Chapter 17: Personal Property
Context of Personal Property
Real property: Land and what is attached to it
Personal property: All property, other than land and what is attached to it
o Tangible property:
Personal property that is mobile, the value of which comes from its physical form
Legally known as chattel
o Intangible property: Personal property, value of which comes from legal rights
Includes insurance policies, accounts receivables, bank accounts, customer records, etc.
Acquisition to ownership:
o No comprehensive system for publicly registering title to personal property exists, because:
Most goods can be easily transported from one province to another
Cost of registration is not justified
Chattels are registered, because it is considered economical to protect the creditor’s right to property.
o Land is acquired through purchase or lease
o Goods are acquired by purchasing or manufacturing them
o Insurance coverage is bought by paying premiums and is described in the insurance policy which gives the
consumer the right to recover losses in specified circumstances
o Accounts receivable are created by delivering goods or services to consumers who agree to pay at a later date.
o Certain intellectual property (copyright) is owned as a result of being created. Others (trademark) are
established through use, registration, or both.
Possession without ownership
o Gaining ownership of the property of another, often with the intent that possession ultimately be returned
o Includes leasing, renting, and franchising,
Obligations arising from ownership and possession
o Owner of property bears ultimate responsibility for its protection.
o One who possesses property but does not own it, must take reasonable care and pay applicable charges for it
Depends on whether the arrangement is contractual or not.
Must be determined who will be the insurer of the property.
Rights arising from ownership and possession
o The owner of the property who is in possession of it is entitled to deal with it as she sees fit.
o Selling the property and transferring ownership and possession to the buyer.
o Leasing the property with the intent of regaining possession or selling it when the lease expires
o Using the property as security for a loan, thereby giving the lender the right to seize or sell the property if the
borrower defaults on the loan
o Transferring possession of chattels to another business for storage, repair, or transport with the corresponding
rights and regain possession.
Principles of Bailment
Bailment: Temporary transfer of possession of personal property from one person to another
o Bailor: The owner of property who transfers possession in a bailment
o Bailee: The person who receives possession in a bailment
o Includes rental, lease, delivery, transport, storage, or shipping.
o Is payment involved?
Possession of property may be transferred without payment by virtue of a loan or a free service
Bailment for value: Bailment involving payment for use of property or a service
Gratuitous bailment: Bailment that involves no payment (Ex. test driving a car) o For whose benefit is the bailment?
Bailments for value is common, in which both the bailor and the bailee benefits
Gratuitous bailments may only benefit one of the parties
Contract of a bailment usually includes: