Deck 36: Personal Property and Bailments

Question 1

What is real property? What is personal property?

Answer 1

Property can be divided into two types: personal property and real property.
Real property can be anything that can be affixed to, erected on and growing on like land, crops and buildings. It is also referred to the rights that are being issued from land ownership.
Personal property can be any movable property. Land is not included in personal property. It includes intangible property, notes, copyrights and all the things that are subject to ownership.

Question 2

Duties of the Bailee. Discuss the standard of care tradition-ally required of the bailee for the bailed property in each of the following situations, and determine whether the bailee breached that duty.
1. Ricardo borrows Steve's lawn mower because his own lawn mower needs repair. Ricardo mows his front yard. To mow the backyard, he needs to move some hoses and lawn furniture. He leaves the mower in front of his house while doing so. When he returns to the front yard, he dis-covers that the mower has been stolen.
2. Alicia owns a valuable speedboat. She is going on vacation and asks her neighbor, Maureen, to store the boat in one stall of Maureen's double garage. Maureen consents, and the boat is moved into the garage. Maureen needs some grocery items for dinner and drives to the store. She leaves the garage door open while she is gone, as is her custom, and the speedboat is stolen during that time.

Answer 2

(1) Yes , Mr R has breached his duty as he had taken the mower for a period. He had lost it due to his own negligence is liable to make payment for the loss of the mower. He has to make payment for breach of his duty as a bailee.
(2) Yes , Ms M is liable as failed to perform her duty as a bailee. She had not asked for the loan of boat but was liable as the property was kept under her jurisdiction in good faith. Hence the loss is to be borne by Ms M as it was due to her negligence that the boat was lost.

Question 3

Vanessa Denai owned forty acres of land in rural Louisiana with a 1,600-square-foot house on it and a metal barn near the house. Denai met Lance Finney, who had been seeking a small plot of rural property to rent. After several meetings, Denai invited Finney to live on a corner of her land in exchange for Finney's assistance in cutting wood and tending her property. Denai agreed to store Finney's sailboat in her barn. With Denai's consent, Finney constructed a concrete and oak foundation on Denai's property and purchased a 190-square-foot dome from Dome Baja for $3,395. The dome was shipped by Doty Express, a transportation company licensed to serve the public. When it arrived, Finney installed the dome frame and fabric exterior so that the dome was detachable from the foundation. A year after Finney installed the dome, Denai wrote Finney a note stating, "I've decided to give you four acres of land surrounding your dome as drawn on this map." This gift violated no local land-use restrictions. Using the information presented in the chapter, answer the following questions.
1. Is the dome real property or personal property? Explain.
2. Is Denai's gift of land to Finney a testamentary gift, a gift causa mortis, or a gift inter vivos?
3. What type of bailment relationship was created when Denai agreed to store Finney's boat? What degree of care was Denai required to exercise in storing the boat?
4. What standard of care applied to the shipment of the dome by Doty Express?
DEBATE THIS: Common carriers should not be able to limit their liability.

Answer 3

(1)Personal property and real property are different from each other. Personal property is the one that is movable and considered private. On the other hand, real property cannot be moved and is permanently attached to the land.
Hence, the dome in the given case is a personal property because it has fabric exterior and frame attached which clearly separates it from the foundation.
(2)The land given as a gift by Ms D to Ms F was an inter vivos gift because inter vivos means while living and both the parties involved in exchange of gift are alive.
On the other hand, this git cannot be causa mortis nor testamentary because it means in death contemplation and after respectively.
(3)The bailment relationship that was created between Ms D and Ms F was an ordinary bailment that benefited bot bailer and bailee. Ms D kept Ms F's sailboat in barn in exchange of her assistance in building an oak foundation on Ms D's property.
As this bailment was a mutual benefit, so Ms D has to give reasonable and high degree of care to Ms F's sailboat.
(4)Company D is a company who transports and licensed for public service. In the given case, the company D should take proper care of the shipment of dome till it is received by Ms F. If there is improper delivery then the liability lies to company D.
Hence, the company must properly deliver it without any damage.

Question 4

The following multiple-choice question is representative of the types of questions available in one of the four sections of ThomsonNOW For Business Law Today. ThomsonNOW also provides feedback for each response option, whether coned or incorrect, and refers to the location within the chapter where the correct answer can be found. Property that has been discarded by the true owner; who has no intention of reclaiming title to it, is referred to as A. lost property.
B) mislaid property.
C) abandoned property.
D) bailed property.

