This document provides an overview of personal property and bailments. It defines key terms like tangible and intangible personal property, different types of property ownership including tenancy in common and joint tenancy, and classifications of lost, misplaced and abandoned property. It also explains bailment law including the types of bailments and standards of care for bailees. Special bailments like those involving innkeepers, carriers, and warehouses are described along with their applicable duties and liabilities.

1. 1
Chapter 29
Personal Property and Bailments

2. 2
Learning Objectives
1. Give examples of tangible and intangible
personal property.
2. Describe the methods of owning property with
others.
3. Differentiate among lost property, misplaced
property, and abandoned property.
4. Identify the requirements of a completed gift.
5. Explain the law that applies to stolen property.

3. 3
Learning Objectives (cont.)
6. Determine when a bailment occurs.
7. Name and describe the principal types of
bailments .
8. Discuss the burden of proof as it relates to
bailments .
9. Make clear an innkeeper’s duty to accept all
guests.
10.Explain innkeepers’ duties of care to their guests
and their guests’ property.

4. 4
PROPERTY
those things that are commonly recognized as being the possessions of a person or group
REAL
Land and things
affixed to land
Tangible Intangible
Stocks/Bonds*
Accounts Receivable*
Intellectual:
- Copyrights
- Patents
- Trademarks
- Trade secret
* Evidentiary form
(chose in action)
Barbie™ dolls, money, negotiable
instruments, trombone, bicycle, pet
squirrel, iPod™, wigs, DNA, pencil,
deodorant, Timbaland CD, robot,
Glock G34™, prunes, sail boat, keg
of beer, pop-up camper, diaper pail,
fishing rod, heart monitor, water bed,
hogs, RocaWear™ shoes, atlas, HDTV,
magazine rack, pack of Winstons, fly
swatter, Q-tip™, economics textbook,
sweater, lava lamp, bottle of Lunesta™,
flower vase, roach trap, acetylene tank,
inventory, X-ray machine, birthday card,
Tupperware™, gum, spare tire, mango,
. . . . chattel
PERSONAL

5. 5
Personal Property
• Tangible personal property
– has substance and can be touched
– also called goods, or chattels
– is movable and includes animals and
crops

6. 6
Personal Property
• Intangible personal property
–not perceptible to the senses and cannot be
touched
–also called chose in action, which means
evidence of the right to property but not the
property itself
–accounts receivable, stock certificates, damages
due from a lawsuit, rights under insurance
policies, intellectual property, etc.

7. 7
Ownership of Personal Property
• Severalty
–When personal property is owned solely by one
person
• Cotenancy
–When it is owned by more than one person
• Tenancy in common
• Joint tenancy
• Community property

8. 8
Types of Cotenancy
• Tenants in common
– Each cotenant’s share of the property passes to his or
her heirs upon death
• Joint tenancy (joint tenants with the right of
survivorship)
– Each cotenant’s share of the property passes to the
surviving joint tenants upon death
– One party usually can sell their interest without
permission of other party, breaking the tenancy

9. 9
Types of Cotenancy
• Community property (tenancy by the entirety)
– Property (except a gift or inheritance) that is acquired by the
personal efforts of either spouse during marriage and that, by
law, belongs to both spouses equally
– One party usually cannot sell their interest without permission
of other party
Tenancy by the entirety in NC

10. 10
Lost, Misplaced, and Abandoned Property
• Lost property
– finder has a legal responsibility, usually fixed by
statute, to make an effort to return the property
• Misplaced property
– finder may not retain possession, must leave with
proprietor/manager
• Abandoned property
– has been discarded by the owner without the intent to
reclaim ownership of it.
• NC unclaimed property

11. 11
Lost, Misplaced, and Abandoned Property
The law of finds gives ownership to the finder if all
of the following apply:
(a) the property is abandoned,
(b) the finder intends to acquire the property
(c) the finder has possession of the property

12. 12
Lost, Misplaced, and Abandoned Property
• Law of salvage gives a salvor (one who salvages)
the right to compensation for assisting a
foundering vessel.
• Salvage
– the reward given to persons who voluntarily assist a
sinking ship or recover its cargo from peril or loss
• http://finance.yahoo.com/news/spain-shipwreck-treasure-shown-first-time-132952966.html

13. 13
Lost, Misplaced, and Abandoned Property
• If shipwreck found outside state borders, law of
finds or law of salvage applies
• If shipwreck found inside state borders,
Abandoned Shipwreck Act of 1987 applies, and
state has right of ownership
• http://www.reuters.com/article/2012/02/02/us-shipwreck-platinum-
idUSTRE8112D320120202

14. 14
Gifts of Personal Property
Three requirements for a gift to be completed:
• the donor (the one giving the gift) must intend to
make a gift
• the gift must be delivered to the donee (the one
receiving it)
• the donee must accept the gift
Once the requirements are met, the donor cannot
reclaim the gift

15. 15
Gifts of Personal Property
• Engagement rings
–Most states consider a conditional gift
–Donor entitled to return if engagement broken
by mutual agreement or the donee, sometimes
even the donor
• North Carolina – most courts say if marriage
doesn’t happen, ring goes back, regardless who
broke it off (no-fault rule)
• What if I give one on Christmas or V-day?

