Chapter 49
Introduction to Property
Objectives:
1. Define the following: tangible property, intangible property, real
property, personal property, fixture
2. Explain ways to transfer title to personal property; three element of a valid gift; treatment of abandoned, lost or mislaid property
3. Property insurance: types of fires; coinsurance clauses; other insurance clauses; insurable interest; valued and open policies; insurer's defenses of misrepresentation; breach of warranty; concealment; waiver; estoppel
4. Define bailment, describe rights and duties of bailor and bailee
5. Explain documents of title
I. Introduction to Property
A. What does it mean to own something? Property as a "bundle of rights"
B. Kinds of Property
1. Tangible property: rights regarding physical objects
2. Intangible property: property rights to something not physical, e.g. copyright in a book
3. Real property: Land. AKA realty
4. Personal property: Everything else. AKA personalty or chattels
5. Fixture. Personal property converted into part of real property by attaching it, e.g. new cabinets
NET&T v. City of
Issue: Should the equipment be treated as "fixtures," and therefore real property, for purposes of real estate taxes? Holding. No. This stuff can easily be removed, and would be if the phone companies moved. It is therefore not a fixture and retains its character as personal property.
II. Transfer of Title to Personal Property
A. Sale; title passes at time parties intend, possession does not necessarily control
B. Gift; Need intent to make a gift, delivery, and acceptance
O'Fallon v. O'Fallon, p. 1045. Facts: Barney died without a will. There was a 1996 Camaro in Barney's name. Ronnie, Barney's seventeen year old son, claimed Barney had given him the car. Barney said he bought the car for Ronnie. Ronnie lived separately at his mother's house, and the car was always there. Ronnie showed he always drove it and had possession of it. The executor challenged the gift, claiming the car as part of the estate.
Issue: Was there a valid gift during Barney's lifetime? If so, car belongs to Ronnie and is not part of the estate.
Holding: Yes, there was a valid gift. Evidence shows intent, delivery, and acceptance.
C. By Will or Descent: I.E. owner dies and property goes to someone else
D. By Accession: Property produced by other property. For example, cow has a calf.
E. Confusion: Fungible goods get mixed up. For example, grain in a grain elevator
F. Possession: Abandoned property goes to finder; Lost property goes to finder, except against true owner; Mislaid property goes to finder, except against true owner. Mislaid is intentionally put somewhere, then unintentionally left.
See Barry Bonds baseball case linked on webpage
Popov v. Hayashi. Facts: Barry hits 73rd homerun of season, setting record. It went into the standing room arcade area on rightfield wall. Both Popov and Hayashi brought gloves. Ball initially landed in Popov's webbing. Not clear how much control he had. Popov is then knocked to the ground and mobbed. The ball pops loose in the melee, and Hayashi picks it up and asks camera man to take his picture. Eventually, cameraman complies and Hayashi holds up the ball. Finding: Popov never proved he had control of the ball, and no one can no if mob had not attacked if he would have retained control.
Issue: Did Hayashi convert the ball in violation of Popov's rights? To prove that, Popov must prove he owned the ball, did he?
Holding: Conversion can exist even if plaintiff fails to establish possession and title. Plaintiff need only prove a right to possession. However, by principles of equitable division, court decided to award ball 50-50.
Reasoning: Step one. Popov did not take title by possession. Evidence does not show that he had possession. Step two, it's not fair to Popov. Court cannot allow violence to deprive him of his right. However, Hayashi did nothing wrong. So, split in two.
Aftermath, ball sold at auction for $450k, split equally. Popov and Hayashi plan to go to see Bonds break Aaron's record, in the same section.
III. Property Insurance
A. Insurance: Contract where one party agrees to pay the other if some contingency happens
B. Most insurance law is state law
C. Fire and Property Insurance
1. Protection in case of loss or damage to property
2. Types of fires: Friendly and hostile
3. Co-insurance clause. Determines amount insurer pays, can be complicated
4. Other insurance clause. Some policies say, "if another policy covers this loss, it is primary."
Courts generally make policies pay pro rata
5. Valued policy: If total loss, insurer pays policy limit. Open policy: If total loss, insurer pays value at time of loss
D. Nature of insurance contracts
1. Offer and acceptance. Binder is when insurer accepts the risk, even before issue of policy.
2. Insurable interest. Need not be the owner. For example, renter can insure the property.
3. Premiums. Payments for the policy.
4. Defenses.
a. Lack of coverage. Most homeowner policies do not cover earthquakes, floods, landslides.
b. Misrepresentation.
c. Breach of warranty
d. Concealment
e. Waiver and estoppel
f. Termination
IV. Bailments
A. One person transfers possession of property to another.
B. Bailment for bailor's benefit, AKA gratuitous bailment. Example, watch this while I go to the lobby.
Low duty of care.
C. Bailment for bailee's benefit.
Example, Homer borrows
D. Bailment for mutual benefit. Example, commercial warehouse or commercial parking garage. Reasonable care required.
Hadfield v. Gilchrist, p. 1054. Facts: Car owner had his car towed. At the storage facility, the car was vandalized. Damages were over $4000.
Issue: Was there a bailment, and if so, what duty of care
was required?
Holding: Yes there was a
bailment, and negligence standard applies.
Reasoning: Most bailments are by agreements. However, law recognizes constructive bailment. The court rejected tower's argument that this was a gratuitous bailment. He is in business to make money. Once prima facie case was made, defendant had burden to prove use of ordinary care, which he failed to do.
E. Absolute duty to return property.
F. Right to limit liability. Most warehouses limit liability, 50 cents per pound is typical. Usually need to give notice of limitation, and opportunity to pay more to increase liability. Solution, buy cargo insurance.
G. Examples of bailees, warehouse, safe deposit box, common carriers, innkeepers
V. Documents of Title
A. Warehouse receipts
B. Bills of lading
C. Negotiable instruments