Question 5

What does it mean to own property in fee simple? What is the difference between a joint tenancy and a tenancy in common?

Question 6

Gifts.
Jaspal has a severe heart attack and is taken to the hospital. He is aware that he is not expected to live. Because he is a bachelor with no close relatives nearby, Jaspal gives his car keys to his close friend Friedrich, telling Friedrich that he is expected to die and that the car is Friedrich's. Jaspal survives the heart attack, but two months later he dies from pneumonia. Sam, Jaspal's uncle and the executor of his estate, wants Friedrich to return the car. Friedrich refuses, claiming that the car was a gift from Jaspal. Discuss whether Friedrich will be required to return the car to Jaspal's estate.

Question 7

What are the three elements necessary for an effective gift? How else can property be acquired?

Question 8

Question with Sample Answer-Bailments.
Curtis is an executive on a business trip to the West Coast. He has driven his car on this trip and checks into the Hotel Ritz. The hotel has a guarded underground parking lot. Curtis gives his car keys to the parking lot attendant but fails to notify the attendant that his wife's $10,000 fur coat is in a box in the trunk. The next day, on checking out, he discovers that his car has been stolen. Curtis wants to hold the hotel liable for both the car and the coat. Discuss the probable success of his claim.

Question 9

What are the three elements of a bailment?

Question 10

Found Proper. Bill Heise is a janitor for the First Mercantile Department Store. While walking to work, Bill discovers an expensive watch lying on the curb. Bill gives the watch to his son, Otto. Two weeks later, Martin Avery, the true owner of the watch, discovers that Bill found the watch and demands it back from Otto. Discuss who is entitled to the watch and why.

Question 11

Answers to the even-numbered questions in this For Review section can be found in Appendix F at the end of this text.
What are the basic rights and duties of a bailee? What are the rights and duties of a bailor?

Question 12

Gratuitous Bailments. Raul, David, and Javier immigrated to the United States from Colima, Mexico, to find jobs and help their families. When they learned that a mutual friend, Francisco, planned to travel to Colima, they asked him to deliver various sums, totaling more than $25,000, to their families. During customs inspections at the border, Francisco told U.S. customs officials that he was not carrying more than $10,000, when, in fact, he carried more than $3 5,000. The government seized the cash and arrested Francisco. Raid, David, and Javier requested the government to return their cash, arguing that Francisco was a gratuitous bailee and that they still retained title. Are they right? Explain fully.

Question 13

Gift Inter Mos. Thomas Stafford owned four promissory notes. Payment on the notes were deposited into a bank account in the names of Stafford and his daughter, June Zink, "as joint tenants with right of survivorship." Stafford kept control of the notes and would not allow Zink to spend any of the proceeds. He also kept the interest on the account. On one note, Stafford indorsed "Pay to the order of Thomas J. Stafford or June S. Zink, or the survivor." The payee on each of the other notes was "Thomas J. Stafford and June S. Zink, or the survivor." When Stafford died, Zink took possession of the notes, claiming that she had been a joint tenant of the notes with her father. Stafford's son, also Thomas, filed a suit in a Virginia state court against Zink, claiming that the notes were partly his. The SOT1 argued that their father had not made a valid gift inter vivos of the notes to Zink. In whose favor will the court rule? Why? [Zink v. Stafford, 257 Va. 46, 509 S.Eld 833 (1999)]

Question 14

Found Property.
A. D. Lock owned Lock Hospitality, Inc., which in turn owned the Best Western Motel in Conway, Arkansas. Joe Terry and David Stocks were preparing the motel for renovation. As they were removing the ceiling tiles in room 118, with Lock present in the room, they noticed a dusty cardboard box near the heating and air-supply vent where it had apparently been concealed. Terry climbed a ladder to reach the box, opened it, and handed it to Stocks. The box was filled with more than $38,000 in old currency. Lock took possession of the box and its contents. Terry and Stocks filed a suit in an Arkansas state court against Lock and his corporation to obtain the currency. Should the cash be characterized as lost, mislaid, or abandoned property? To whom should the court award it? Explain. [Terry v. Lock, 343 Ark. 452, 37 S.W.3d 202 (2001)]

