$270.] FOR BENEFIT OF BAILEE OR BAILOR

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care and the property is damaged thereby, he becomes liable in damages.

2. Use of Deposit. As a rule the bailee must not use the deposit. If, however, use of the chattel is necessary or beneficial, he may use it; in fact, if necessary, he must do so, e. g., to exercise a horse or milk a cow. If the use is not beneficial or necessary, he has no right to use the property.

3. Commission. This is a bailment of goods for the purpose of enabling the bailee to perform some work or benefit on the goods free of charge.

4. Care. The bailment being solely for the benefit of the bailor, only slight care is exacted of the bailee, and an injury to the property resulting from the want of slight care makes the bailee liable in damages.

The bailee is not obliged to commence or undertake such a bailment; but, having voluntarily commenced, he is accountable for a degree of skill commensurate with the value and intricacy of the labor to be performed. A offers to carry a cask of wine for B from one place to another. This is purely a gratuitous offer and there is no obligation on the part of A to do the work. If, however, he calls for and receives the cask and starts on its carriage, he is liable for any loss occasioned from improper care and lack of skill.

5. Re-Delivery. When the bailment is terminated, the bailee must return the property to the bailor. If, however, the bailor is not the lawful owner, the bailee may be directed to return the property to the one having the title. The bailee has a right to hold the property until he is reimbursed for any accidental or necessary expense coupled with the bailment. The bailee, however, had no right to retain the property in satisfaction of some other claim that he may have against the bailor.

The bailee receives the sole benefit in the loan for use. The bailment is for his personal use. A high degree of care is required of him. Any deviation from the original purpose makes him liable for all losses.

The property must be returned at the agreed time. The bailee must bear incidental expenses, but is entitled to be reimbursed by the bailor for extraordinary expenses.

In the deposit, the bailee receives the goods for safe keeping without charge, to be returned upon demand. In this, the bailor receives the whole benefit of the bailment, and only slight care is required of the bailee. Special instructions must not be disregarded, but the property may be returned at any time.

The bailee has a right to be reimbursed for expense incurred. If he fails in proper care he is liable in damages; unless use is beneficial or is necessary he must not use the article deposited.

A commission implies that the bailee will work or perform some benefit on the goods bailed, free of charge. This bailment is for the sole benefit of the bailor, and only slight care is required of the bailee. The bailee may refuse the commission, but, having accepted it, he must exercise the degree of care and skill requisite to the undertaking. He may return the property to the person having title, but has the right to hold the same until reimbursed for necessary expense, but not for some other claim against the bailor.

Describe the loan for use, the degree of care required of the bailee, and the duty of the bailor.

Define a deposit, and state the rights and duties of the bailor and

bailee.

Define a commission. State the rights and duties of the parties in a commission as regards care, re-delivery, etc.

272. Introduction. By far the greater number of bailments are of this class wherein both parties are benefited. The former classes do not represent business enterprises. Here is found the true consideration to support the bailment as it is ordinarily understood. The idea of mutuality of benefit is present and this fixes the liability of the parties. This is the most important class of bailments, and includes all business relationship whereby the contract of bailment is entered into and for which an implied or expressed remuneration is given by the bailor to the bailee as a consideration for his services. There are two classes of bailments in which mutuality of benefit is present. The bailment of pledging and the one of hiring.

273. Pledge or Pawn. This bailment is a delivery of personal property as security for the payment of a debt. It is one of the oldest kinds of bailment. The simplest illustration is where money is loaned and some chattel is given as a security that the debt will be paid at a certain time. A very similar transaction,

and one of frequent occurence is known as the giving of collateral security. In this the thing bailed is the delivery of stocks or bonds as a security for a loan. To illustrate: A goes to his banker and borrows $1000.00, delivering to the banker, bonds, the market value of which is greater than the loan. A usually gives the banker authority to sell the bonds if the debt is not paid at maturity. Out of the sale, will be deducted the debt and any additional charges.

1. Debt. From the definition and nature of the bailment it is evident that there must be a debt. The bailee may hold the pledged property until the debt and all proper charges are paid. The debt may be absolute or conditional; absolute, as in the loaning of the money; conditional, as in the obligation assumed by an indorser or surety on the part of the bailor.

2. Possession. The pledgee must have actual or constructive possession of the property, but he may make the pledgor his agent and allow him to continue in the use of the property. If the pledgee surrenders his possession to the pledgor, the bailment is at an end. The debt is not, however, thereby cancelled.

3. Duties and Rights of Pledgee. The parties are mutually benefited by the bailment—the pledgor, by being able to contract a debt the security for which is the thing bailed; the pledgee, by being secured for the amount loaned. The bailee is therefore accountable for ordinary care only. When the bailment is terminated by the payment of the debt the bailee must not only return the property bailed, but any increase by way of interest, dividends or offspring of animals. The pledgee is liable for loss occasioned by absence of proper care. The pledgor, however, must show that such loss was caused by the negligence of the pledgee. If the goods are stolen, this fact does not necessarily make the pledgee liable. The burden of proving lack of care is on the pledgor. The main right of the bailee is the right to hold the property for the payment of the debt, a right of detainer, as it is called. The debt, however, must be a legal one. If it is tainted with illegality, or if the bailment is forbidden by the law, the bailment is voidable, if not void.

$274, 275.] FOR BENEFIT OF BOTH PARTIES

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4. Rights of Pledgor. The bailor having parted with possession of the property still holds the title, which, however, is subject to the bailee's claim. His first right is to redeem by paying the debt and thereby terminating the bailment. He may sell, transfer or mortgage his title in the property, but always subject to the rights of the bailee. The purchaser acquires all the bailor's rights and may pay the debt and demand the return of the property.

The

5. Remedies. The pledgee upon default of the pledgor has a choice of several remedies: (1) He may sue the pledgor for the debt; (2) he may sell the property after proper notice has been given; (3) he may ask for a decree of foreclosure. sale must generally be public, and free from fraud. The pledgee cannot appropriate the property in satisfaction of the claim. If in the sale there is a deficit, he may sue for the balance; and if there is a surplus, it must be accounted for to the pledgor.

274. Pawnbrokers. The pawnbroker's business is regulated largely by state legislation. At common law the rights of a pawnbroker are the rights of an ordinary pledgee. The business is that of furnishing loans on personal property delivered to the pawnbroker. The pawnbroker was the forerunner of the present banker. He loaned money at interest, receiving as a security personal property. The distinction so far as loaning money is concerned is that the banker demands security in the form of notes, stocks, bonds or real estate, whereas the pawnbroker's security is generally personal chattels.

Mutuality of benefit is the main feature of bailments that embody business enterprises.

A pledge or pawn is the bailing of personal property as security for debt. The debt may be absolute or conditional, but must exist in the case of a pledge.

The pledgee must have possession, actual or constructive, of the property. The pledgee may surrender his interest in the property to the pledgor but this does not cancel the debt.

The pledgee is responsible for ordinary care.