Possession, Custody and Bailment

Possession is the actual physical control of a property, or the intent to possess exclusively a property intending to prevent others from using the property.

Possession may mean effective, physical or manual control, occupation, evidenced by some outward act, sometimes called de facto possession or detention as distinct from a legal right of possession. This is a question of fact rather than of law.

What happens when an owner of property lawfully parts with possession of the property? Two situations may arise.

In the first situation, if the owner has no intention for any other person to have exclusive control, then the other person has no rights to possess the property. This person is a custodian.

Custodian is defined as person or institution that has charge or custody of property, papers, or other valuables. Custody is defined as the care and control of a thing or person for inspection, preservation or security.

If the owner, upon parting with possession, gives full control over the property to another person, a bailment is created.

A bailment is a transaction under which property are delivered by one party (the bailor) to another party (the bailee) on terms which normally require the bailee to hold the property and ultimately to return the property to the bailor or to dispose of the property according to the bailor’s instructions.

A bailment is usually based upon a contract. Three elements are required for the creation of a bailment, namely:

  1. The bailee is to take care of the property and return it in accordance with the bailor’s instruction. The extent of the duty of care varies, depending upon whether the bailment is for payment or free.
  2. The bailee is liable for the loss or damage of the property should the bailee be negligent.
  3. The bailee cannot deny the bailor’s ownership of the property.

Thus, the bailee is given both physical and legal possession over the property but does not become the owner of the property, The bailor keeps the ownership or title to the property, and may recover possession upon the end of the bailment.


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