Bailment - Law of Contracts II - Notes
- Essentials of
Bailment
- Delivery of
Possession
- Delivery
should be upon contract
- Delivery
should be upon some purpose
- Delivery of
Possession - Custody without possession is not bailment. Waiter
takes coat at restaurant and then coat is missing. Here possession hence
bailment. - Ultzen v. Nicolls
- Lady kept
jewellery in a box at defendant's place but kept the key of the box with her
possession not given no bailment. - Kaliaperumal
v. Vishalakshi Similarly bank
lockers also do not fall within the ambit of bailment.
- Actual
possession is physical transfer of goods. Constructive possession is when there
is no change in physical delivery but something is done by the bailor so as to
put the goods in possession of bailee.
- Case involving
insurance claim, where in case of an accident car had to be delivered to
nearest garage for repairs. Later on car caught fire and this delivery was held
sufficient to constitute insurance company as bailee and the garage keeper as
sub bailee. - N.R. Srinivasa Iyer v. New
India Insurance Co.
- Delivery
should be upon contract - Person's ornament got stolen later on
police recover it and it gets stolen from them. Held no bailment as there was
no contract. - Ram Gulam v. Govt. of U.P.
- The above
stated view has been changed later on and it has been held that bailment can
arise without an enforceable contract. - State of
Gujarat v. Memon Mahomed
- Delivery
should be upon some purpose - Bailment is to be for some purpose
and is subject to the condition that when purpose is accomplished goods will be
returned to bailor or disposed of as per his mandate. - R. v. Ashwel
- Plaintiff gave
several promissory notes and asked defendant's servants to consolidate them
into one single note. The servants lost the notes and he sued them as bailee.
Court held since notes were not to be retuned no bailment. - Secy. of State v. Sheo Singh Rai
- Similarly
deposit with bank is not bailment as not same note and coins are to be
returned. - U.O.I. v. K.V. Venugopalan
- In sale
ownership is transferred and buyer is not compelled to return good. In case of
soft drink bottle where terms stipulates that
buyer will get money back on return of bottle then it is sale as buyer
may not return the bottle.
- Bailor has
duty to tell bailee of any possible condition which put him at risk. If goods damage then even if he is unaware he
is liable however he is not liable for all damages but which could care and
skill can guard against.
- The burden of
proof is on bailee to show that he was not negligent.
- If bailee's
own goods are lost along with that of bailor then its not a valid excuse for
showing reasonable care except when bailor knows of bailee's negligent conduct.
- Lakshmidas v. Megh Raj
- Involuntary
bailee is a person who comes into possession of something without his consent.
He is not liable for any loss if he has taken reasonable care of goods.
- Even if a clause
in contract absolve bailee from his liability even if he has not taken
reasonable care then that clause is valid as per §151 and §152 could only mean
to take even higher duty of care and not below.
- §154 - Provides that bailee must only use goods for
purpose allowed to him by the bailor and if he uses them in other way then he
is liable absolutely and even act of god won't be a defence.
- §155 -157 -
Bailee must not mix his goods with that of bailor and if he does so and if the
goods are separable then he must separate them and bear the expense of
separating them or otherwise compensate the bailor.
- §161 - If
goods are not returned by bailee after completion of bailment then any loss to
goods even due to act of god will be incurred by bailee. - Prakash Road Lines v. Oriental Fire and General Insurance Co.
- §159 - If
bailor take back good lend in gratuitous bailment then if bailee suffer any
loss due to such pre-pone of bailment then bailor must pay for the same.
- §162 -
Bailment is terminated either by death of bailor or bailee.
- Bailee is not
entitled to keep goods even if bailor is not the true owner of the goods. He is
liable to return the goods to bailor and he will not be liable for conversion
while doing so.
- If bailee
return good to third person he need to show that third person had better claim
over the goods. Seizure of goods from bailee by authority of law is
permissible.
- Finder of good
is a bailee having only right to lien.
- §170 - Particular
lien could only be exercised when it improves good such as horse trainer and
not merely maintaining good such as keeping and feeding horse a stable.
- General lien
could not be applied to deposit of money as then there is no bailment. It also
does not apply to paper, security if they are kept for purpose of security or
some other purpose.
- Money could be
considered as good and lien could be used. - Mercantile Bank of India Ltd. v. Rochaldas Gidumal
- Bank could
exercise lien on joint accounts. - Syndicate
Bank v. Vijay Kumar
- If security is
deposited for one loan then it could not be used for another loan.
- Factor or
agent could only lien good that come in their possession in capacity of agency
and also they could not lien good that come in their possession for specific
purpose.
- Solicitor
forfeit their right to lien the moment they discharge themselves by misconduct
or decide not to act for client or cannot represent client such as in a case
where firm of lawyer got dissolved individual lawyer cannot lien.
- If bailor
wants to sue sub bailee then he is bound to the terms between bailee and sub
bailee.
-
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