Chapter 35: Personal Property and
Bailments
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Learning Objectives
• What is real property? What is personal
property?
• What is the difference between joint tenancy
and tenancy in common?
• What are the three elements necessary for
an effective gift?
• What are the three elements of a bailment?
• What are the rights and duties of a bailee?
What are the rights and duties of a bailor?
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Introduction
• Definition: Property consists of legally
protected rights and interests a person
has in anything with an ascertainable
value that is subject to ownership.
– Difference Between Real and Personal Property.
– Ownership rights in each.
• Acquiring Ownership of Personal Property.
• Laws Governing Mislaid, Lost, or Abandoned
Property.
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Property Ownership
• Property ownership is viewed as a
“bundle of rights”, including the:
– Right to possess.
– Right to sell.
– Right to give.
– Right to lease.
– Right to destroy.
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Fee Simple
• Owner owns the entire “bundle of
rights”.
• Fee simple gives the owner the
maximum possible estate or right of
ownership of real property, continuing
forever.
• Chapter 36 will deal with realty estates.
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Tenancy in Common
• A and B own an
undivided interest
in the property.
• Upon B’s death
interest passes to
B’s heir, “C”.
• The new owners
of the property
are A and C.
A
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X
B
C
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Joint Tenancy
•A and B own a Joint
Tenant interest in
property.
•Upon B’s death, B’s
interest
automatically passes
to A, the surviving
joint tenant.
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A
X
B
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Community Property
• Community Property (limited number
of states)
– Property acquired by couple during their
marriage is owned as an undivided ½
interest in property (real and personal).
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Real Property Ownership
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Acquiring Ownership of Personal Property
• Possession.
– Capture of wild animals (wild animals belong
to no one).
– Finding of abandoned property.
– Adverse Possession.
• Production.
– Writers, inventors, manufacturers, and others
who produce personal property acquire title
to it.
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Gifts
• Voluntary transfer of property
ownership from Donor (owner) to
Donee (recipient) for no consideration.
• Three types
– Intervivos—while donor is living.
– Causa Mortis: -- made by donor in
contemplation of imminent death.
– Testamentary – after death, by
will/inheritance.
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Three Requirements for a Valid Gift
• Donative Intent.
• Delivery—actual or “constructive”
(symbolic, such as keys to car).
– Relinquishing Dominion and Control: Donor
must give up complete control or dominion.
Case 35.1 In re Estate of Piper.
There was no evidence of actual delivery of the rings to
plaintiff Kaufmann. Thus the rings remained in the
estate of Piper.
• Acceptance by donee.
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Acquiring Ownership of Personal Property
• Accession.
– Someone adds value to a piece of personal
property by use of either labor or materials.
• Confusion.
– Commingling so that a person’s personal
property cannot be distinguished from
another’s.
– Fungible goods consists of identical particles
such as oil or grain.
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Mislaid, Lost, and Abandoned Property
• Mislaid Property: Voluntary placed
somewhere, then inadvertently forgotten.
Finder is steward for true owner.
• Lost Property: Involuntarily left. Property
owner acquires title against whole world,
except for true owner. Finder must return
to true owner or be liable for conversion.
• Abandoned Property: Discarded by true
owner with no intention of recovering.
Acquires title against all the world,
including the original owner.
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Bailments
• A bailment is formed by the delivery of
personal property, without transfer of title,
by one person (Bailor) to another
(Bailee), usually under an agreement for a
particular purpose.
• The property must be returned by the
Bailee to the Bailor, or a third party as
directed by the Bailor, in the same or
better condition.
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Elements of a Bailment
• Personal Property. (Tangible or
Intangible--but not persons or realty.)
• Delivery of Possession.
– Bailee given exclusive control or possession.
– May be actual (physical) or constructive.
– Bailee must knowingly accept (Bailee must
intend to exercise control over chattel).
– “Involuntary” Bailments.
• Bailment Agreement.
– Express or Implied.
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Ordinary Bailments: Duty of Care
• Bailment for the sole benefit of Bailor:
– A gratuitous Bailment; Bailee owes Bailor a low
duty of care, liable only for gross negligence.
• Bailment for the sole benefit of Bailee:
– Bailee owes Bailor a high duty of care and is
liable for even slight negligence.
• Mutual Benefit Bailment: most
common.
– Each party owes the other a reasonable duty of
care.
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Bailments: Bailee Duty of Care
Bailment
for Benefit
of Bailor
Low Duty
of Care
Mutual Benefit
Reasonable
Care
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Bailment
for Benefit
of Bailee
High Duty
of Care
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Rights of the Bailee
• Right To Possess.
– Bailee may acquire or use property
temporarily. Title does not pass.
• Right to Use Bailed Property.
• Rights of Compensation.
– Reimbursed for costs or services as
provided in the agreement.
• Right to Limit Liability.
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Duties of Bailee
• Duty to return bailed property in same
condition to bailor, or bailee may
liable for conversion and/or
negligence.
Case 35.2 LaPlace v. Briere.
Presumption of negligence occurs when bailed property
is damaged under the bailee’s control; can be rebutted
by proof of bailee using reasonable and ordinary care.
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Rights and Duties of Bailor
• Right to have property protected and used as
agreed.
• Right to have property back at end of
bailment with service or repair done
properly.
• Right to have the Bailee not convert.
• Right to not be bound to limitation of liability
unless Bailor knows.
• Duty to Provide safe goods:
–Mutual Benefit Bailment: free from known or hidden
defects; Sole Benefit of Bailee: notify if any known
defect.
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Special Types of Bailments: Common Carriers
• Common Carriers are strictly liable for
damages except if the damages caused
by:
– An act of God.
– An act of the public enemy.
– An order of the public authority.
– An act of the shipper.
– The inherent nature of the goods.
Case 35.3 Treiber & Straub, Inc. v.
United Parcel Service, Inc..
Carrier’s disclaimer limiting liability was enforceable and
was prominent enough on the web site and repeated
several times when the shipper “clicked” in agreement.
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Special Bailments: Warehouses and
Innkeepers
• Warehouses:
– Issue documents of title (warehouse receipts)
subject to contractual negotiations. Owes duty
of reasonable care.
– Can’t exculpate, can limit.
• Innkeepers:
– Owe duty of strict liability, modified by state
statutes; if innkeeper provides safe and notifies
guests.
– If parking area provided and innkeeper accepts
bailment, then may be liable.
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