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1. Which of the following are examples of bailments?
I. A woman parks her car in a parking lot, locking it, and taking the keys with her
II. A hotel guest leaves his passport in the hotel safe
III. A health club cleans out its “lost and found” area and gives the unclaimed items to charity
IV. A metals trader deposits a gold bar in a safe deposit box at a bank
A. I and IV only
B. II only
C. II and IV only
D. I and III only
Which of the following is true regarding bailments?
I. To form a bailment, the bailee must consent to possess and control the bailor’s property
II. A bailment is created when a delivery truck loads the delivery company’s goods into the company’s delivery truck
III. A bailment is created when a tenant stores his goods in an apartment owned by the landlord
IV. A bailment is created when a consignment store accepts goods from a customer to sell to other customers
A. I and II
B. II and III
C. III and IV
D. I and IV
Explanation – D – In order for a bailment to be created, a bailee must accept possession of personal property and exercise control over it. Thus, statement I is true. Likewise, a consignment is a bailment for the special purpose of allowing the consignee to hold the goods for sale, and statement IV is true as well. II and III are not true. An employee’s possession of the 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. Thus a bailment is not created when a delivery truck loads goods owned by the delivery company into a delivery truck, as the driver is the agent of the company and merely has custody over the goods (rather than the independent control necessary to create a bailment). Finally, a bailment is not created when a person stores his personal possessions in a rented apartment.
Are all bailees held to the same standard in taking care of an item subject to a bailment?
A. Yes, b/c all bailed goods should be protected from foreseeable hazards
B. Yes b/c acceptance of bailed goods includes a covenant of absolute liability for their harm or destruction
C. No b/c the degree of care owned by the bailee depends on the nature of the bailment
D. No b/c the bailee has merely a duty to keep bailed goods belonging to a bailor separate and identifiable from bailed goods belonging to another bailor
Explanation – C – The bailee’s duty to safeguard the goods varies significantly depending on the type of bailment formed by the parties. For instance, common carriers are treated as insurers of the goods entrusted to them, and are liable for the loss or damage of such goods except under circumstances beyond their control (e.g. acts of God or the inherent perishable nature of goods). A bailee who has borrowed another’s personal property without compensation is considered to reap the entire benefit of the transaction and is also held to a very high standard of care. However, if the bailment is mutually beneficial to both the bailor and the bailee, the bailee is held merely to a standard of due care, and will not be liable for damage to the bailed goods in the absence of negligence
Which one of the following is an effective disclaimer of liability for bailed goods?
A. A printed notation on a coat check claim ticket: “We are not responsible for any items checked”
B. A posting on a hotel room door in Ohio: “Hotel is not responsible for valuables not kept in hotel safe”
C. A notice on a valet parking ticket: “We are not responsible for the safety of your car or anything in it”
D. A notice on the back of a form for a delivery service: “We are not responsible for anything that happens to your goods”
Explanation – B – By OH statute, an innkeeper is not liable for a guest’s valuables if the innkeeper meets certain statutory requirements, including the posting of notices in conspicuous areas informing guests of the availability of a safe and other means to protect against loss. Thus, a sign on a hotel room door stating that the hotel is not responsible for valuables not stored in the hotel safe is an effective disclaimer of liability. Note, however, that in Ohio, an innkeeper is not obligated to hold property the value of which is in excess of $500, and will not be held liable for personal property exceeding that value, regardless of whether the property was received by the hotel.
Which of the following statements regarding gifts is/are true?
I. A valid gift requires donative intent, actual delivery, and acceptance
II. When a gift is given, absolute title to the property passes at the completion of the gift
III. A person claiming title to personal property by gift has the burden of proving the gift by clear and convincing evidence
IV. A promise to make a gift in the future is unenforceable unless supported by consideration
A. I only
B. I, II, and III
C. III only
D. II, III, and IV
Explanation – D – While a valid gift requires donative intent, delivery, and acceptance, delivery can be either actual or constructive.
