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114 Cards in this Set
- Front
- Back
What is Personal Property?
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Personal property is all property that's not real property (land; stuff affixed to land)
Tangible - may be seen, weighed, measured, etc. and is capable of being possessed - Chattels Real (items of personal property that are visible, tangible, and movable) Intangible - personal property whose intrinsic value lies in the items' capacity to signify or represent value (stock certificates, notes, patents, cash) also chattels real (interests in property that amount to less than a freehold estate - lease or mortgage) and choses in action (personal rights not reduced to possession but which are recoverable by suit at law - accounts receivable, insurance policies, right to sue for damages) |
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Obtaining Title by Judgment - Remedies
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P must choose between recovery of goods (replevin) and damage award for value of goods (conversion) - could also recover for damages caused by D's wrongful trespass
Trespass - damage for interference with right to possession - not interference with title - remedy is RECOVERY for any DAMAGES to chattel and for damages resulting from loss of possession for period in question Conversion - Interference with TITLE - wrongful exercise of dominion of control over property to exclusion of rights of owner - or withholding it from his possession under claim inconsistent with his rights of ownership If D comes into possession lawfully, P must also prove that he demanded return of property after D exercised dominion or control over it, and that D refused to deliver - purchaser of property, although innocent, also has committed an act of interference with owner's title - REMEDY - FORCE SALE from P to D (fair market value) Replevin - Recovery of Goods - P seeks specific performance for return of chattel that has been wrongfully taken or detained by D - you can file a motion for order of possession any time before final judgment - must have affidavit stating description, value, and location of property, circumstances surrounding unlawful detention, and damages - P must post replevin bond DOUBLE value of property before it's carried out! Then it will be seized and D will be served - property will then be delivered to P UNLESS D also posts double value of property beforehand If D cannot delivery the property, replevin action proceeds as a claim for conversion |
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Acquisition of Title
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Most common: by purchase! Also: gifts, adverse possession, accession, or confusion, and taking possession of otherwise unowned property
Right to possession as against the whole world except the true owner is obtained by finder of lost property and EVEN converter of chattel - also, right to possession without title is conferred when bailment is created You can get right to possession even if you're a thief or converter! Gift - voluntary, gratuitous present gift of property For a valid inter vivos gift: present donative intent, delivery to the donee, acceptance by donee |
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Present donative intent
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exists when party intends to transfer ownership without consideration and the donor is neither influenced by fraud or duress
"present" - not satisfied by saying gift will be made in future - but you CAN make a gift right now but do possession later (like give them the title now but move in later) |
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Delivery to the Donee
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every gift must be delivered to the donee!
actual delivery - physical item delivered constructive delivery - donee is provided means for obtaining dominion and control of gifted property but doesn't actually get the thing itself - IF physical delivery of property is not possible or practical given the nature of the gift, THEN constructive deliver will suffice - donor must relinquish as much control as he can - effective gift of car REQUIRES that donor give and sign over certificate of title - NOT just keys agent delivery - ONLY complete when the property is delivered to the donee (because he could call the agent at any time and stop delivery). BUT if agent is the DONEE'S agent and gets the property, that completes delivery! Contents of safety deposit boxes - if multiple persons have access to the box, even though that doesn't mean each of these people own everything in the box, just delivering something to the box is not necessarily a gift - look to intent! |
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Acceptance of Gift
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Every gift needs to be accepted
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Irrevocability
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once gift is effective, you can't just take it back - donee would need to re-convey (if you just say you'll give it back but don't, it's still yours)
gifts in contemplation of marriage - conditional gift that becomes irrevocable when marriage occurs - before that, groom can get the ring back! Gifts in Contemplation of Death - conditional gifts - you get this if I die from this anticipated event - if donor does NOT die from anticipated event (survives or dies from something else) condition has not been met and donor's estate gets it back. If they DO die from this thing, donee gets to keep the property if it has been delivered to him - even if it says something else in the will! |
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Gifts to Minors
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Transfers to Minors Act - valid irrevocable gift to minor can be made by transferring gift to custodian who holds it for the minor
Guardian has duty to invest and care for property - entitled for reasonable compensation Custodian who is NOT compensated is NOT liable to the minor for losses that result from taking care of the property UNLESS there's bad faith, intentional wrongdoing, or gross negligence While child is a minor, custodian can pay out income from custodial property or the custodial property itself for minor's best interests MUST be paid out to minor when he turns 21, or if donor specifies, before 21 starting at 18 |
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Burden of Proof for Gifts
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Burden of proof lies with donee to show that this was a gift
Exceptions: parent to child gives us a presumption of a gift (can overcome by clear and convincing evidence) |
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Unowned Property/Abandonment
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Property that's abandoned - if you exercise dominion and control over it, you have full title - has to be INTENTIONAL relinquishment of title - not just lost
Intent - not using property for a period of time with nothing else is NOT enough. Protracted period of nonuse PLUS other circumstances might be enough All intangible property held by a business association is presumed abandoned if it has remained unclaimed for more than 5 years after it has become distributable Bank accounts presumed abandoned if owner hasn't put money in or taken it out in 5 years, has not evidenced interest in account, it's presumed abandoned Safety deposit box - 3 years of total nonuse presumes abandonment |
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Extra card
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fill
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Payment of unclaimed funds
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fill
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Title by Purchase - Entrustment Rule
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You can only get the title the seller has
Exception: entrustment rule - person who entrusts property to the merchant and merchant inadvertently sells your property, the third party gets GOOD title if he's a BFP |
