Deck 47: Introduction to Property, Property Insurance, Bailments, and Documents of Title

Question 1

A thief stole Harold's car and installed new speakers in it.Later the police caught the thief and returned the car to Harold.Harold now owns the  speakers by accession.

Answer 1

True

Question 2

The most frequently used documents of title are the warehouse receipts issued by warehousers and the bills of lading issued by carriers.

Answer 2

True

Question 3

The transfer of personal property involves formalities not required in the transfer of real property.

Answer 3

False

Question 4

The coverage of fire insurance policies varies by state, but the policies are written for no more than one-year terms.

Question 5

If Clark buys a tomato plant, he owns the tomatoes produced by the plant based on "confusion."

Question 6

Bailments for the bailee's sole benefit are usually limited to the gratuitous loan of personal property for use by the bailee.

Question 7

Isabelle put a box of books in the bedroom of her roommate.The roommate now owns the books, because they are presumed to be a gift.

Question 8

Sales of tangible personal property involve the transfer of title.

Question 9

Accession means the right of the owner of property to any increase in it.

Question 10

An heir of a person who dies receives title to the property of the decedent by reason of a gift.

Question 11

Janessa receives a text from her Aunt Mary in which Mary says she has decided to give Janessa her pet python as a gift.Janessa may refuse to accept the gift.

Question 12

A bailment may be made of either real or personal property.

Question 13

Insurance companies have been successful in limiting the authority of local selling agents to bind the company through waiver or estoppel.

Question 14

Mark finds a camera on a park bench at Disneyland.Mark can keep the camera if the true owner cannot be found, because it is lost property.

Question 15

The finder of lost property is entitled to possession of it, even against the true owner.

Question 16

An example of a bailment for the bailor's sole benefit is when Sherri, without compensation, lends her Cappuccino maker to Ed for Ed's party.

Question 17

A negotiable electronic document of title running to the order of a named person or to bearer is negotiated by delivery, which means voluntary transfer of control.

Question 18

A furnace would often be classified as a "fixture."

Question 19

Claudia hires Greg to plant a tree in her yard.Greg discovers a metal box buried in the ground.Greg owns the box and its contents since he is the finder.

Question 20

The delivery necessary for a gift may be accomplished constructively.

Question 21

At the end of a bailment, a bailee may correctly deliver the bailed property to a third party (other than the bailor) in certain cases.

Question 22

Coinsurance is common in property insurance as a means of sharing risk between the insurer and insured.

Question 23

An insurable interest in property is a financial interest that justifies insuring such property.

Question 24

Intangible property does not exist in a physical form.

Question 25

Robert steals a truckload of electronic equipment and stores it in Eastside Warehouse.After five weeks, Robert instructs Eastside to make the goods available to Charles for pickup.Even if Eastside acts reasonably and in good faith, it will be liable to the true owner of the goods if it allows Charles to take the goods.

Question 26

When goods have been commingled, it is sometimes possible to get title by confusion.

Question 27

A lease for office space is considered to be personal property.

Question 28

Bailed property must be tangible.

Question 29

All bills of lading are negotiable and may be transferred like a check.

Question 30

Property insurance may be either a valued policy or an open policy.

Question 31

The basic principles of contract law apply to insurance policies.

Question 32

Harold says in the presence of three other people that he is giving his automobile to his nephew, and then hands the keys to the car to the nephew.Delivery of the auto has taken place.

Question 33

The holder of a negotiable document of title to whom the document has been duly negotiated has legal title to the goods covered by the document.

Question 34

No warranties are given out by the person who negotiates or transfers a document of title.

Question 35

The regulation of insurance has been left to the states.

Question 36

The anthropology department of Towers University is doing an excavation on property that belongs to the Browns.If, in the process of excavation, the university finds some valuable lost items, they will belong to the Browns and not to the university.

Question 37

Albert offers his nephew, Tom, his 2011 car which would only need about $1,000 in repairs to put it in running order.Tom has no right to reject the car.

Question 38

A friendly fire is one that is contained to an intended place, such as a fireplace, stove, or barbecue grill.

Question 39

Melissa cannot transfer control of the goods held by a bailee by transferring a document of title.

Question 40

Patent rights are considered to be personal property.

Question 41

Another term for personal property is:

A) fixtures.
B) chattel.
C) patent.
D) realty.

Question 42

Which of the following is a requirement of a valid gift?

A) An adult donor.
B) Delivery.
C) Payment of money.
D) A writing.

Question 43

Which of the following is tangible real property?

