Section 204

Table of Contents

Subsection 204(3)


N.E. Palmer, Bailment, Second Ed., The Law Book Co. Ltd, 1991

Bailee has a legal interest in the leased property (pp. 81-82)

A bailment gives rise to a form of property because it creates a division of interests in rem within the compass of a single chattel. The division is chronological rather than geographical; as in the case of leaseholds, a bailment divides the ownership of the res "on a plane of time" [fn 20: Lawson, Introduction to the Law of Property (2nd ed., 1982), p. 148.] The bailee obtains a legal interest in the form of possession, which is in many respects equivalent to an estate in land; and in the case of some bailments at least (such as pawns, liens and probably contracts of hire) this interest is preserved although the bailor disposes of his interest during the bailment to a third party. [fn 22: Lawson, op. cit., pp. 96-97; and see Rich v. Aldred (1705) 6 Mod. 216; 87 E.R. 968, where Lord Holt observed: "If A bails goods to C, and after gives his whole right in them to B, B cannot maintain detinue for them against C, because the special property that C acquires by the bailment was not thereby transferred to B." This statement was cited with approval in Franklin v. Neate (1844) 13 M. & W. 481 at 486; 153 E.R. 200 at 202 by Rolfe B., who went on to remark: "there does not seem to be any solid ground of distinction, in this respect, between a bailment by way of pawn and any other bailment."] The bailor retains a reversionary interest in the form of his residual or eventual right to possession, which normally (but not necessarily) exists concurrently with his ownership of the goods; and here, again, this interest is generally preserved although the bailee disposes of the goods to a third party. In the terminology of the older authorities, the bailor has the "general" and the bailee the "special" property in the subject chattel.