Business Law -115 -- Cengage -- Chapter 29-- Acquiring Ownership of Personal Property

Jared owns 100 acres of woodland. One day, he and Margie are hiking through Jared's woods and Margie finds a gold ring. The true owner is never discovered. Which of the following statements about this situation is correct?

Because the ring was found on Jared's property, he is probably entitled to keep it.

Alexander loans Miko his baking dish so she can make lasagna for dinner tonight for her family. What kind of bailment is this?

bailee benefit bailment

Because Jamal was in the hospital after a severe heart attack and did not believe he would survive, if his actions resulted in a gift it would be a gift _________. Jamal's action of handing the keys to Fernando and telling Fernando that he expected to die so the car is Fernando's would indicate the ___________ to make a gift, as well as constitute the ________ of the gift to Fernando. When Fernando took the keys and began driving the car, it was ________ of the gift.

- causa mortis - intent - delivery - an acceptance

In giving the gift, Jamal was anticipating his death due to the _________ . When Jamal survived it, the gift likely _________ revoked. If the gift was revoked, then Fernando _____ have to return the car to Jamal's uncle.

- heart attack - was - does

When a gift is given in anticipation of _________ death, it is called a gift _____________ and must comply with additional rules. The additional rules for a gift ____________ are that the gift is not ___________ until the donor dies from the contemplated event, and the gift is ____________ revoked if the donor survives the contemplated event.

- imminent - causa mortis - causa mortis - absolute - automatically

This gift would be a gift _________. With this situation, the additional requirement that the donor die of the expected cause ________ apply. In this situation, Jamal ________ have to give the car to Fernando in order for the gift to be complete.

- inter vivos - would not - would not

A gift is a _________ transfer of property for which no consideration is given. For a gift to be effective, there must be _________ intent on the part of the ___________, actual or constructive _________, and ____________ by the donee.

- voluntary - donative - donor - delivery - acceptance

Beth owned an original U.S. flag. She had previously loaned the flag to Ross, a lawyer, so that he could display the flag on the wall behind his office desk. One day while visiting Ross in his office and admiring the flag, Beth said to Ross, "You are so fond of that flag, I would like you to have it!" Ross responded with a gracious "thank you." In this situation

Beth has made a valid, binding gift because she intended to transfer present ownership to Ross and Ross accepted the flag.

One of Jenna's favorite things to do is relax by the lake on her neighbor Brad's property. One day, Jenna is sitting by Brad's lake reading a book when she discovers a diamond ring near the water's edge. Jenna shows the ring to Brad, but Brad doesn't know who the owner is. Jenna and Brad post notices around the small town they live in, hoping someone will come forward to claim the ring. After a reasonable amount of time, if the real owner does not claim the ring:

Brad owns the ring.

In January, Erwin told David, his nephew, that he would give him a car when he graduates from college. David graduated in May. If Erwin refuses to give David a car, David can sue him for breach of an inter vivos gift.

False

Jody loaned her neighbor, Phil, her snow blower. Phil set it near his driveway and later accidentally ran over and destroyed it. In a suit to recover damages, Jody as plaintiff has the burden of proving that Phil was negligent and caused the destruction of her snow blower.

False

Stephen wants to give his niece, Dawn, a piece of jewelry as a gift. Stephen gives Tracy, his agent, the bracelet to take to Dawn. The delivery element of making a gift has been completed.

False

The difference between an inter vivos gift and a gift causa mortis is that the inter vivos gift is made during the donor's lifetime and a gift causa mortis is a gift made after the donor's lifetime by the donor's estate.

False

Jake owns an old piece of exercise equipment. He has been using the equipment merely to hang his clothes on, so Jake decides to get rid of the thing. He takes the unused exercise machine to the landfill and throws it off the back of the truck. Maggie, a teenager, is at the landfill rummaging for useful items. Maggie sees the exercise equipment and decides it is just the thing to give her sister for Christmas, so she decides to take it home. As she is loading it into the back of her pickup truck, Jake stops and tries to get it back. The landfill owner sees the commotion and decides he would like to have the equipment as well. Who has the best rights in the exercise equipment?

Maggie

Johann is going to Myrtle Beach for vacation. Johann's friend Victor is going to Myrtle Beach for vacation as well, although Victor will be arriving a couple of days after Johann. Victor plans to sell his grandfather's gold watch while he is in Myrtle Beach. It is a beautiful antique watch worth $3,000. Victor decides that the watch will be safer traveling with Johann than with Victor, because Victor will have two other passengers in his car and Johann is traveling alone. The morning that Johann plans to leave, Victor places the gold watch under the front passenger seat of Johann's car, but does not tell Johann that the watch is there. Johann travels to Myrtle Beach. When he stops at gas stations or rest areas or restaurants, Johann does not lock his car. Two days later, when Victor arrives in Myrtle Beach, he discovers that the watch is no longer in Johann's car, and Johann has no idea what happened to it. Victor wants to sue Johann for the loss of the watch, claiming that they had a bailment and that Johann did not exercise due care. Did Victor and Johann have a valid bailment?

No, the parties did not have a valid bailment because Johann was unaware that the watch was in the car and therefore did not agree to the bailment.

