Property 9/15

Armory v. De Lamirie

Facts: After a chimney sweeper's boy found a jewel and took it to a goldsmith's shop for appraisal, the apprentice goldsmith removed the stones under false pretenses and refused to return them, prompting the boy to sue the master goldsmith for the value of the gems.

Rule: Finder has the right to possess against all but the true owner. Boy entitled to the jewel’s full value- his claim was superior to everyone except the rightful owner.

Hannah v. Peel

Facts: While stationed at a house that had been requisitioned for World War II, a soldier named Duncan Hannah found a valuable brooch on a windowsill and turned it over to the police, who later gave it to the property owner, Major Peel, prompting Hannah to sue for its value since Peel had never actually occupied the house. [1, 2]

Rule: a finder of lost property on another person's land has a superior right of ownership over the property owner if the owner has never occupied the premises and has no knowledge of the item's existence. IT WAS NOT PART OF THE SOIL OR EMBEDDED IN THE HOUSE. LOOSE ON THE CURTAINS.

McAvoy v. Medina

Facts: After a customer named McAvoy found a pocketbook containing money left on a table in Medina’s barber shop and handed it to the shop owner to find the true owner, McAvoy sued Medina for the money when the true owner never claimed it.

Rule: The court ruled that when property is mislaid—meaning it was intentionally placed on a surface by the owner and then accidentally left behind—the owner of the premises has the superior right to hold the item for the true owner against all others, including the finder. From PROFESSOR- SHOP OWNER HAS DUTY/MORAL OBLIGATION.TO SAFEGUARD FOR TRUE OWNER. But he says duty is actually really too strong of a word, especially since that “duty” would certainly vary by jurisdiction.

Benjamin v. Lindner

Facts: While performing a routine inspection on a repossessed airplane for his employer, Lindner Aviation, Heath Benjamin found over $18,000 in cash hidden inside a wing panel, leading to a legal dispute between Benjamin, the aviation company, and State Central Bank over who had the right to keep the unclaimed money.

Rule: because the money hidden inside the airplane wing panel was classified as mislaid property rather than a treasure trove or lost property, the owner of the premises where the plane was located had a superior right to possession over the finder.

Hurley v. City of Niagara Falls

Facts: While remodeling a residential basement under a contract with the homeowners, a contractor named Edward Hurley found $4,990 in cash hidden under a sink and turned it over to the local police department, sparking a statutory legal dispute over whether the contractor or the homeowners had the superior right to the unclaimed money.

Rule: The court ruled that under New York's lost property statute, any hidden or mislaid property that is discovered is legally categorized as "lost property," granting a contractor who finds it a superior right to ownership over the property owners who had no knowledge of its existence. Statute abolished the lost/mislaid distinction. Hurley was the finder and takes title.

Property (NYS Personal Property Law Section 251)

money, instruments payable, drawn or issued to bearer or to cash, goods, chattels and tangible personal property other than (a) “instruments” as defined in subdivision two of this section, (b) animals, (c) wrecks governed by the provisions of the navigation law, (d) logs and other property governed by section three hundred twenty-three of the town law and (e) vehicles governed by the vehicle and traffic law.

Instrument (NYS Personal Property Law Section 251)

a check, draft, promissory note, bond, bill of lading, warehouse receipt, stock certificate or other paper or document, other than those payable, drawn or issued to bearer or to cash and other than money, evidencing, representing or embodying a chose in action or a right with respect to property or a share, participation or other interest in property or in an enterprise.

Lost Property (NYS Personal Property Law Section 251)

includes lost or mislaid property.  Abandoned property, waifs and treasure trove, and other property which is found, shall be presumed to be lost property and such presumption shall be conclusive unless it is established in an action or proceeding commenced within six months after the date of the finding that the property is not lost property.

Owner (NYS Personal Property Law Section 251)

any person entitled to possession of the lost property as against the finder and against any other person who has made a claim.

Finder NYS Personal Property Law Section 251)

the person who first takes possession of lost property.

Transportation Facility NYS Personal Property Law Section 251)

a railroad car or coach, Pullman car, street surface railroad car, subway car, motor bus, motor coach, taxicab, aircraft or steamship, and any other vehicle or conveyance used for carriage of persons whether or not such use is in the course of a business of transporting persons.  “Transportation company” as used in this article means the person carrying on a business of operating a transportation facility.  A taxi driver is a “transportation company” with respect to a taxicab which he owns and operates as owner.

