business law chapter 23 outline
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business law chapter 23 outline

Course: ECO 271, Spring 2012

School: CUNY Hunter

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Chapter 23 Personal property and Bailments I. Nature of Property A. Property Something that is capable of being owned. It is also used to refer to a right or interest that allows a person to exercise dominion over a thing that may be owned or possessed. B. Property Ownership We are speaking of a bundle of rights that the law recognizes and enforces. Example: ownership of a building includes the exclusive right to...

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23 Chapter Personal property and Bailments I. Nature of Property A. Property Something that is capable of being owned. It is also used to refer to a right or interest that allows a person to exercise dominion over a thing that may be owned or possessed. B. Property Ownership We are speaking of a bundle of rights that the law recognizes and enforces. Example: ownership of a building includes the exclusive right to use, enjoy, sell, mortgage, or rent the building. If someone tries to use the property without the owners consent, the owner may use the courts and legal procedures to eject that person. Ownership of patent includes the rights to produce, use and sell the patented item, and to license others to do those things. Private ownership of property is protected by the constitution. These right are not unlimited, a person cannot use property in an unreasonable manner that injures others. The state has police power through which it can impose reasonable regulations on the use of property, tax it, and take it for public use by paying the owner compensation for it. I. Classifications of Property A. Personal Property versus Real Property 1. Real Property: is the earths crust and all things firmly attached to it. a) Example: land, office, buildings, and houses 2. Personal property: defined by process of exclusion, Personal property is used in contrast to real property. Ex. books, clothing, and stock in corporation. 3. Real property may be turned into personal property if it detached from the earth. Personal property if attached to the earth becomes real property. a) 4. Example: when marble is quarried, it becomes personal property, but if it is used in constructing a building, it becomes real property again. Fixture: When personal property is attached to, or used in conjunction with, real property in such a way as to be treated as part of the real property. B. Tangible versus intangible personal property Tangible property: can be physical existence. Examples: cars, animals, and computers. Intangible property: property that has no physical existence. Examples: rights under a patent, copyright, or trademark. C. Public and private property Public property: property is owned by the government or a government unit. Private property: if it is owned by an individual, a group of individuals, a corporation or some other business organization. II. Acquiring Ownership of Personal Property A. Production or Purchase A person owns the property that she makes unless the person has agreed to do the work for another party. In that case the other party is the owner of the product of work. Another way of acquiring property is by purchase. Example: a person who creates a painting, knits a sweater, or develops a computer program is the owner unless she has been retained by someone to create the painting, knit the sweater, or develop the program. B. Possession of Unowned Property 1. One may still acquire ownership of personal property by posing it if the property is unowned. 2. Examples: wild animals and abandoned property. C. Rights of Finders of Lost, Mislaid, and Abandoned Property 1. Abandoned Property: The owner intentionally placed the property out of his possession with the intent to relinquish ownership of it. The finder who takes possession of abandoned property with intent to claim ownership becomes the owner of property, has better rights then everyone. Example: Norris takes his TV set to the city dump and leaves it there. Fox finds the TV set and takes it home, new owner of TV set. 2. Lost Property: The owner did not intend to part with possession of the property. The person who finds the lost property does not acquire ownership of it, but acquires better rights to it then anyone one other than the true owner. Example: Barbers camera fell out her handbag while she was walking down the street. True owner can get back her item if the founder sold item. If the finder of lost property knows who the owner is and refuses to return it, the finder is guilty of conversion and must pay the owner the fair value of the property. 3. Mislaid Property: The owner intentionally placed the property somewhere and accidentally left it there, not intending to relinquish ownership of the property. The finder does not acquire ownership of it, but acquires better rights to it then anyone one other than the true owner. Example: Fields places her backpack on a coatrack at campus bookstore while shopping for textbooks. Forgetting her backpack, she goes home. Chapter 23 Personal property and Bailments Some states have a statute, estray statutes, the person must give public notice of the fact that the property has been found, AD in newspaper. All states have statute of limitations that the require true owner of property to claim it or bring a legal action to recover possession of it within a certain number of years. A person who keeps possession of lost or unclaimed property for longer than that period of time will become the owner. (Corliss Case) D. Leasing Is a transfer of the right to possess and use personal property belonging to another. It is becom ing an increasingly important way of acquiring the use of many kinds of personal property, from automobiles to farm equipment. E. Gifts 1. A voluntary transfer of property to the donee(the person who receives gift), for which the donor(the person who gives the gift) gets no consideration in return. 2. To have a valid gift: The donor must intend to make a gift , The donor must make delivery of the gift. And The donor must accept the gift. 3. Gifts inter vivos : is a gift between two living persons. 4. gifts causa mortis: is a gift made in contemplation of death. It is a conditional gift and is effective unless any of the following occurs: The donor recovers from peril or sickness under fear of which the gift was made The donor revokes or withdraws the gift before he dies The donee dies before the donor F. Conditional Gift A gift may be made on a condition that the donee comply with certain restrictions or preform certain actions. It is not a completed gift. It may be revoked by the donor before the donee com pels with the conditions. Example: gifts in contemplation of marriage, engagement rings. These gifts are generally considered to have been made on an implied condition that marriage between the donor and the donee will take place. The traditional rule applied in many states provides that if the donee breaks the engagement without legal justification or the engagement is broken by mutual consent, the donor will be able to recover the ring or other engagement gift. However, if the engagement is unjustifiably broken by the donor, the traditional rule generally bars the donor, the traditional rule generally bars the donor from recovering gifts made in con templation of marriage. (Lindh Case) G. Uniform Transfers to Minors Act Has been adopted in every state, provides a fairly simple and flexible method for making gifts and other transfers of property to minors. (under age of 21) An adult may transfer money, securities, real property, insurance policies, and other property. The transferor(the person who gives or other wise transfers the property) delivers, pays, or assigns the property to, or registers the prop erty with, a custodian who acts for the benefit of the minor under this act. The custodian may be the transferor himself, another adult, or a trust company, depending again on the type of property transferred. It must be for the minors, benefit not theirs. H. Will or Inheritance Ownership of personal property may also be transferred upon the death of the former owner. The property may pass if the will is validly executed. If there is no valid will, the property is transferred to the heirs of the owner according to state laws. I. Confusion Us the intermixing of different owners' good in such a way they cannot be separated. Ex. Suppose wheat belonging to several different people is mixed in a grain elevator. If the mixing was by agreement or if it resulted from an accident without negligence on anyone's part, each person owns his proportionate share of the entire quantity of wheat. If it is wrongfully or negligently mixed, any person responsible for this must bear any loss caused by the confusion. J. Accession Increasing the value of property by adding materials, labor, or both. The owner of the original property becomes the owner of the improvements. This is true if the improvement was done with the permission of the owner. Ex. Hudson takes his car to a auto mobile shop. He is still the owner. Problems may arise if materials are added or work is performed on personal property without the consent of the owner. The owner can get it back without reimbursement. (thief steals car, im proves it, owner doesnt have to pay) If the property was mistakenly improved in good faith by someone who believes he owns the property, In such a case a court must weight the respective interests of two innocent parties. Ex. Johnson leaves a stone in the sidewalk from his truck. Hudson picks it up thinking it was left there on purpose. Johnson went to get it back later but Hudson did improvements on it. A court could decide the Hudson would pay from the improvement or Johnson pay for the stone. The greater the extent to which improvements have increased the value of property, the more likely the court will choose the second alternative and permit the owner to acquire ownership of the improved property.
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