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Right to Possession
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If you have present possession of property, you have a better claim to that than anyone else EXCEPT the rightful owner and other people that possessed it before you and didn't abandon his rights
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Finders
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Finders' duties - notify owner of lost chattel when they know or have reaosnable means of finding him - also have duty to deliver it to local police station - also have duty of care while in possession and can be found liable for damages in their care |
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Lost property
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property separated from owner...FILL
judged lost when it's unattended in a completely inappropriate location Finder of lost property acquires the possessory interest - EXCEPTIONS - if lost property found on private property and finder is a trespasser = NO possessory interest - found on private property not open to public and is a highly private place? stays with owner of place (even if the property is not actually theirs) |
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Extra card
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fill
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Mislaid property
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Property that's intentionally placed in a certain spot, but owner has forgotten where it is
Finder does not get possessory interest - it goes to owner of the LOCUS where property is |
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Bailments
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bailment is a way to acquire right to possess property without having title to it
transfer of possession of personal property from a bailor to bailee without transfer of title (lend rake to neighbor, etc.) Bailee liable for ordinary expenses of the thing Bailor liable for any extraordinary things property needs with bailee has it |
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Elements of bailment
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Delivery of personal property to bailee, bailee's acceptance of possession and control, must be intended return of personal property to bailor once purpose of bailment is achieved
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Must a bailee have knowledge of personal property?
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No - if bailee exercises control over container, bailee has possession of stuff in the box even if they don't know what is in there - could be liable if stuff in container was foreseeable
They have to accept responsibility too, not just possession even if someone leaves personal property on their premises - have to look at extent to which owner of property exercises control over the property |
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must bailee return exact goods to bailor?
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Generally yes, once reason for lending is over
EXCEPTION - fungible goods - agricultural products - if they're stored with same kind and like quality, bailee must return same quantity but it doesn't matter whose |
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employee/employer
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No bailment - employer controls employee, so still controls possession
but if employee is negligent in using employer's stuff, there's no vicarious liability |
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buyer/seller
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FILL
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lessor/lessee
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Generally when lessee stores property, lessor doesn't assume liability - BUT when lessor controls the property there is a bailment?
If you can't prove a bailment, then plaintiff has burden of proof of showing duty of care |
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Parking lots
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when you put a car in a commercial lot, bailment depends on who has possession of keys - if you park yourself, you're usually a lessee and you retain liability, but if you give keys to valet, that's a bailment
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Safety deposit box
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bailment usually created
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Bailment relationships - gratuitious bailments
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When bailee holds property for the sole benefit of the bailor (like when I let you park on my lot free of charge)
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Mutually Beneficial Bailments, Commercial bailments, Bailments soleley for benefit of bailee
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FILL
Each has a different standard of care imposed on bailee! |
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Bailees' duty of care
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Gratuitious bailment - bailee held to only a low standard of care - only liable for gross negligence
Mutually beneficial - ordinary negligence (ordinary duty of care) For sole benefit of bailee - bailee held to high level of care - responsible even if damaged by slight negligence |
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Duty to Deliver
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bailees have duty to give back in original or agreed-upon form
common law: bailee liable to bailor if he misdelivers to a third party - also, bailee's liablity was absolute and not excused by ?? |
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Warehouseman
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FILL
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Comingling goods
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can't do it except with fungible goods
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Right to Possession
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Bailee has exclusive right to possess property for agreed-upon time, even superior to the owner!
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Creditors
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can't interfere with bailee's rights
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rights of incidental use
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bailor has rights of incidental use?
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Bailee's duties
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fill
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Bailor's duties
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not to interfere with possession of bailee during term of bailment
don't undermine or interfere with intended use by bailee |
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Bailor's rights against bailee
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damages, introver (?), replevin (return of property)
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Bailor's rights against third parties
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limited to trespass to chattels for damages but cannot sue for loss of possession
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Burdens of proof
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Bailor must prove: existence of bailment and that bailee failed to return in agreed upon condition or at all for prima facie case
then bailor has to prove that damage was beyond his duty/standard of care |
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limitations of liability
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Extra card
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Innkeeper liability
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fill
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Who may bring a personal property possession rights action?
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anyone who claims title to or has a right to possession
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Who can be sue?