A) Corn harvested and stored in a grain bin.
B) A copyright.
C) The mortgage on an office building.
D) The freight elevator in an office building.

Question 44

Harvey's Car Rental rents Darlene an intermediate-size car at $159 per week for her business trip.What is the relationship between Harvey's and Darlene?

A) The temporary transfer of title to Darlene.
B) A bailment for the sole benefit of the bailor.
C) A bailment for mutual benefit.
D) A bailment for the sole benefit of the bailee.

Question 45

Which of the following is NOT personal property?

A) Building materials.
B) An air-conditioning system before it is installed in a house.
C) Trees that have been cut into logs.
D) A 140-acre farm.

Question 46

To prevent the use of the insurance policy for wagering purposes, the person who is to be indemnified under the contract must have:

A) a binder.
B) an insurable interest.
C) good faith.
D) a coinsurance clause.

Question 47

An example of property that is intangible is a:

A) song.
B) computer.
C) pencil.
D) book.

Question 48

Which of these elements determine the existence of a bailment?

A) A separation of ownership and possession of the property.
B) A duty on the party in possession to redeliver the identical property to the owner or to dispose of it according to the owner's directions.
C) Neither of these.
D) Both a  separation of ownership and possession of the property  and also a  duty on the party in possession to redeliver the identical property to the owner or to dispose of it according to the owner's directions.

Question 49

Transfer of title to personal property can occur by all but which of the following ways?

A) By accession.
B) By gift.
C) By deed.
D) By will or descent.
E) Transfer can occur by any of the above.

Question 50

Temporary insurance coverage prior to the issuance of the actual policy may be obtained by use of a(n):

A) premium agreement.
B) coinsurance clause.
C) option clause.
D) binder.

Question 51

A type of insurance in which the insured and the insurer share a risk of loss due to fire is:

A) reinsurance.
B) co-insurance.
C) non-forfeiture insurance.
D) no-fault insurance.

Question 52

Personal property so firmly attached to real property that an interest in it arises under real property law is known as a(n):

A) tangible property.
B) fixture.
C) intangible property.
D) None of these.

Question 53

A gift causa mortis is a gift:

A) made by a donor after death in her will.
B) that is conditional.
C) made in the contemplation of the donor's imminent death.
D) T hat is both conditional and  made in the contemplation of the donor's imminent death
E) T hat is both conditional and  made by a donor after death in her will.

Question 54

The UCC does not cover:

A) sales of goods.
B) gifts.
C) negotiable instruments.
D) investment securities.

Question 55

Korbin asked Karen to marry him and gave her a 1 carat diamond engagement ring.Three months later, Karen broke the engagement because she decided she was not ready for marriage.According to most courts, Korbin may:

A) not recover the ring even if the marriage does not take place because gifts cannot be conditional.
B) recover the ring because he did not break the engagement and the gift was conditional.
C) not recover the ring because it was a gift.
D) recover the ring and sue for damages.

Question 56

Defenses of the insurer include:

A) misrepresentation.
B) judgment pro rata.
C) concealment.
D) Both misrepresentation  and concealment.
E) Both judgment  pro rata.  and concealment.

Question 57

The failure by an applicant to disclose material facts that an insurer does not know but has a right to know is called:

A) waiver.
B) concealment.
C) fidelity.
D) misrepresentation.

Question 58

An inter vivos gift is a gift:

A) of live animals.
B) contingent upon the donee's surviving the donor.
C) made by a donor during her lifetime.
D) None of these.

Question 59

A $40,000 fire insurance policy covers a building, which is valued at $50,000, and there is an 80% co-insurance clause.If the building is totally destroyed by fire, the policyholder will receive:

A) $32,000
B) $8,000
C) $40,000.
D) $50,000.

Question 60

The fixture test of purpose or use applies only if the item:

A) is affixed to the realty in some way.
B) can be removed without material injury to the realty.
C) is affixed to the realty in some way and also  can be removed without material injury to the realty.
D) is distinct from the realty but could be affixed to it.

Question 61

A bill of lading serves as:

A) evidence of the contract of insurance.
B) a contract for employment.
C) a receipt for the storage of goods.
D) a document of title.

Question 62

Farmer Brown brings his crop of wheat to the local grain elevator where it is stored along with the grain of several other farmers.A few months later, the grain elevator declares bankruptcy.Who owns the grain? Can Farmer Brown get his grain back? Explain.

Question 63

Mary cleaned her dorm room in the spring and left a pile of books in Sara's room.Mary told everybody that the books were a gift to Sara.Does Sara have to dispose of them?

