2. P A R T P A R T Property Personal Property and Bailments Real Property Landlord and Tenant Estates and Trusts Insurance Law 5 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

3. Personal Property and Bailments PA E TR HC 23 “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)

4. Learning Objectives  Nature & classifications of personal property  Acquiring ownership of personal property  Bailments  Documents of title 23 - 4

5.  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 Property Overview 23 - 5

6.  Personal property may be classified as:  Tangible – has a physical existence  Examples: cars, clothing, animals, furniture  Intangible -- has no physical existence  Examples: intellectual property (patents, copyright, trademark), stocks, and bonds Classifying Property 23 - 6

7.  Ownership of personal property may be acquired by: production, purchase, lease, taking possession of unowned property, will or inheritance, confusion, accession, or gift Acquiring Ownership 23 - 7

8. Possession of Unowned Property 23 - 8  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

9. Acquisition of Property 23 - 9  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

10. Bailments 23 - 10  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

11. Duties & Rights of The Bailee 23 - 11  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 bailees held to higher standard

12.  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  Person who acquires negotiable document of title generally acquires both title to the document and goods Documents of Title 23 - 12

13. 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. 23 - 13

14. Test Your Knowledge  True=A, False = B  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. 23 - 14

15. 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 23 - 15

16. 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 23 - 16

17. Thought Questions  Have you ever been a bailee? A bailor? What type of problems may arise in a bailment situation? 23 - 17