Chapter 17 Personal property: Bailment and Insurance (Class Notes)

Chapter 17

Real Property

• Immovable

Personal property

• movable

2 types

• Tangible -- can touch ( goods, chattels)
• Intangible -- can’t touch ( untraceable)

5 ways of Acquiring personal property rights

1. by contract
2. by gift
3. by possession
4. by finding
5. by creation

Case Study # 1

Oliver is entitled to the Diamond as he never gave ownership to jeweller. He found it and therefore he acquired rights to it. He should get the Diamond.

Losing personal property rights

1. by selling
2. by leasing (temporarily)
3. If destroyed
4. By abandoning (i.e. intention to give up control) (Note:- if you lose something your rights are not extinguished)
5. By affixation to land (i.e. Fixtures)

FIXTURE – a chattel that has been sufficiently affixed, or attached, to real property

• once a chattel becomes a fixture, it belongs to owner of real property

Factors in Determining whether item is a fixture

1. Degree of Attachment
   • Higher the degree of attachment more likely it is a fixture
2. Purpose of Attachment
   • Objective intention – would a reasonable person think it was attached to become part of land (e.g. to add value) or to better use the item
3. Tenant’s Fixtures
   • Generally, commercial T can remove its trade fixtures at end of lease without doing irreparable damage provided the lease does not state otherwise

Case Study #2

Main oven is a fixture therefore it is a part of Real property. As Aust has mortgage on the real property. Leon is a owner of real property. He is in default of mortgage therefore Aust can enforce power of sale of foreclosure and can get it. Its hard to figure out if it’s a fixture or a chattel. If it’s a fixture Aust will get it, if its not a fixture it will go to Froelich. In this case it’s a fixture.