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fill
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Remedies - conversion
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conversion (money damages for property already taken): elements:
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Replevin
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FILL
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Extra card
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fill
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Intentional interference with right to possession
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fill
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Acquisition of Title or Right to Possession (list)
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acquisition of title, right to possession, accession, confusion, gift
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Acquisition to Title - wild animals
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UNOWNED: may be acquired by first person who obtains possession of property with intent to control it - includes:
Wild Animals: (reduce it to possession - not just mere pursuit unless you mortally wound it - but if you're supposed to have hunting license and you don't, you don't have title to any animals - also your rights may be subject to rights of landowners (not usually, but if you're trespassing you can't benefit from your wrong), and if your animal escapes, unless it's marked, habitually returns to you, or you promptly pursue it, you lose title) |
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Acquisition to Title - abandoned property
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and abandoned property (if an owner voluntarily relinquishes rights with no intent to reclaim them, coupled with some act or omission that indicates that possessor neither claims no retains any interest it's abandoned! Usually mere passage of time isn't enough, but if it's a protracted period of disuse with other circumstances, maybe okay! You must have actual/constructive possession and intent to control property - then you get rights of first possessor
crime to abandon pets, boats, or junk motor vehicles |
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Acquisition to title - intangible personalty
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Intangible Personalty - under Unclaimed Funds Act, property is assumed abandoned if the owner does not claim it or demonstrate an interest in it for period specified by statute
provides procedures for reporting and returning unclaimed property to Division of Unclaimed Funds - if you do, you're relieved of liability from owner **deposits held by banking or financial institutions are presumed abandoned if the owner has not, within FIVE YEARS, increased or decreased amount of funds, presented bank book for crediting of interest, corresponded with bank in writing about deposit, transacted business with the bank, or otherwise indicated an interest in deposit as evidence by a memo on file with bank Money or intangible property removed from a safe-deposit box on which lease or rental period has EXPIRED, or any amount arising from sale of such property, is presumed abandoned if, within THREE years from date on which lease or rental period expired, owner has not indicated an interest in or knowledge of the funds Every person holding funds $50 or more that is presumed abandoned must file verified report on property stating owner's name, SS number, and last address, if known Holder must attempt to communicate with owner at his last known address at least 30 days before submitting report when holder files report, he transfers unclaimed funds to Division, although he may retain a portion at option of Division, in which case holder must reach an agreement with Division as to how to invest them Then Division can sell the stuff at a reasonable time and place and manner - all proceeds must be credited to account of owner of property |
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Right to Possession
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one who is not first in chain of title, and who obtains possession by a finding or conversion rather than gift or sale, has right to possession that is INFERIOR to prior possessor's but SUPERIOR to subsequent finders or converters
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Finders
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a finder is one who discovers lost or mislaid property and asserts possession (physical control) over it with intent to control it
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Lost property
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that which owner has parted with accidentally and involuntarily through negligence or inadvertance, and has no knowledge of its whereabouts
property is presumed to be lost when unattended in wholly inappropriate location if lost, one who reduces it to possession becomes finder! acquires right of possession superior to all others except prior owner lost property usually found on PUBLIC rather than private property - less likely owner deliberately place property on the street however, if personal property has been lost on private property, whether finder acquires possessory rights depends on whether he is a trespasser and whether location is highly private - if trespasser, owner of the PLACE (locus in quo) will assume right of possession If highly private locus, owner of the PLACE acquires possessory rights |
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Mislaid property
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that which owner has voluntarily and intentionally placed somewhere and then forgotten
property left in a location where owner is likely to have placed it deliberately and then gone away without it is presumed to be mislaid finder of mislaid property (as a chattel found on private property is usually categorized) acquires no right to possession - instead, owner of the SITE (locus in quo) obtains right to possession until property is claimed by true owner This is because: owner of locus can better hold the chattel for the prior owner, who may remember where he mislaid the property and retrace his steps to look for it, OR finder may have been trespassing on property when he made the find landowner becomes custodian of property for true owner |
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Treasure
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Treasure trove = gold, silver, jewels, or money hidden for safekeeping in a secret location by unknown owner
Common law: finder has title as against EVERYONE but true owner and his heirs - trespasser can take title, and ownership of land is irrelevant in Ohio, there is no statte specifically dealing with rights of owners and finders of treasure, so usual rule dealing with lost property applies |
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Buried Chattel
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things embedded in soil, like Native American relics, which cannot be classified as either treasure trove or lost property, belong to owner of LAND, NOT FINDER
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Duties of Finders
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if finder knows or has reasonable means of discovering identity of true owner of property, he MUST take steps to notify owner that property has been found