Which of the following is true regarding gifts inter vivos and gifts causa mortis?
I. An inter vivos gift requires that the donor must part with control during his life
II. A gift causa mortis may be revoked during the donor’s life or in her will
III. Stock certificate, bonds, and bank accounts often give rise to questions of whether ownership has actually been transferred
IV. In Ohio, delivery of the keys to an automobile is sufficient to effect a gift
B. I and III
C. II and IV
D. I, III, and IV
Explanation – B – To make a valid inter vivos gift, the donor must part with control of the property during his life with intent that title pass immediately and irrevocably to the donee; thus I is true. It is also true that gifts of stock, bonds, and bank accounts often are subject to issues of whether ownership was transferred and whether the delivery requirement was met, making III true. However, gifts causa mortis may not be revoked by the donor’s will so II is not true. Under Ohio law, delivery of the keys to a car is not sufficient to create a gift without assignment and delivery of the certificate of title, and IV is false
Which of the following statements regarding conditional gifts is true?
A. A donor may not impose conditions on a gift such that a gift will fail during the donor’s lifetime
B. An engagement ring is a type of conditional gift
C. A gift by an infant is subject to a condition precedent
D. A gift given in life (inter vivos) is absolute and irrevocable
Explanation – B – The modern trend in OH is that a gift given in contemplation of marriage, such as an engagement ring, may be revoked if the agreement to marry is breached, regardless of which party may be at fault for terminating the agreement. The donor is entitled to recover the ring or other gifts b/c the condition precedent to its vesting, the marriage, has not occurred.
A – Incorrect à a gift ordinarily is absolute and irrevocable. However, a donor may impose conditions on a gift so that if the conditions fail, the gift fails. The conditions can certainly fail during the donor’s lifetime
C – Incorrect à a gift by infant is subject to a condition subsequent in that the infant may disaffirm the gift upon attainment of the age of majority
D – Incorrect à A gift ordinarily is absolute and irrevocable. However, a donor may impose conditions on a gift so that if the condition fails, 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 the circumstances.
Which of the following statements regarding gifts causa mortis is true?
A. The policy of law encourages gifts causa mortis b/c they help fulfil the donor’s intent without having to meet all of the testamentary requirements for making a will
B. A gift causa mortis is effective even if the donor is healthy at the time of making the gift, so long as they die immediately after the gift is made
C. If the donor of a gift survives the donee, a gift causa mortis is revoked by operation of law
D. Although the gift is not revoked by will, the gift is still considered to pass within the probate estate
Explanation – C – A gift causa mortis is a gift of personal property that a donor makes while anticipating imminent death from a specific cause, such as a terminal illness. It is true that, if the donor of a gift survives the donee, the gift is revoked by operation of law. In fact, if the donor survives the immediate health crisis, the gift is also revoked
Which of the following statements regarding lost property is true?
A. If property is lost, the one who reduces it to possession becomes its owner
B. Lost property is usually found on public rather than private property
C. Lost property includes that which the owner has parted with intentionally
D. Property is never presumed lost
Under Ohio law. What is the effect of finding lost personal property on private property?
A. The finder automatically acquires possessory rights
B. The finder does not take acquire possessory rights until 30 days after the lost item has been found
C. It depends on whether the finder is a trespasser and whether the location is highly private
D. The owner of the place where the property was found (locus in quo) assumes the right of possession
Explanation – C – Under OH law, whether a finder of lost personal property on private property acquires a possessory interest depends on whether the finder’s a trespasser on the property and whether the location is highly private. A trespasser does not acquire possessory right in the item, which instead belong to the owner of the locus in quo. Even if the person is not trespassing, the owner of the house acquires rights to the property in a highly private locus.
Which of the following statements regarding lost or misplaced property is false?
A. A finder of lost property can sue any subsequent possessor of the property who interfered with the finder’s rights to the property
B. Mislaid property is that which the owner has deliberately placed somewhere but forgotten
C. The finder of mislaid property acquires no possessory rights
D. A finder is one who discovers lost property and acquires title over it
Explanation – D – A finder is one who discovers lost property and acquires possession over it. A finder does not acquire title to the property, but only a possessory interest.
