A manifested intention to control the particular item
General Rules on Acquiring Possession by Finding Articles
RULE: An owner of property does not lose title by losing the property. Owner’s rights persist even thought the article has been lost or mislaid. However, a finder has rights superior to everyone but the true owner.
Armory v. Delamire (prior possessor wins): P. finds a jewel and takes it to D. jewler for appraisal. The jeweler refuses to give the jewel back to P. saying P. does not own it. Court held: P. is entitled to recover either the jewel or the full money value of the jewel and that the prior possessor has the superior right. NOTE: the P. was a chimney sweeper boy who found the jewel while working – does his employer have the right to the jewel? Read on.
Relativity of Title: The owner prevails over the finder, but the finder prevails over a subsequent possessor.
Clark v. Maloney: P. recovers logs, floating in a river and moored them with ropes. D. later found logs, seemingly abandoned. Court held that P.’s rights are not lost by losing the log.
Finder v. Owner of Premises: Knowledge of chattel is not required for possession. If the finder is a trespasser, the owner of the premises where the object is found prevails over the finder, even if the owner’s did not know of such chattel
Barker v. Bates: Logs wash up on P.’s property. D. steals them from P.’s land. Court held that P. had preferable right to possession over a trespasser.
Ratione Soli: “By reason of the soil.” The claim of the landowner extends to anything on the land.
South Staffordshire Water v. Sharman: P. operates a pool. D. is an employee of P. and in charge of cleaning out the pool. D. found 2 gold rings at bottom of pool. Court ruled that, where an owner of house or land invites an employee on the land for limited, specific purpose, the possession of that thing found is in the owner of the property. (Note, the employee in Armory was able to keep property – why – perhaps because the rings in Sharman were embedded and embedded property is the property of the owner)
Hannah v. Peel: P. finds brooch hidden on a window ledge inside D’s house. D. never lived in the house. D. took possession of brooch and sold it. Court ruled that P. finder could prevail. Lesson: If the owner of the house has not moved into the house (has not made it his “personal space”), the owner is not in constructive possession of the articles therein of which he is unware. Note also: The brooch was found on a window ledge (i.e. lose on the property). The brooch was not part of the property (i.e. embedded).
Law of Bona Fide Purchases: The owner of property does not lose the right to property because the property is inadvertently sold.
5. Sharman and Hannah v. Peel distinguished: In Sharman, the finder loses. But in Hannah v. Peel, the finder wins. WHY? In Sharman, the owner had control over the loqus in quo, but not in Hannah v. Peel. Thus, the D./owner in Hannah v. Peel did not satisfy the #2 condition for the establishment of possession (a manifested intention to control a particular item).
The Lost – Mislaid Distinction
Lost Property: Property the owner accidentally and casually lost (e.g. a ring slips through a hole in a pocket). Lost property goes to the finder, rather than the owner of the premises.
Bridges v. Hawkesworth: P. is in a shop and finds a lost bag of money on the floor. P. gives to D. to give to rightful owner. Owner never shows up. Court rules that property is lost. Lesson:the finder of a lost article is entitled to it as against all persons except the real owner.
Mislaid Property: Property that is intentionally placed somewhere and then forgotten. Mislaid property goes to the owner of the premises.
McAvoy v. Medina: P. finds purse on the counter in a barber shop. The purse is mislaid property, because it was assumed that it was intentionally placed on the counter and forgotten. The court ruled that the purse goes to the owner of the property; the finder has no rights. Lesson: the finder of mislaid property has no rights; the property goes to the owner of the land.
Favorite v. Miller: D./treasure hunter thought that part of a 200 year old statue of King George was on P.’s property. W/o telling P., D., w/ use of a metal detector, found statue fragment. Court ruled that D. was in error and the fragment was P’s property because 1) the D. trespassed and 2) the property was embedded.
Definition: A bailment is the transfer of the rightful possession of personal property to a person who is not its owner and for a limited purpose. The true owner is the bailor and the person in possession is the bailee. E.g. delivery of clothes to dry cleaner; delivery of film to the film processor.
