Personal Property

Nature of Bailor and Bailee’s Rights The bailor continues to be the owner of the goods, despite the transfer of possession. He may sue to recover the goods against a third person for conversion. He can also sue for damage caused to the goods by a third party. The bailee has a so-called “special property” in the goods. The nature of the bailee’ rights will depend on the type of bailment. The bailee can sue to prevent third parties interfering with the goods. He can assert the rights of the owner against wrongdoers. He may only recover as to the extent of his interest in the goods. The bailee may have rights under the terms of his contract. The duties of bailor and bailee will depend to some extent on the nature of the bailment. Bailments range from leasing or hiring in which the bailor as lessor. / hirer might be the supplier of goods to a consumer lessee / hiree, to repairing and servicing where the bailor is the person whose goods are repaired or serviced by the bailee.… Read the rest

Sub-Bailment

Sub-Bailment or New Bailment If the person who holds goods bails them or gives them to a third party, then there may be a sub-bailment or a new substituted bailment. If the new bailee is intended to be a subordinate instead of a substitute, the original bailee continues as such; this is a sub-bailment. This may or may not be permitted under the terms of the bailment. A sub-bailment may arise when a person who is himself a bailee, gives or entrusts the bailed goods to another. Under the sub-bailment, the original bailment continues, and the original bailee retains his responsibilities. This is in contrast to a case where the original bailment ends and a new substituted bailment takes place. In this latter case, the original bailee’s liability will be limited to his duty to his care in finding the replacement. It may also be governed by the terms of a contract.… Read the rest

Leasing

Hire of Movables The hire of movables covers many different types of transactions and arrangements. They may range from the long-term leasing of major items of capital equipment to a short term hiring of consumer goods and equipment. The hire or leasing may range from a whole of life transaction equivalent to a purchase in economic terms to a short-term hire for temporary use. A finance lease is similar to a purchase and mortgage back. The financing / leasing charges effectively pay for / amortise the capital cost of the leased item over the term of the agreement. Under a contract of hire, the hirer obtains the right to use particular goods or chattels in return for a payment or more commonly a series of payments. The owner of the goods gives possession to the hiree, in most cases. The common law principles of bailment apply, subject to the terms of the contract which provide to the contrary.… Read the rest

Consumer Hire

Consumer Hire and Hire Purchase Goods and equipment may be let and hired. Hiring is a type of bailment for reward, and the common law provisions apply, subject to legislative modifications. The ordinary rules for the formation of a contract and its avoidance by fraud, mistake, misrepresentation, incapacity etc. apply to hire purchase contracts. Consumer hire, leasing and hire purchase are regulated under the Consumer Credit Act. It makes overriding requirements in relation to the circumstances of the lending and hiring and the terms of the contract. Other legislation requires that the consumer hirer is regulated in most cases. A hire purchase agreement is an agreement for the bailment / hire or lease of goods with an option or a provision for their purchase under the terms of the agreement. Two or more agreements may together constitute a hire purchase agreement. The terms and conditions of the hire and hire purchase agreement largely determine the legal relationship between the parties.… Read the rest

Contracts & Title

Interests in Goods It is possible for there to be multiple equitable co-owners of goods. Persons may be legal joint owners, but equitable co-owners. The principles in relation to joint ownership and tenancy in common in respect of goods are broadly similar to those for land. The legal and equitable rules differ slightly.The equitable co-ownership prevails as between the co-owners. Legal estates for life, future interests in goods and other such interest and rights are not permitted in relation to goods. It is generally not possible to create conditional ownership or place covenants and restrictions on goods which bind third parties and the successors of the original owners. It is possible to make provision in a contract between the parties, but this will not usually bind the goods or a third party. It is possible to lease goods. It is possible to create various interest in goods under a trust. Contracts may provide for the transfer of goods subject to conditions. … Read the rest

Proprietary Remedies

Proprietary Claim It is a fundamental principle of law that one cannot give what one doesn’t have. This is sometimes expressed by the Latin maxim “Nemo dat quod non habet” or more commonly “Nemo Dat”. Generally, a person cannot give a better title to goods or other assets than that which he holds. There are a number of limited exceptions, which are set out in other articles. If a person holds, detains or appropriates property belonging to another (in the sense that the other has a legal interest in it) then that property must be returned, irrespective of whether the person knew of the true position in relation to ownership when he acquired it. The legal interest applies and takes effect, irrespective of notice of it. It holds good against all parties. Where a person has misappropriated or has wrongly disposed of property in which another has a legal interest, that other may claim against that person for conversion or for monies had and received to his use. … Read the rest

Trespass to Goods

Torts Protecting Ownership/ Possession of Goods There are a number of civil wrongs which protect the rights of the true owner and the person in possession of goods. Because of the relativity of title, the true owner might better be described as the person with the better title to the goods. Trespass to goods is the direct and wrongful interference with another in the possession of goods or movables. The person in possession of goods may assert that right to possession against all comers, except a person with better title. In this respect, there is considerable truth in the expression that possession is nine-tenths of the law. Accordingly, the person who finds moveable property / a chattel, (such as something that has been clearly lost), who is not aware of the identity of the true owner, may retain possession of it against all parties, except the true owner. Trespass to Goods Trespass to goods is the unjustifiable and unlawful direct taking of or interference with another’s possession of goods.… Read the rest