Which of the following statements regarding lost property is false?
A. At common law, the finder of treasure trove has title against anyone but the true owners and his heirs
B. In Ohio, there is a statute dealing specifically with the rights of finders of treasure troves
C. Buried chattel belongs to the owner of the land
D. A finder of property must try to notify the owner that the property has been found, if she knows or has reasonable means of discovering the owner’s identity
Explanation – B – Ohio does not have a statute dealing with the rights of treasure trove. Rather, the usual rules dealing with lost property apply.
assets whose physical characteristics and capacities give it an intrinsic value i.e. cars, clothing, books, furniture
Can be referred to as chattels personal
§ Chattels real = interests in real property that are NOT freehold estates – a lease or a mortgage
§ Chooses in action = personal right to property that is recoverable by means in a lawsuit i.e. accounts receivale in a business, the right to sue for damages, the right to recover under life insurance policy
o Gifts – including bequests or devises in a will
o Taking possession of otherwise unowned property
o A person can obtain a right to possession without getting good title even by a thief or a willful converter
o Finding lost property
§ intent on the party of the donor to give the gift
· Donative intent exists when a party intends to transfer ownership without consideration and the donor is neither influenced by fraud or duress
· Present = not satisfied by the statement “the gift will be made in the future” à needs to be NOW
o Can have gift now but possession in the future – title is what is important à title must pass NOW
· Example = Arnold writes a letter to his daughter stating he is giving a specified painting to her and that she now owns it, subject to Arnold’s possession of it until his death. Arnold has made a gift of the painting to his daughter. She has a vested remainder in it.
o Transfer with a retained life estate and a future interest (remainder) in the donee
o Arnold has made a present gift of the painting b/c painting is daughter’s now even though Arnold keeping possession during his lifetime à daughter has ownership interest in painting
· Example = A father tells a son, “In two years, I’m going to give you this painting.” When two years elapse, the son does not own the painting and the father is under no obligation to give it over. This is an instance of intent to make a gift in the future, which is merely a promise unsupported by consideration and therefore unenforceable.
o Just a promise – not a present interest
o When two years elapses, son does not own the property à father only expressed an interest or promise to make a gift in the future but not supported by consideration so not enforceable
Donee is provided the means for obtaining possession and control of the gifted property but does not actually get the item of the gift itself
o Permitted as a substitute for actual delivery when the physical delivery is not possible or not practical given the nature or circumstances
o In OH such substitute delivery is effectively accomplished when the donor surrenders as much control over the property as is presently possible (at the time of the gift)
§ i.e. delivery of a passbook
o In OH an effective gift of a car requires that the donor assign and deliver the certificate of title to effectuate a gift
§ Cannot just give car keys
o Example = Alicia wants to give a car to Brian as a Christmas gift. A snowstorm occurs that will delay delivery of the actual car until after New Year’s Day. Not wanting to delay the giving of her gift, Alicia, on Christmas Day, gives Brian the keys to the car with a holiday card that says, “The car is yours!” Ohio will not accept this substitute delivery insofar as Alicia failed to also assign and deliver a certificate of title.
§ Not valid substitute delivery is OH – Alicia has failed to assign and deliver the certificate
o Once delivery is made to donee, the principal cannot stop the agent from delivering anymore
o Example = You want to give a watch as a gift to your friend. You give the watch to your agent, call your friend, and tell the friend, “I have made a gift to you. It is yours now. My agent currently has it.” A gift has not been made, because your agent still has it, and you, being in control of the agent, could still demand the property back.
