Personal Property-Bailment

Question 1

Title

Rights

Answer 1

One who does not have title to goods cannot pass good title to even a bona fide purchaser except under certain exceptions

Question 2

Title Exceptions

Question 3

Abandoned Property

Answer 3

Is property that the owner has voluntarily relinquished all ownership of, without reference to any particular person or purpose

*To show that property was abandoned, it is necessary to show an intent to give up both title and possession, unless sufficient time has passed to deem the property abandoned

Facts against an argument for abandoned property i.e., facts show that a person or organization uses intense efforts to find/recover the property

Question 4

Title to Abandoned Property is Acquired How?

Answer 4

Title to abandoned chattel is acquired by: (i) actual or constructive dominion and control over the thing, and (ii) an intent to assert ownership over it

Question 5

Recovery of Property

Question 6

Rightful Owner of Property

Question 7

Superior Right to Possess Lost Property

Question 8

Treasure Trove

Answer 8

Treasure trove is any gold or silver in coin, plate, or bullion found concealed (e.g., in the earth, in a house i.e, behind a wall in house, in a bureau, etc.), the owner of which is unknown

Traditionally, Treasure trove is considered to belong to the finder as against everyone in the world except the true owner

Under the modern view, treasure trove is treated as just another form of lost property. Under this treatment, the theory of constructive possession holds that the owner of real property possesses all that which lies beneath the surface of his land

*Apply both views and determine who would have the right to possess the property?

Question 9

To discourage trespass on private property, amny states aplly the usual rules applicable to ___________ in dealing with treasure trove

Answer 9

Lost Property

Question 10

Lost Property

Question 11

Lost Property

rights

Answer 11

Generally, the finder of lost property is entitled to possession of it as against everyone except the true owner

One exception to this general rule is lost property that is found in a highly private locus (e.g., a home). In which case, the owner of the locus in quo, and not the finder, will acquire the possessory rights

Question 12

Finder of Lost Property

Answer 12

The finder of lost property is treated as a bailee for the sole benefit of the owner of the goods

Thus, in this situation, the bailee can be held liable for the loss of the goods only if she fails to exercise slight care

Question 13

Mislaid Property

Question 14

Mislaid Property

rights

Answer 14

The finder of mislaid property does not acquire rights to possession. Instead, the owner of the locus in quo becomes entitled to possess the property

Question 15

Tortious Conversion

Answer 15

Tortious conversion of personal property does not deprive the true owner of title

Question 16

When stolen property is found by a third party, a constructive, or involuntary, __________ arises

Question 17

Bailment

Answer 17

A bailment is the relationship created by the transfer of possession of personal property by the bailor to the bailee for the accomplishment of a certain purpose

The bailee acquires the right to possess the property in accordance with the terms of the bailment, but there is no transfer of title

The normal bailment is consensual

But with constructive bailment, the legal consequence of a bailment is imposed on the bailee without his consent

Question 18

Elements of Bailment

Whether an effective bailment is created

Answer 18

Bailment requires physical possession and intent to exercise control

One of the elements of an effective bailment is knowledge of the presence of the bailed item. A person is not considered to be in possession of an item as a bailee unless she has knowledge, or can be charged with knowledge, of the presence of the item

*Example: Facts show that Danielle merely placed a watch on Kirby’s dashboard, and the watch was stolen by another person before Kirby ever knew the watch was there on dashboard. Thus, no effective transfer of possession from Danielle to Kirby and consequently no bailment created. Further, Danielle cannot hold Kirby liable for the value of the watch

Question 19

Constructive Bailment

Answer 19

Is created when a person lawfully acquires possession of another’s personal property, other than by a bailment contract, and holds it under circumstances that the law imposes on him the obligation to keep the property safe and redeliver it to its owner

Question 20

To establish a prima facie case against a bailee, a bailor must show . . .

Answer 20

That the property was delivered to the bailee and that the bailee failed to return the property or returned the property in damaged condition

The burden then shifts to the bailee to explain the loss or damage and to prove that he exercised due care

Question 21

The bailee has no right to ___ from the bailor for caring for the property and is, in effect, a ____ bailee

Answer 21

Compensation; Gratuitous

Question 22

Bailment Diligence and Liability

Answer 22

Generally, where the bailment is gratuitous, for the sole benefit of the bailor (i.e., the bailee is uncompensated), only slight diligence is required, and liability is found where there is gross negligence

(i.e., Sam accepts a package on his roommate behalf becuase roommate was not home to accept package himself, and does it as favor for a driver (employee) of a company delivering the package which would be the bailor. Sam accepted the package from the driver on someone else’s behalf and received no compensation to deliver the package to the intended recipient (roommate), thus the bailment was for the sole benefit of bailor (the company/the driver for company). The facts show the package went missing and the roommate never retrieved it. Thus, Sam only owed a duty of slight care and is not liable absent gross negligence. *See also common carrier flashcard for the liability of the company

However, the bailee is absolutely liable to the bailor for any intentional, unauthorized use of the property that results in loss or damage, irrespective of the question of care or negligence, and he is absolutely liable as a converter when he departs from the terms of the bailment

Absolute liability also attaches if the bailee removes the goods from an agreed place of storage to another without the bailor’s knowledge or consent

Question 23

Professional Bailee Limitation on Liability

Answer 23

A professional bailee may not exempt himself from liability for his own negligence but may limit his liability

The limitation is not valid unless the bailor knows, or should know, of the limitation and assents to it before bailment arises

Question 24

Upon termination of the bailment, the bailee owes a duty to ….