Bailment

Created when possession of a chattel is transferred from one person (the bailor) to another (the bailee) for a limited purpose. Example: when you lend your car to a friend, or hand it over to a valet, or leave your clothes at a dry cleaner.

REQUIRES MUTUAL ASSENT IE BOTH PARTIES KNOWING OF THE EXCHANGE

If a bailee refuses to return your chattel, that’s conversion. If you are successful in your conversion action, you force the bailee to buy it from you at its value at the time the conversion took place.

Bailee has two responsibilities to the owner: (1) the duty to return the property and (2) the duty to care for the property.

So if something is lost or damaged when bailed, the presumption is of negligence on the part of the bailee. And the burden is on them to disprove that they were negligent.

APPLIES TO TANGIBLE PERSONAL PROPERTY ONLY. NOT REAL PROPERTY LIKE A HOUSE

The Winkfield

Facts: After a steamship named The Winkfield collided with and sank another ship called the Mexican, the Postmaster-General filed a claim against the liable owners of The Winkfield to recover the value of lost mail that he possessed as a bailee.

Rule: a bailee in possession of goods may recover the full value of those goods from a third-party wrongdoer who destroys or damages them, and the wrongdoer cannot escape liability by arguing that the bailee is not the true owner.

Peet v. Roth Hotel

Facts: After Mrs. Peet left her valuable custom ring with a hotel cashier to be picked up by a jeweler staying as a guest, the ring was lost or stolen from the front desk, prompting Peet to sue the Roth Hotel Company for its value.

Rule: a bailment is created when a bailee knowingly accepts possession of an item, regardless of their ignorance of its specific high value, and they bear the burden of proving they exercised ordinary care (commensurate to the hazard) if the item is lost while in their custody.

Samples v. Geary

Facts: After a patron checked her winter coat at a dance school's cloakroom without disclosing that a valuable fox fur piece was concealed inside the sleeve, the fur went missing, prompting the patron to sue the school's operator, T.H. Geary, for its value.

Rule: The court held that a bailment cannot be created over a concealed item without the bailee's actual knowledge or express consent, meaning a coat checker cannot be held liable for the loss of a valuable fur piece hidden inside a checked garment. Bailee must have knowledge or control of the specific property for liability to attach.

Noworyta v. Klippert

Facts: After Noworyta delivered two cabinets to Klippert for repair and refinishing, a fire broke out at Klippert's place of business and completely destroyed the cabinets, prompting Noworyta to sue for money damages. [1]

Rule: in a bailment action, a bailor establishes a prima facie case of negligence by proving the property was delivered to the bailee in good condition and not returned, shifting the burden to the bailee to provide an evidentiary explanation for the loss or damage.

Professor actually says: The burden is on the bailee to show he was not negligent. Not on the bailor to show negligence by the bailee.

Pavesi v. Carollo

Facts: After Marlene Pavesi delivered her car to Kenneth Carollo's automobile repair shop for service, the shop was burglarized and the vehicle was stolen, prompting Pavesi to sue the mechanic for the loss.

Rule: a bailee successfully rebuts the presumption of negligence arising from a failure to return bailed property by proving the property was stolen during a burglary, shifting the burden back to the bailor to prove that the bailee's active negligence or lack of reasonable care contributed to the theft.

From professor: Failure to return bailed goods raises a PRESUMPTION OF NEGLIGENCE. Once the bailee shows the loss was by theft, the presumption is rebutted and the burden shifts to the bailor to prove the bailee’s active negligence or want of reasonable care. Whether the bailee met the standard of reasonable care is a question for the jury. In this case, evidence supported a finding of reaosnable care.

Irons v. Smallpiece

Facts: After a father made a verbal gift of two colts to his son but retained physical possession of the animals until his death, the estate's executrix refused to hand them over, prompting the son to sue to compel delivery of the colts.

Rule: The court held that a verbal gift of a personal chattel does not transfer legal title to the donee unless it is accompanied by actual, physical delivery of the property.

