BAILMENT, PLEDGE and PAWN.

Relating to Moveable Property:

Bailment defined: [Sec 148]
Bailment is
1. the delivery of goods
2. by one person, called the bailer,
to another person, called the bailee
3. for some specific purpose
4. upon a contract that
- when the purpose is accomplished
- they shall be returned
or - otherwise disposed of according to the
directions of the person delivering them.
Pledge or Pawn = Bailment as Security


Parties to the Contract
In Bailment - Bailer
- Bailee

In Pledge - Pledger
- Pledgee

Pawn - Pawner
- Pawnee


A few Examples of Contract of Bailment.
Relating to Moveable Property:
A watch is given for repairs
Diamonds are given for being set in a gold ring.
In both the cases, the identical watch or the
identical diamonds set in the gold ring - should
be returned after the purpose for which they
were given has been fulfilled.
A Pawn (Pledge) of jewel/or any other moveable
property on security of which money is borrowed;
(Here, movable Property is delivered to secure
repayment of any loan taken against such property)
Cloth given to a tailor to stitch a suit to size
Goods delivered to a transport company for being
carried and delivered to the consignee are all examples
of contract of bailment.
Certain Instances which are not Bailment
When Cash is deposited in Bank Account for safe
custody,
the bank is not bound to return the identical
currency notes which are deposited;
nor can the customer question the use to which
it is put.
The only liability of the banker is to return that
amount.
The jural relationship is, therefore, not one of
Bailor and Bailee, but of debtor and creditor.
When property is deposited in Court pursuant to
an order passed by, there is no bailment because
- the delivery is not pursuant to a contract;
Where police have recovered stolen property,
the possession of that property by Government is
- not that of a Bailee;
Hire-purchase agreement is only a contract of
bailment of goods with an element of sale, which
fructifies when the option to purchase them is
exercised by the Bailee.
The Indian Contract Act deals with
the general principles underlying a contract of
Bailment, and
some special types of bailment like
Pledge and
Finder of lost goods.

Rights and Duties of Bailee.
Rights of Bailee:
1. Right to enforce the duties of Bailor.
2. Right to lien - unless there be a contract
to the contrary.
3. Right to deliver goods to one of the
Joint-owners.
4. No liability to true owner if Bailee acts
as per the directions of his Bailor.
Duties of Bailee.
1. To take care of the Goods
2. Not to make any unauthorised use of Goods
3. Not to mix his own Goods with the Bailor
4. Not to set up adverse titles
5. To account for the increase in the Goods bailed
6. To return the Identical Goods, as the situation
warrants.
Rights and Duties of Bailor.
Rights of Bailor:
1. To enforce the duties of Bailee
2. Contract voidable at his option, if Bailee
defaults
3. Right to recall Goods at any time in a
gratuitous bailment
Duties of Bailor:
1. To disclose faults in the Goods bailed
2. To pay expenses in gratuitous bailment
3. To reimburse for any loss sustained by the
Bailee

Rights & Duties of Finder of Goods.
The person who finds goods belonging to
another and takes them in to his custody is
subject to the same responsibility as the Bailee.
[Sec 71]
Thus the legal position of a finder of Goods is
the same as that of a Bailee.

Rights of Finder of Goods:
1. He can retain possession of the Goods against
everybody except the true owner
2. He is entitled to receive Compensation for the
trouble and expenses, voluntarily incurred to find
out the true owner


Rights of Finder of Goods 2

3. He may sue for specific reward where the
owner has offered any such reward

4. He has a right to sell the Goods, provided
- a) that the goods are in danger of
perishing
- b) that the goods are in losing the greater
part of its value
- c) that the lawful charges of the finder,
in respect of it, amounts to twothirds
(2/3) of its value.

Obligations of Finder of Goods:
1. He is expected to take care of the Goods
2. He should not mix his own Goods with
those found
3. He should not set up an adverse title
over the Goods
4. He is duty-bound to account for any
increase in the Goods
5. He should return Goods when demanded
6. He is duty-bound to find the true owner.