Chapter 49
Personal Property and Bailments
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
TRUE/FALSE QUESTIONS
B1. Personal property is sometimes referred to as personally or chattel.
B2. Businesses usually pay taxes on the personal property they own, use, or lease.
B3. A fixture is included in a sale of land if the contract does not provide otherwise.
B4. Trade fixtures are no exception to the rule that fixtures are a part of real property.
B5. Those who find abandoned property cannot acquire ownership rights through mere
possession of it.
B6. The most common way to acquire personal property is to produce it.
B7. An effective delivery requires that a donor retain control and dominion over the
subject matter of a gift.
B8. One requirement of a valid gift is acceptance by the donee.
B9. Property voluntarily placed by its owner with no intention of reclaiming it is mislaid
property.
B10. A person who finds mislaid property acquires title to the goods.
B11. Estray statutes determine ownership rights in wild animals that have gone “estray.”
B12. A bailment of persons is possible.
B13. A bailment cannot be found without the elements of control and knowledge.
B14. A bailee never has a right to use the bailed property.
B15. In ordinary bailments, bailees do not have the right to limit their liability.
B16. If the bailed property was destroyed or stolen, through no fault of the bailee, the
bailee’s obligation to return the property is excused.
B17. A bailee has a responsibility to take appropriate care of the bailed property.
B18. A bailor does not have a duty to compensate the bailee as reimbursement for costs
incurred by the bailee in keeping the bailed property.
B19. Warehouse companies are not liable for loss or damage to property resulting from
negligence.
B20. In many states, a hotel is not liable for the loss of any cash or property that guests
bring into their rooms if the hotel is not negligent.
MULTIPLE CHOICE QUESTIONS
B1. Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house,
barn, and other structures permanently attached to the land. Faye’s brother Huey
owns everything else in the ranch’s operation—livestock, feed, and so on. The
personal property is owned by
a. Faye and Huey.
b. Faye only.
c. Golden Spurs Ranch.
d. Huey only.
B2. With Meg’s permission, Nell cuts the trees growing on Meg’s land. Nell sells the
timber to Olin, who converts it to a variety of wood products. Personal property
includes
a. after the trees are cut, the timber and the wood products.
b. only, after the trees are cut and sold, the wood products.
c. only, after the trees are cut, the timber.
d. only the trees while they are growing on the land.
B3. Luna leases a commercial building to operate Mom’s Diner. During the term of the
lease, Luna installs a new roof and a walk-in cooler, and repaves the parking lot. Most
likely to meet the definition of a trade fixture is
a. the cooler.
b. the parking lot.
c. the roof.
d. none of these choices.
B4. Nouri is declared mentally incompetent. Omar, Nouri’s friend, insists that she
transfers her assets to him “for safekeeping.” A court might conclude that this gift is
not effective on the ground that there was no
a. acceptance.
b. delivery.
c. donative intent.
d. relinquishment of control.
B5. Rikki sells shares in Sparkling Spa Company to Telsa. Rikki does not deliver the actual
possession of the shares to Telsa, but gives her the key to a safety-deposit box in
Unity Bank in which the stock certificates are locked. Presenting the key is
a. accession.
b. constructive delivery.
c. confusion.
d. conversion.
B6. Patty’s parents give her a car as a graduation present. While Patty spends the summer
in Europe, her friend Rita agrees to keep the car in her garage. On Patty’s part, this is
acquisition of property by
a. bailment.
b. capture.
c. find.
d. gift.
B7. Bowie owns a 1957 Chevrolet coupe, which Danica customizes and details to Bowie’s
specifications. The car earns several awards at regional vehicle customizing
competition shows. The result of Danica’s efforts is
a. accession.
b. acquisition.
c. conversion.
d. dominion.
B8. John steals an old, battered bicycle that is parked, unlocked, in front of a convenience
store. He repairs, paints, and replaces parts on the bike until it is like new. The original
owner, Kim, claims the bike. The bike belongs to
a. John and Kim as owners in common.
b. John because he made substantial improvements to it.
c. John because Kim claimed it only after John improved it.
d. Kim because John stole it.
B9. Grain from Harvest Farms is wrongfully commingled with grain from Idyllic Fields,
which obtains possession of all of the grain. This is
a. a bailment.
b. accession.
c. confusion.
d. production.