§ Delivery has not been effectuated and no gift
§ If the agent is the donee’s agent, that completes the gift b/c the donee’s agent is under the control of the donee à once agent gets the gift, it is like the donee getting it
In the context of gift giving, what happens when make a gift of the contents of the box – can deliver the contents of the box
§ But if have multiple persons with access to safety deposit box and access does not make you the owner of the contents of the box, then merely delivering items in the safety deposit box will not be a completed gift
§ Was there an intent expressed by the donor that the donee has actually been delivered the person property so the donee is deemed the owner
Donee must actually accept the gift
· As a general rule, we assume acceptance
· Not necessarily always the case though – look to facts, possible donee has done something to indicate he doesn’t want the gift
· What if donee is not home but donee’s parent opens the door and accepts the gift?
o Delivery? – probably not b/c uncertain that the parent is truly the agent of the child BUT if that child comes home and takes possession of the gift, effective delivery
o If child doesn’t want the gift – may be incomplete acceptance
General rule = A gift once completed is irrevocable, donor cannot get it back
o Example = Father gifts Daughter with a deed to property. Father later goes to Daughter saying that he has made a mistake and asks for the property back. Daughter agrees and rips up the deed. Thereafter, Father dies. The property will not be dispersed as part of Father’s estate, because Father’s gift to Daughter was effectuated and became irrevocable. At that point, Father could have only regained the property if Daughter had delivered the property to him with the intent to make a gift.
§ Still owned by daughter b/c effective gift to daughter and she accepted – for daughter to divest herself of property is to re-convey property to dad, cannot just rip up deed
§ If personal property = can just give the personal property back to dad
In OH, gifts in contemplation of marriage i.e. engagement rings, is a conditional gift that vests and becomes irrevocable when the marriage occurs
o Until marriage, the gift is conditional and can be recovered
o Donor of gift can revoke the gift and recover it regardless of the reason the marriage was called off
Gifts causa mortis – conditional gifts as when they are made during life as the donee is told that you get the gift only if I die from this anticipated event which I fear causing my death
o If donor does not die from that anticipated event – that gift is incomplete and the condition has not been met à donor or donor’s estate gets the property back
o Need all elements of regular gift and then demonstrate the existence of the condition (dying from anticipated even which I fear)
o Present gift – delivery saying this is yours if I die from this anticipated event which I fear
o If in fact the donor survives the event or dies in a different manner – gift is revoked
o Anytime during donor’s life, donor can revoke the gift
o ONLY time gift causa mortis becomes irrevocable is when donor dies from the anticipated event which the donor feared
o i.e. donor about to undergo risky operation at a hospital with 20% success rate; donor fears operation and day before, goes to neighbor – donor gives neighbor his favorite fishing pole and says neighbor gets to keep it if the donor dies during the operation
§ If donor survives the operation à gift is revoked
§ If donor survives operation and dies after of something else à gift is revoked b/c didn’t die from operation
§ Uniform Act = a valid irrevocable gift to a minor can be made to a minor by transferring the property to a custodian who holds the property for the minor
· At the time the gift is made – title vests in the minor but custodian has physical possession
· Custodian can be paid for his services –right to reasonable compensation
· Custodian who is NOT compensated (normally family members) is NOT liable to the minor for losses that result from the custodial property unless the custodian acted in bad faith, involved in intentional wrongdoing, or was grossly negligent
· While the child is a minor, custodian can pay out the property as the custodian deems advisable for the minors best interests
o Custodian must turn the custodial property over to the minor when the minor reaches 21 or when the person who set up the account named the age
§ When have a problem regarding gifts on bar – burden of proof lives with the person who is alleging to acquire title of the gift (donee)
· Exception = when a transfer is made from a parent to a child, presumption that that was gift
o Not conclusive – parent can still bring in evidence to prove not a gift
o Standard = CCE to overcome the presumption
o A person acquires title to abandoned property by being the first to reduce the property to his possession and then exert dominion and control over it
§ Has rights of a first possessor – the person who abandoned his title, breaks the chain of title so like there was no possessors before
o An abandoned property is one that has been owned by an individual and that individual has intentionally relinquished that ownership and does not intent to recovery
§ Example = Abe places an old sofa on the sidewalk in front of his house. Lena sees the sofa while driving home, stops and places it in her car. The sofa will rightfully be considered Lena’s. The placement of the sofa on the sidewalk will be viewed as an act akin to throwing out the trash and therefore as an intent to abandon.
o Intent = merely not using property over a period of time is NOT sufficient to constitute abandonment
§ However, a protracted period of disuse, accompanied by other circumstances indicating an intent to abandon, may be an intent to abandon
o OH, Unclaimed Funds Act – the general rule is that all intangible property that is held by a business association is presumed abandoned if it has bene remained unclaimed by the owner for five years after it has become payable or distributable
o Bank accounts = presumed abandoned if the owner has not within five years increased or decreased the amount of the deposition, hasn’t present a bank book for his interest, hasn’t corresponded with the bank concerning the account, or has not otherwise indicated interest in the account evidenced by memorandum
§ Unclaimed funds of $50 or more = presumed abandoned, the bank must file with the Director of Commerce, must pay the director of commerce 10% of the aggregated funds shown in the report, and must provide owners of those funds at least 30 days in advance of filing those reports
§ Payment of unclaimed fund – holder will be relieved and held harmless of all transfers to the state
· Given 30 days’ notice and no response, give money to director àheld harmless
§ State maintains unnamed trusts funds = publishes unclaimed funds so can still reacquire title
o Safety deposit box = presumption arises after the items have not been dealt with for three years
o Title by purchase = person cannot transfer better title than what he has
§ Exception = entrustment rule – situation where a person entrusts his property to a merchant (person who deals by repairing or selling that type of property) and the merchant inadvertently sells your property, the third party gets good title under the entrustment rule (UCC)
· True owner will have recourse against the merchant but cannot get his property back
A person who has possession of property even though that person doesn’t have title has a better right to possession of that property than all others in the world other than the owner of the property and any prior possessors who didn’t abandon their rights to the property
o Example = Bill borrows a book from Lois. Bill doesn’t own the book, he just has possession. Terry, who is staying with Bill, inadvertently picks up the book when she takes her belongings to leave. Terry now has possession and therefore a better right to possession than anyone else in the world except Bill and Lois. Bill’s right to possession supersedes Terry’s right because Bill was a prior possessor who did not abandon the property. Lois has a better right of possession than Terry because she is the true owner of the book.
A person becomes a finder of property when the property has either been lost or misplaced and the person exercises physical control over the personal property (reduce the property to their possession)
§ Do not acquire title – just acquire rights to possession
· Duty to notify the owner of the lost chattel when they know or have reasonable means of discovering the identity of the chattel
· Duty to eport the finding of the chattel or give the property to a law enforcement officer/agency
· Duty of care – if fail to meet duty of care, liable to damages caused by their negligence
Property separated from the person’s possession without the person’s intention – considered lost when left in a wholly inappropriate place without intention i.e. something falls out of your pocked
§ Finder of lost property by reducing the chattel to possession acquires the possessory interest
Finder does not get possessory interest if property found on private property and finder was a trespasser OR lost property is found on private property that was not open to the public but was instead a highly private place
o In both instances where the finder cannot keep the property, the owner of the locus of the place where the property is found is the finder of the property found
o Example = Burt and Ernie trespass on Chevy’s land. While on Chevy’s property, Ernie sees a billfold with money on it and points it out to Burt, who then runs over to the billfold, picks it up, and puts it in his pocket. Burt and Ernie begin to argue over ownership of the billfold. Chevy, the landowner, then comes out of his house to see what is going on. Burt asks Chevy, “Is this yours?” and Chevy responds, “No, it isn’t.” On these facts, as against Ernie, Burt has a better right to possession of the billfold because, by having picked it up and pocketing it, he reduced it to possession first. But, as against Chevy, Burt’s right to possession of the billfold is not better. Burt, who found the billfold only while trespassing on Chevy’s land, cannot benefit from being a trespasser, and the possessory interest in turn goes to the owner of the land where the lost property was found, which in this case is Chevy.
