Personal Property New York

Front 1

Bailments: Definition

Back 1

A bailment is the relationship created by the transfer of possession of an item of personal property by one called the bailor to another called the bailee for the accomplishment of a certain purpose.

There is no transfer of title.

An express contract is not necessary.

Front 2

Creation of a Bailment

Back 2

It is essential to the creation of a bailment that the bailee obtain actual or constructive possession of the item of personal property, i.e., physical custody over the property coupled with intent to exercise control.

Front 3

Creation of a Bailment: Intent

Back 3

The bailee must have an intent (either specific or generic) to acquire possession of the property and become a bailee.

A bailment cannot be created where the bailor attempts to force possession of the item of personal property upon the bailee.

No affirmative duties can be imposed on a possessor under these circumstances.

Front 4

Creation of a Bailment: Generic Intent

Back 4

It is not essential that the bailee know the precise nature of the item being bailed for a bailment to come into existence, as long as she has a general intent to receive the item.

For instance, a parking lot becomes a bailee of the automobile it receives plus all personalty therein, as long as such items are normal contents of a car.

Front 5

Problem Situations: Parking Lots

Back 5

Parking a car in a parking lot may constitute the renting of parking space or it may create a bailment.

The answer will hinge on a determination of whether the owner has surrendered control over the car to the garage.

Thus, the turning over of the keys by the owner to the operator of the garage indicates the creation of a bailment.

Front 6

Problem Situations: Bathhouses

Back 6

Despite the fact that the person using the bathhouse locker does not surrender the key, the bathhouse keeper is a bailee of the clothes.

Front 7

Problem Situations: Safe Deposit Boxes

Back 7

The relationship between the proprietor of a safe deposit vault and one who rents a box is that of bailor and bailee.

Front 8

Problem Situations: Master and Servant Relationship

Back 8

The ordinary possession by a servant of her master's goods does not constitute a bailment.

Actually, the servant merely has custody of the goods.

The possession and control of the goods remain with the master.

In a bailment, the bailee has the right of possession and control of the goods, for the term of the bailment, against all the world including the bailor.

Front 9

Problem Situations: Garagekeeper

Back 9

A garagekeeper is a bailee for hire

Front 10

Problem Situations: Warehouses

Back 10

A warehouseman may limit the amount of his liability in case of loss or damage to stored goods (but not for conversion to his own use) by including a limitation provision in the warehouse receipt or storage agreement.

On the other hand, the bailor may request in writing that the warehouseman increase the amount of his liability, but the warehouseman may then charge increased rates.

Front 11

Problem Situations: Checkroom Deposit

Back 11

NY law limits recovery by a patron who sues for negligence to:

1. The value of the coat if negligence is shown, AND a fee is charged for checking the coat, AND a value in excess of 200 dollars is declared AND a written receipt stating the value is issued when the coat is given to the checkroom attendant;

2. 300 dollars if a value in excess of 200 is declared and the other conditions are met, but negligence cannot be shown; and

3. 200 dollars if no fee or charge is exacted or a value in excess of 200 dollars is not declared and a written receipt is obtained when the coat is declared.

To so limit recovery, the owners of hotels, motels, or inns must conspicuously post copies of the statute.

The posting requirement does not apply to restaurant owners.

The above statutory provisions do not apply when the customer sues for theft by the owner or owner's employees.

Front 12

Problem Situations: Restaurateurs

Back 12

Restaurateurs are not liable for coats on hooks near a guest's seat.

Front 13

Problem Situations: Storekeeper

Back 13

A storekeeper is a bailee of articles necessarily laid aside (e.g., old coat is put aside while trying on a new one).

Front 14

Problem Situations: Bank as Bailee

Back 14

A bank is a bailee of deposits received during the period after its closing time and the opening of its next business day.

Front 15

Problem Situations: Pledge

Back 15

A pledge is a particular type of bailment by which the bailor delivers property to the bailee to secure a debt owed by the bailor to the bailee.

Title to the property remains in the pledgor.

The property may be sold if the pledgor defaults in repayment of the underlying debt.

Unauthorized use of pledged property by the pledgee does not terminate the pledge, but an inability to restore the article when the pledgor completes payment on the debt is a conversion.

Front 16

Bailments Distinguished: Consignment

Back 16

A consignee differs from an ordinary bailee in that she is authorized to sell the goods in the ordinary course of trade.

In a true consignment for sale, the consignee is not only a bailee but also an agent of the consignor to sell the goods.

Front 17

Bailments Distinguished: Sale

Back 17

A sale involves the transfer of title to the vendee, as distinguished from a bailment, which involves merely a transfer of possession to the bailee.

In a sale, the loss of goods is sustained by the vendee because she is the owner.

In a bailment, the loss of goods falls upon the bailor because he has title.

When the identical thing delivered is to be restored in the same or an altered form, the contract is one of bailment, and the title to the property is not changed; but when there is no obligation to restore the specific article, and the receiver is at liberty to return another thing of equal value, or the money value, and the title to the property is changed, it is a sale.

A sale on approval is a bailment, the bailee having an option to purchase; a sale or return is a sale, which becomes a bailment if title is revested in the vendor by the vendee.

Front 18

Bailee's Rights: Possession

Back 18

The bailee, during the running of the bailment, has the exclusive right to possess the property in question, provided she is exercising this right according to the terms and conditions of the bailment.

The bailee may maintain an action in conversion or replevin against third parties who interfere with her possession or even against the bailor.

Unless she is a gratuitous bailee, she may replevy even as against the bailor to recover possession.

A creditor of the bailor has no greater rights than the bailor himself and no right to take the bailed goods by attachment.

Front 19

Bailee's Rights: Use

Back 19

The bailee has no right to use the item of personal property bailed, except in a manner that is expressly or impliedly agreed upon with the bailor.

Any intentional unauthorized use of the goods resulting in loss or damage renders the bailee absolutely liable to the bailor, irrespective of the question of care or negligence.

Front 20

Bailor's Rights in Bailed Goods: Actions Against Bailee

Back 20

Where, due to the wrongful act of the bailee, the goods bailed have been lost or damaged, the bailor can maintain against the bailee an action for damages for breach of contract, a tort action for damages, a conversion action, or a replevin action.

Front 21

Bailor's Rights in Bailed Goods: Actions Against Third Parties

Back 21

Where the bailment is for a definite time, a bailor cannot maintain an action in conversion or replevin during the life of the bailment against a person who converts the bailed property from the bailee, because he has neither the possession nor the right to possession.

If, by reason of a gratuitous bailment or one terminable at will, the bailor may treat the bailment as ended, he may maintain the actions for conversion or replevin against a third party.

A bailor may sue a third party who injures the bailed property for damages for injury to his reversionary interest, even though he may not maintain trover or replevin for lack of the immediate right to possession; it is immaterial whether the bailee was contributorily negligent, as the sole issue is whether the third party was negligent.

Front 22

Bailee's Duties: Duty of Care

Back 22

A bailee is not an insurer of the safety of the goods bailed, but will be liable only for failure to adhere to the standard of care imposed upon her by the nature of the bailment.

Where the bailment is for the sole benefit of the bailor, the bailee must exercise only slight diligence with respect to the goods bailed.

Where the benefit is for the sole benefit of the bailee, great diligence is required; the bailee will be liable for even slight nelgigence.

A bailor has a duty to warn a gratuitous bailee-user of known defects.

Bailments for hire and pledges are for the mutual benefit of the bailor and bailee, and in such instances, the bailee must exercise ordinary care.

Modern courts apply the ordinary care standard to all three types.

Front 23

Bailee's Duties: Burden of Proof

Back 23

When goods have been lost, destroyed, or damaged during the bailment, the burden is on the bailee to prove that the loss was caused without a breach of her duty of care.

In order to establish a prima facie case, the bailor need only show that:

1. The bailment was created;

2. He made proper demand for the return of the goods; and

3. The goods were returned in a damaged state or they were not returned at all.

Once the bailor has established his prima facie case, the burden is then upon the bailee to establish that any damage or loss resulted without a breach of her duty of care.