Detinue

Nature of Detinue Detinue is the wrongful withholding, retention or detention of goods (chattels, movable personal property) by the defendant, in respect of which the claimant has a better title. The person detaining the chattel must do so adversely to the claimant’s rights. It is the appropriate claim/form of action for the recovery of goods. Generally, a demand must be first made of the defendant, before taking legal action. The demand should be notified to the person who possesses the goods or otherwise brought to his knowledge. A demand is not required where it would be patently futile. The withholding must be unlawful and in breach of the claimant’s rights. Where the refusal to deliver is reasonable, for example, where the item has been found, and the claimant’s claim is not apparent, the refusal may be lawful. The mere keeping of another person’s goods does not to detinue. Where, however, a person has possession of the goods of another and a valid demand is made for them by the owner, an unqualified and unjustifiable refusal to deliver them up entitles the owner to sue in detinue and is evidence of conversion.… Read the rest

Conversion

Nature of Conversion I There is conversion where a person wrongfully deprives the true owner of the use and possession of goods. Conversion takes place where there is any dealing with goods which is inconsistent with the rights of the true owner. As with trespass generally, liability is strict. Conversion may occur in good faith where the person believes he is the owner of goods. The action need not be intentional or even negligent. It is enough that the defendant acts voluntarily. The essence of conversion is that a person deals with another person’s goods in a manner inconsistent with his latter’s ownership. This could be by way of a purported sale, pledging for security or the physical breaking of the item concerned. Where a third party is in possession of goods with the consent of the owner, an abuse of that consent may constitute conversion. This would include the destruction of the item and its purported sale or mortgage.… Read the rest

Overview

Personal Property Personal property is distinguished at common law from real property. The importance of the distinction has reduced over time. Prior to 1959, there were different rules on succession for each type of property, which had profound consequences. The distinction is still of great practical significance, in several other contexts. Real property comprises land and fixtures, including in particular buildings and other fixed structures on land. Certain things which are closely associated with the land are classified as real property. Some such things remain real property, at least for certain purposes. Chattels, movables, goods and personal property are subject to different rules to real property for many purposes. These terms have broadly the same meaning for present purposes and are used interchangeably here Interests in Goods It is not possible to create multiple interests in movable goods to the same extent as is the case with immovable property, (i.e. land and buildings).… Read the rest

Acquiring Title

New Goods When a product is manufactured or created, a new ownership/ title comes into existence. The components / ingredients which have been incorporated and lost their identity, cease to be owned or possessed separately. The components cease to have a separate title, once their identity is subsumed in that of the new product. It is presumed that the creator of the new goods takes ownership. There is no general rule applicable to all cases and manufacturing processes. Difficult questions of interpretation may arise as to whether and when the old goods cease to exist and new goods come into being. The substantial alteration of the goods does not destroy their separate title. However, their incorporation into something new, may do so, even if they could be separated. The better view appears to be that where a person creates goods using materials to which he is not entitled, the person who has owned the constituent materials has a better title and may claim ownership to it against the creator.… Read the rest

Title & Possession

Title / Ownership of Goods Title refers to ownership. The owner is said to have title.A property right gives the right to assert possession, control and ownership of something, which holds valid as against all persons. It is presumed that the owner is the person in possession. The person may have possession without physical possession. Title to goods may be acquired by the first owner by being made or assembled. A subsequent owner may acquire title by purchase, gift or other lawful acquisition from the preceding owner. A finder of goods which have been abandoned will generally acquire title. If the goods are purchased or acquired from a person without title, the title is not usually taken. The “true owner” or person with a better title, may usually assert his ownership against a person who has purchased or acquired the goods from a person who did not have title. Title to goods may be acquired by their being legitimately appropriated from a state of nature.… Read the rest

Title Issues

Title Conflicts in Relation to Goods The general position is that a person cannot give title unless he has title; only the “true” owner may dispose of the goods. This is expressed in the Latin phrase Nemo Dat Quod Non Habet; no person may give what he does not have. There are a number of long-established exceptions to the so-called “Nemo Dat” rule. A person in possession of goods may assert title to them against all third parties, except those with a better title to the goods concerned. This reflects the principle of relativity in property law, which applies to both land/buildings and goods. Conflicts regarding the ownership of goods and related issues are discussed in other articles. This article deals with certain exceptions to the general principles applicable to the sale and transfer of goods. There are a number of cases in which a transfer made by a person other than the owner, may pass title, which holds good against all parties, including the “true” owner. … Read the rest

Title by Estoppel

Absolute Bill of Sale

Bills of Sale The Bill of Sales Act is intended to prevent persons obtaining credit on the basis of their apparent ownership of goods, which they do not in fact own. The legislation is in some aspects narrow, but in other ways has wide application and great practical significance. There are two types of bill of sale. An absolute bill of sale is one by which ownership of goods is transferred. The requirements of the Bill of Sales Act apply to goods which are already owned and which are disposed of or mortgaged by the owner by a written document (a bill of sale). There are many important exceptions to the legislation. Some of the exceptions have been used in order to provide mechanisms to give secured credit in relation to the purchase of goods, without being subject to the onerous registration requirements of the Act. A bill of sale is a written document by which the ownership of goods (personal chattels) is transferred. … Read the rest

Real v Personal

Real / Immovable v Personal / Movable Property I Traditionally, the law distinguished between real and personal property. Until the 1950s, different rules applied to the transfer of real property and personal property on death. Real property referred principally to freehold land, while personal property referred to all other interests, including leasehold interests and movables. This distinction and classification is almost irrelevant in modern times. Personal or movable property refers to goods and other non-fixed property. The rules in relation to personal or movable property are distinct from those relating to real property. Real property means land, buildings, and other things fixed to that land. Goods become part of the land or a “fixture” when they are physically attached to the land with the intention that they should become a permanent part of it. Real / immovable property generally requires transfer by a formal deed, which is a document executed in a formal fashion.… Read the rest

Trespass to Goods