intent + delivery)

Question 14

Irons v. Smallpiece - Facts

Answer 14

• father makes verbal gift of two colts to son but colts remain in possession of father
• 6 months later - son says hay very expensive on market + father agrees to sell hay at a lower price to him, but doesn’t provide any hay until another six months later
• when father dies, executrix of his estate receives the colts -> son sues in trover

Question 15

Irons v. Smallpiece - Decision

Answer 15

• Court says no delivery, therefore no gift

Question 16

Why do we require delivery for a gift?

Answer 16

• way of showing transfer of possession (possession is prima facie evidence of ownership)

Question 17

Why do we require delivery?

Answer 17

• way of showing transfer of possession (possession = prima facie evidence of ownership)

Question 18

Gifts Cause Mortis

Answer 18

• if about to die or contemplating great risk of death, might give someone something on condition that you die (if you don’t die, the item is still yours)
• requires actual or symbolic delivery of the property in order to be enforced

Question 19

Gift Causa Mortis vs. Wills

Answer 19

• gifts causa mortis tend to do an end-run around wills - wills have certain formalities, vs. causa mortis completely informal + lacks the safeguards of a will
• problem is that gifts causa mortis technically supersede wills despite informality

Question 20

Foster v. Reiss - Facts

Answer 20

• Ethel has a will that leaves $1 to husband, everything else to children + grandchildren (they were under a separation agreement at the time, so he cannot claim automatic 1/3 of her estate)
• before her operation, she writes a note telling husband where everything is + what he should do with cash + passbooks if she dies -> she falls into coma after operation then dies
• husband gets the note during the operation -> he takes possession of the stuff mentioned

Question 21

Holographic Will

Answer 21

• will written in own hand

- doesn’t require witnesses

Question 22

Foster v. Reiss - Procedural Posture

Answer 22

• legal action brought by executors + trustees of Ethel’s estate to recover items taken by husband on basis of the letter

Question 23

Foster v. Reiss - Decision and Dissent

Answer 23

• majority says no gift b/c no delivery (at minimum, he would’ve had to retrieve the items, bring them to her, + have her okay them - can’t do b/c coma)
• dissent stresses purpose - says this scenario is ridiculous b/c the directions in writing are just as good evidence of the gift as delivery would be

Question 24

Gilbert v. McSpadden

Answer 24

• Gilbert + spouse execute deeds to three parcels of land w/ intent of making gift of a parcel to each of their children
• almost four years pass + Gilbert retains possession of the deeds -> goes to visit daughter shortly before Christmas, takes deeds from lockbox w/ apparent intention of delivering them -> he arrives tired + goes to bed, dies overnight
• deeds found in his suitcase -> court says possession of the deeds never passed from him to children, so no gift (property remains part of his estate)

Question 25

Sales of Personal Property vs. Gifts

Answer 25

• delivery not required for sales of personal property

- deed is also not required for sales of personal property (deed is not required for gift either, but can be used)

Question 26

Real Property and Requirements for Transfer

Answer 26

• deeds are required + must be delivered