Front 24

Bailee's Duties: Absolute Liability

Back 24

A bailee is rendered absolutely liable (in conversion) when she departs from the terms of the bailment.

A departure from the terms of the bailment exists if the bailee removes the goods from an agreed place of storage to another without the bailor's knowledge or consent, or uses the goods for a different purpose than the one agreed upon.

When the bailee expressly agrees, or by custom or previous course of dealing impliedly agrees, to insure the goods against hazards, but fails to do so and the goods are damaged or destroyed by such hazard, the bailee is rendered absolutely liable.

Front 25

Bailee's Duties: Misdelivery

Back 25

Upon termination of the bailment, the bailee has a duty to redeliver or account for the thing bailed in its original or agreed-upon altered form.

A bailee is absolutely liable for improper delivery of bailed goods to someone other than the bailor or someone claiming under him.

An exception to the rule of absolute liability for misdelivery has been made by some courts when the bailee delivers the chattel to one holding an indispensable instrument (e.g., claim check), so long as the bailee has no notice or knowledge that the one presenting the instrument was not the bailor.

NY recognizes this exception, at least with respect to forged claim checks for automobiles in commercial parking lots.

When a bailee has notice of, or reason to know of, an adverse claim to the bailed property, the bailee will be absolutely liable for delivery to the original bailor, if he is not the true owner.

Front 26

Bailee's Duties: Limitation of Liability

Back 26

The parties may prescribe the extent of the bailee's liability by contract and may impose either a lesser or greater obligation than the law ordinarily requires.

A professional bailee may not, however, exempt herself by contract from liability created by her own negligence.

A professional bailee may, under proper circumstances, limit her liability but such limitation is not valid unless the bailor knows of and assents to the limitation.

The instrument limiting liability must be a contract.

Front 27

Bailee's Duties: Note on Limitation of Liability

Back 27

Most courts hold that a claim check does not evidence a contract between the parties, as it is not sufficient proof that the bailor actually knew of its terms.

Liability limitations on posted signs are not binding on the bailor in the absence of proof that he read the notice or by its size and location should have read the sign.

A garagekeeper housing or servicing four or more vehicles may not exempt herself from liability where injury results from her own negligence or that of her employees.

But a disclaimer of liability by one who simply leases garage space is permitted, and a disclaimer of liability by one who simply leases garage space is permitted, and a disclaimer is presumably effective where a loss occurs while a vehicle is in the custody of a garagekeeper but there is no negligence on her part.

Contracts (even baggage checks) exempting carriers entirely from liability for goods in transit are void as against public policy.

Front 28

Bailee's Duties: Nonliability for Misdelivery

Back 28

A carrier can disclaim liability for misdelivery by an explicit provision in the commercial bill of lading that represents the goods for transportation purposes.

In the absence of a notation of limited liability on the negotiable instrument, a bona fide purchaser can hold the bailee liable for misdelivery.

Front 29

Reimbursement and Compensation

Back 29

The general rule regarding reimbursement is that ordinary expenses must be borne by the bailee, and extraordinary expenses by the bailor.

In a bailment for the mutual benefit of the bailor and the bailee, the bailee is entitled to receive the agreed compensation for her services or, in the absence of such an agreement, the reasonable value of the services.

In a gratuitous bailment or one for the sole benefit of the bailor or for the sole benefit of the bailee, the bailee is entitled to no compensation.

Front 30

Termination of a Bailment

Back 30

Generally, a bailment may be terminated by agreement or by conduct of the parties.

Front 31

Constructive Bailments

Back 31

A constructive bailment is one implied by law regardless of the intent of the parties.

Once possession is assumed, the bailment is then implied in law.

Constructive bailments arise with respect to lost and mislaid property.

Front 32

Storage of Household Goods

Back 32

Before the bailment, the warehouse operator must make written disclosure to the bailor of the estimated monthly storage charge, other related charges, an inventory of the goods, and any limitations of damage provisions.