B10. Rhett works at Scarlett’s Sandwich Café. After work, in the parking lot, Rhett finds a
diamond ring lost by Thalia. Title to the ring is possessed by
a. Rhett.
b. Scarlett’s.
c. Thalia.
d. the state.
B11. Danielle delivers her dress to Every Day Cleaners for dry cleaning. Every Day’s clerk
promises that the dress will be ready within five business days. Danielle agrees to pay
the charge for the cleaning when she picks up the dress. These parties have a
contract. This is
a. an implied bailment.
b. an involuntary bailment.
c. an express bailment.
d. no bailment.
B12. Baboo rents a golf cart at Country Club Golf Course. Durwood, the attendant, gives
Baboo key number “12” and points to the cart lot behind the clubhouse. This is
a. constructive delivery.
b. physical delivery.
c. not a delivery until Baboo turns the key and starts the cart.
d. no delivery.
B13. Uri borrows Vera’s boat to enjoy with Wendell for a weekend. Uri runs the boat
aground, damaging the hull. Liable for the cost of repairing the boat is
a. Uri and Vera equally.
b. Uri, Vera, and Webdell proportionately.
c. Uri only.
d. Vera only.
B14. Ben allows Cody to store his trailer on Ben’s property for $20 a month while Cody is
out of town. Later, Ben notices rainwater collecting in the trailer and covers it with a
tarp at a cost of $40. This cost is most likely borne by
a. Ben and Cody.
b. Ben only.
c. Cody only.
d. neither Ben nor Cody.
B15. Roy leaves his pick-up truck at Sam’s Auto Service for an oil change. This is a bailment
for
a. neither party’s benefit.
b. the parties’ mutual benefit.
c. the sole benefit of the bailee.
d. the sole benefit of the bailor.
B16. Owen takes a Paisley-made pinball machine to Quality Games, Inc., for repair. Lacking
certain parts, Quality ships the game to Regal Company. While in Regal’s possession,
the game is damaged. Quality can recover for the damage from
a. no one.
b. Owen.
c. Paisley.
d. Regal.
Fact Pattern 49-1B (Questions B17–B18 apply)
Town Transport Company (TTC) agrees to pick up two containers for Unlimited Sales, Inc.,
and store their contents, to be delivered later. While TTC unloads one container, the other
disappears from TTC’s loading dock.
B17. Refer to Fact Pattern 49-1B. These facts give rise to
a. a presumption of negligence by TTC.
b. a presumption of theft by a third party.
c. a presumption of theft by TTC.
d. Unlimited Sales’s liability for the container’s loss.
B18. Refer to Fact Pattern 49-1B. TTC can avoid liability
a. by proof that TTC was not negligent.
b. by proof that TTC’s warehouse is located in a high-crime area.
c. by proof that Unlimited Sales was negligent in hiring TTC.
d. under any circumstances.
B19. GR8 Stores, Inc., hires Haul-Way Company, a common carrier, to transport 500 Intelo
Game consoles from San Diego to Phoenix. En route, a pothole causes the truck to
crash, damaging the goods. Liability for the damage most likely rests with
a. GR8 Stores and Haul-Way.
b. GR8 Stores only.
c. Haul-Way only.
d. Intelo only.
B20. Veritable Company stores office furniture with Warehouse Storage, Inc. (WSI), under a
contract that limits the warehouse company’s liability for lost or damaged property to
$500. The furniture is lost through no fault of WSI. The loss is most likely suffered by
a. Veritable and WSI.
b. Veritable only.
c. WSI only.
d. neither Veritable nor WSI.
ESSAY QUESTIONS
B1. Jim wants to give Klio a diamond necklace that Jim has in his safe deposit box at First
National Bank. The bank is closed for a holiday. Jim gives Klio a key to the box and tells
her to go to the bank after the holiday and take the necklace. Klio does this. The next
day, Jim dies unexpectedly. Jim’s heirs want the necklace. What type of gift was this?
Can Klio keep it?
B2. Jean leaves her prom dress with Kwik ‘n Kleen Launderers to be cleaned and altered
for the dance. On its return, the dress is greasy and smells bad, and the alterations
burst at the seams. Who suffers the loss and why?