TYPES OF PROPERTY

Property: Legally protected rights and interests in anything
with an ascertainable value that is subject to ownership.

Real Property: Land and everything of value attached
to it, such as foliage and permanent structures, or found
under it, such as minerals and water.

Personal Property: Property that is movable –
sometimes referred to as chattel or personalty.


Tangible Personalty: Personal property that has
physical substance (e.g., a television set or car).

Intangible Personalty: Personal property the value
of which does not depend on physical existence
(e.g., stocks, bonds, patents, and copyrights).
Fixtures: Buildings and other improvements other than
trade fixtures attached to real property such that
(1) the fixture cannot be removed without causing
substantial damage to the real property, or
(2) the fixture is so adapted to and takes on the
characteristics of the real property that it
becomes part of that real property.
Ch. 47: Personal Property and Bailments - No. 1
West’s Business Law (9th ed.)
PROPERTY OWNERSHIP

Fee Simple: Absolute ownership entitling the property owner
to possess, use, or dispose of the property as she chooses.

Concurrent Ownership

Tenancy in Common: Co-ownership of property in
which each party owns an undivided interest in the
whole property.

Joint Tenancy: Joint ownership of property in which
each co-owner owns an undivided interest in a portion of
the whole property.

Tenancy by the Entirety: Joint ownership of property
by husband and wife, where neither party can transfer
his or her interest in the property without the other’s
consent.

Community Property: Joint ownership of property by
husband and wife in which each spouse owns an
undivided one-half interest in property acquired during
marriage.
Ch. 47: Personal Property and Bailments - No. 2
West’s Business Law (9th ed.)
ACQUIRING OWNERSHIP: NON-GIFTS

Ownership of personal property may be obtained in the
following ways:

Purchase: Property rights may be acquired in exchange
for money or other valuable consideration.

Possession: Property rights may be acquired by taking
possession of unclaimed, lost, or abandoned property.

Production: Property rights may be acquired by
creating the property.

Accession: Property rights may be acquired by adding
value to existing property by personal labor or materials.


Ownership by accession may be subject to
challenge if (1) the accession was wrongfully done,
or (2) the accession greatly increased the value of
the property or changed its identity.
Confusion: Property rights may be acquired by mixing
together goods belonging to two or more persons in such
a way so that the separately-owned goods can no longer
be identified.
Ch. 47: Personal Property and Bailments - No. 3
West’s Business Law (9th ed.)
ACQUIRING OWNERSHIP: GIFTS

Gift: Any voluntary transfer of property made without
consideration, past or present.

In order for a transfer of property to be considered a gift,
the following conditions must be satisfied:
(1) Donative Intent: The donor (the person giving the
gift) must intend for the transfer to be a gift;
(2) Delivery: The gift must be delivered to the donee
(the person for whom the gift is intended), who, as
a result of the gift, must be free to exercise
dominion (ownership rights) over the property in
question; and
(3) Acceptance: The donee must accept the gift.

Inter Vivos Gift: A gift made during the donor’s
lifetime and not in contemplation of imminent death.

Causa Mortis Gift: A gift made in contemplation of the
donor’s death. The donee must survive the donor in
order to accept the gift. If the donor does not die as
expected, the gift is revoked.
Ch. 47: Personal Property and Bailments - No. 4
West’s Business Law (9th ed.)
MISLAID, LOST, OR ABANDONED PROPERTY

Mislaid Property: Property with which the owner has
voluntarily parted and then cannot find or recover. When
mislaid property is found, the finder does not obtain title to
the mislaid property, but rather holds it in trust for the true
owner.

Lost Property: Property with which the owner has
involuntarily parted and then cannot find or recover. When
lost property is found, the finder can claim title to the
property superior to that of any other person except the true
owner.


Estray Statute: A statute defining a finder’s rights in
property when its true ownership is unknown.
Abandoned Property: Property with which the owner has
voluntarily parted with no intention of recovering it. When
abandoned property is found, the finder can claim title to the
property superior to that of any other person including the
true owner.
Ch. 47: Personal Property and Bailments - No. 5
West’s Business Law (9th ed.)
BAILMENTS

Bailment: A situation in which the personal property of one
person (the bailor) is entrusted to another person (the bailee),
who is obligated to return the bailed property to the bailor or
dispose of it as directed by the bailor.

Bailments involve only personal property – real
property cannot be the subject of a bailment.

Possession of the bailed property must be transferred to
the bailee in such a way that:
(1) the bailee is given exclusive possession and
control over the property (subject to the bailor’s
superior rights), and
(2) the bailee knowingly accepts the personal property
delivered by the bailor.

