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Property Law

Personal Property



Personal property can be divided into two major categories: tangible and intangible. Tangible property includes such items as animals, merchandise, and jewelry. Intangible property includes such rights as stock, bonds, patents, and copyrights.

Possession Possession is a property interest under which an individual to the exclusion of all others is able to exercise power over something. It is a basic property right that entitles the possessor to continue peaceful possession against everyone else except someone with a superior right. It also gives the possessor the right to recover personal property (often called chattel) that has been wrongfully taken and the right to recover damages against wrongdoers.



To have possession, an individual must have a degree of actual control over the object, coupled with an intent to possess the object and exclude others from possessing it. The law recognizes two types of possession: actual and constructive.

Actual possession exists when an individual knowingly has direct physical control over an object at a given time. For example, an individual wearing a particular piece of jewelry has actual possession of it. Constructive possession is the power and intent of an individual to control a particular item, even though it is not physically in that person's control. For example, an individual who has the key to a bank safe-deposit box, which contains a piece of jewelry that she owns, is said to be in constructive possession of the jewelry.

Lost, Mislaid, and Abandoned Property Personal property is considered to be lost if the owner has involuntarily parted with it and does not know its location. Mislaid property is that which an owner intentionally places somewhere with the idea that he will eventually be able to find it again but subsequently forgets where it has been placed. Abandoned property is property to which the owner has intentionally relinquished all rights.

Lost or mislaid property continues to be owned by the person who lost or mislaid it. When a person finds lost goods, the finder is entitled to possession against everyone with the exception of the true owner.

The finder of lost articles on land belonging to someone else is entitled to possession against everyone but the true owner. However, if the finder of the misplaced goods is guilty of TRESPASS, she has no right to possess the goods. The owner of the place where an article is mislaid has a right to the article against everyone else but the true owner. Abandoned property can be possessed and owned by the first person who exercises control over it with an intent to claim it as his own. In any event, between the finder of a lost, mislaid, or abandoned article and the owner of the place where it is found, the law applies whatever rule will most likely result in the return of the article to its rightful owner.

Ordinarily when articles are found by an employee during and within the scope of her employment, they are awarded to the employer rather than to the employee who found them.

Treasure trove is any gold or silver in coin, plate, or bullion that is hidden by an unknown owner in the earth or other private place for an extended period. The property is not considered treasure trove unless the identity of the owner cannot be determined. Under early common law, the finder of a treasure trove took title to it against everyone but the true owner. The U.S. law governing treasure trove has been merged, for the most part, into the law governing lost property. In the absence of a contrary statutory provision, the title to treasure trove belongs to the finder against all others with the exception of the true owner. If there is a controversy as to ownership between the true owner and the state, the owner is entitled to the treasure trove.

Confusion and Accession Confusion and ACCESSION govern the acquisition of, or loss of title to, personal property by virtue of its being blended with, altered by, improved by, or commingled with the property of others. In confusion, the personal property of several different owners is commingled so that it cannot be separated and returned to its rightful owner, but the property retains its original characteristics. Any fungible (interchangeable) goods, such as grain or produce, can be the subject of confusion.

In accession, the personal property of one owner is physically integrated with the property of another so that it becomes a constituent part of it, losing any separate identity. Accession can make the personal property of one owner become substantially more valuable chattel as a result of the work of another person. This occurs when the personal property becomes an entirely new chattel, such as when grapes are made into wine or timber is made into furniture.

Subject to the doctrine of accession, personal property can become real property through its transformation into a fixture. A fixture is a movable item that was originally personal property but has become attached to, and associated with, the land and therefore is considered a part of the real property. For example, a chandelier mounted on the ceiling of a house becomes a fixture.

Bailments A BAILMENT is the rightful temporary possession of goods by an individual other than the true owner. The individual who entrusts his property into the hands of another is called the bailor. The person who holds the property is called the bailee. Ordinarily, a bailment is made for a designated purpose upon which the parties have agreed. For example, when a person pawns a diamond ring, she is the bailor and the pawnshop operator is the bailee. The pawnshop owner holds the ring for an agreed period as security on the loan to the bailor. The bailor is entitled to recover possession of the ring by paying back the loan within the time period. If the bailor fails to pay back the loan in time, the bailee gains ownership of the ring and may sell it.

A bailment differs from a sale, which is an intentional transfer of ownership of personal property in exchange for something of value, because a bailment involves only a transfer of possession or custody, not ownership.

Bona Fide Purchasers The basic common-law principle is that an individual cannot pass better title than she has and a buyer can acquire no better title than that of the seller. Because a thief does not have a title in stolen goods, a person who purchases from the thief does not acquire title.

A bona fide purchaser is an individual who has bought property for value with no notice of any defects in the seller's title. If a seller indicates to a buyer that she has ownership or the authority to sell a particular item, the seller is estopped (prevented) from denying such representations if the buyer resells the property to a bona fide purchaser for value without notice of the true owner's rights. At common law, such an ESTOPPEL did not apply when an owner brought an item for services or repairs to a dealer and the dealer wrongfully sold the chattel. The bona fide purchaser, however, was subsequently protected under such circumstances by the UNIFORM COMMERCIAL CODE, which was adopted in all states.

A buyer who induces a sale through fraudulent representations acquires a VOIDABLE title from the seller. A voidable title may be vacated at the seller's option, upon discovery of the buyer's FRAUD. The seller has the authority to transfer good title to a bona fide purchaser for value without notice of the outstanding EQUITY.The voidable title rule is only applicable in situations where the owner is induced to part with title, not merely with possession, as a result of fraud or deception.

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