Newell v. Nat’l Bank

Facts: After a man critically ill with pneumonia delivered a diamond ring to his close friend as a gift, he unexpectedly recovered and wore the ring until his death four years later, prompting a legal dispute between the friend and the bank administering the deceased man's estate over who owned the ring. [1, 2]

Rule: The court held that a valid inter vivos (lifetime) gift can be successfully executed even if the donor is under the apprehension of imminent death, provided they intend an immediate, unconditional transfer of title, and the donor's subsequent recovery from illness does not automatically revoke the gift.

Basically, when Newell took posession of the ring, he ewas reluctant to wear it, so he actually gave a life estate to Reynolds (the original owner) to let Reynolds wear it until Reynolds died.

Side note:

A gift causa mortis is conditioned upon the giver’s dying. IF it were causa mortis, the giver could revoke the gift he ends up surviving.

Possession v Custody Example

Belle was a clerk at a large department store. She was working at the counter that took goods being returned for a refund. Clara Customer brought a winter jacket to the counter where Belle was working and presented it to Belle while Belle was working. Has Belle become a bailee?

No. Belle would be considered to merely be in custody rather than in possession. She has control of item on behalf of her employer. Belle was operating under the direction and control of her employer, so the employer would be considered to be in possession. Thus, Belle would not become the bailee of the jacket.

Lien

a right to possess another's property until that person's debt is discharged.

Duties of Care

Where the bailment has been forced upon the bailee, that is a factor used to minimize the bailee's duty of care.

Where the bailment is for the benefit of only the bailor rather than the bailee, that is another factor used to minimize the bailee's duty of care.

At the other end of the spectrum, where the bailment is only for the benefit of the bailee, that is a factor used to maximize the bailee's duty of care.

Where the bailee has been compensated for holding the property, that is a factor that indicates the bailment is for the mutual benefit. The bailee is getting the compensation and the bailor is getting the benefit of having another person care for his goods. Under these circumstances, the bailee's duty of care should fall between the two extremes.

Consignment

the delivery of possession to a party who is authorized by the owner to sell the property on the owner's behalf. Ordinarily, a consignee receives a share of the proceeds. As the possessor of goods belonging to another, the consignee is a bailee until title is effectively transferred to a buyer or the goods have been returned to the consignor/seller.

Pledge

a bailment of property to secure an obligation.

4 Categories of Found Property (Common law, quoted in Benjamin v Linder)

1. abandoned property

2. lost property

3. mislaid property

4. treasure trove

Abandoned Property

Property is abandoned when the owner no longer wants to possess it. Abandonment is shown by proof that the owner intends to abandon the property and has voluntarily relinquished all right, title, and interest in the property. Abandoned property belongs to the finder of the property against all others, including the former owner.

Lost Property

Property is lost when the owner unintentionally and involuntarily parts with its possession and does not know where it is. Stolen property found by someone who did not participate in the theft is lost property. The finder has taken possession. That possession gives the finder better rights than anyone else except the true owner. As long as the owner does not show up, the finder has a better right to possession than any other person.

Moreover, the finder is taking on the duties of (1) having to return the found property to the owner and (2) exercising care of the property until the true owner shows up to claim it.

Mislaid Property

Mislaid property is voluntarily put in a certain place by the owner who then overlooks or forgets where the property is. It differs from lost property in that the owner voluntarily and intentionally places mislaid property in the location where it is eventually found by another. In contrast property is not considered lost unless the owner parts with it involuntarily.

The finder of mislaid property acquires no rights to the property. The right of possession of mislaid property belongs to the owner of the premises upon which the property is found, as against all persons other than the true owner.

Treasure Trove

Treasure trove consists of coins or currency concealed by the owner. It includes an element of antiquity. To be classified as treasure trove, the property must have been hidden or concealed for such a length of time that the owner is probably dead or undiscoverable. Treasure trove belongs to the finder as against all but the true owner.

When treasure trove is found, the treasure goes to the government.

Treasure trove is part of the English common law. However, it is one part of the English common law that never became part of the common law adopted in the United States. No state in the United States includes treasure trove as a category of found property.

When treasure has been found buried in the ground in the United States, other doctrines have been used to determine who has the best rights to it. Generally, it is classified as lost property, so it goes to the finder if the owner does not appear to claim it. Another approach is to consider it to be part of the land in which it is buried. In the alternative, the buried treasure might be classified as abandoned, so the finder gets ownership. It might even be claimed by the state or federal government under some statute or other doctrine.