§ Chevy is not the real owner
§ Burt has better right to possession even though Ernie saw it first, Burt reduced it to his possession
§ Burt v. Chevy = Chevy has a better right b/c Burt was a trespasser and cannot keep the possession à goes to owner of the land (Chevy)
Property where the owner has intentionally put in a certain spot but then later forgets where it is placed, and the property is presumed mislaid when à Finder does not have possessory interest in it, possession is deemed to be belong to the owner of the locus, who owns the land where the mislaid property has been found
§ Mislaid = goes to owner of locus even though someone else found it
§ Example = Forgetful Frank leaves his wallet on the counter at the coffee shop after paying the bill. Later, a clumsy customer, having spilt his coffee, finds the wallet on the counter while reaching for some napkins. The wallet is mislaid property and the clumsy customer who found it acquires no possessory interest in it. The owner of the coffee shop obtains a right to possession of the wallet and has the responsibility to hold onto the property until Frank returns for it.
Money or other items buried in the ground, apply lost property rules
A way to acquire the right to possess property without the title to it
o Transfer of possession of personal property by a bailor to a bailee without the transfer of title i.e. I lend my rake to my neighbor – has possession but not title
Person who has acquired possession of custody without ownership
o Liable for ordinary expenses incurred while in possession of the bailment
§ i.e. A lend B his car – B should pay for the gas
Person who transfers the possession of the property
o Liable for all extraordinary expense incurred by the bailee i.e. A lends car to B – engine explodes while B is driving, A is responsible to repair
o Delivery of personal property to bailee
o Bailee’s acceptance of possession and assumption of control over the property
o Intended return of the personal property to the bailor when the purpose of the bailment is achieved
o Although, it is typical for the bailee to have knowledge of the personal property that is the subject of a bailment, specific knowledge may not be required where, for example, the bailee exercises control over a chattel that might act as a receptacle or closed container that conceals other items of personality, the bailee has taken control over the other items hidden in the box
o In such a circumstance, the existence of a bailment with respect to those concealed items will depend upon whether the concealment of such items was a foreseeable possibility
§ Foreseeable that there are things of values in that box
Must a bailee accept not only possession of the property but also accept responsibility for its safekeeping for a bailment to exist?
o Despite the fact that many bailees, particularly those who own private property to which the public has access, attempt to disclaim liability for personal property left on their premises, these disclaimers are not determinative of whether or not a bailment exists à depends on facts
o The issue of whether an owner of a premises has become the bailee of personal property left on that premises is usually determined by the degree to which the owner of the premises exercises control over such property
Must a bailee intend to return the identical good or goods to the bailor?
General rule = bailee must return the goods to the bailor when the bailment is over and has to be the exact good returned
o Although, it is typically the case that a bailment entails an intent on the part of the parties to have the identical property returned to the bailor, exception:
§ When fungible goods such as wheat or grain are expected to be stored by bailee with goods of the same kind and of like quality, an intent to return to bailor not the identical goods but goods of the same kind and of like quality and that will be the extent of the bailment
· Only works if the goods are in fact the same kind and quality
§ Possession by an employee of the employer’s goods does not constitute a bailment because the employer has control over the employee and any property the employee is using
§ In a bailment there isn’t vicarious liability that we see in a employer/employee relationship = in a bailment, if A loans B his rake and while B uses the rake while in possession and hurts a child, A is not liable – B is liable b/c controlled the possession of the rake
§ Unlike a bailment that is only a transfer of possession without a transfer of title, a sale involves a transfer of title
§ When title moves, so does the risk of loss à who owes the risk of loss can turn on whether it is a sale or bailment
· Seller acquires title and risk of loss
· Bailee does not acquire title or risk of loss
§ HYPO = A jeweler buys, sells, and repairs watches. One day, Henry sells his watch to the jeweler, who then puts the watch on display in a show case. Later that day, Lee drops off his watch at the same jewelers to have it repaired. That night, a fire destroys the jewelry store, including the watch Henry had sold the jeweler and the watch that Lee had left to be repaired. Assuming no negligence on the part of the jeweler, does jeweler have an action against Henry? Does Lee have an action against the jeweler? Who bore the risk of loss for the two watches in question?