a finder is a quasi bailee for owner until owner reclaims property or SOL has run - possessor may eventually acquire title if sufficient time passes for goods to be deemed abandoned or SOL has run finder owes owner a duty of care in possession of property and will be liable for negligence if he fails to meet this standard Employer/Employee - rights of a finder are also subject to rights of his employer when find is made in reglar course of an employer-employee relationship. Generally, employee is required to turn over property to employer In Ohio, question turns on whether property is considered lost or mislaid - if lost, finder is entitled to possession - if mislaid, employee is under duty to turn chattel over to his employer when the location of find is employer's property |
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Converters
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converters (a thief is one!) acquires right to possession, NOT title, superior to any subsequent possessor of property
original converter is in a better position to be found by original owner than is a subsequent converter, finder, or purchaser of property from first converter where owner of chattel had no intention to pass title to converter of chattel, such as a thief or a bailor who appropriates the property, the converter obtains no title purchaser from converter, even if he qualifies as a BFP for value, also obtains VOID TITLE and is liable to a true owner for conversion, EXCEPT in transfer induced by fraud, entrustment, or transfer of money or negotiable instruments |
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Transfer induced by fraud
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where the owner of the chattel did intend to transfer title of it, but the transfer was obtained by FRAUD, the transferee obtains VOIDABLE title
such title can be revoked by transferor upon discovery of fraud HOWEVER, if fraudulent transferee sells his property to a BFP for value before title is voided, purchaser receives good title and will NOT be liable to original owner |
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Entrustment
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title will transfer to buyer in ordinary course of business from a merchant to whom property has been entrusted by owner
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transfer of money or negotiable instruments
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under UCC, when transfer to BFP is of money or negotiable instruments, BFP will retain title
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Accession
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owner's rights in chattel may be cut off by accession, which refers to the expenditre of labor or addition of materials to the chattel by another person (trespasser) without consent of owner and without knowledge by laborer of owner's rights
whether accession results in transfer of title to trespasser depends on whether he is an innocent or willful trespasser |
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Willful conversion
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does not acquire title by accession, no matter how much the value of the property is increased or how the form is changed
a willful wrongdoer will not be allowed to benefit from his own wrong! where conversion was willful, title does NOT pass to converter - P may choose to recover improved property itslef or value of improved property |
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Innocent conversion
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owner of property ordinarily has right to increases of value of the property - where owner's property is increased or improved due to additions made by another party, owner obtains title to the whole
HOWEVER, if other's additions substantially change the value or identity of the property, ACCESSION will occur where accession has occurred, the original owner of the property may NOT recover the property itself by specific performance - however, because a conversion has occurred, although innocent, the original owner has an action for damages measure of damages is value of property BEFORE D's additions or improvements PLUS consequential damages |
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Severable additions
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Title does not pass by accession IF the materials can be identified and severed without injury to original property
title to an accessory passes with principal property if it is so merged or attached to principal as to constitute part and parcel of it |
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Confusion
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confusion of goods takes place where there has been sch an intermixture of goods owned by different parties that the property of each is no longer distinguishable (fungible goods)
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Innocent Act (confusion)
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if the confusion of goods takes place as a result of mutual consent (i.e. grain in a warehouse), unintentional mistake, or inevitable accident (like intermingling of logs on a river after a storm), the parties become tenants in common to the entire mass
where amount of contribution of each is KNOWN, the interset of each party in the comingled goods is measured in proportion to his respective share if teh respective contributions are unknown, parties are entitled to equal shares of the total mass doctrine of confusion does not apply where there has been a unilateral innocent mistake, such as where a merchant had on hand some goods that were not yet paid for at the time of his death, and the goods were placed along with his other stock the importance of this distinction involves the priority for payment of claims where the entire estate or other fund is insufficient to satisfy competing creditors |
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Wrongful Act (confusion)
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if confusion of good takes place as a result of an unlawful or fraudulent act, the burden is on the wrongdoer to prove his share of the commingled proeprty
where the contributions are unknown and the wrongdoer cannot prove the amount of his contribution, he forfeits his share entirely - in this case, the innocent owner is entitled to the entire mass |
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Elements of a Gift
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a gift is a voluntary transfer of property by one person to another without any consideration - absolute title to property passes at completion of gift
valid gift generally requires 3 elements: 1) donative intent 2) delivery, either actual or constructive; and 3) acceptance a persona claiming title to personal property by gift has burden of proving the gift by clear and convincing evidence, as the law does not presme and gift conveyance from parents to child, however, is often PRESUMED a gift, and burden shifts to contestant to overcome presumption by clear and convincing evidence |
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Present donative intent
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Present Mental Capacity and Intent - intent must be to make a present transfer of ownership, without consideration and not under the influence of fraud of duress
Intent to Pass in Future NOT a Gift - promise to make a gift in the future is unenforceable unless supported by consideration Present Transfer of Future Interest - valid even though the interest will not become possessory until some future time. In such a case the donor may intend to immediately vest title in property yet reserve right of possession until a future date Conditional Gifts - gift is ordinarily absolute and irrevocable. However, a donor may impose conditions on a gift so that if the conditions fail, the gift fails. Whether a gift is conditional or absolute is a question of the donor's intent, to be determined from any express declaration by the donor at the time of the making of the gift or from circumstances. Three types of conditional gifts are recognized: 1) gift given in contemplation of marriage - may be revoked if agreement to marry is breached, regardless of fault 2) gift by an infant is subject to a condition subsequent in that the infant may disaffirm the gift upon attainment of age of majority Gift causa mortis - in contemplation of death - may be revoked during donor's life, but may NOT be revoked in a will |