The actual charge for storage may not exceed the estimate by more than 10%.

In addition to any other right of action the bailor may have, the bailor has the right to recover up to treble damages for unlawful detention of his household goods.

Attorney's fees are also recoverable.

Front 33

Common Carriers and Innkeepers: Definitions

Back 33

A common carrier is one who, for compensation, transports goods or persons for anyone who wishes to employ her.

An innkeeper is one who provides board and lodging to transients.

Front 34

Liability: Common Carrier

Back 34

The liability of a common carrier as to passengers is limited to foreseeable negligence.

The common carrier is an insurer of goods given to her by the shipper and is liable for any loss or damage to the goods except by act of God, act of the state, act of the shipper, or inherent nature of the goods (e.g., perishable)

Front 35

Right to Sue

Back 35

Usually, the right to sue the carrier for any breach of contract is in the consignee, but where there is a violation of the Statute of Frauds, the consignor may sue for breach of the contract of carriage.

To detain goods allocated to a carrier, the plaintiff must give an undertaking in a fixed amount prescribed by the court.

If suit is not brought within one year after delivery or the date when the goods should have been delivered, the carrier is discharged from liability.

Front 36

Liability: Innkeepers

Back 36

As to guests, the liability of an innkeeper is limited to negligence and he is held to a standard of reasonable care.

He is not an insurer of the safety of a guest.

As to the property of his guests, he is an insurer and is liable for loss by burglary, theft, or negligence.

An innkeeper can limit his liability by providing a safe for his guests to keep their valuables in.

Front 37

Common Law Lien

Back 37

A common law lien is the right to possess and retain personal property that has been improved or enhanced in value by the person who claims the lien until the person claiming the property pays in full all charges attaching to the property for the improvement.

Every lien requires that:

1. A debt has arisen from services performed on the thing,

2. Title to the thing is in the debtor, and

3. Possession of the thing is in the creditor

Front 38

General Lien

Back 38

A general lien is the right to retain all of the property of another person as security for a general balance due from that person.

Front 39

Special Lien

Back 39

A special lien is the right to retain specific property of another to secure some particular claim or charge which has attached to the property retained.

Front 40

Consequence of Classification of Lien (Special or General)

Back 40

If a lienholder has a general lien and releases part of the chattels, he releases no portion of his lien and he may hold the unreleased portion until the entire lien charge is paid.

If the lien is a special lien and he releases a portion of the chattels held, he thereby waives his lien to the extent of the chattels released.

Where doubt exists, the lien is construed as special rather than general.

Front 41

Lien Given by One Not the Owner

Back 41

A lien is a proprietary interest--a qualified ownership--and in general can be created only by the owner or by someone authorized by him.

Front 42

Problems Regarding Liens: Innkeeper and Common Carrier

Back 42

The lien of the innkeeper and the common carrier is recognized by common law.

An innkeeper's lien attaches to any property brought into the inn.

A common carrier's lien attaches only to property that it receives from the property owner.

Front 43

Problems Regarding Liens: Warehouse Operator

Back 43

The lien was extended to the warehouse operator to secure him for the time and labor expended upon the chattel and for his storage charges.

Its status under the NY Constitution is uncertain.

Front 44

Problems Regarding Liens: NY Constitutional Law

Back 44

The NY Constitution has been held to prohibit the ex parte sale of property to satisfy the lien of a garagekeeper.

Front 45

Waiver of Lien: By Contract

Back 45

A lien may be waived by any contract inconsistent with the existence of the lien (e.g., one agrees to deliver the goods before payment for her services is to be made)

Front 46

Waiver of Lien: By Acceptance of Other Security

Back 46

When a lienor accepts security by payment, the security eliminates the common law lien.

Front 47

Waiver of Lien: Demand for Unlawful Charges

Back 47

Where, in her valid lien, the lienor includes amounts in excess of her lawful charges, the lien is waived.

Front 48

Waiver of Lien: Reservation of Lien or Temporary Use by Bailor

Back 48

The lien is not lost if the lienholder surrenders the goods to the bailor specially reserving her lien, or the bailor is permitted to make temporary use of the property.

