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Chapter 48
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. Property consists of the legally protected rights and interest of a person in
anything with an ascertainable value that is subject to ownership.
B2. How property is taxed and what is required to transfer or acquire property is
determined by whether the property is classified as tangible or intangible.
B3. A fixture is normally included in a sale of land unless the sales contract
specifies otherwise.
B4. Trade fixtures belong to the owner of the property on which they are installed
regardless of the purpose of their installation or who installed them.
2 TEST BANK B—UNIT TEN: PROPERTY AND ITS PROTECTION
B5. The most common way to acquire personal property is to produce it.
B6. Constructive delivery is a general term for all of those acts that the law holds to
be equivalent to acts of real delivery.
B7. Constructive delivery occurs when property is physically transferred.
B8. To be effective, a gift causa mortis must meet only two requirements: intent
and acceptance.
B9. Confusion of fungible goods results in the owners’ loss of their rights in the
property.
B10. Simply finding something and holding onto it gives the finder legal rights in the
property.
B11. A finder of mislaid property becomes the caretaker of the property.
B12. Someone who finds abandoned property acquires title to it and that title is good
against the whole world, including the original owner.
CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 3
B13. All transactions involving the delivery of property from one person to another
create a bailment.
B14. Intangible personal property may be bailed.
B15. A bailment must be in writing to be valid.
B16. A bailee must exercise reasonable care in preserving the bailed property.
B17. In most bailments, the bailee can retain the goods given by the bailor and
return equivalent property.
B18. The implied warranties of merchantability and fitness for a particular purpose
extend to bailments that include rights to use the bailed goods.
B19. Common carriers can contract away their liability for damaged goods.
B20. Warehouse companies are not liable for loss or damage to property resulting
from negligence.
4 TEST BANK B—UNIT TEN: PROPERTY AND ITS PROTECTION
MULTIPLE CHOICE QUESTIONS
B1. Gretel, an inventor, has tools in her workshop, including hammers, a table saw,
and drills. She has a patent on her most recent invention, a kitchen gas grill.
She licenses the patent to Home Appliances, Inc., a company in which she
owns stock. Her tangible personal property includes the
a. workshop tools.
b. Home Appliances stock.
c. patent on the gas grill and license to Home Appliances.
d. all of the choices.
B2. Orla leases a building to Pleasant Valley Residence, an assisted living facility.
During the term of the lease, Orla installs a new roof and commercial kitchen
appliances, and repaves the parking lot. Most likely to meet the definition of a
trade fixture is
a. the kitchen appliances.
b. the parking lot.
c. the roof.
d. none of these choices.
B3. Paca is declared mentally incompetent. Quelita, Paca’s friend, insists that Paca
transfer her considerable assets to Quelita “for safekeeping.” If Paca makes
this “gift,” a court might conclude that it is not effective on the ground that there
was no
a. acceptance by the donee.
b. constructive delivery.
c. donative intent.
d. relinquishment of control.
B4. Mallory’s sister Naomi gives Mallory a leather working kit for Christmas. Mallory
uses the kit to make a saddle. Mallory’s acquisition of the saddle is by
CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 5
a. gift.
b. accession.
c. confusion.
d. production.
B5. Ester sells shares in Fast Food Franchise Company to Gaye. Ester does not
hand the stock certificates to Gaye, but gives her the key to a safety-deposit
box in Heartland Bank in which the certificates are locked. Presenting the key
is
a. incomplete delivery.
b. constructive delivery.
c. production.
d. conversion.
B6. In contemplation of death during surgery, Donnelly gives his guitars to Ezri.
The surgery is successful, and Donnelly recovers from the operation. The gift
of the guitars is
a. not revoked because it was a gift causa mortis.
b. not revoked because it was a gift inter vivos.
c. revoked because it was a gift causa mortis.
d. revoked because it was a gift inter vivos.
B7. Einar owns a 1967 Ford Mustang, which Ginny customizes and details to
Einar’s specifications. The car earns an award at the Regional Motorsports
Customizing Convention. The result of Ginny’s efforts is
a. accession.
b. confusion.
c. conversion.
d. production.
6 TEST BANK B—UNIT TEN: PROPERTY AND ITS PROTECTION
B8. Randall steals a damaged, broken bike that is parked, unlocked, in a dorm bike
rack. He repairs, paints, and replaces parts on the bike until it is like new. The
original owner, Sabi, then claims it. The bike belongs to
a. John and Kim in equal measure.
b. John because he made substantial improvements to it.
c. the state under the applicable estray statute.
d. Kim because John stole it.