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Delivery: Actual, Constructive, or Symbolic
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Actual - actual delivery occurs when donor physically vests the donee with possession of the subject matter of the gift (donee receives dominion and control)
Constructive and Symbolic - if manal delivery is not practicable because of the size or weight of the object, or its inaccessibility, constructive or symbolic delivery may be permitted Constructive delivery - occurs when donee is provided the means for obtaining possession or control of the property. Constructive delivery is delivery in the eyes of the law, though not necessarily in fact Symbolic delivery - arises when donee receives something in the name or stead of the property itself; item delivered is intended to signfiy that a transfer is intended, but does not itself transfer the practical means of controlling and possessing the subject matter of the gift Constructive delivery is permissible in Ohio - if item is impossible or impracticable to manually deliver, substitute delivery is sufficient and is satisfied when the donor surrenders as much control over the subject matter as presently possible if delivery of an item such as a key divests the donor of dominion over the subject matter of the gift and vests the donee with the sole means of obtaining possession, the gift is complete another example is delivery of a deposit book issued by a savings bank with intent to make a gift of the funds in the account |
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Complete Transfer
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the transfer of possession must be as complete as the nature of the property and the circumstances will permit
where the circumstances do not allow physical delivery, the delviery of the means of getting possession, or making use of the thing given, will suffice. This is constructive or symbolic delivery, depending on the method used the transfer must be completed during the lifetime of the donor - the donor's expressed intention to make a gift before his death is NOT sufficient to constitute delivery |
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Delivery through an agent
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delivery requirement is met if the gift is transfered to an agent of the donee
delivery to the agent of the DONOR does NOT effectuate delivery to the donee - instead the gift is effective when agent delivers it to donee whether a third person who takes delivery is the agnet of the donor or the donee depends on intent of donor if there has been a valid deliery by other means, a donor can retain possession of property if he is acting merely as teh donee's agent for safekeeping |
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Acceptance
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donee must accept the gift, but acceptance is presumed unless a clear intent to refuse to accept the gift is demonstrated
acceptance is presumed where the gift would be beneficial to the donee unless an affirmative act by the donee shows otherwise |
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Inter Vivos Gifts
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to make a valid gift inter vivos, donor must part with control of the property during his life, with intent that title pass immediatley and irrevocably to donee
burden of proving the essential elements of such a gift rests upon the party claiming the gift following types of property often give rise to questions of whether ownership has been transferred and delivery requirement met Stock Certs - endorsement by the donor to the donee on stocks certs and delivery of the certs to the donee are sufficient to effect a gift of such securities, but ENDORSEMENT IS NOT REQUIRED existence and transfer of certs may be the best evidence of a completed gift of corporate stock, but such evidence is not required as a matter of law. Rather, what is required for a completed gift is clear and convincing evidence that the one who intended to make a gift of corporate stock IN FACT relinquished ownership and control Bonds - onwership of bearer bonds may be transferred by any form of actual or constructive delivery, such as a telephon call or a note to custodian who is authorized to deliver bonds to the donee through such means US savings bond, however, is NOT effectively transferred until new owner's name is registered pursuant to federal law requirements Automobiles - in Ohio, delivery to keys to an automobile are NOT a gift - donor must assign and deliver certificate of title to the donee Bank Accounts - donor may effect a gift by opening an account in the name of teh donee or by opening an account in the names of the donor and the donee jointly. In either case, contractual obligation of teh bank to pay the donee satisfies the delivery requirement in many jxs, there is a presumption that any deposit in a joint account is not a gift, absent clear proof of donative intent under Ohio law, the opening of a joint and survivorship account, in absence of fraud, duress, undue influence, or lack of capacity, is CONCLUSIVE evidence of decedent's intention to transfer to the surviving party a survivorship interst in the balance remaining in the account at his death a joint account WITHOUT a provision for survivorship is conclusive evidence, in the absence of fraud or mistake, that the depositor's intention is not to transfer the survivorship interest to the surviving party (in this case, funds belong exclusively to the depositor's estate, subject only to claims arising under other rules of law) Safe-Deposit Boxes - delivery of contents of a bank safe-deposit box is not accomplished merely by giving donee the key to the box although a safe-deposit box lease agreement providing that two co-lessees are joint tenants with right of survivorship does not constitute a gift inter vivos because of lack of delivery, the agreement does vest a present, equal joint interest in the res in both co-lessees, and upon the death of one, the survivor becomes the absolute owner of the res by the operative provisions of the contract |
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Gifts Causa Mortis
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a gift causa mortis is a gift of personal property made by the donor in ancticipation of IMMINENT death from a SPECIFIC CAUSE (such as illness from which donor is then suffering) that the donee keeps if donor dies from the anticipated death, but is revoked by operation of law if the donor survives
policy of law is against encourageent of gifts causa mortis because they are essentially testamentary yet do not meet the statutory requirements for making a will Therefore, all the requisites (present mental capacity and intent, delivery, and acceptance) of a valid inter vivos gift must also be present and shwon by clear evidence in order to prevent fraud and perjury Donor's Intent - donor must intend the gift to take effect immediately - a promise to pass property at death does not constitute a gift causa mortis the present donative intent mst be evidence by actual or constructive delivery Cause and Time of Death - the donor need not be ine extremis nor need his death immediately occur, as long as death occurs as a result of the existing disorder, without any intervening complete recovery Imminence of Death - there is no gift causa mortis if the donor is acting under only a general fear of impending death but is in good health at the time Revocation - gift is not revoked by donor's will, and gift passes outside probate estate. However, it may be revoked by the donor during life. Such revocation of teh gift is automatic if the donor does NOT die as anticipated withint the reasonable period of tim if the donor survives the donee, gift is revoked by operation of law |
