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Property I
University of Iowa School of Law
Gallanis, Thomas P.

Property I

Professor Thomas P. Gallanis

Fall 2016


A.Finders’ Rights

Requirements for Possession

Actual power over the thing
A manifested intention to control the particular item

General Rules on Acquiring Possession by Finding Articles

RULE: An owner of property does not lose title by losing the property. Owner’s rights persist even thought the article has been lost or mislaid. However, a finder has rights superior to everyone but the true owner.

Armory v. Delamire (prior possessor wins): P. finds a jewel and takes it to D. jewler for appraisal. The jeweler refuses to give the jewel back to P. saying P. does not own it. Court held: P. is entitled to recover either the jewel or the full money value of the jewel and that the prior possessor has the superior right. NOTE: the P. was a chimney sweeper boy who found the jewel while working – does his employer have the right to the jewel? Read on.

Relativity of Title: The owner prevails over the finder, but the finder prevails over a subsequent possessor.

Clark v. Maloney: P. recovers logs, floating in a river and moored them with ropes. D. later found logs, seemingly abandoned. Court held that P.’s rights are not lost by losing the log.

Finder v. Owner of Premises: Knowledge of chattel is not required for possession. If the finder is a trespasser, the owner of the premises where the object is found prevails over the finder, even if the owner’s did not know of such chattel

Barker v. Bates: Logs wash up on P.’s property. D. steals them from P.’s land. Court held that P. had preferable right to possession over a trespasser.

Ratione Soli: “By reason of the soil.” The claim of the landowner extends to anything on the land.

South Staffordshire Water v. Sharman: P. operates a pool. D. is an employee of P. and in charge of cleaning out the pool. D. found 2 gold rings at bottom of pool. Court ruled that, where an owner of house or land invites an employee on the land for limited, specific purpose, the possession of that thing found is in the owner of the property. (Note, the employee in Armory was able to keep property – why – perhaps because the rings in Sharman were embedded and embedded property is the property of the owner)

Hannah v. Peel: P. finds brooch hidden on a window ledge inside D’s house. D. never lived in the house. D. took possession of brooch and sold it. Court ruled that P. finder could prevail. Lesson: If the owner of the house has not moved into the house (has not made it his “personal space”), the owner is not in constructive possession of the articles therein of which he is unware. Note also: The brooch was found on a window ledge (i.e. lose on the property). The brooch was not part of the property (i.e. embedded).

Law of Bona Fide Purchases: The owner of property does not lose the right to property because the property is inadvertently sold.

5. Sharman and Hannah v. Peel distinguished: In Sharman, the finder loses. But in Hannah v. Peel, the finder wins. WHY? In Sharman, the owner had control over the loqus in quo, but not in Hannah v. Peel. Thus, the D./owner in Hannah v. Peel did not satisfy the #2 condition for the establishment of possession (a manifested intention to control a particular item).

The Lost – Mislaid Distinction

Lost Property: Property the owner accidentally and casually lost (e.g. a ring slips through a hole in a pocket). Lost property goes to the finder, rather than the owner of the premises.

Bridges v. Hawkesworth: P. is in a shop and finds a lost bag of money on the floor. P. gives to D. to give to rightful owner. Owner never shows up. Court rules that property is lost. Lesson: the finder of a lost article is entitled to it as against all persons except the real owner.

Mislaid Property: Property that is intentionally placed somewhere and then forgotten. Mislaid property goes to the owner of the premises.

McAvoy v. Medina: P. finds purse on the counter in a barber shop. The purse is mislaid property, because it was assumed that it was intentionally placed on the counter and forgotten. The court ruled that the purse goes to the owner of the property; the finder has no rights. Lesson: the finder of mislaid property has no rights; the property goes to the owner of the land.

Favorite v. Miller: D./treasure hunter thought that part of a 200 year old statue of King George was on P.’s property. W/o telling P., D., w/ use of a metal detector, found statue fragment. Court ruled that D. was in error and the fragment was P’s property because 1) the D. trespassed and 2) the property was embedded.


