Business Law (part 19)

Personal Property

by

 Charles Lamson

 Intangible personal property is covered in the next couple of posts. The most personal kind of intangible personal property is your identity, and it's theft, through use of your Social Security number, bank account, or credit card number, is not only frightening, but also difficult to solve. Federal and state governments are addressing the problem through various laws and regulations. For information on this issue, visit www.consumer.gov/idtheft.

Nature of Personal Property 

Anything that may be owned is property. A person may enter into a contract with another to use property without becoming the owner of the property. The law protects not only the right to own property but also the right to use it. Property includes not only physical things but also such things as bank deposits, notes, and bonds that give the right to acquire physical property or to use such property.

Personal Property

Property is frequently classified according to its mobility. If it is movable property, it is personal property. Thus clothing, food, TVs, theater tickets, and even house trailers are personal property.

Land is not personal property, but an interest in land less than complete ownership, such as a leasehold, is normally classified as personal property.

In addition to movable physical property, personal property includes rights to money such as notes, bonds, and all written evidences of debt. Personal property is divided into two classes:

1. Tangible
2. Intangible

Tangible Personal Property

Tangible personal property is personal property that can be seen, touched, and possessed. Tangible personal property includes animals, merchandise, furniture, annual growing crops, clothing, jewelry, and similar items.

Intangible Personal Property

Intangible personal property consists of evidences of ownership of rights or value. The property itself cannot be touched or seen. Some common forms of intangible personal property include checks, stocks, contracts, copyrights, and savings account certificates.

Methods of Acquiring Personal Property

The title to personal property may be acquired by purchase, will, descent, gift, accession, confusion, and creation.

Purchase

Ownership most commonly occurs through purchase. The buyer pays the seller, and the seller conveys the property to the buyer. 

Will

The owner of property may convey title to another by will. Title does not transfer by will until the person who made the will dies and appropriate judicial proceedings have taken place.

Descent

When a person dies without leaving a will, that person dies intestate. The person's heirs acquire title to the personal property according to the laws existing in the decedent's state of residence.

Gift

A gift is the transfer made without consideration in return. The person making a gift it's called the donor. The person receiving the gift it's called the donee. In order to have a valid gift, the donor must have the intention to make the gift and there must be a delivery of the property being given to the donee. 

Accession

Accession is the acquiring of property by means of the addition of personal property of another. If materials owned by two people are combined to form one product, the person who owned the major part of the materials owns the product.

Confusion

Confusion is the mixing of the personal property of different owners so that the parts belonging to each owner cannot be identified and separated. Grain, lumber, oil, and coal are examples of the kinds of property susceptible to confusion. The property, belonging to different owners, may be mixed by common consent, by accident, or by the willful act of some wrongdoer.

When confusion of the property occurs by Common consent or by accident, each party will be deemed the owner of a proportionate part of the mass. If the confusion is willful, the title to the total mass passes to the innocent party, unless it can be clearly proven how much of the property of the one causing the confusion was mingled with that of the other person. 

Creation

One may acquire personal property by creation. This applies to inventions, paintings, musical compositions, another intellectual productions. Title to these may be obtained for a period of years through patents and copyrights.

The one who first applied for and obtains a patent gets title to the production. Creation alone does not give absolute title; it gives only the right to obtain absolute title by means of a patent, which protects the creator for 17 years. Songs, books, and other compositions fixed in any tangible medium of expression are protected by copyright from their creation. A copyright gives the owner the exclusive right to reproduce, copy, perform, or display the work or authorize another to do so. Although the copyright provides protection from the time of creation of the work, the copyright must be registered for the owner to sue for infringement. Copyrights protect authors for their lifetime plus 70 years, as of January 1st, 1978.

Lost and Abandoned Property

The difference between abandoned and lost property lies in the intention of the owner to part with title to it. Property becomes abandoned when the owner actually discards it with no intention of reclaiming it.

A person who discovers and takes possession of property that has been abandoned and that has never been reclaimed by the owner acquires a right thereto.The finder of abandoned goods has title to them and thus has an absolute right to possession. The prior owner, however, must have relinquished ownership completely. 

A number of State have enacted the uniform disposition of unclaimed property Act. This law provides that holders of property that the law presumes is abandoned must turn over the property to the state.

Property is considered to be lost when the owner, through negligence or accident, unintentionally leaves it somewhere.

The finder of lost property has a right of possession against all but the true owner as long as the finder has not committed a wrong of some kind. No right of possession exists against the true owner except in instances when the owner cannot be found through reasonable diligence on the part of the finder and certain statutory requirements are fulfilled.

In a few cases the courts have held that if any employee finds property and the course of employment, the property belongs to the employer. Also, if property is mislaid, not lost, then the owner of the premises has first claim against all but the true owner. This especially applies to property left on trains, airplanes, and restaurants, and in hotels.  

*SOURCE: LAW FOR BUSINESS, 15TH ED., 2005, JANET E. ASHCROFT, J.D.., PGS. 149-155*

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