Personal Property Flashcards
Bailment
A delivery of something of a apersonal nature by one party to another to be held according to the purpose or object of the delivery and to be returned or delivered when that purpose is accomplished. OR The delivery of good s in trust, upon a contract expressed or implied, that the trust shall be faithfully executed (lessor v jones, 1920)
Bailment is the temporary, voluntary taking into custody of chattels which are the property of another. Bailment is a common law proprietary relationship that comes about by the bailee taking possession of the bailor’s property. The bailee gets property rights exercisable against everyone other than the owner or prior bailee.
Bailment is different from sale or gift (no title to the object is given, just a temporary possession). It is also different from a license (a bailee takes possession and so is liable to take reasonable care of the bailor’s property, but a licensor does not take possession and so is not liable
A contract is not necessary. E.g. a finder is a bailee for the true owner (there is no contract involved). Bailments often are, however, associated with a contract. In such cases the contract can modify the terms of the relationship.
Morris v. C.W. Martin (1965) (English).
a) Has there been a bailment? I.e. was the item taken with the intent to take possession?
b) The bailee has obligations in tort: in negligence to take reasonable care of the goods (and for conversion if transfer to someone else, and for detinue if fail to return). Duty of care on a bailee:
i) Bailments for the benefit of the bailor alone i.e. bailee takes custody of the goods (to carry or do something to them), receives no payment, and can’t use them (would otherwise represent a benefit): Gratuitous mandate – bailee liable only for gross negligence (i.e. low standard of care on bailee)
ii) Bailments for the benefit of the bailee alone i.e. gratuitous loan where bailor lends chattels to the bailee for their use: there is a high standard of care on the bailee, so will be liable for the least neglect (the item can only be used for the purpose for which it was lent)
iii) Bailments for the benefit of both (e.g. pawn where goods are given as security for a loan or other debt, hire where goods are left with the bailee for their use with payment made to bailor): ordinary standard of care on the bailee
c) Burden of proof is on bailee to show appropriate level of care was taken.
d) If there is a contract then exemption clauses limiting liability will apply
Duty of Care on a bailee
(Morris)
If the bailment is for the benefit of the bailor then you have a low obligation (gross neg only)
If the benefit is entirely for you then you have a higher standard
If mutual benefit, then middle standard
Actions for Bailment
The bailee has obligations in tort: in negligence to take reasonable care of the goods (and for conversion if transfer to someone else, and for detinue if fail to return).
If you take possession of the chattel not with the intent of looking after it and ultimately returning it, but instead with the intent of keeping it, then the relevant tort you commit is conversion.
If there is a contract, the contract can alter the terms of the bailment.
Finders
Finders is the situation in which there is NO contract. Sub-bailment is also a situation where there is no contract.
Finders have rights + obligation to true owner, who exerted most control
A person who finds a lost item does not have to take possession, and is not liable to the true owner if they do not. A finder who takes possession gets right as a finder but also obligations as a bailee for the true owner or some prior bailee. Just picking something up and putting it back probably will not count, but if take it away or use it then yes, probably will be held as taking possession.
If you find something and you know/can find out who the true owner is, the item should go back to that true owner.
Consider an item (lost by the true owner) left on some landowner’s land.
a) If the item was in / under / attached to the land, then the landowner has the superior claim
b) If the item was only on the land, can look at the problem from one of two perspectives (and sometimes come to different conclusions as a result):
i) Obligation approach: if landowner didn’t know it was there, has no obligation/liability to the true owner, but if they knew it was there, they become a bailee and owe a duty to take reasonable steps to locate the true owner. Thus knowledge important when considering obligations. In deciding who should get the item, this obligations approach will suggest whoever owes an obligation to the true owner should get the item. So the landowner only gets an item that was on their land if they knew it was there e.g. Kowal
ii) Rights approach: in deciding who has the best right to the item (the finder or landowner, assuming can’t find the true owner) whoever had exerted / intended to exert the most control over the item should get it. So the landowner presumed to have property right to the item (albeit a weaker presumption when the item is on as opposed to in / under / attached to their land) regardless of whether they knew it was there (i.e. knowledge not so important when considering from a rights approach) e.g. Grafstein
Rights Approach (to find who has best right to property when it is found ON property but not in/under/attached)
in deciding who has the best right to the item (the finder or landowner, assuming can’t find the true owner) whoever had exerted / intended to exert the most control over the item should get it. So the landowner presumed to have property right to the item (albeit a weaker presumption when the item is on as opposed to in / under / attached to their land) regardless of whether they knew it was there (i.e. knowledge not so important when considering from a rights approach) e.g. Grafstein
Obligation Approach (to find who has best right to property when it is found ON property but not in/under/attached)
Obligation approach: if landowner didn’t know it was there, has no obligation/liability to the true owner, but if they knew it was there, they become a bailee and owe a duty to take reasonable steps to locate the true owner. Thus knowledge important when considering obligations. In deciding who should get the item, this obligations approach will suggest whoever owes an obligation to the true owner should get the item. So the landowner only gets an item that was on their land if they knew it was there e.g. Kowal
Gift in contemplation of death
You are a bailee until actual death occurs.