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Gifts to Minors
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although minors may hold title to property in their own capacity, the law recognizes that a donor may not wish to allow the minor donee to have full use or control of a substantial gift of money or securities
gift or transfer made pursuant to Ohio Transfers to Minors Act ir irrevocable and conveys to the minor indefeasibly vested legal title to the subject property title to the property that is the subject of a gift under the act vests in the minor at the time the gift is made. However, the donor must deliver possession and control of the property to a custodian |
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Choice of Custodian
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there may only be one custodian for each gift
the custodian may be the donor, any other adult, including but not limited to an adult member of minor's family or the guardian of the minor, or a trust company custodian may resign or may be removed upon petition of an adult memeber of the minor's family, or by minor after age of 14 |
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Custodial Property
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custodial property is created and trasnfer is made when:
a security is registered inthe name of a custodian, as custodian for the minor, or delivered in writing with any necessary endorsements money is paid or delivered to a broker or financial institutuion for credit to an account in the name of the custodian, as custodian for the minor lifeor endowment insurance policy or annuity contract, or the minor named as beneficiary of such, is registered with the issuer or assigned in writing delivered to the custodian, as custodian for the minor real estate or interest in real estate is the subject of an executed and delivered deed, assignment or similar conveyance into the name of the custodian, as custodian for minor certificate of title issued by dept or agency of state or US evidencing title to tangible personal property is issued in the name of, or delivered to, custodian blah blah tangible personal property is accompanied by a statement of a gift or transfer designating the custodian and any other interst in property is transferred in writing to the custodian, as custodian, including an irrevocable exercise of a power of appointment in favor of the minor |
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Duties of Custodian
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collect, hold, manage, invest, and reinvest the custodial property
custodian entitled to reimbursement for reasonable expenses incurred inthe performance of his duties and, unless he is the donor or transferor, the custodian may receive reasonable compensation for his services custodian NOT compensated for services is not liable for losses to custodial property unless they result from bad faith, intentional wrongdoing, or gross negligence, or from custodian's failre to maintain the standard of prudence required in investing custodial property pursuant to the act |
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Payment and distribution
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the custodian may pay as much of the property or its income as he deems advisable for the use and benefit of the minor before the age of majoirty
final distribution of custodial property MUST be delivered or paid to minor when minor attains the age of 21 years, or at an age between 18 and 21 years as specified by the donor in the writing providing for the gift. if the minor dies before final distribution, final distribution will be made to the minor's estate |
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Bailments Defined
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a bailment is the transfer of possession of personal property by a bailor to a bailee without the transfer of title
a bailment is usually made for a particular purpose, and after this purpose is performed, the property must be delivered back to to the bailor in its identical form bailment is a relationship that is created by contract, and although there are implied terms that courts impose upon this class of contract, the creation of the contract is not unlike any other contract ESSENTIAL ELEMENTS: delivery of personal property to bailee; acceptance by bailee; and intended return to the bailor |
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Creation of Bailment
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delivery of property to the bailee MUST be accompanied by knowledge and acceptance by the bailee of possession and assumption by the bailee of control over the property
although consent to possession and knowledge of presence of the article are required, these are to be distinguished from knowledge or consent to the fact of bailment |
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Disclaiming Bailment
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ofthen the owner of private proeprty to which public has access, such as a parking lot or restaurant, wil post signs disclaiming liability for items left on the premises
such signs are NOT determinative of the issue of whether a bailment has been created; rather, the actual degree of control exercised by the owner of teh property over such items is a critical factor some disclaimers can, however, effectively limit the liability of the bailee, once the bailment has been created |
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Fungible Goods
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the transfer of fungible goods, such as wheat or grain, constitutes a bailment when the goods are stored with other fungible goods of like quality, even though the identical goods are not returned
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Concealed Property
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problems arise with respect to closed receptacles containing other items of personalty of which the bailee was not expressly aware and did not expressly consent to hold
a bailee may be held liable for a concealed item of unusual value only when it was foreseeable that such items might be present (a hotel will be responsible for items left in its hotel safe because items of value are generally left there) |
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Bailment v. Employer/Employee
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an employee's possession of teh employer's goods is NOT a bailment
rather, the employee merely has custody of the goods and has not assumed the independent control over the goods necessary for a bailment the employee is subject to the control of the employer, whereas the bailee has the right of possession and control of the goods negligence of an employee is imputed to the employer, but the bailee's negligence is not generally imputed to the bailor, because the bailee has control and possession and acts in his own interest |
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Bailment v. Lease
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a lessor does not ordinarily assume control over personal property that the lessee may store on the leased property
