603
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
A1. Tangible personal property represents a set of rights and interests but has no real
physical existence.
A2. Generally, individuals are not required to pay annual taxes on personal property that
is used for business.
A3. Real property cannot be turned into personal property by detaching it from the land.
A4. A trade fixture is personal property that is installed for a commercial purpose by a
tenant.
604 TEST BANK A—UNIT TEN: PROPERTY AND ITS PROTECTION
A5. Those who find lost property cannot acquire ownership rights through mere
possession of it.
A6. A gift is a voluntary transfer of property for which no consideration is given.
A7. Delivery of intangible personal property must always be accomplished by actual
delivery.
A8. A gift causa mortis does not become absolute if the donor does not die.
A9. Property voluntarily placed by its owner and inadvertently forgotten is abandoned
property.
A10. A finder of lost property can claim title to the property against the whole world—
except the true owner.
A11. A finder of lost property who knows the true owner and fails to return the property is
guilty of the tort of conversion.
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A12. A bailment of real property is possible.
A13. All transactions involving the delivery of property from one person to another create a
bailment.
A14. A bailment agreement can be express or implied.
A15. In a commercial bailment, the bailee must exercise ordinary care.
A16. In most bailments, the bailee can retain the goods given by the bailor and return
equivalent property.
A17. If the bailed property has been lost or is returned damaged, a court will presume that
the bailee was negligent.
A18. Property that is leased from a bailor must be fit for the intended purpose of the
bailment.
A19. The delivery of goods to a common carrier creates a relationship between the shipper
and the carrier.
606 TEST BANK A—UNIT TEN: PROPERTY AND ITS PROTECTION
A20. A hotel owner is always strictly liable for the safety of a guest’s automobile.
MULTIPLE CHOICE QUESTIONS
A1. Helen owns heavy construction equipment and the tools to service it, as well as office
furniture, including computers. Ilya owns a number of patents, trademarks that
identify the products made under those patents, and stock in the company that sells
those products. Personal property includes the items owned by
a. Helen and Ilya.
b. Helen only.
c. Ilya only.
d. neither Helen nor Ilya.
A2. Chita owns the land on which Downwind Farm is situated, plus the farmhouse, barn,
and other structures permanently attached to the land. Chita’s brother Elmo owns
everything else on the farm—implements, seed, and so on. The real property is
owned by
a. Chita and Elmo.
b. Chita only.
c. Downwind Farm.
d. Elmo only.
CHAPTER 49: PERSONAL PROPERTY AND BAILMENTS 607
A3. Baksheesh owns a house. In the house, on a tile floor is a throw rug. Most likely to
meet the definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
A4. Fanny buys clay to throw pottery, which is glazed and fired in a kiln. The finished
products are sold to Gifte Shoppe, which sells these items and others to customers
who often present them as gifts. The most common way to acquire personal property
is to
a. buy it.
b. commingle it.
c. produce it.
d. receive it as a gift.
A5. Rocco gives Sequoia a computer as a gift. Using the computer, Sequoia develops a
new computer game, for which she obtains intellectual property protection, and
forms Titan Games, LLC, to make and market the game. Sequoia’s acquisition of the
game is by
a. gift.
b. accession.
c. confusion.
d. production.
608 TEST BANK A—UNIT TEN: PROPERTY AND ITS PROTECTION
A6. Ansel owns Bar-B Ranch. Ansel’s only son Cy owns Double-D Ranch in the same
county. Ansel gives 90 percent of the Bar-B to Etta, a short-term employee. This gift
a. may lack the required element of “donative intent.”
b. may lack the required element of “donor’s acknowledgement.”
c. may lack the required element of “heir’s acquiescence.”
d. meets all of the requirements for an effective gift.
A7. Kade and Lila each press certain quantities of olive oil to sell to Mediterranean
Products, Inc., and agree to share storage costs until Mediterranean can take delivery.
The oil is commingled so that Kade’s cannot be distinguished from Lila’s. This is
a. accession.
b. confusion.
c. conversion.
d. dominion.
A8. Idaho Farms mistakenly puts its potatoes in Jackson Co–op’s storage bin, which
already contains Kelly Spud Farm’s potatoes. It is impossible to tell which potatoes
originally belonged to which party. This is
a. a bailment.
b. accession.
c. confusion.
d. production.
CHAPTER 49: PERSONAL PROPERTY AND BAILMENTS 609
A9. Floyd tells his daughter Glenda that she can have his Harley Davidson when he dies,
but he does not add this to his will. This is
a. a valid gift causa mortis.
b. a valid gift inter vivos.
c. a valid gift testamentary.
d. not a valid gift.