Definition: A bailment is the transfer of the rightful possession of personal property to a person who is not its owner and for a limited purpose. The true owner is the bailor and the person in possession is the bailee. E.g. delivery of clothes to dry cleaner; delivery of film to the film processor.

Requirement for the Creation of a Bailment

possession of personal property by the bailor
delivery to the bailee
acceptance of the bailee

actual physical control
intent to possess

3. More on 2c(1) – Actual Physical Control

Allen v. Hyatt Regency – Nashville Hotel – P drove car into an attended garage that automatically dispensed with a ticket (ticket had exculpatory clause written on it), and had only one way in and out. Car was stolen. Was bailment created, even though P. never handed over his keys? The court ruled that the facts of this case were not at variance with the legal requirements of “bailment for hire” as there was an expectation of protection on the operator of the garage. LESSON: A Bailment may be found to exist in attended lot situations, even though attendant has no physical control of the car.

McGlynn v. Parking Authority of City of Newark: Facts similar to Allen, but NJ Supreme Court applies new test (which Helmholz says is departure from bailment test) in which the court looks to decide who is better situated to safeguard cars/chattel, e.g. who is better able to protect. Helmholz wary of such tests – because with this approach, open garages would also be considered bailments; and then you don’t have traditional test anymore

4. More on 2c(2) – Intent to Possess

a. Peet v. Roth Hotel: P gives hotel cashier a ring so that cashier can give it to a jewler who is going to replace a stone. The cashier/D agrees to do so, not knowing that the ring is very valuable. Court rules that a bailment had been created. LESSON: if the value of chattel is not known to the bailee, the bailee is still liable for the full cost of the item.

5. Rights and Duties of Bailee:

Duties of Bailee to Exercise Care (Helmholz says: Traditional Law of Bailment, Influenced by Roman Law)

Bailment for the sole benefit of the bailee: If the bailm

e a) a deed or instrument of gift of b) an actual delivery of the thing to the donee. INTENTION W/O DELIVERY DOES NOT EQUAL A GIFT.

Gruen v. Gruen: P. sought a declaration from the court that he is the rightful owner of a painting given to him by his now deceased father. P. conceded that he never had possession of the painting but asserted that his father made a valid gift of title, reserving a life estate for himself. Court ruled that if the donor gave donee only the title to the gift w/ no right to possession until his death, the delivery requirement is satisfied.

Helmholz Nuggets on Inter-Vivos Gifts

What is necessary for valid delivery is for the donor to part with control (to no longer retain control) – Control has to be surrendered. It could be surrendered to a trustee. RE: Gruen. Guren gave to his son remainder interest, but retained a life estate. At this time, the son owned the painting and the father was simply a life tenant.
In order to a gift to be valid, transfer of possession has to happen now – enjoyment of that gift can be later (e.g. Gruen)
Where delivery is possible, courts are likely to require actual physical delivery. What may be delivery of a Steinway piano is different then the delivery of a hershey bar.

Gifts Causa Mortis

Definition: A Gift Causa Mortis is an exception to the statute of wills which requires a witness if you wan’t to leave a testamentary gift. Why have gifts causa mortis? Helmholz says that the things that cover a gift causa mortis is limited – a gift has to be personal property. It is not likely that gifts causa mortis will be made of stock certificates. We have gifts causa mortis because Roman law had them. Note, gifts causa mortis are always subject to revocation if the donor recovers.


There Must Be Intent To Make A Gift
A Gift Must Be Personal Property
A Gift Must Be Made While The Donor Is Under The Apprehension of Imminent Death
Possession of the Property Given Must Be Delivered at The Time of The Gift to the Donee

Woo v. Smart: Two days before his death, decedent handed to P. 3 personal checks worth 100+K. The administrator of decedent’s estate filed a bill of complaint for declaratory judgment against donee, alleging the 3 checks were not effective gifts because they were not presented for payment and paid prior to decedent’s death. LESSON: The court ruled that because a check does not operate as an assignment of funds, mere delivery of a check does not place the gift beyond the donor’s power of revocation and the check simply becomes an unenforceable promise to make a gift.

Difference Between Gruen (gifts) & Woo (gifts causa mortis): A gift casua mortis requires more – it requires actual possession. The donee in Gruen had title, but not possession.