where the lessor does assume control, a bailment IS created a lessor owes the lessee a duty of ordinary care for the protection of the lessee's personalty on the premises, but if there is a lease, the burden is on P to show breach of duty of care if P can prove that a bailment was created, the burden shifts to the bailee to show that he was not negligent lease v. bailment - look out for parking lots and safe-deposit boxes |
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Parking Lots
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Whether parking a car in a commercial parking lot constitutes a bailment depends on whether the owner of the car surrenders control of the car to the lot operator
if the owner of the car parks his own car and takes the key with him,he has merely leased the space if the owner must allow the attendant to park his car and keep the keys, a bailment is created |
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Safe-Deposit boxes
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the rental of a safe-deposit box usually creates a bailment because of the degree of control retained by the bank
typically, the bank retains a duplicate key, and the user of the box cannot enter the vault without singing in and using the bank's key as well |
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Sale
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a sale involves a transfer of title to the vendee, rather than mere transfer of possession
the importance of determining whether a transaction is a bailment or sale lies in the liability for risk of loss i a bailment, the risk of loss remains with the bailor because he retains title. However, in a sale, title passes to the vendee and, therefore, the vendee assumes risk of loss if a bailee has option to purchase, title does not pass until the bailee exercises the option to buy. Similarly, when goods are sold on approval, the potential purchaser becomes a bailee until either the goods are rejected (title remains with the seller) or the sale becomes final (title transfers to buyer) the UCC contains provisions specifying when the risk of loss passes to the buyer when the goods are delivered to the common carrier |
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Special Types of Bailments
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Consignment: bailment for special purpose of allowing consignee to hold goods for sale - consignee is either to sell the goods and remit the purchase price to the consignor or to return the goods if not sold
Pledge: transfer of possession of personal property to secure the performance of an obligation of the bailor owed to the bailee the pledgee has a lien on the property, with a right of sale in case of defalut at common law and under UCC, pledgee is bound to exercise ordinary care for the protection and preservation of the subject matter of the pledge the pledgee must return the chattel after the pledgor's tender of the full amount of the debt. The pledgor has a right to redeem and a right of action for conversion if pledgee wrongfully witholds the proeprty |
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Rights against Bailee
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bailor can maintain a cause of action against the bailee for damages to the ptroperty or breach of K
bailor may also bring an action in trover if the bailee's acts amount to a conversion of the goods the bailor may pursue an action in repelevin when he is entitled to immediate possession of the goods and the bailee fails to return them the bailee or warehouseman has an obligation to delivery the goods to the bailor upon demand unless the warehouseman raises a lawful excuse such as delivery of the goods to a person whose receipt was rightful as against the claimant |
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Rights by or Against third parties
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where the bailor has a present right to demand possession of the chattel from bailee, bailor may sue a thrid party in trover or replevin where the third party has damaged, converted, or purchased the bailor's goods
when the bailment is for a def time, however, bailor has no right to possession during the life of the bailment! so the bailor cannot bring actions for trover or replevin during the life of the bailment. However, bailor may bring trespass action for damages to the chattel bailor will not be liable for any injuries to third parties resulting from the negligence of the bailee. In other words, the negligence of the bailee is not imputed to bailor like agency or employment relationships |
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Right to possession and incidental use
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during the term of the bailment, bailee has exclusive right to possess the goods against the whole world, INCLUDING THE BAILOR
however, the bailee has no right to use the goods except as far as any use might be implied by, or incidental to, the purpose for which the bailee holds the goods or as otherwise expressly agreed (this might include bailments for storage, repair, or transport. The bailee will make use of the goods incident to performing any of these services) any unlawful exercise of dominion over the property constitutes CONVERSION and renders bailee liable unless bailor ratified bailee's acts |
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Rights of Action
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bailee acquires a special interest in teh bailed property that enables him to bring an action for damages or specific performance against one who interferes with his possessory interest
bailee may bring an action for damage, destruction, or interference with bailed goods and may recover them from a third person who has wrongfully taken them for his own possession. A bailee can also bring a conversion action against bailor if bailor wrongfully takes goods from bailee's possession bailed property cannot be subjected by bailee's creditors to the payment of bailee's debts |
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Duty of Care
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the standard of care to which the bailee is held depends on the nature of the bailment relationship
nature of the bailment relationship is first analyzed to determine whether the benefit was MUTUAL, or lay with only ONE of the parties Gratuitous Bailments: where the bailment is gratuitous and the bailee holds the property for the sole benefit of the owner (bailee is uncompensated), bailee will be held to only a slight duty of care finder of lost property is a gratuitous bailee for benefit of the owner and, thus, is required only to avoid gross negligence causing damage to the chattel Mutually beneficial bailments - commercial bailments, bailments for hire, and pledges are mutually beneficial to bailor and bailee bailee is not the insurer of goods - but if the bailee does agree to insure the goods, bailee will be absolutely liable |
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Standard of Care
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in mutually beneficial bailment, the bailee is held to a standard of due care and will be liable for ordinary negligence
where bailee has taken all reasonable efforts to safeguard bailed goods, he will not be held liable for a theft or fire that could not reasonably have been foreseen or prevented if the goods are damaged or destroyed without negligence on the part of the bailee, the risk of loss falls on the bailor |
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Breach of Contract