Answer 24

redeliver/return or account for the thing bailed

Question 25

Adverse Possession of Personal Property

Answer 25

In Virginia, title to personal property by adverse possession results from the running of a five-year statute of limitations period

When five years have run, the party in possession becomes the true owner and thus has an enforceable right to possession superior to everyone

The statute of limitations for adverse possession DOES NOT run UNLESS the possession is: *(i) Actual; (ii) Open and Notorious; (iii) Hostile and Adverse, under a claim of right; and (iv) Exclusive and Continuous

Question 26

Accession

Answer 26

Is the addition of value to property by expenditure of labor or the addition of new materials

If the addition can be detached from the principal chattel, this will be ordered and each party will be put in status quo ante

If the addition cannot be detached from the principal chattel, the determination of ownership depends on whether the trespasser acted in good faith or was a willful trespasser

Question 27

Accession: Innocent Trespasser

Answer 27

Where an innocent trespasser adds value to the original owner’s chattel, the general rule is that the original owner retains title, and the trespasser cannot sue for compensation for the value of his labor or materials added to the chattel

However, where the increase in the value of the chattel is so great that it would be unfair to permit the original owner to reclaim her property, the original owner is limited to a cause of action for damages and may not sue in replevin, becasue the accession divested her of title

Question 28

Accession: Willful Trespasser

Answer 28

A willful trespasser cannot gain any rights of ownership in the property he has enhanced in value

The original owner is entitled to the property in its improved state/condition regardless of the degree of augmentation in value made by the trespasser

Question 29

When does parking a car in a parking lot or parking garage constitute a bailment?

Answer 29

If control over the car is surrendered to the owner or operator of the garage, the transaction would indicate a bailment

Question 30

When does parking a car in a parking lot or parking garage not constitute a bailment?

Answer 30

Where the car owner selects the space, parks the car, locks the car, and takes the keys, he leases the space, and the garage owner or operator is not a bailee

Determination of liability crossover

Question 31

Bailment for Hire or for the Mutual Benefit of the Bailee and Bailor

Answer 31

The bailee is required to exercise ordinary due care

The burden is on the bailor to prove that the bailee was negligent

If the bailee exercised ordinary due care and the loss was through no fault of her own, then she is not liable for the loss (i.e., theft by a third party could arguably be no fault of a bailee). Thus, the bailor cannot recover the value of the property in such case.

Question 33

Common Carriers

Answer 33

A common carrier is one who is hired to transport persons or goods from place to place

Three requirements must be met to determine common carrier status: (i) there must be a holding out to perform a service; (ii) it must be for hire; and (iii) it must be for carriage

If the service is a common carrier, then it is considered an insurer of the goods given to it by the shipper

The common carrier is thus liable for the loss or damage to the goods, except if the loss is due to an act of state, an act of the shipper, or the inherent nature of the goods

Question 34

Common Carrier Liability Commences When …

Answer 34

The goods are delivered to the carrier and accepted for immediate transportation

Duty also arises to deliver goods and responsiblity for the goods does not end until the goods are delivered

Question 35

Gift

Answer 35

A voluntary transfer of property without any consideration or compensation

Question 37

Inter Vivos Gift

Answer 37

Is a gift made during the donor’s life when the donor is not under any threat of impending death in contrast to a gift causa mortis

Question 38

Elements of a Valid Inter Vivos Gift

Answer 38

To show that a valid gift inter vivos was intended, three requirements must be proved by clear and convincing evidence: (i) donor had present donative intent, i.e., the donor must have intended the gift to take place immediately; (ii) the gift was delivered, i.e., the donee received dominion and control over the subject matter of the gift; and (iii) acceptance of the gift by the donee.

Example: element (ii) failed beause the CD was left in TSD’s safe deposit box and therefore was not placed in Sonny’s control.