B9. Nero and Omar agree to buy natural gas to sell to Power Fuel Refinery and to
share storage costs until Power Fuel can take delivery. The gas is commingled
so that Nero’s cannot be distinguished from Omar’s. This is
a. a bailment.
b. production.
c. confusion.
d. in violation of the law.
B10. James works at Kay’s Breakfast Café. After work, in the parking lot, James
finds a diamond ring lost by Lani. Title to the ring is possessed by
a. James.
b. Kay’s.
c. Lani.
d. the state.
B11. Dallas asks Eddie if he can store his furniture in Eddie’s garage while he
serves a tour of duty with the U.S. Marines Corps. Eddie agrees. This is
a. a bailment.
b. accession.
c. a gift causa mortis.
d. abandoned property.
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B12. Miranda delivers her bridesmaid’s dress to Nina for alterations. Nina promises
that the dress will be ready within five business days. Miranda agrees to pay
the charge when she picks up the dress. This is
a. an implied bailment.
b. an involuntary bailment.
c. an express bailment.
d. not a bailment.
B13. Logan borrows Morris’s bike to ride over mountain trails. The bike is damaged
during the ride. Liable for the cost of repairing the bike is
a. Logan and Morris in equal measure.
b. Logan.
c. Morris.
d. all of the choices.
B14. Denny allows Elbert to store his trailer on Denny’s property for $20 a month
while Elbert works temporarily at a distant job site. Later, Denny notices
rainwater collecting in the trailer and covers it with a tarp at a cost of $50. This
cost is most likely borne by
a. Denny and Elbert in equal measure.
b. Denny.
c. Elbert.
d. Cody’s employer.
B15. Luther leaves his pick-up truck at Midtown Auto Service for an oil change. This
is
a. a bailment.
8 TEST BANK B—UNIT TEN: PROPERTY AND ITS PROTECTION
b. accession.
c. none of the choices.
d. production.
B16. Oleg takes a PowerMade-brand rototiller to QuikFix Inc. for repairs. Lacking
certain parts, QuikFix ships the rototiller to Repair & Parts Company. While in
Repair & Parts’s possession, the machine is damaged. QuikFix can recover for
the damage from
a. no one.
b. Oleg.
c. PowerMade.
d. Repair & Parts.
B17. EquipLease Company leases a thresher to Farm Harvest, Inc., a firm that
contracts with farm owners to harvest their crops. The machine is seriously
damaged through Farm Harvest’s neglect. Most likely liable for the damage is
a. EquipLease.
b. Farm Harvest.
c. the farm owners.
d. no one.
Fact Pattern 48-1B (Questions B18–B19 apply)
Truck & Transfer Inc. agrees to pick up two containers for United Home Products
Corporation and store their contents, to be delivered later. While Truck & Transfer un–
loads one container, the other disappears from the company’s loading dock.
B18. Refer to Fact Pattern 48-1B. These facts give rise to
a. a presumption of negligence by Truck & Transfer.
b. a presumption of theft by a third party.
c. a presumption of theft by Truck & Transfer.
d. United Home’s liability for the container’s loss.
CHAPTER 48: PERSONAL PROPERTY AND BAILMENTS 9
B19. Refer to Fact Pattern 48-1B. Truck & Transfer can avoid liability
a. by proof that Truck & Transfer was not negligent.
b. by proof that Truck & Transfer’s loading dock is in a high-crime area.
c. by proof that United Home was negligent in hiring TTC.
d. under any circumstances.
B20. 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.
ESSAY QUESTIONS
B1. Quentin wants to give Rowena a pearl necklace that he has in his safe deposit
box at Security Bank. The bank is closed for a holiday. Quentin gives Rowena
a key to the box and tells her to go to the bank after the holiday and take the
necklace. Rowena does this. The next day, Quentin dies unexpectedly. His
heirs want the necklace. What type of gift was this? Can Rowena keep the
necklace?
10 TEST BANK B—UNIT TEN: PROPERTY AND ITS PROTECTION
B2. Gene leaves her Honda Fit with Intown Motors for routine maintenance. On its
return, the interior of the car is greasy and the exterior is scratched and dented.
Who suffers the loss and why?