Buck, fearing death from severe injuries suffered in a machinery accident, assigned over a certificate of deposit worth $100,000 and delivered the certificate to Pearl, a friend, who gladly accepts. Buck ends up recovering from the injuries. Why must Pearl give the certificate of deposit back to Buck?

This type of gift is known as a gift causa mortis. It is a conditional gift which is conditioned on Buck actually dying. Because Buck recovered, the gift is automatically revoked.

Ed wants to give Howard his old car, but Howard says he doesn't want it. Howard later reconsiders and tells Ed he does want the car. His previous repudiation means there is no gift, and Howard has no rights in the car.

True

Griffith Manufacturing ships 40 crates of goods by Trusty Shipping, a common carrier. Trusty offers Griffith a shipping rate of $725 for a limited liability of $5,000 or a rate of $975 for full liability for any harm to the goods. Griffith chooses the $725 rate. In transit, Trusty's driver has an accident during an ice storm and all of Griffith's goods are destroyed, causing a loss of $12,000. If Griffith sues Trusty,

Trusty will be liable for only $5,000 because a common carrier is allowed to limit its liability by contract.

Hanna intends to give her granddaughter, Melodee, her antique hat pin. This heirloom has been kept under lock and key in the wall vault in the library of Hanna's house in Virginia. The hat pin is currently the only item in the vault. When Hanna is visiting Melodee in Connecticut, Hanna gives Melodee the only key to the vault. Melodee is grateful for the present and excitedly accepts. In this situation has there been a completed gift?

Yes. There has been constructive delivery of the hat pin.

Which of the following is/are generally subject to a standard of strict liability for bailed goods?

common carriers

Bertha, from Chicago, traveled to San Francisco to attend a conference. Her sister, Martha, lives in San Francisco and consequently, Bertha made arrangements to spend a couple of days with her sister. The next morning sitting at the breakfast table, Bertha realizes that she packed a mismatched pair of shoes (one is black and the other is blue). Luckily, Martha wears the same size of shoes and lends Bertha a pair of black leather pumps. During the day, the shoes are damaged while Bertha is wearing them. Bertha's duty of care would be a duty of

extraordinary care, because this is a bailment for the sole benefit of the bailee.

George gave his great-grandfather's pocket watch to Nurse Nadene because he expected to die soon. This is a(n)

gift causa mortis.

Quinn and Anna have been friends for many years. They have discussed many times that when Quinn dies, Anna will inherit Quinn's prized antique, a beautiful hand-carved writing desk. One day, to make sure that Quinn's wishes are actually carried out when he dies, he tells Anna again that she will inherit the antique desk, this time in the presence of his three adult children. Quinn states that he wants to enjoy the desk while he is still living, so it will remain in his house until his death. Quinn's will states that the antique desk will go to his sister Analise. When Quinn dies, the an

goes to his sister Analise.

Joe's Garage specializes in repairing foreign cars. Malcolm brings his Alpha Romeo to Joe's Garage for repair. Malcolm explains to Joe, the owner of the garage, that there is a strange sound under the hood and the left front tire is wobbling. Joe is about to leave town to go to Italy for three weeks and tells Malcolm that he cannot accept the repair job and Malcolm should remove the car from Joe's property. Malcolm is worried about driving the car, so he leaves it on Joe's property behind the building. Joe leaves for vacation, not realizing that Malcolm's Alpha Romeo is parked out back. While Joe is in Italy, someone vandalizes the car and causes thousands of dollars of damage. When Malcolm returns for his car and finds out the car has been vandalized, Malcolm sues Joe. Malcolm claims the car was Joe's responsibility because they had a valid bailment. The court will likely find that Joe and Malcolm:

had no valid bailment, and Joe is not responsible for the damage to the car.

Bruce tells his son, "You can have my 1990 truck, but if your grades fall, I'm taking it back." Bruce

has made no gift.

A bailment is different from a gift because

in a bailment, only possession of the property is transferred to the bailee, whereas with a gift, both possession and ownership must pass to the donee.

Ali took a seat at a booth at Midway Diner. Between the salt and pepper shakers, Ali noticed something glittering. It was a diamond ring. The ring is most likely

mislaid property.

Digger lives in Memphis and wants to visit his girlfriend Sarah in Nashville. Digger asks his friend Trevor if he can borrow Trevor's new convertible for the trip so he can impress Sarah. Trevor agrees, and Digger sets off on a road trip to Nashville. Unfortunately, Digger has a few beers first and ends up driving the convertible off the highway into a ditch. The convertible was brand new, and Trevor had not yet purchased insurance on the car. When Trevor asks Digger to pay for the repairs, Digger declines, saying "It's not my car, it's yours! You pay for the damages!" If Trevor sues Digger for the damage to the car, the court will likely:

require Digger to pay because this was a bailment for the sole benefit of the bailee.

Lacy set her textbook under her chair in her business law class and then forgot to take it with her when she left the classroom. A janitor later discovered the textbook and gave it to the Dean of the Business College. In this situation,

the college is a constructive bailee, obligated to return the textbook to Lacy, and until it does, it is liable for harm to the property.

The element that distinguishes a contract from a gift is

the element of consideration which is present in a contract, but not in a gift.