Property Class Notes 1/27/04


The problem on bailments


Letís do the problem!


One question I failed to consider was whether there was a bailment at all.Did a bailment exist?A bailment requires that the bailee actually take possession of the good with intent to possess or control.Did Diana deliver possession of the item to Irene?If this actually was a bailment, how would we classify it?Irene would argue that it was a gratuitous bailment for the benefit of the bailor.In that case, Irene is only liable if she was grossly negligent.


The main idea is that there are different standards of care depending on how you classify the bailment.


Then, on the other hand, there is a letter.Irene only knew that she had possession of a letter, but she didnít know what was inside it.Whatís the issue?Well, just what did Irene take possession of?Did she take possession of the envelope, or the envelope and its contents?Itís a question of intent.This question arises often.If you ever read the contracts on the back of claim checks when you pick up your car, it always says that the garage owner isnít liable for theft or damage to the contents of your car.


So what was Ireneís intention with respect to the money?This is something a court would have to wrestle with.Was there an implied bailment?Irene wasnít just the bailee for the envelope.The envelope itself was worthless.Itís only the contents that have some value and may carry some liability if you lose them.


Finders Ė the holding of Armory


Say Joe finds a watch.Then Joe loses the watch.Jane finds the watch, and Joe sues Jane for the return of the watch.So who is the rightful owner?What do we find out from Armory?The finder will win out against anybody except the true owner.If thatís the rule, then who wins in the hypothetical?No help there!


What about the second holding?It says that a prior possessor prevails against a subsequent possessor who is not the true owner.This isnít what the court said in Armory!How can we infer this rule?


This case seems really simple, but itís not!Whatís really the holding of the case?Who was the true owner in Armory?Nobody knows!Even though the finder prevails against all but the true owner, and thatís what the court states, this must be at least partly dictum because the true owner isnít before the court!


How about a third version of the holding?A prior possessor who is a finder prevails against a subsequent possessor who is a bailee.In other words, a finder prevails over a bailee.


The parties before the court were a finder and a subsequent possession.Anything that is said about the true owner must be dicta!


SoÖBraunstein claims that we canít resolve our simple hypothetical based solely on Armory!How are we going to resolve the case?Weíre going to look at the public policy reasoning behind the rule of Armory.The court wanted to encourage public order, protect findersí reasonable expectations, minimize the effect on the law of bailments, and secure the return of the item to the true owner.


The fourth policy justification suggests that we want to find for the first finder, because in some sense the first finder is closer to the true owner.The public order goal also pushes towards giving the thing to the first finder.


Braunstein is trying to make the point that you frequently cannot resolve cases just by looking at the rule.Often, there are multiple plausible holdings of a precedent-setting case, and these holdings may be in conflict.Therefore, you must look for a ďhigher authorityĒ and consider the public policy justification for the rule.


Hannah v. Peel


Peel buys a house.Itís taken by eminent domain for the war, released, and taken again.Hannah finds this brooch in the house.He informs his commanding officer, and then turns the brooch into the police.The police eventually turn over the brooch not to Hannah, but to Peel, the property owner, who sells it.Hannah sues Peel!Whatís the issue?


Donít forget, the only rule we have at this point is the rule of prior possession.Who is the prior (first) possessor?Is it the owner of the house (the locus in quo or place in question)?Or is it the finder?


The court goes through a sort of messy analysis.The judge never tells us how the cases he refers to are applicable to the facts of the present case.


The judge starts with Bridges v. Hawkesworth.In that case, some money was found on the floor of a shop.The finder turns it over to the shopkeeper.They canít find the true owner.So the question is: who is entitled to possession of the notes?It turned out that the notes went to the finder.The shopkeeper didnít have possession as against the owner.What the court is saying is that if the true owner sued the shopkeeper because the notes went missing, the true owner would lose.The shopkeeper never accepted possession of the notes and never knew of their existence.The court leaps to the conclude that because the shopkeeper didnít have possession against the true owner, the shopkeeper didnít have possession against the finder either.This is a big logical leap.It might be right, but it fails to take into account the relativity of possession.


What else do we learn from Bridges v. Hawkesworth?Just because youíre the owner of land doesnít mean youíre the owner of everything that sits on the land.So Peel is not necessarily going to win just because heís the owner of the house.So the owner of the locus in quo doesnít always possess things found on the land.The owner doesnít win in Bridges; the finder wins!Later weíll find out that the holding of Bridges was limited to public places.Then the question becomes whether or not a shop is a public place.


How do we characterize the house in Hannah?How do we characterize a hospital?Whether itís public or private will make a difference.


What is the relevance of intent?What was the intent of the shopkeeper?One thing we can get out of this case is that possession, as elusive a concept as it is, has something to do with intent.The judge in this case quotes Oliver Wendell Holmes, who says two types of intent must be present in order for there to be possession: (1) intent to appropriate (use) and (2) intent to exclude (exert exclusive control; keep others from using property).


If you donít know something is there, you canít intend to appropriate it for your own use or intend to exclude others.


Braunstein has a problem with this case: Couldnít Peel have claimed to have the intent to appropriate everything in the house?Peel was compensated for the use of the house, but that doesnít mean he intended to give up any of the stuff not related to the governmentís occupation.We donít know what Peelís intent was.So Bridges doesnít take us very far, and judge doesnít say why the case is relevant.


The court makes a big deal out of the fact that Peel never occupied the house.


Does Armory help?What about Pierson?In Pierson, the court acted as though there was no owner of the locus in quo (the beach).


What about South Staffordshire?What happens in that case?The employee finds some rings while cleaning a pool.Who gets the rings?The owner of the land wins.How come?There are several theories.


When you possess land, you get everything attached to or under the land.In Hannah, the brooch was neither.


When the locus in quo is private property from which the public is excluded, then the trespasser doesnít get to keep what he finds.But that wasnít the case in Hannah.


Also, the employee was doing something sort of ďbeyond the scope of his employmentĒ.The employee wasnít invited on the property for the purpose of finding lost things.How would that apply to Hannah?Hannah wasnít in Peelís house to find stuff.He was there to do army stuff like hanging up blackout curtains.If thatís the rationale for South Staffordshire, wouldnít Peel win?


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