What if you find Gold or silver Coin plate or bullion?
then it is a treasure trove - that is property of crown
Grafstein v Holme and Freeman (1958, ONCA)
Box/Money
Knowledge important when determining obligation to true owner. Also look at intent to control - presumption that landowner exercises most control. (more attachment to land = stronger presumption
(1) If item is in / under / attached to someone’s private land, the landowner will be presumed to have control (and so will have a stronger claim to it), as opposed to if item is simply on their land in which case landowner still has presumption in their favour, but will be weaker. Note makes no difference whether the landowner is aware of the item’s existence.
(2) But someone can be a finder even though they find something on someone else’s private land (i.e. doesn’t have to be found on public land)
(3) Also look at parties intent to control
If landowner had known of the contents - would have had obligation to true owner to secure such a sum of money, and simply putting the box on the shelf would not have been sufficient
However, landowner didn’t know of the sum of money at this time.
Thus knowledge is important when determining the obligation to the true owner.
Note had no obligation to open the box to see what was in there.
Concerning the contents of the box, the 2 employees claim they revealed it’s contents to the store owner, but not as part of their employment (this is what led to the claim of trespass). Held that store owner had prior custodial control over the contents.
Rights approach.
City of Cranbrook v Brown (1998)
Couch/money
Ratio: If you can identify the rightful owner, then they have a superior title and win out over the person in possession. (dont have to work out who has the greater right between finders)
Kowal v Ellis (1977, ManCA)
Obligation approach
If an object is in, attached to or under the land it belongs to the land owner, but if it is just on the land it is not a fixture (as is the case here)
The court asked: did the landowner have any OBLIGATIONS towards the true owner of the pump before the finder found it? I.e. was the land owner a prior bailee? The key criteria is whether the landowner knew it was there (in Grafstein court held that it did not matter if the landowner knew it was there when considering if he had a right to ownership. But here considering the issue from an obligations approach, so knowledge is important).
Cant be a bailee if you dont know it is there (with obligation approach) so landowner couldnt have been bailee. Pump goes to finder.
Court stated that it does not know how to rationalize a trespasser who is a finder. (howell says would need to give them some rights to encourage to find true owner - prevent free for all, but also dont want people trespassing)
Ratio: (Obligations approach). no rights/obligations unless takes possession, then has to take reasonable steps to locate owner.
Parker v British Airways Board (1982)
Rights approach. Consider exclusivity etc of the area → shows control. Lays out rights and obligations of owners vs occupiers.
Asked if the fact that the bracelet was in the executive lounge at the airport meant it was under sufficient CONTROL
Finder Rights/Obligations
(a) Finder only gets rights if item is lost/abandoned and they take it into their care/control.
(b) Finder acquires very limited rights if they had dishonest intent or were trespassing
(c) Finder acquires right to keep it against all but the true owner and anyone who can assert a prior right that existed before the finder “found”.
(d) If employee finds in course of employment, employer is finder
(e) Finder has an obligation to reasonably try to find the true owner.
Rights/obligations of an occupier:
(a) If the object is in / attached to the land or a building, strong presumption in favour of the occupier over the finder, regardless of whether they knew it was there.
(b) If the object is only on / in a building, only a weak presumption in favour of the occupier, and must ask if before the item was found, did the occupier manifest an intention to control the building and the items found within it.
(c) If an occupier has expressed such an intent, then is under an obligation to reasonably ensure that lost chattels are found and returned to the true owner.
(d) Occupier of chattel (ie car, boat) is to be treated as occupier of building
Discussed policy:
(1) What is the best approach so that the true owner will be found
(2) What is the best approach so that a finder does not become a “concealed keeper”
