Personal Property-Bailment Flashcards
Title
Rights
One who does not have title to goods cannot pass good title to even a bona fide purchaser except under certain exceptions
Title Exceptions
Abandoned Property
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
Title to Abandoned Property is Acquired How?
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
Recovery of Property
Rightful Owner of Property
Superior Right to Possess Lost Property
Treasure Trove
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?
To discourage trespass on private property, amny states aplly the usual rules applicable to ___________ in dealing with treasure trove
Lost Property
Lost Property
Lost Property
rights
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
Finder of Lost Property
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
Mislaid Property
Mislaid Property
rights
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
Tortious Conversion
Tortious conversion of personal property does not deprive the true owner of title
When stolen property is found by a third party, a constructive, or involuntary, __________ arises
Bailment
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
Elements of Bailment
Whether an effective bailment is created
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
Constructive Bailment
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
To establish a prima facie case against a bailee, a bailor must show . . .
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
The bailee has no right to ___ from the bailor for caring for the property and is, in effect, a ____ bailee
Compensation; Gratuitous
Bailment Diligence and Liability
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
Professional Bailee Limitation on Liability
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
Upon termination of the bailment, the bailee owes a duty to ….
redeliver/return or account for the thing bailed
Adverse Possession of Personal Property
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
Accession
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
Accession: Innocent Trespasser
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
Accession: Willful Trespasser
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
When does parking a car in a parking lot or parking garage constitute a bailment?
If control over the car is surrendered to the owner or operator of the garage, the transaction would indicate a bailment
When does parking a car in a parking lot or parking garage not constitute a bailment?
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
Bailment for Hire or for the Mutual Benefit of the Bailee and Bailor
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.
Common Carriers
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
Common Carrier Liability Commences When …
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
Gift
A voluntary transfer of property without any consideration or compensation
Inter Vivos Gift
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
Elements of a Valid Inter Vivos Gift
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.
The basic ways of accomplishing delivery of a gift inter vivos are:
Actual Physical Delivery, Constructive Delivery, and Symbolic Delivery
Actual Physical Delivery
Example:
Constructive Delivery
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:
Symbolic Delivery
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).
What is required for a valid Gift Causa Mortis?
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.
A gift Causa Mortis can be made only as to ___
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
Revocation of a Gift Causa Mortis
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
Claim Title to a Joint Account Presumption
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
An Inter Vivos Gift, once made, is revocable or irrevocable?
Irrevocable
The donor may intend to immediately vest ____ in the donee but reserve the right of ____ until some future date
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
Although a donee’s acceptance of a beneficial gift is presumed, a donee may refuse to accept a gift by an ____
Affirmative Act
Securities
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
Gift of a Promissory Note
Donative Intent and Delivery
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).
Check
Issue: Whether there is a valid gift by sending a personal check
*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.
Check
Indorsed check of another party
*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?