A) Yes, because there was a present intent and delivery.
B) Yes, because they are constructively in Sara's possession.
C) No, because there was no agreement between the two parties.
D) No, because Sara did not accept the books.

Question 64

Dr.Olson is a board-certified ophthalmologist who constructs some specially designed examining tables to use in looking at his patient's eyes.The tables are firmly attached to the floor of the space he rents for his office.If Dr.Olson decides to move his office, which of the following is correct?

A) The tables are fixtures that cannot be removed.
B) The tables are trade fixtures.
C) Dr. Olson may remove the tables if they can be removed without materially damaging the realty.
D) The tables are trade fixture and that  Dr. Olson may remove the tables if they can be removed without materially damaging the realty.

Question 65

Which of the following is/are the criteria for a common carrier?

A) The carriage must be part of its business.
B) The carriage must be for remuneration.
C) The carrier must represent to the general public that it is willing to serve the public in the transportation of property.
D) All of these are criteria.

Question 66

Carol took her earrings off at Marcia's beauty shop and put them on the counter.She left the shop without remembering the earrings.Betty finds them and wants to keep them.Can she?

A) Yes, she now is the true owner.
B) No, Marcia would have the right to keep them as against anyone but Carol.
C) Yes, since she is a finder.
D) No, since the earrings were personal property.

Question 67

Marilyn brought her $400 silk dress to University Dry Cleaners to be cleaned.On the back of the ticket she received in exchange for the dress was written, "Liability limited to five times the cost of cleaning." Marilyn's dress was lost and University now claims it owes her no more than $53.25, five times the cost of cleaning.Is that true?

A) No, because the limitation was not communicated to her.
B) No, because University is a common carrier.
C) No, because the limitation is unconscionable.
D) No, because Marilyn is not a bailor.

Question 68

If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they would own one-third of the mixture by:

A) confusion.
B) prescription.
C) adverse possession.
D) accession.

Question 69

Margaret told Bill she would give him her concert tickets.Later she changed her mind and decided she wanted to use the tickets after all.Is Margaret required to give Bill the tickets?

A) No, because there was no acceptance.
B) No, because there was no delivery.
C) No, because there was no intent to make a present transfer.
D) All of these are correct.

Question 70

Insurance protects a business from:

A) strict liability.
B) damage from natural causes.
C) negligence.
D) tort liability.
E) All of these are protected.

Question 71

Showplace insures its $160,000 building with two insurers: with Hometown Insurance for $60,000 and with National Insurance for $120,000.The building suffers a fire loss of $75,000.From whom and for how much can Showplace collect?

Question 72

Intangible real property includes all of the following except:

A) leases.
B) fixtures.
C) easements.
D) None of these. All real property is tangible.

Question 73

The rights of a holder of a negotiable document of title to whom it has been duly negotiated include:

A) title to the goods.
B) all rights accruing under the law of agency or estoppel.
C) title to the document.
D) All of these are rights.

Question 74

Explain the difference between lost, mislaid, and abandoned property and who has rights to it.

Question 75

Mark wants to give Susan his car.How can he effectively "deliver" it?

A) By giving her an indorsed title certificate.
B) By giving Susan the keys.
C) By making her take it for a period of time.
D) By giving her a bill of sale for it.
E) By giving her an indorsed title certificate or by  giving Susan the keys.

Question 76

Why are delivery and acceptance both necessary to have a valid gift? Explain.

Question 77

Which of the following statements is not true of insurance policies?

A) The basic principles of contract law apply to insurance policies.
B) Insurance companies tend to standardize their policies.
C) Some states forbid standardization of insurance policies.
D) All of these.

Question 78

Larry leaves his hat under the seat at the movie theater.Is this a bailment?

A) Yes, since the theater controls the building.
B) No, because the theater manager does not have physical possession of the goods.
C) Yes, if the theater manager finds it.
D) No, because Larry did not pay the theater to keep his hat.

Question 79

All but which of the following hold an insurable interest?

A) A buyer of a truck, whether or not the buyer had knowledge of the fact that the truck was stolen by the seller.
B) A seller with a purchase money security interest.
C) Shareholders in a closely held corporation to the extent of their interest in the corporation's property.
D) A lessee of property.

Question 80

Warranties in insurance contracts:

A) may be used to avoid liability in all states, whether or not the breach of warranty is material.
B) are of great importance.
C) are becoming increasingly easy to use as a basis for an insurer to avoid liability on a policy when an insured breaches.
D) may be expressly included in the contract, be clearly incorporated by reference, or be implied.