E. Bailments

E. Bailments

1. Definition: [§ 61] A bailment is the rightful possesion of goods by one who is not the owner. The true owner is a bailor, the person in possession a bailee. The bailee has the duty to care for the goods and deliver them to the owner as agreed.

a. Examples: A bailment arises when O leaves an appliance with an electrician for repair, checks a coat, has furniture moved by a moving company, or deposits mail in the post office. In eeach case O is a bailor. These bailments arise out of consensual arrangements of the two parties. But bailments can also arise from involuntary possession (see infra, §74).

2. Creation: [§62] To create a bailment, the alleged bailee must assume actual physical control with the intent to possess. Since a bailee has duties and liabilities, courts define “physical control” and “intent” in such a way as to carry out the expectations of the parties and to be fair. If a court thinks tthat liability would be unexpected or unfair, it can usually find that the defendant did not have “physical control” or “intent to possess.”

a.Actual physical control: [§63] To have a bailment, the bailee must take actual physical control of the object.

(1) Parking llot cases : [§64] A frequently litigated situation involing creation of a bailment involves A leaving his car in a parking lot owned by B. Is B a bailee for A (and subject to a bailee’s liability for loss or damage) ? Distinguish two types of cases:

(a) Park and lock: [§65] If A parks his own car in a lot, retains the keys, and does not deliver the car to the attendant, some older cases hold no bailment is created. Example : Parking on the common airport parking lot, where A pays when he leaves, does not create a bailment, because B has not assumed control over the car. [Wall v. Airport Parking Co. of Chicago, 244 N.E.2d 190 (III. 1969)] NNewer cases, however, hold a bailment is created in a “park and lock” parking garage. [McGlynn v. Newark Parking Authority, 432 A.2d 99 (N.J. 1981); Allen v. Hyatt Regency-Nashville Hotel, 668 S.W.2d 286 (Tenn. 1984)]

(b) Attended lots: [§66] If A leaves the keys with an attendant, who gives A ticket identifying the car for redelivery, a bailment is created. If A does not leave the keys, but B has attendants present parking other cars and able to exercise surveillance – thus ccreating expectations in A that B has accepted a duty of reasonable care – a bailment may be found even though the attendant has no physical control of the car. [Parking Management, Inc. v. Gilder, 343 A.2d 51 (D.C. 1975)]

(2) Coat cases: [§67] Another ambiguous bailment situation often arising is where a customer hangs a coat on a coat rack provided for customers in a commercial establishment. If the customer merely put her coat on the seat beside her without the knowledge of the proprietor, there is no bailment. When a coat rack is provided – and used – the proprietor has not undertaken a duty to watch it. Unless the proprietor knows that the coat is put on the rack and in some way indicates that it will be cared for, the risk of loss remains with the owner of the coat. [Theobald v. Satterthwaite, 190 P.2d 714 (Wash.1948)]

(3) Custody distinguished: [§68] Another method of avoiding bailee rights and liabilities is to find that a person had custody rather than possession. Possession is required for a bailment. Custody is where goods are handed over but the owner does not intend to relinguish the right of domination over them. A common example iis where a department store clerk hands goods to a customer for examination. The customer has custody, not possession, and is not a bailee.

(a) Servants: [§69] A servant entrusted with goods by his master is not a bailee, but a custodian. The distinction is important in criminal law. A person who feleniously takes goods from the possesion of an owners is guilty of common law larceny. A person who fraudulently converts goods in his possesion that belong to another is guilty of the statutory crime of embezzlement. Thus, if accused had possession of the goods he cannot be convicted of larceny. By saying that a servant has only custody, the law permits servants to be convicted of larceny of their master’s chanttels. [State v. Schingen, 20 Wis. 79 (1865)]

b. Intent: [§70] The bailee must have an intent to exercise physical control, and ...