Front 49

Real and Personal Property Distinctions: Real Property, Personal Property, and Leases

Back 49

Personal property is movable property and includes every kind that is not real property.

Real property may be converted into personalty by severance and vice versa by an annexation intended to be permanent.

At common law, leases of land for a term of years, no matter of what length, were classed with personal property as chattels.

By New York statute, any estate in land--including leaseholds, fixtures, and mortgages--is classified as real property

Front 50

Real and Personal Property Distinctions: Crops

Back 50

Fructus naturales (part of the land) and fructus industriales (considered personalty) are sufficiently related to the land so that a conveyance of the land includes a conveyance of the crops.

This result is based on the presumed intention of the parties: however, a contrary intent may be shown.

Even after termination of her tenancy, the former tenant may enter upon the property in order to harvest and remove crops planted by her, under the doctrine of emblements, so long as the tenancy:

1. Was for an uncertain duration, and

2. Terminated without the fault of the tenant.

Front 51

Real and Personal Property Distinctions: Fixtures

Back 51

Under the concept of fixtures, a chattel that has been annexed to real property is converted from personalty to realty.

The former chattel becomes a fixture and passes with ownership of the land.

Front 52

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy

Back 52

A thing capable of ownership but not then owned belongs to the person who acquires actual or constructive CONTROL or dominion over it and has the INTENT to assert ownership over it.

Front 53

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy: Wild Animals

Back 53

Wild animals in their natural state are unowned.

They become private property upon being reduced to possession.

The first person who exercises dominion and control over the wild animals becomes, with possession, the owner of it.

Ownership continues so long as possession is maintained.

Front 54

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy: Wild Animals: Constructive Possession

Back 54

The concept of constructive possession will be applicable where one has set traps or nets, or where a hunter has mortally wounded an animal and is in pursuit so that actual possession is inevitable.

If a wild animal escapes and resumes its natural liberty, title is lost.

Exceptions exist where an animal has a habit of return or where an animal is marked and the owner exercises all possible efforts to pursue and recapture the animal.

Front 55

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy: Wild Animals: Trespass

Back 55

While a landowner is not regarded as the owner of all wild animals found on her property, a trespasser who kills game on another's land forfeits his title in favor of the landowner.

One who violates a statute forfeits his title in animals caught pursuant thereto.

Front 56

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy: Tortious Conversion

Back 56

Tortious conversion of personal property does not deprive the true owner of her title.

Moreover, one who does not have title to goods cannot pass title even to a bona fide purchaser.

Exceptions: A bona fide purchaser can obtain good title from one without title where:

1. Money or a negotiable instrument is transferred;

2. The owner of goods, induced by fraud or misrepresentation, sells the goods to the defrauder intending to transfer title to them, and the defrauder subsequently sells the goods to the bona fide purchaser; or

3. The owner of goods has expressly or impliedly represented that the possessor of the goods is the owner or has authority to sell them, and the bona fide purchaser has relied in good faith upon the representations.

Front 57

Acquisition and Loss of Right or Title to Personal Property: Ownership by Occupancy: Tortious Conversion: Burden

Back 57

One attempting to divest another of personal property has the burden of showing title and the right to do so.

Possession plus a claim of title is prima facie evidence of title and ownership.

Front 58

Lost, Mislaid, and Abandoned Property: The Concept

Back 58

The fact that the owner has either lost or mislaid his property does not lead to the divestiture of his title.

However, rights of possession must be decided.

Front 59

Lost Property

Back 59

Property is lost when the owner has accidentally or involuntarily parted with his possession and does not know where to find it.

Front 60

Mislaid Property

Back 60

Property is mislaid when, judging from the place where found, it can reasonably be determined that it was intentionally placed there and thereafter forgotten.

Front 61

Abandoned Property

Back 61

Abandoned property is that which the owner has voluntarily relinquished all ownership of, without reference to any particular person or purpose.

It is necessary to show an intent to give up both title and possession.