· Henry = sold watch to jeweler à can jeweler sell Henry? NO, Henry sold his watch, upon the sale, title passed to the jeweler and the risk of loss
· Lee = leaves watch to be repaired at jewelry à does Lee have an action against the jeweler? As long as the risk of loss didn’t pass to the jeweler, Lee still has the risk of loss
· “No negligence” – important
§ When a lessee stores personal property on a leased property, the lessor does not ordinarily assume control over that property; however, when the lessor does assume control a bailment is created and the lessor (owner of the property) is the bailee
§ The practical legal distinction is that, if the personal property is damaged and there is a question about whether the lessor failed to provide ordinary care for the protection of the property the burden of proof shifts depending upon the relationship establishment
· If plaintiff cannot prove that the lessor assumed control over the property and so created a bailment, then the P has the burden of showing that the lessor breached his duty of care
· If plaintiff can prove that the lessor assumed control over the property so as to create a bailment, then the burden is on the bailee (demonstrate he did not breach his duty)
Bailments where in bailee is uncompensated and wholes custody of the property for the sole benefit of the bailor
§ Examples of situations that give rise to a gratuitous bailment include the following:
· A bailee is a finder or custodian of lost propertyBailee allows someone to park a car in his lot free of charge
§ Commercial bailments
§ Bailments for hire i.e. rent a car
§ All bailee’s have a duty of care with respect to the personal property in their custody
§ The standard of care for respective bailees depends on the nature of the specific bailment relationship each bailee is in
The bailee with be held to a low level of care i.e. A puts his car in B’s garage, B held to a low standard of care
o And so, the bailee with be liable for damage to the chattel that result from gross negligence
The bailee will be held to an ordinary level of care
o And so the bailee will be liable for damage if the damage was caused by bailee’s ordinary negligence
· Bailees had a duty to redeliver or account for bailed chattel in its original form or its agreed upon alternate form i.e. jewelry store for repairs
· Bailee was liable to the bailor if delivery was made to a third party to had no rightful claim to a bailed chattel
· This liability existed regardless of whether or not bailor had title to the property
· Further the bailee’s liability was absolute and not excused by innocent mistake or lack of negligence
· Example = Maid finds a valuable ring in a hotel room she is cleaning. She gives the ring to Bellboy to take out and have appraised. Bellboy instead sells the ring. Between Bellboy and Maid, a bailment was created with Bellboy as bailee. In a suit by Maid, the Bellboy may not assert in his defense that Maid did not have title or that the hotel had a superior right to possession. Bellboy will lose
A warehouseman will neither be liable for receiving good from someone who has no right to dispose of them nor liable for delivering goods to someone who had no right to receive them if that warehouseman acted in good faith and observed reasonably commercial standards
Because bailee’s duty to delivery is one that contemplates the return of the identical goods received under the bailment, there is a related duty of bailee to not commingle goods in its possession unless those goods are fungible
§ With respect to the bailed property, all bailees have the exclusive right to possess the property during the time of the bailment and that might be superior to the owner during the bailment
§ The bailee’s right to possession establishes a possessory interest in the bailed property that:
· Protects the bailed property from potential interference from bailee’s creditors AND
· Even protects the bailed property from bailor taking back the property if there is a definite term of the bailment
§ With respect to the bailed property, all bailees have a right to its incidental use during the term of the bailment
· With respect to personalty that is the subject of the bailment’s right to use this property is – must be incidental in the term of the bailment or bailor expressly said he can do what he did
· Baileees who exercise dominion over the property in a manner not consistent with the restriction of “incidental use” render themselves liable for conversion of the property unless the bailor ratifies
o Before bailor can ratify, must have full knowledge of all material facts – would a reasonable person want to know this fact before making a decision
Because a bailee is a proper possessor, baileees may sue any party – bailor included – who interferes unlawfully with their possessory interest for:
· Specific performance
· Replevin – return of possession
o Bailor has the duty to not interfere with the exclusive possession of the bailed property during the term of the bailment
