P A R T
5
Property
Personal Property and Bailments
Real Property
Landlord and Tenant
Estates and Trusts
Insurance Law
McGraw-Hill/Irwin Business Law, 13/e
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.
C H A P T E R
23
Personal Property and Bailments
“Few rich men own their
own property. The
property owns them.”
Robert Green Ingersoll, in an address
to the McKinley League, New York
City (October 29, 1896)
Learning Objectives
 Nature
& classifications of personal
property
 Acquiring ownership of personal
property
 Bailments
 Documents of title
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Property Overview
Property refers to (a) something that may be
owned, or (b) a right or interest that allows a
person to exercise dominion over a thing that
may be owned or possessed
 American principles of private property
developed out of Western civilization



Other cultures may have different principles
Property is classified as real or personal
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Classifying Property

Personal property may be classified as:
 Tangible – has a physical existence
 Examples:
furniture

cars, clothing, animals,
Intangible -- has no physical existence
 Examples:
intellectual property (patents,
copyright, trademark), stocks, and bonds
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Acquiring Ownership

Ownership of personal
property may be acquired
by: production, purchase,
lease, taking possession of
unowned property, will
or inheritance, confusion,
accession, or gift
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Possession of Unowned Property
First
person to take possession of a wild
animal normally becomes owner of animal
Finder of abandoned property may claim
ownership
Finder of lost property does not acquire
ownership, but acquires better rights than
anyone other than the true owner
Finder of mislaid property acquires no rights,
but has right to hold property for true owner
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Acquisition of Property
Confusion
is ownership due to intermixing of
different owners’ goods
Accession means increasing property value by
adding materials, labor, or both
Inheritance refers to transfer of property upon
the death of former owner
Gift is a voluntary transfer of property to a
donee (recipient) from a donor (gift giver) who
receives no consideration in return
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Bailments
A
bailment occurs when a bailor who owns
personal property (or someone holding the
right to possess it) delivers it to another (the
bailee) who accepts it and is under an express
or implied agreement to return it to the bailor
or to someone designated by the bailor
Example: bailment of
car to valet
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Duties & Rights of The Bailee
Bailee
has two basic duties: (1) take care of
property and (2) return it to owner
Degree of care required of bailee to protect
property depends on the type of bailment:
For bailor (slight degree of care)
 Mutual benefit (ordinary care)
 For bailee (high degree of care)

Professional
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bailees held to higher standard
Documents of Title
A document of title refers to the document
that identifies ownership of property
 Warehouse receipt or bill of lading may be
either negotiable or non-negotiable


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Person who acquires negotiable document of
title generally acquires both title to the
document and goods
Test Your Knowledge

True=A, False = B

A person who finds abandoned property may
claim ownership

A conditional gift is not a gift.

Tom found a textbook on a desk that had “S.
James” written inside the cover. Tom has the
right to sell the textbook.

Personal property may be classified as
tangible or intangible.
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Test Your Knowledge

True=A, False = B




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A document of title refers to the document
that identifies ownership of property.
A shipping company, such as UPS, is held
only to a slight duty of care.
A bailment is a contract.
Accession means mixing property owned by
several people so that the property cannot be
separated and ownership is indeterminate.
Test Your Knowledge

Multiple Choice
 Jake borrowed Jane’s car, but dented the
rear fender. Jake must:
(a) Say he’s sorry, but with only a slight duty
of care, he owes no further obligation to Jane
 (b) Return the car to Jane in the same or similar
condition or pay damages
 (c) Replace the car
 (d) both B and C
 (e) none of the above

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Test Your Knowledge

Multiple Choice
 Ben gave Jenn an engagement ring, but
Jenn decided to break the engagement.
Ben asked for the return of the ring. Which
of the following is correct?
(a) Jenn may keep the ring since it was a gift
 (b) Jenn may sell the ring and keep the money
 (c) Jenn must return the ring to Ben
 (d) Both A and B are possible options
 (e) none of the above

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Thought Questions

Have you ever been a bailee? A bailor?
What type of problems may arise in a
bailment situation?
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