Ownership of an abandoned chattel is acquired by reducing it to possession.

Title to an abandoned chattel is acquired by:

1. Actual or constructive control or dominion over the thing; and

2. An intent to assert ownership over it

Where abandoned property is held by an intermediary with no property interest in the property, the state may assume title to the property through a process called escheat.

Front 62

Finder of Lost Property: Definition

Back 62

NY law eliminates the traditional distinction between lost and mislaid property; the subject statute defines "lost" property as that either lost OR mislaid.

Abandoned property, waif, treasure trove, and other property that is "found" are PRESUMED to be "lost property" unless the presumption is challenged in an action or proceeding commenced within 6 months from the finding.

Front 63

Finder of Lost Property: Property with Value under 20 Dollars

Back 63

A finder of lost property of less than 20 Dollars in value must make a reasonable effort to find the owner and restore the property to her; if unable to do so after a reasonable effort, title vests in the finder at the end of 1 year from the finding.

Front 64

Finder of Lost Property: Property with Value of 20 Dollars or More and Instruments

Back 64

A finder of an instrument or lost property with a value of 20 Dollars or more, who knows the property was lost, must, within 10 days of finding it, either return it to the owner or report the finding and deposit the property with the police.

A person in possession of premises where the property is found has a similar duty.

Front 65

Finder of Lost Property: Role of Police--When Finder Acquires Title

Back 65

The police notify all persons they have reason to believe have an interest in the property as well as the occupant or person in charge of the premises where the property was found.

The time period for which the police must hold the property is dependent upon the value of the property.

Title to lost property vests in the finder when the statutory provisions are complied with, and there are no adverse claims or all filed claims are defeated by the finder.

Front 66

Finder of Lost Property: Multiple Finders

Back 66

If several persons participate in a finding, they are joint finders with equal rights in the property found.

Front 67

Finder of Lost Property: Employees

Back 67

If a private employee is under a duty to deliver lost property to the employer, the employer is considered the finder if she notifies the police.

Front 68

Adverse Possession

Back 68

Title to personal property by adverse possession results from the running of a statute of limitations, which requires that the cause of action for recovery of the property be brought within a specified period after it accrues.

When the period has run, the party in possession has an enforceable right to possession superior to everyone, and thus becomes the true owner.

Front 69

Accession

Back 69

Accession is the addition of value to property by the expenditure of labor or the addition of new material.

A problem is presented when one other than the owner takes a chattel and augments its value.

A WILLFUL TRESPASSER who augments the value of property cannot gain ownership rights in the chattel.

The owner of the chattel may elect to sue the trespasser for damages for conversion, or she may sue for replevin.

However, an INNOCENT TRESPASSER may acquire title interest where the property has been completely changed by the addition to the property or where the augmentation in value is so great that it would be unfair to permit the original owner to reclaim her property.

Under these two circumstances, the original owner is limited to a cause of action for damages. She may not sue in replevin because the act of accession divested the former owner of title.

Front 70

Exam Tip on Accession

Back 70

If a bar exam question asks about title to property that has undergone a great increase in value through accession after being taken from its original owner, the conclusion is likely to depend primarily on whether the trespass on the property was willful or innocent.

Front 71

Confusion

Back 71

Confusion is the intermingling of goods (e.g., fungible goods) owned by different persons in such a way that the property can no longer be distinguished.

If the amount contributed by each of the respective owners is known, the parties are tenants in common of the mass in proportion to their respective interests, regardless of whether the confusion was fraudulent or willful.

If, however, the amounts are unknown and confusion took place innocently, the owners are tenants in common equally in the mass.

If the amounts are not known and the confusion results by virtue of the wrongful or negligent act of one of the owners (or his agent, bailee, or trustee), the burden is on the wrongful commingler to identify her portion.

If she cannot do so, the entire mass belongs to the innocent owner.

Front 72

Title by Judgment: Election of Remedies

Back 72

One who destroys, misuses, misdelivers, or otherwise wrongfully deprives the owner of chattel of her possessory rights may be liable to the owner via various theories of recovery.

