Question 1

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:

Accepted Answer

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

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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.

Accepted Answer

A) True 
 B)False

Question 5

All but which of the following hold an insurable interest?

Accepted Answer

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

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

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?

Accepted Answer

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

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is NOT personal property?

Accepted Answer

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

Question 10

A bill of lading serves as:

Accepted Answer

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

Question 11

How does the liability of a common carrier differ from that of an ordinary bailee with regard to property that is lost or damaged while in possession of the carrier?

Accepted Answer

The answer of How does the liability of a common...

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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?

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

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?

Accepted Answer

The answer of Showplace insures its $160,000 building with two...

Question 18

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.

Accepted Answer

The answer of Farmer Brown brings his crop of wheat...

Question 19

A gift causa mortis is a gift:

Accepted Answer

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 20

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?

Accepted Answer

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

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

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:

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

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

All but which of the following hold an insurable interest?

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.

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?

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

Which of the following is NOT personal property?

A bill of lading serves as:

How does the liability of a common carrier differ from that of an ordinary bailee with regard to property that is lost or damaged while in possession of the carrier?

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

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

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?

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

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

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?

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.

A gift causa mortis is a gift:

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?