o Bailor has the duty to not interfere with or undermine bailee’s right to use the bailed property in ways incidental to and anticipated for the purpose of the bailment
§ During the term of the bailment, the bailor has no right to possession so the bailor is limited to brining a trespass to chattels action for damages that may be caused by third party and cannot sue third party for loss of possession
§ If the bailor has a present right to demand possession of the chattel from the bailee, the bailor can maintain actions for trover or replevin against any third party who has damages or converted the chattel
o To establish a prima facie case against the bailee, the bailor must prove
§ The existence of a bailment AND
§ Failure of the bailee to return the property undamaged to bailor at the termination of the bailment
o Once a bailor’s prima facie case is established, bailees have the burden to show that
§ They met the appropriate standard of care OR
§ They did not cause the loss
o A bailee will generally be held liable to the applicable duty of care despite efforts to disclaim liability
o A bailee may, however, limit liability if contracted for, but bailee must show that the bailor assented to the terms
§ Terms limiting liability found on a parking stub, claim check, or posted signs are typically not binding on a bailor unless you can demonstrate that when bailor left his car he had knowledge of the sign and assented
§ When an innkeeper has a metal safe or vault, suitable door locks and window fastenings for the sleeping rooms of guests, and conspicuous notices of the statutory provisions limiting innkeeper liability, the innkeeper will generally not be liable to guests to the loss or injury of their property
· Exception – despite meeting the above requirements for avoiding liability to guests, the innkeeper will nevertheless be liable to a guest for loss or injury to the guest’s property if the guest had offered to deliver that property to the innkeeper for the safe keeping in the safe or vault and the innkeeper forgot to put the property in the safe or refused to put it in the vault
§ An innkeeper will not be obligated to safekeep property exceeding a value of $500
In general, an action regarding personal property may be brought by anyone who claims title to or has a right to possession
In general, an action regarding personal property may be brought against: anyone who is claimed to be a subsequent possessor who has interfered with the P’s right of title or possession
o At common law, a person bringing an action regarding personal property had to elect or chose one of two possible remedies: recovery of damages (in an action for conversion) or recovery of the personal property (in an action for replevin).
o If the bailment is contracted for and there is a breach, the aggrieved party can bring an action for breach of contractual obligations.
§ In a conversion action, the plaintiff seeks money damages of the value of the property wrongfully taken
§ Essentially the effect of a successful conversion action is one that
§ To establish a “wrongful taking” of property
· P must show that D wrongfully exercised dominion or control over the property to the exclusion of the owner OR
· If D originally came into possession of the property lawfully, P must show that D has refused to return the good upon to demand to the rightful owner
§ In a successful conversion action, money damage will be measured by fair market value at the time of the taking
§ When the conversion action is successful, the exchange of title from P to D
· Does not occur when the court issues its decree BUT ONLY
· Judgment is satisfied by D’s payment of damage
§ After there is judgment for P but before there is satisfaction of that judgment, P in a conversion action can elect instead to sue for replevin and recover his property
§ OH statutory recognizes the right of replevin for Ps who seek specific performance for return of personal property wrongfully taken or obtained
· In a replevin action, a party may
o Before such an order of replevin is carried out, a P must post a replevin bond double the value of the property sought to be recovered
o Upon posting the replevin bond, replevin will be carried out by serving the bond to the D and seizing the property
o Once seized, the property will be delivered, unless D, before such delivery executes a bond double the recovery himself
§ OH statute further provides that, if recovery of the property from D is not possible, the replevin action can proceed as a claim for conversion as long as due notice is given to D
· This is an action for damages resulting from the intentional interference with the right of possession
· In this action, P can recover both for damages to the property and damages resulting from the loss of possession
As an interference with title, P with a possessory interest can bring a replevin action for recovery of possession of the property even though he or she is not the true owner
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