Question 15

Spotlight on Joint Tenancy-property ownership. Vincent Slavin was a partner at Cantor Fitzgerald Securities in the World Trade Center (WTC) in New York City In 1998, Slavin and Anna Baez became engaged and began living together. They placed both of their names on three accounts at Chase Manhattan Bank according to the bank's terms, which provided that "accounts with multiple owners are joint, payable to either owner or the survivor." Slavin arranged for the direct deposit of his salary and commissions into one of the accounts. On September 11, 2001, Slavin died when two planes piloted by terrorists crashed into the WTC towers, causing their collapse. At the time, the balance in the three accounts was $656,944.36. On September 14, Cantor Fitzgerald deposited an additional $58,264.73 into the direct- deposit account. Baez soon withdrew the entire amount from all of the accounts. Mary Jelnek, Slavin's mother, filed a suit against Baez to determine the ownership of the funds that had been in the accounts. In what form of ownership were the accounts held? Who is entitled to which of the funds and why?

Question 16

Concurrent Ownership. In July 2003, Chester Dellinger and his son Michael opened a joint hank account with Advancial Federal Credit Union in Dallas, Texas. Both of them signed the "Account Application," which designated Chester as a "member and Michael as a "joint owner." Both of them received a copy of the "Account Agreement, Disclosures and Privacy Policy," which provided that "a multiple party account includes rights of survivorship." Chester died in February 2005. His will designated Michael as the executor of the estate, most of which was to he divided equally between Michael and his brother, Joseph, Chester's other son. Michael determined the value of the estate to be about $117,000. He did riot include the Advancial account balance, which was about $234,000. Joseph filed a suit in a Texas state court against Michael, contending that the funds in the Advancial account should be included in the estate. Michael filed a motion for summary judgment. Who owned the Advancial account when Chester was alive? Who owned it after he died? What should the court rule? Explain. [In re Estate of Dellinger, S.W.3d (Tex.App.-Dallas 2007)]

Question 17

A Question of Ethics. Marcella Lashmett was engaged in the business of fanning in Illinois. Her daughter Christine Montgomery was also a farmer. Christine often borrowed Marcella's farm equipment. More than once, Christine used the equipment as a trade-in on the purchase of new equipment titled in Christine's name alone. After each transaction, Christine paid Marcella an agreed-to sum of money, and Marcella filed a gift tax return. Marcella died on December 19, /999. Her heirs included Christine and Marcella's other daughter, Cheryl Thomas. Marcella's will gave whatever farm equipment remained on her death to Christine. If Christine chose to sell or trade any of the items, however, the proceeds were to be split equally with Cheryl. The will designated Christine to handle the disposition of the estate, but she did nothing. Eventually, Cheryl filed a petition with an Illinois state court, which appointed her to administer the will. Cheryl then filed a suit against her sister to discover what assets their mother had owned fin re Estate of Lashmett, 369 IP.App.3d 1013, _N.E.2d (4 Dist. 2007)]
1. Cheryl learned flat three months before Marcella's death, Christine had used Marcella's tractor as a trade-in on the purchase of a new tractor. The trade-in credit had been $55,296.28. Marcella had been paid nothing, and no gift tax return had been filed. Christine claimed, among other things, that the old tractor had been a gift. What is a "gift"? What are the elements of a gift? What do the facts suggest on this claim? Discuss.
2. Christine also claimed that she had tried to pay Marcella $20,000 on the trade-in of the tractor but that her mother had refused to accept it. Christine showed a check made out to Marcella for that amount and marked "void." Would you rule in Christine's favor on this claim? Why or why not?

Question 18

Critical Legal Thinking. Suppose that a certificate of deposit (CD) owned by two joint tenants (with the right of survivor-ship) is given by one of the joint tenants as security for a loan {without the other joint tenant's knowledge). Further suppose that the joint tenant dies after defaulting on the loan. Who has superior rights in the CD, the creditor or the other surviving joint tenant?

Question 19

Video Question. Co to this text's Web site at www.thomsonedu.com/westbuslaw/bIt and select "Chapter 36." Click on "Video Questions" and view the video titled Personal Property and Bailments. Then answer the following questions.
1. What type of bailment is discussed in the video?
2. What were Vinny's duties with regard to the rug-cleaning machine? What standard of care should apply?
3. Did Vinny exercise the appropriate degree of care? Why or why not? How would a court decide this issue?