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since a bailment is usually a contractual relationship, liability of the bailee may also arise from breach of the terms of the K. To establish a prima facie case for breach of a bailment contract, the P must plead the existence of the contract of bailment, delivery of the bailed property to the bailee, and the failure of the bailee to redeliver the bailed property at the termination of the bailment
bailee will be held absolutely liable for any damage to goods caused by his own breach of contract thus, if the bailee goes beyond the scope of the bailment agreement or uses goods for different purpose other than that agreed pon, such as by transporting or storing the goods outside a specified location, he will be held liable for any damage resulting from the unauthorized use, regardless of his lack of negligence UCC sets standards of care in certain types of commercial bailments and limits the bailee's ability to disclaim liability through waivers |
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Warehouse
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under the common law and the UCC, the warehouser is held to a REASONABLY CAREFUL MAN standard of care with respect to the goods - he is not an insurere of goods
an operator of a warehouse must use reasonable care and diligence to protect property stored in its facilities from loss of damage by fire, theft, burglary, or other similar causes |
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Bailments for Sole Benefit of Bailee - borrowing
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when person borrows another's personal property, the benefit accrues entirely to the borrower - in other words, it is for the sole benefit of the bailee
therefore, a borrower is held to the greatest duty of care with respect to the chattel even slight negligence causing damage to the chattel may give rise to an action for damages |
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Common Carriers
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at common law, a common carrier is treated as an insurer of chattels entrusted to its care. Thus, the common carrier will be liable for loss or damage to the goods under any circumstance other than: an act of God; an act of a public enemy; an act of state (legal process); an act of a shipper (defective packaging); or the inherent nature of goods (perishable items)
a common carrier is one who holds himself out to the public as engaged indiscriminately in transporting persons or property for compensation, offering his services to the public generally gov't transit agencies are held to standards of gov't authority |
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Innkeepers
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at common law, strict liability was imposed on innkeepers with regard to the chattels of the guests
Modern statutes, however, limit their liability |
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Duty not to Commingle
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unless the warehouse receipt otherwise provides, or unless the goods are fungible, a warehouseman must keep the goods covered by each receipt separate so as to permit identification and delivery of goods at any time
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Duty of Delivery
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bailee owe duty to bailor to redeliver or account for bailed chattel in its original or agreed-upon altered form
at common law, a bailee is absolutely liable if, instead of redelivering the property to the bailor, he delivers it to a third party who does not have a rightful claim to it. Such action against the bailee could be for breach of the bailment agreement or for conversion of the chattel such liability is NOT excused by innocent mistake or lack of negligence!! in general, a bailee is estopped to deny his bailor's title. Moreover, lack of title in the bailor is not an excuse for nondelivery Under the UCC, a bailee who in good faith, observing reasonable commercial standards, has delivered goods according to the document of title is not liable for misdelivery, even if the person from whom he received the goods or to whom he delivered the goods in fact had no right to them |
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Limitation of Liability
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a bailee will generally be held to the applicable duty of care despite efforts to disclaim all liability
in other words, the bailee may not attempt to contract away all liability for his own negligence! Warehouses - although a warehouser will not be allowed to contract away his liability for negligence, he may set a limit of liability on each item or unit of weight Special Contracts - bailee may limit his liability if a special contract to that extent is proved - requires a showing that the bailor had notice of the terms and assented to them Lack of knowledge or consent - parking lot ticket delivered to bailor by bailee is a mere token for identification, and conditions thereon purporting to limit the bailee's liability become no part of the contract, in the absence of anything to indicate that the bailor assented to the conditions before delivering the property to the bailee the same rule applies to claim checks - they do not evidence a contract as there is not sufficient proof that the bailor knew or should have known of the term disclaiming liability the rule also applies to posted signs, limitations on which are not binding without proof that bailor read the notice or should have read the notice given its size and location |
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Common Carriers
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Ohio statute makes invalid any attempt by a common carrier to limit contractually his liability to deliver the property safely to its destination
however, as noted above, various fed and internat'l laws govern the liability of carriers handling the movement of goods across state lines and between countries |
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Innkeepers
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In Ohio, an innkeeper is not liable for a guest's valuables if the innkeeper meets the statutory requirements of posted notices in conspciuous areas informing guests of the availability of a safe and other means to protect against loss
valuables include property such as money, bank notes, jewelry, precious stones, negotiable or valuable papers, and bullion!! innkeeper not obligated to hold property the value of which is in excess of $500, and will not be liable for property exceeding that value, whether property was received or not |
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Burden of Proof
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to establish a prima facie case in a bailment action, the bailor must prove the existence of the bailment contract, the delivery of the bailed property to the bailee, and the failure of the bailee to redeliver property undamaged at the termination of the bailment
once a prima facie case is established, burden shift to bailee to show that the loss was NOT due to his negligence adn he exercised ordinary care in safeguarding bailed property if the presumption of the bailee's negligence is rebutted, the burden shifts back to the bailor to prove the bailee's negligence |
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Financial Responsibilities of Bailor to Bailee
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in a comercial bailment or one for the mutual benefit of the bailor and bailee, the bailee has a right to agreed-upon compensation for her services or reasonable value of the services
however, if sole benefit is to bailee, bailee is entitled to no compensation although the bailee is liable for ordinary expenses of maintaining the property during bailment, bailor is liable for any extraordinary expenses incurred by the bailee |