Allen v. Hyatt Regency – Nashville Hotel – P drove car into an attended garage that automatically dispensed with a ticket (ticket had exculpatory clause written on it), and had only one way in and out. Car was stolen. Was bailment created, even though P. never handed over his keys? The court ruled that the facts of this case were not at variance with the legal requirements of “bailment for hire” as there was an expectation of protection on the operator of the garage. LESSON: A Bailment may be found to exist in attended lot situations, even though attendant has no physical control of the car.
McGlynn v. Parking Authority of City of Newark: Facts similar to Allen, but NJ Supreme Court applies new test (which Helmholz says is departure from bailment test) in which the court looks to decide who is better situated to safeguard cars/chattel, e.g. who is better able to protect. Helmholz wary of such tests – because with this approach, open garages would also be considered bailments; and then you don’t have traditional test anymore
a. Peet v. Roth Hotel: P gives hotel cashier a ring so that cashier can give it to a jewler who is going to replace a stone. The cashier/D agrees to do so, not knowing that the ring is very valuable. Court rules that a bailment had been created. LESSON: if the value of chattel is not known to the bailee, the bailee is still liable for the full cost of the item.
5. Rights and Duties of Bailee:
Duties of Bailee to Exercise Care (Helmholz says: Traditional Law of Bailment, Influenced by Roman Law)
Bailment for the sole benefit of the bailee: If the bailment is for the sole benefit of the bailee (as when a person borrows a lawnmower), the bailee is required to use extraordinary care. The bailee is liable for even slight neglect that results in the goods being damaged or destroyed or lost.
Bailment for the mutual benefit of bailor and bailee: If the bailment benefits both the bailor and bailee (e.g. dry cleaning), the bailee must exercise ordinary care and is liable for ordinary negligence.
Bailment for the sole benefit of the bailor: A gratuitous bailee must use only slight care and is liable only for gross negligence.
Modern Trend re: Duty of Bailee: The above noted traditional rules re: duty of the bailee were rejected in Peet. The Peet court (and modern courts) hold that in all cases, the bailee will be held to an ordinary leel of care (e.g. simple negligence). Why? It is simply too hard to determine who benefits and to what degree A benefits over B.
5. Burden of Proof: Because the bailor may not know the facts concerning the loss of the bailed goods, modern courts placed the burden on the bailee to prove due care.
6. Duty to Redeliver: Regardless of the standard of care required of a bailee while the goods are in his custody, a bailee is held to strict liability when it comes to redelivery. If the bailee misdelivers the goods to the wrong person, his is stuck with liability even though he used reasonable care.
Exception to this Harsh Rule: An involuntary bailee is liable only if the bailee was negligent in delivering the goods to the wrong person. The courts impose strict liability on the ordinary bailee because he is in breach of contract when he misdelivers. But an involuntary bailee has no contract and has a lesser liability.
Cowen v. Presspich: P/investment bank, sent a 17 y.o. to D’s office to drop off a bond; P drops it through a letter slot in a door; D. picks it up, sees it is the wrong bond, opens the door and calls for P’s agent. Another person picks up the bond, and D, not knowing, hands the imposter the bond. The bond is never seen again. Lesson: As an involuntary bailiee (D. took no possession), D. is liable only if negligence is shown.
Contractual Modification of Liability: A contractual limitation on liability requires the consent of the bailor. Posting is not enough unless the bailee can show the bailor saw and accepted the sign. Putting a limited liability provision on a claim check will not work either unless the bailee can show that the bailor was, or should have been aware of it.
a. Carr v. Hoosier Photo Supplies: P, a lawyer, purchased film from a retailer and used this film on European vacation. Upon return, P. took 18 roles to Hoosier supply to be developed; only 14 were returned. The film from Kodak and the receipts from Hoosier were posted with a limited liability waiver – “ The film will be replaced if … damaged or lost by us or any subsidiary company even though by negligence or other fault. Except for such replacement, the sale, processing, or other handling of this film for any purpose is without other warranty.” The court ruled that this limitation was valid; P. was a lawyer and assented to the terms by his non acquiesance. NOTE: Helmholz says the court might uphold this exculpatory clause but overrule Allens (see above) because, in Allen, the bailee excluded liability. In Carr, bailee limited liability and agreed to pay for the value of the lost property (e.g. the lost roles of film).