Business Law Personal Property & Bailments Chapter 49 2/4/12 3:25 Personal Property and Bailments Personal Property versus Real Property: •Real Property Realty, real estate—land and everything permanently attached to it •Personl property chattels, is capable of being moved •Distinction important both properties are subject to different taxes- tax rate is based on market value of real prop and businesses usually pay taxes on personal prop they own use or lease..
Also the way they are transferred ; personal prop is informal and real prop involves a written sales contract and deed that is recorded with the state •Conversion of real prop to personal property by detaching it from the land and personal prop may be converted to real prop by attaching it to real property Fixtures •Fixtures- thing affixed to realty—when it is attached to the realty by roots; embedded in it; or permanently attached by means of cement, plaster bolts, nails, or screws.
Fixtures are included in the sale of land if the sales contract does not provide otherwise •The role of intent when courts decide whether item is a fixture they examine th intention of the party who placed the object on the property. Is deemed a fixture if prop attached cannot be removed without causing damage and the propery attached is so adapted to the rest of the realty as to become a part of it. •Trade Fixtures is personal property that is installed for commercial purposes. They remain the property of the tenant unless removal would irreparably damage the building. Acquiring ownership of personal property Possession Sometimes a person can become owner of personal prop by possessing it; i. e catch a wild animal •Production Produce personal property i. e. writers, inventors, manufacturers •Gift voluntary transfer of property ownership •Donative Intent When gifts are challenged the court looks at language of donor and the surrounding circumstances and relationship of parties. •Delivery gift must be delivered to the donee, can be a third person. Constructive delivery is when the physical object itself cannot be delivered, a symbolic or constructive delivery will be sufficient. But does not confer actual possession just the right to take it.
Effective delivery also requires that the donor give up control and dominion –ownership rights. •Acceptance is usually assumed unless otherwise indicated •Causa Mortis & inter vivos a gift made in contemplation of imminent death •Accession Something added- when someone adds value to a person item. •Confusion co mingling of goods to the extent that one person personal prop cannot be distinguished from another’s then the owners share ownership. Mislaid, Lost and Abandoned Property •Mislaid property Property that has been voluntarily placed somewhere by the owner and then inadvertently forgotten.
Person who find mislaid property does not obtain title to the goods •Lost property A finder can claim title against the whole world Conversion of lost property is when the finder knows the true owner and fails to return the property and finder has committed a tort of conversion Estray Statutes usually require the finder or the county clerk to advertise the property in an attempt to help the owner recover what has been lost. •Abandoned property Someone who finds abandoned property acquires title to it, and the at title is good against the whole world, including the original owner.
Bailments •Bailment is formed by the delivery of personal property, without transfer of title, by one person called bailor to another called bailee—usually made for particular purpose, lease store, repair or transport property—possession is transferred without passage of title or intent to transfer title. •Elements Personal property, delivery without title , and agreement the property will be returned to the bailor unless otherwise stated Only personal property, not real The bailee must be given exclusive possession and control over the property ?
Physical vs constructive delivery—constructive is a substitute or symbolic delivery i. e keys to a car. ?Involuntary bailee acquires property accidentally or by mistake. i. e finding someone else’s purse Ordinary Bailments •Sole benefit of the Bailor- gratuitous bailment, no consideration •Sole benefit of Bailee – bailee is borrowing the item for his own benefit •Mutual Benefit Bailment for her or commercial bailment i. e car repair •Rights of the Bailee ?Right of possession – right of control permits bailee to recover damages from 3rd party i. cleaners send out suede jacket to other store ? Right to compensation even in a gratuitous bailment bailee has right ot be reimbursed for cost incurred ? Bailee lien – has right to put lien on property until compensated ? Right to limit liability-Bailee can post signs limiting liability and are called to the attention of the bailor and are not against public policy •Duties of the Bailee- to take care of property and surrender to bailor •Duites of the Bailer- to compensate the bailee as agreed or reimbursemt sost incurred ? Bailors duty to reveal known defects i. e. tractor with bad brakes ?
Bailor can incur warranty liability for injuries resulting from defective article Special Types of Bailment •Common Carriers are publicly licensed to provide transfortation servies to the public •Warehouse Companies-professional bailee providing storage fo propery for compensation •Innkeepers –hotel owners were strictly liable for the loss of an cash or property that guest brought into their rooms. Today only those who provide lodging to the pubic for compensation as a refular business are covered under this rule. Many states innkeepers can avoid strict liability by providing safe and notifying guest.