Bailments

Question 1

Bailment Definition

Answer 1

When owner (bailor) temporarily transfers exclusive possession and control of chattel to another (bailee)

Question 2

Two requirements of a bailment

Answer 2

• 1) Exclusive possession = actual physical control

• Includes symbolic and constructive delivery (e.g. giving keys to a car)

• 2) Acceptance by Bailee = insinuates implementation of a contract or agreement

• Constructive acceptance found where item is acquired and retained under circumstances in which recipient should keep it safely and return it to owner (e.g. owner left or lost coat in hotel dining room)

Question 3

Four types of bailments

Answer 3

• 1. Express:

• Critical terms of bailment have been discussed
• Can have express bailment that supersedes common law

• 2. Implied by failure to discuss terms:
- e.g. friend asks to borrow car and you toss her keys

• 3. Implied by operation of law:

• e.g. law of finders: legal finder of lost property acquires simple possessory interest
• Was it:
• Lost: owner involuntarility parts with possession
• Mislaid: involuntary parts with object
• Abandon: first person to take possession is actual legal finder, acquires true ownership interest
• Treasure trove

• 4. Implied by constructive possession:
- e.g. waiter takes your hat and puts in on a coat rack in plain sight – implied invitation and still was within their constructive possession

Question 4

Duty to redeliver property undamaged

Modern View

Answer 4

Bailee must demonstrate exercise of due care

• Plaintiff only needs to prove there was a bailment, not that bailee was negligent
• Bailee needs to prove they were NOT negligent
• Reasonable care under the circumstances

Question 5

Duty to redeliver property undamaged

Traditional CL View

Answer 5

• Bailee will be liable if they cant prove they were not negligent
• Burden is on bailee
• “We did everything a regular dry clearer would do”
• Bailment for the sole benefit of the bailee – e.g. borrowing car → slight negligence
• Bailment for the sole benefit of the bailor – e.g. finder of lost property → gross negligence
• Bailment for the mutual benefit of bailor and bailee – e.g. customer test-drives dealer car → ordinary negligence

Question 6

Container / ordinary contents rule:

Answer 6

• Bailment does NOT exist for unknown extraordinary contents

• Duty only exists for known contents and unknown ordinary contents
• Purpose: Risk allocation; protects expectations of bailee
• Reasonably expected contents somewhat reliant on circumstances of bailment
• E.g. valet at country club parks your car and it disappears, cannot sue for $10,000 hidden in glove box. Could sue for the $1,000 worth of golf clubs in the back bc it is reasonably expected

Question 7

Law of Finders

Answer 7

Implied bailment on finder of lost/mislaid property

Question 8

Duties of finder

Answer 8

• 1. Reasonable care for property
• 2. Reasonable attempt to find true owner (Depends on nature of object - reasonable is different for a penny v. million bucks)

Considering the nature of the property and the circumstances, failure to do so makes them a wrongful converter

Question 9

Law of Finders:

Statute of Limitations

Answer 9

Determines period during which true owner may reclaim the property before simple possessory interest becomes true ownership; usually 2 years

Question 10

Law of Finders:

Lost definition

Answer 10

Def: true owner involuntarily/unintentionally/unconsciously parts with possession of property

Question 11

Law of Finders:

Legal finder has what possessory interest

Answer 11

• Actual finder has a simply possessory interest (SPI) = entitled to possess the lost property against everyone but the true owner – See Armory v. Delamirie
• Special Interest turns into true ownership after statute of limitations has passed

Question 12

Law of Finders:

Lost property - Exceptions

Answer 12

• 1. Buried property → Owner of locus in quo (OLIQ) has a SPI
• 2. Highly private locus → Owner of locus in quo (OLIQ) has a SPI – see Bridges v. Hawkesworth
• E.g. University of Denver is private property but not highly private because the public is invited in on a regular basis, so the finder has the SPI
• E.g. finding a diamond ring in the back room of a restaurant, need to ask how often the restaurant allows the public in to see the chef
• 3. Trespasser finder → Owner of locus in quo (OLIQ) has a SPI
• 4. Employee finder → Employer has a SPI – See Staffordshire v. Sharman
• Only while the employee is performing specific duties of employment
• Not if the employee comes in off-duty and for extraneous purposes

Question 13

Law of Finders:

Mislaid Property Definition

Answer 13

Intentionally placed somewhere and forgotten; owner voluntarily parts with possession, intentionally put in a certain place to be retrieved later but is subsequently forgotten

Question 14

Mislaid Property:

Legal finder’s property rights and rationale behind that

Answer 14

Owner of the locus in quo has a SPI

• Actual finder acquires no rights in the property
• Rationale: to protect property rights of the true owner
• We expect owner will remember location of place where left

Question 15

Owner of Locus in Quo: Definition

Answer 15

Locus in quo refers to “the place where the cause of action arose”

The land to which the defendant trespassed.

It may also be used, more generally, as any place mentioned, that is, the venue or place mentioned.

Question 16

Law of Finders:

Mislaid Property

Exception

Answer 16

Treasure trove exception

Actual finder has SPI unless trespassing

Money, coins, gold, or silver hidden for a length of time so it is not reasonably possible to determine the true owner

Question 17

Abandoned Property:

Definition

Who gets ownership?

Answer 17

Definition: Given nature of property and circumstances where found its clear true owner intended to relinquish all interest in the property and leaves it so it may be appropriated by another

Ownership: actual finder has an interest in true ownership = unqualified right to the property

Not prohibited from rummaging through garbage cans for abandoned property under finder’s law (unless supplemented by state law or local ordinances)

Question 18

Shipwrecks

Embedded/Not Embedded

Abandon/Not Abandon

&

Law of Salvage

Answer 18

o Embedded

• Not abandoned – law of salvage
• Abandoned – federal ownership or tribe if on Indian land

o Not embedded

• Not abandoned – law of salvage
• Abandoned – law of finders

Law of Salvage – finder entitled to possession of recovered goods but not title