Replevin is an action to recover the chattel itself.

Trespass is an action to recover money damages incurred by reason of the dispossession.

Trover is an action (commonly known today under the title of conversion) in the nature of a forced sale to recover the value of the chattel along with damages for dispossession.

Front 73

Title by Judgment: Conversion

Back 73

An owner may allege conversion and sue the wrongdoer in trover.

If the action of trover is elected, title passes in favor of the defendant.

The plaintiff, however, may pursue her election and use the various remedies described, and the right of election is not barred until the judgment is satisfied.

When satisfaction of the judgment has occurred, title to the converted property passes in favor of the defendant, and it relates back to the date of conversion.

Thus, if the property is destroyed after conversion but before satisfaction of the judgment, the loss falls on the converter.

Anyone who is in actual possession of the chattel in question or who is entitled to immediate possession of the chattel can maintain an action for conversion.

Note that where the converter sells the subject of the tort before the action is brought, the purchaser (even a bona fide purchaser) is liable as a converter.

Front 74

Inter Vivos Gift

Back 74

The donor must intend to make an immediate gift.


Do not confuse a gift and a promise to make a gift.

A gratuitous promise to make a gift in the future is not binding under contract law because it lacks consideration, but a gift, once made, is binding and cannot be withdrawn by the donor.

Front 75

Inter Vivos Gifts: Delivery

Back 75

The validity of an inter vivos gift depends on the delivery of the property to the donee.

Front 76

Inter Vivos Gifts: Delivery: Gifts of Checks or Notes

Back 76

If the donor is the drawer or maker of the check or note, the delivery is not valid the check or note is cashed.

If the donor is giving someone else's check or note, then delivery i valid when the check or note is given, even without a valid indorsement.

Front 77

Inter Vivos Gifts: Delivery: Gifts of Stock Certificates

Back 77

A stock certificate is validly delivered when given, even without indorsement.

Front 78

Inter Vivos Gifts: Delivery: Gifts Through Agent

Back 78

If the agent is the DONOR'S AGENT, the gift is not delivered until GIVEN TO THE DONEE.

If the agent is the DONEE'S AGENT, the gift is delivered when GIVEN TO THE AGENT.

If in doubt and the donee is a minor, presume the agent is the donee's agent; otherwise, the agent is presumed to be the donor's.

Front 79

Exam Tip on Gifts through Agent

Back 79

The time of effectiveness of a gift through an agent can best be remembered by considering who controls the agent.

A donor who has sent a gift via her own agent an theoretically recall the agent at the last minute; but a donor who delivers a gift to the donee's agent has no power to instruct the agent to return the gift.

Front 80

Inter Vivos Gifts: Donee's Acceptance

Back 80

Acceptance of the gift by the donee is also a critical element in a valid inter vivos transfer.

However, joint control by the putative donor and donee negates the gift.

Front 81

Inter Vivos Gifts: Gifts in Contemplation of Marriage

Back 81

Engagement gifts (e.g., an engagement ring) are made in contemplation of marriage and are conditioned upon the subsequent ceremonial marriage taking place.

If the marriage does not occur, engagement gifts must be returned regardless of who is at fault for breaking off the engagement.

Front 82

Gifts Causa Mortis

Back 82

Only personal property may be transferred as a gift causa mortis.

Delivery and acceptance must be sufficient to vest control and dominion in the donee.

Delivery to an agent does NOT complete the gift.

At the time of the gift, the donor must have an immediate and present fear of death.

However, the actual cause of death need not be the specific one the donor feared.

A gift causa mortis is revocable and is automatically revoked by the donor's recovery or by the donee's death.

Front 83

Gift Challenged as Induced by Fraud

Back 83

Fraud vitiates all contracts and generally is not presumed but must be proved by the party seeking to relieve himself from an obligation on that ground.

However, the burden is shifted and the transaction is presumed void when it is virtually certain that the parties did not deal on equal terms.

It is then incumbent upon the stronger party to show that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary, and well understood.