16. 16
Uniform Transfers to Minors Act
• Establishes a procedure for gifts to be made to
minors
– Minors are assured that gifts to them will either be
used for their benefit or made available to them when
they become adults
– Allows property to be transferred to a custodian for
the minor’s benefit.
– Once minor reaches age of majority (21 or 18),
custodianship ends
• UTMA in NC statutes

17. 17
Gift in Causa Mortis
• Gift in Causa Mortis
– A gift given during one’s lifetime, in contemplation of
death from a known cause
– Considered a conditional gift, ineffective if:
• Donor does not die as expected
• Death caused by circumstances other than those feared

18. 18
Stolen Personal Property
• The title to stolen goods remains with the original
owner
• Even an innocent buyer who purchases the goods
at market value has no title to the goods.
• Possession may be regained by the true owner, no
matter who has the goods at the time.

19. 19
Bailments of Personal Property
• Bailment
– the transfer of possession and control of personal
property to another with the intent that the same
property will be returned later
• Bailor
– The person who transfers the property
• Bailee
– The person to whom the property is transferred

20. 20
Bailments of Personal Property
• Neither party intends for title to property to pass
in a bailment
• Bailee has responsibility to return same property
to the bailor (or someone the bailor designates)
• If person in possession of property has no control
over it, no bailment occurs

21. 21
Bailments of Personal Property
• Mutuum
– When an individual loans goods to another with the
intention that the goods may be used and later
replaced with an equal amount of different goods

22. 22
Principal Types of Bailments
• Three principle types:
– Bailments for sole benefit of bailor
– Bailments for sole benefit of bailee
– Mutual benefit bailments
Gratuitous
Bailments

23. 23
Principal Types of Bailments
• Gratuitous bailments
– Property is transferred to another person without
either party’s giving or asking for payment of any kind
– Lack consideration, so may be rescinded at any time
by either party

24. 24
Principal Types of Bailments
• Bailments for the sole benefit of the bailor
– When possession of personal property is transferred
to another for purposes that will benefit only the
bailor
– Bailee required to use only slight care, and would be
responsible only for gross negligence
– Bailee has no right to use the bailor’s property
– Use without permission could result in tort of
conversion

25. 25
Principal Types of Bailments
• Bailments for the sole benefit of the bailee
– Bailee required to use great care, would be
responsible for slight negligence
– Bailee may use property for purposes for which
bailment was created
– Use for other purposes or for longer than provided in
the bailment would make bailee responsible for
damages

26. 26
Principle Types of Bailments
• Bailments for the sole benefit of the bailee
(cont.)
– Bailee responsible for ordinary and expected expenses
– Bailor responsible for unusual, unexpected, or
damages not caused by bailee’s negligence

27. 27
Principal Types of Bailments
• Mutual-benefit bailment
– Both parties benefit
– Bailee has duty to use reasonable care, and is
responsible for ordinary negligence

28. 28
Principal Types of Bailments
• Consignment contract
– type of mutual benefit bailment in which the
consignor entrusts goods to the consignee for the
purpose of selling them
– if not sold, property returned to owner

29. 29
Standard of Care
• Many courts today apply the reasonable standard
of care to all types of bailments
• Even if for sole benefit of bailor or bailee
– In NC: (Raymond Clott v. Greyhound Lines, INC. 1971)
• “the degree of care required in all classes of bailments is, in
truth, the care of the man of ordinary prudence as adapted to
the particular circumstances. The care must be "commensurate
care" having regard to the value of the property bailed and the
particular circumstances of the case.”

30. 30
Burden of Proof
• Most courts shift the burden of proof in bailment
cases to the one who is in the best position to
know what happened - the bailee
• When items in the possession of a bailee are
damaged, lost, or stolen, the burden is on the
bailee to prove that it was not negligent

31. 31
Special Bailments
• Innkeeper
– the operator of a hotel, motel, or inn that holds itself
out to the public as being ready to entertain travelers,
strangers, and transient guests.
• Transient
– a guest whose length of stay is variable.