A bailment agreement may be either express (i.e.,
written) or implied (i.e., not written) and presumes that
the bailed property will be returned to the bailor or a
third party designated by the bailor or will be disposed
of by the bailee in the manner agreed to by the bailee
and the bailor.
Ch. 47: Personal Property and Bailments - No. 6
West’s Business Law (9th ed.)
ORDINARY BAILMENTS

There are three types of ordinary bailments:
(1) Bailment for the Sole Benefit of the Bailor: A
gratuitous bailment made for the convenience and
benefit of the bailor;
(2) Bailment for the Sole Benefit of the Bailee: A
gratuitous bailment made for the convenience and
benefit of the bailee; and
(3) Bailment for the Mutual Benefit of the Bailor and
Bailee: This most common kind of bailment involves
some compensation by the bailor for services rendered
by the bailee.
Ch. 47: Personal Property and Bailments - No. 7
West’s Business Law (9th ed.)
BAILEES: RIGHTS AND DUTIES

Rights of Bailees: Certain rights are implicit in any bailment
agreement (absent explicit terms to the contrary), namely
(1) the right to control and possess the bailed property
during the term of the bailment agreement,
(2) in some cases, the right to use the bailed property,
(3) except in cases of gratuitous bailments, the right to be
compensated, and
(4) the right to limit their liability for damage to the bailed
property by agreement with the bailor, as long as the
limitation (a) is called to the bailor’s attention and (b) is
not contrary to public policy.

Duties of the Bailee: A bailee must
(1) take proper care of the bailed property, and
(2) surrender the bailed property to the bailor or dispose of
it in accordance with the bailor’s instructions.

A bailee who fails to return or dispose of the bailment as
instructed by the bailor is presumed to be negligent.
Ch. 47: Personal Property and Bailments - No. 8
West’s Business Law (9th ed.)
BAILORS: RIGHTS AND DUTIES

Rights of Bailors: A bailor has the right to expect that
(1) its property will be protected with reasonable care
while in the bailee’s possession,
(2) the bailee will use the property as agreed,
(3) the bailee will relinquish the property as directed by the
bailor,
(4) the bailee will not convert the goods unless agreed,
(5) the bailee’s liability will not be limited except as
known to the bailor and as permitted by law, and
(6) repairs or service to the property will be done in a
workmanlike manner.

Duties of Bailors: A bailor must
(1) compensate the bailee as agreed, and
(2) notify the bailee of all defects known to or reasonably
discoverable by the bailor.
Ch. 47: Personal Property and Bailments - No. 9
West’s Business Law (9th ed.)
TERMINATION OF BAILMENTS

Bailments for a specific term end when the stated term
lapses. Otherwise, a bailment can be terminated at any time
by:
(1) mutual agreement of the bailor and bailee;
(2) demand by the bailor or bailee;
(3) satisfaction of the purpose of the bailment;
(4) an act by the bailee that is inconsistent with the terms
of the bailment; or
(5) operation of law.
Ch. 47: Personal Property and Bailments - No. 10
West’s Business Law (9th ed.)
DOCUMENTS OF TITLE

Document of Title: A document which purports (i) to be
issued by or addressed to a bailee and (ii) to cover goods in
the bailee’s possession which are either identified or fungible
portions of an identified mass.

Bill of Lading: A document, issued by a person engaged in
the business of transporting goods, verifying the receipt of
goods for shipment.

Warehouse Receipt: A receipt issued by a person engaged in
the business of storing goods for hire.

Delivery Order: A written order to deliver goods directed to
a warehouser, carrier, or other person who, in the ordinary
course of business, issues warehouse receipts or bills of
lading.
Ch. 47: Personal Property and Bailments - No. 11
West’s Business Law (9th ed.)
SPECIAL TYPES OF BAILMENTS

Common Carrier: An owner and provider of publiclyavailable transportation services who renders those services in
return for compensation.


Warehouser: A provider of storage for compensation.


The delivery of goods to a common carrier creates a
bailment relationship between the bailor whose property
is being shipped and the common-carrier bailee, who is
held strictly liable for the bailed personal property.
Unlike the strictly-liable common carrier, a warehouser
is liable for loss or damage to bailed property resulting
from the warehouser’s negligence. However, the
warehouser is expected to exercise a higher degree of
care, commensurate with the warehouser’s status as a
professional bailee, than an ordinary bailee.
Innkeepers: Innkeepers, hotel owners, and others who
provide lodging to the public for compensation as a regular
business are strictly liable for any loss of or damage to their
guests’ property.
Ch. 47: Personal Property and Bailments - No. 12
West’s Business Law (9th ed.)