Question 39

The basic ways of accomplishing delivery of a gift inter vivos are:

Answer 39

Actual Physical Delivery, Constructive Delivery, and Symbolic Delivery

Question 40

Actual Physical Delivery

Answer 40

Example:

Question 41

Constructive Delivery

Answer 41

Is the handing over of the means of obtaining possession and control, or in some other way relinquishing dominion and control over the property; it is permitted where actaul manual delivery is impossible or impracticable

Example:

Question 42

Symbolic Delivery

Answer 42

Is the handing over of some object that is symbolic of the thing given

A written instrument or deed of gift that manifests donative intent, describes the subject matter, is signed by the donor, and is delivered to the donee is the most common way of effectuating symbolic delivery. When the gift is beneficial to the donee, acceptance is presumed

Example: Mary signed the deed of gift, stating that it was her “full intent and purpose” to “presently pass title” of the contents of the safe deposit box to Staci. (donative intent satisfied)
There was symbolic delivery when Mary delivered the deed to Staci, and constructive delivery when Staci was given a key to the dafe deposit box. (delivery). Lastly, Staci accepted the deed and the key. (Acceptance).

Question 43

What is required for a valid Gift Causa Mortis?

Answer 43

The elements required for a gift inter vivos must be met, and in addition, the donor must be in contemplation of imminent death

Example: Argument for gift causa mortis would fail if the purported gift was made two years before Tom’s health began to deteriorate and five years before he died so well before imminency of death anticipation or knowledge of such death.

Question 44

A gift Causa Mortis can be made only as to ___

Answer 44

Personal Property

If a deed to real property is given, the rules governing causa mortis do not apply (i.e., rules of revocation and unanticipated cause of death etc.,) and the gift of the deed is completed immediately upon delivery and acceptance of the deed; recording is not required

Question 45

Revocation of a Gift Causa Mortis

Answer 45

The gift is generally revoked by operation of law if the donor recovers, and some courts hold that the gift is revoked even if the donor dies, but from an unanticipated cause/event

Gift causa mortis can also be revoked by the donor before death

Question 46

Claim Title to a Joint Account Presumption

Answer 46

There is a presumption that the surviving party of a joint account takes the sums remaining in the account as against the estate of the decedent unless a different intention is shown at the time the account was created by clear and convincing evidence

Example: there is clear and convincing evidence of a different intention because when the account was made, Tom told Dottie that the money in the checking account was to be used exclusively for his maintenance and to be spent only as he directed. this raises an inference that the account was opened for convenience. On the facts, questionable as to whether this would meet the standard of “clear and convincing evidence” necessary to be construed as an account of convenience

Question 47

An Inter Vivos Gift, once made, is revocable or irrevocable?

Answer 47

Irrevocable

Question 48

The donor may intend to immediately vest ____ in the donee but reserve the right of ____ until some future date

Answer 48

Title; Possession

Donative intent does not mean that the donor intends the donee to obtain full and complete rights of use and enjoyment in the subject matter of the gift

Example: Title passed to Staci upon executionn and delivery of the deed of gift from Mary, and Staci had a right to open the box at any time without Mary’s consent or presence. But, Mary also reserved the use of and income from the personal property in the safe deposit box

Question 49

Although a donee’s acceptance of a beneficial gift is presumed, a donee may refuse to accept a gift by an ____

Answer 49

Affirmative Act

Question 50

Securities

Answer 50

VA law allows the donor to continue to receive the dividends up to the time of donor’s death, even after the delivery of securities to the donee

Question 51

Gift of a Promissory Note

Donative Intent and Delivery

Answer 51

Under VA law, surrender of an instrument to a party on the instrument discharges that party’s liability on the instrument

While a promise to make a gift in the future does not satisfy the intent element, if a promissory note has been drawn in favor of the donor, and the donor makes a gift of that promissory note, then the gift is valid.

Example: Even though Donald did not write “canceled” on the note, by mailing the note back to its makers accompanied by the words “Merry Christmas,” it appears Donald had donative intent (Donative intent). Facts also show that Donald was the named payee on the promissory note (delivery).

Question 52

Check

Issue: Whether there is a valid gift by sending a personal check

Answer 52

*Checks present a special problem with respect to the delivery requirement for a gift

The mere manual delivery of a check made by the donor does not fulfill the delivery requirement

A check is an order to the bank to deliver the money as directed

Generally, death of a principal (in this case, person that sent check), terminates the authority of an agent (the bank) to deliver a gift. However, under VA statute, a bank may honor a check if the check is presented within 10 days after it learns of its customer’s death. Thus, if the bank cashes the check within this time period, delivery is complete and the gift of the check would be valid.

Example: Donald (Principal) sent Bruce a personal check. Howver, Donald died before Bruce could present the check to the Bank (Agent) for payment.

Question 53

Check

Indorsed check of another party

Answer 53

*The check of another is not a directive of the donor to the donor’s bank to complete delivery by making payment, and thus the special delivery problem does not arise. *see other flashcard about check and special delivery

The indorsed check represents a “Form of a Contract Right” given by another, and its transfer fulfills the delivery requirement

Even a check of another that is not indorsed, if manually delivered and presented with the requisite donative intent, satisfies the elements for a valid gift

Example: Donald mailed a properly indorsed partnership distribution check to richie. Thus, delivery constituted a valid gift.

Issue on these facts: Delivery element met?