A10. Inadvertently, Morris leaves his backpack at NuWay Launderers when he stops to pick
up his clothes. The backpack is
a. abandoned property.
b. gifted property.
c. lost property.
d. mislaid property.
A11. Jennifer finds a full duffel bag that she believes may be subject to an estray statute.
Estray statutes apply to
a. abandoned property.
b. bailed property.
c. lost property.
d. mislaid property.
A12. Emily checks her luggage at Flyaway Airlines’s ticket counter before boarding her
flight to Houston. Subject to a bailment is
a. Emily.
b. Emily’s luggage.
c. Emily’s ticketed seat on the flight.
d. none of the choices.
610 TEST BANK A—UNIT TEN: PROPERTY AND ITS PROTECTION
A13. Delacroix discovers a boat adrift, and retrieves and anchors it. The boat features a
number on its side and other evidence pointing to its owner, Elvira. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
A14. Mona asks Ned if she can store her furniture in his garage while she serves a tour of
duty with the U.S. Marines Corps. Ned agrees. 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.
A15. Jill loans her laptop to Kyle. 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.
CHAPTER 49: PERSONAL PROPERTY AND BAILMENTS 611
A16. Sid borrows Tony’s paint sprayer to paint his house. Uma allows Vic to store his
posthole digger in her shed. The party with a right to use the bailed property is
a. neither Sid nor Uma.
b. Sid and Uma.
c. Sid only.
d. Uma only.
A17. Quint rents a riding mower from Rent-All, Inc. Quint leaves the mower in a remote
location overnight. When he returns to retrieve it, it is gone. Liability for the loss most
likely rests with
a. Quint and Rent-All.
b. Quint only.
c. Rent-All only.
d. neither Quint nor Rent-All.
A18. Bob rents a golf cart at Country Club Golf Course. The brakes are worn, and while Bob
is driving the cart, they fail. The cart crashes into a tree, and Bob is injured. Country
Club could have discovered, with reasonable diligence, that the brakes were worn.
Liability for Bob’s injuries most likely rests with
a. Bob and Country Club.
b. Bob only.
c. Country Club only.
d. neither Bob nor Country Club.
612 TEST BANK A—UNIT TEN: PROPERTY AND ITS PROTECTION
A19. Beta Company arranges to have Carrier Corporation, a common carrier, transport fifty
HDTVs from New York to California. Dan is Carrier’s driver. Carrier will not be liable to
Beta for failing to deliver the TVs on time if
a. authorities are stopping and searching all trucks entering California.
b. Carrier’s dispatcher mistakenly delays Dan’s departure.
c. Carrier’s truck is broken into and the TVs are stolen.
d. Dan has to wait two days in Denver for the truck to be repaired.
A20. Tab stores video equipment with U-Store-It, Inc., under a contract that excuses the
warehouser from liability for any damage. A fire due to U-Store-It’s negligence
destroys the equipment. The loss is most likely to be imposed on
a. neither Tab nor U-Store-It.
b. Tab and U-Store-It.
c. Tab only.
d. U-Store-It only.
ESSAY QUESTIONS
A1. During a storm on Blue Lake, a boat sinks, but its owner Cappy survives. Cappy plans
to return to the site of wreck to salvage its equipment and his possessions, but he
delays. Meanwhile, Dick, an amateur diver, discovers the wreck and strips it clean of
useful items. Cappy learns of the recovery and files a suit against Dick, claiming that
the items are his. Dick responds that the sunken boat was abandoned and therefore
he has good title to whatever he took possession of. What is the court likely to rule,
and why?
CHAPTER 49: PERSONAL PROPERTY AND BAILMENTS 613
A2. Frenchy’s Fast Fries (3F) requires that its employees wear uniforms and protective
clothing while on the job. 3F provides a locker room for the employees to leave their
street clothes and personal items while working. A sign on the back of the locker room
door states, “Frenchy’s is not responsible for the loss of any property in the locker
room.” Grant, a 3F employee, changes his clothes in the locker room before starting
work and leaves his wallet and watch in a pocket of his jacket hanging in his locker.
When he returns after his shift, the wallet and watch are gone. Does Grant’s leaving
personal items in the locker room constitute a bailment? If so, what type of bailment?
If not, what legal relationship is it? Does 3F’s sign exculpate the company for Grant’s
loss? Why or why not?