32. 32
Innkeeper’s Duty of Care
• Use reasonable care in protecting guests from
harm
• Respect guest’s rights of privacy
• They are insurer’s of guest’s property (with
exceptions)
– Caused by guest’s own negligence
– Acts of God or the public enemy
– Accidental fire where innkeeper was not negligent
– If property has characteristics which cause its own
deterioration

33. 33
Innkeeper Statutes in NC
• http://www.ncga.state.nc.us/gascripts/statutes/st
atutelookup.pl?statute=72

34. 34
Special Bailments
• Carriers
– businesses that undertake to transport persons,
goods, or both.
• Common carrier
– a carrier that holds itself out to the general public to
provide transportation for compensation

35. 35
Carriers
• Common carriers are insurers of goods accepted
for shipment, making them liable for damage,
unless damage caused by:
– Acts of God
– Acts of the public enemy
– Acts of public authorities
– Acts of the shipper
– The inherent nature of the goods

36. 36
Interstate Commerce Act
• Common carriers may only refuse or require
special rates if:
– Not equipped to carry the goods
– Inherently dangerous, creating hazards beyond the
control of the carrier’s usual safety facilities
– The carrier doesn’t represent itself as hauling that
type of goods
– Goods improperly packed
– Goods not delivered at the proper place and time

37. 37
Common Carriers
• Not excused from liability for losses due to strikes,
mob violence, fire, and similar causes
• May limit the amount of their liability on the bill
of lading
• If shipment charges not paid, carrier has right to
sell goods at public sale

38. 38
Common Carriers of Passengers
• Passenger
– a person who enters the premises of a carrier with the
intention of buying a ticket for a trip.
• One continues to be a passenger as long as one
continues the trip.

39. 39
Common Carriers of Passengers
• The Federal Aviation Administration (FAA) has
established regulations that require the screening
of passengers and property before they enter an
aircraft to search for dangerous weapons,
explosives, and other destructive substances.
• Passengers who do not consent to the screening
must be refused transportation.
• http://www.tsa.gov/traveler-information

40. 40
Common Carriers of Passengers
• Racial profiling
– the act of targeting a person for criminal investigation
primarily because of racial or ethnic characteristics
– may not be a motivating factor in a carrier’s decision
to refuse transportation

41. 41
Special Bailments
• Warehouser
– a person engaged in the business of storing goods for
hire
• Warehouse
– a building or structure in which any goods, but
particularly wares or merchandise, are stored
• Warehouse receipt
– a receipt issued by a person engaged in the business
of storing goods for hire.

42. 42
Special Bailments
• Public warehouser
– one that owns a warehouse in which any member of
the public who is willing to pay the regular charge may
store goods
• Private warehouser
– warehouser whose warehouse is not for general public
use

43. 43
Special Bailments
• Warehousers must use reasonable care
– Failure to do so could make them liable for
loss/damages
– Amt. of liability can be limited in storage agreement or
warehouse receipt
• Warehouser’s lien
– Right to retain possession of the goods until the
satisfaction of the charges imposed on them
– Lien may be enforced at public or private sale, as long
as proper notice is given

44. 44
Question?
What type of property has substance and can be
touched?
A. Intangible
B. Tangible
C. Touchable
D. Corporeal

45. 45
Question?
What type of property is not perceptible to the
senses and cannot be touched?
A. Intangible
B. Tangible
C. Touchable
D. Corporeal

46. 46
Question?
What is the transfer of possession and control of
personal property to another with the intent
that the same property will be returned later?
A. Bailment
B. Lien
C. Mortgage
D. Pawn

47. 47
Question?
When an individual loans goods to another with the
intention that the goods may be used and later
replaced with an equal amount of different
goods it is known as ________.
A. Bailment
B. Bailor
C. Lien
D. Mutuum

48. 48
Question?
What is a person engaged in the business of storing
goods for hire?
A. Warehouser
B. Common carrier
C. Passenger
D. Consignor

49. 49
Question?
What is the right to retain possession of the goods
until the satisfaction of the charges imposed on
them?
A. Carrier right
B. Warehousing
C. Warehouser’s FOB
D. Warehouser’s lien

50. 50
Question?
When personal property is transferred to a bailee
with the intent that both parties will benefit it is
called ___________.
A. Bailments for the sole benefit of the bailor
B. Bailments for the sole benefit of the bailee
C. Mutual-benefit bailment
D. Bailments for the sole benefit of the consignee

51. 51
Question?
Personal property owned solely by one person is
called _________.
A. Cotency
B. Possession
C. Severalty
D. Chattel

52. 52
Question?
What are businesses that undertake to transport
persons or goods?
A. Freighters
B. Container transport
C. Carriers
D. Common transport

53. 53
Question?
The law of __________ gives a salvor the right to
compensation for assisting a foundering vessel.
A. Finds
B. Salvage
C. Abandoned property
D. Abandonment