2.2 Bailment and Pledge

7/25/2019 2.2 Bailment and Pledge

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BAILMENT ANDPLEDGE



Meaning of a bailment

The word “Bailment” is derived from the ren!h word“Bailer”" whi!h means “to deliver”#

The word Bailment means to !hange a $ossession ofthe goods i#e to deliver% of goods from one $erson to

another for some s$e!i&! $'r$ose.

According to section 148,

“Bailment means the delivery of goods by oneperson to another for some purpose, upon a

contract, that they shall when the purpose isaccomplished, be returned or otherwisedisposed of according to the direction of theperson delivering them.”



It means that" 'nder the !ontra!t ofbailment

(ne $erson delivers goods to the other $ersonfor a s$e!i&! $'r$ose#

)hen the $'r$ose is over" the goods are to be

ret'rned to the owner The goods ma% be dis$osed of a!!ording to the

dire!tion of the owner of the goods#

In the !ontra!t of Bailment there are two $arties#

i* Bailor+ the $erson who deliver goods"ii* Bailee+ the $erson to whom the goods are

delieverd#



E,am$les

-# A delivers a $ie!e of !loth to B" a tailor"to be stit!hed into a s'it# There is a!ontra!t of bailment between A and B#

.# A sells !ertain goods to B who leavesthem in the $ossession of A# Therelationshi$ between B and A is that of

bailor and bailee#/# A lends a boo0 to B to be ret'rned after

the e,amination# There is a !ontra!t ofbailment between A and B#



1ase+ BA2A33A 4# PATIL 352 2TATE (M62(7E -899

B:s stolen ornament were re!overed b%the $oli!e" b't disa$$eared from the$oli!e !'stod%# ;eld the state was liable

be!a'se the !ontra!t of bailment wasim$lied#



7e<'isites of bailment

-# 1ontra!t+ a bailment is 's'all% !reatedb% the agreement between the bailorand the bailee# The agreement ma% be

e,$ressed or im$lied#.# Deliver% of $ossession+ A bailment

ne!essaril% involves deliver% of

$ossession of goods b% bailor to bailee#

1ase+ 4alla$er'mal vs visala0shmi -8/=

A lad% emo$l%ed a goldsmith for melting her old >eweller% andma0ing new one o't it# Ever% evening she re!evied the 'n&nished >eweler% and $'t it in to bo, 0e$t at the goldsmith $remises# 2hehowever" 0e$t the 0e% of the bo, with herself# (ne night the >eweller% was stolen from the bo,# ;eld there was no bailment asthe goldsmith had redelevered to the lad% the bailor the >ewelerbailed with him b% her#



/# or some $'r$ose+ he deliver% of thegoods from bailor to baliee m'st be forsome $'r$ose# If goods are delivered b%

mista0e to a $erson there is nobailment#

?# 7et'rn of s$e!i&! goods+E,amine whether the following !onstit'te a !ontra!t of

@Bailment: 'nder the $rovisions of the Indian !ontra!t a!t"-=9.#i# 3 $ar0s his !ar at a $ar0ing lot" lo!0s it and 0ee$s the

0e%s with himself#ii# The sei're of goods b% the !'stoms a'thorities#



1ont##

Deliver% ma% be a!t'al or !onstr'!tive#A!t'al deliver% ma% be made b%$h%si!all% handling over the goods

bailed to the bailee# )here as !onstr'!tive or s%mboli!

deliver% ma% be made b% doingsomething whi!h has the ee!t of$'tting the goods in the $ossession ofthe intended bailee or of na% a'thoriedto hold them on his behalf# E,am$le"

deliver% of 0e%s of !ar to a me!hani! of



(ther e,am$les ofbailment+

-# 2ei're of goods b% !'stom a'thorities"who after sei're are in the $osition ofa bailee#

.# A!!e$tan!e of goods b% a trans$ort!om$an% or railwa% for !arriage#

/# A!!e$tan!e of arti!les b% $ost oC!e as

a val'e $a%able $ar!el#



1lassi&!ation or t%$es ofBailments

1. ratuitous Bailment+ it is thebailment of goods witho'r an% !hargesor reward#

!. "on ratuitous bailment+ it is thebailment for some !harges or reward#

#. Bailment for the e$clusive bene%t

of a bailor.4. Bailment of mutual bene%t of both

bailor and bailee.



DTIE2 ( BAIL(71. &o disclose 'nown faults

. E,am$le+ A hires a !arriage of B# The !arriage is 'nsafe"tho'gh B is not aware of it" and is in>'red# B is re$onsibleto A for the in>'r%#

!. &o bear e$traordinary e$pense of bailment.

. E,am$le+ A leaves his !ar with B" a friend" for safe!'stod% for . months" B has to $a% 7s - $er month tothe night wat!hman for 0ee$ing a wat!h over the !ar# It isthe d't% of A to $a% B the ne!essar% e,$enses in!'rredb% B#

#. &o indemnify bailee for the loss in case ofpremature termination of gratuitous bailment.

. E,am$le+ A lends an old dis!arted bi!%!le to Bgrat'ito'sl% for three months# B in!'rs 7s# -. on itsre$airs# If A as0es for the ret'rn of the bi!%!le after onemonth" he will have to !om$ensate B for e,$ensesin!'rred b% 1 in e,!ess of the bene&t derived b% him#



1ase st'd%

A hire a carriage of B and agrees to pay Rs. 500 as hirecharges. The carriage is unsafe though B is unaware of it.A is injured and claims compensation for injuries sufferedby him. B refuses to pay. Discuss the liability of B.

• Section 50 pro!ides that if the goods are bailed for hire"the bailor is responsible for such damage" whether hewas or was not aware of the e#istence of such faults inthe goods bailed.

• Applying the abo!e pro!isions in the gi!en case B isresponsible to compensate A for the injuries sustainede!en if he was not aware of the defect in the carriage.



DTIE2 ( BAILEE

1. &o ta'e reasonable care of the goods bailed.

. E,am$le+ A entered a resta'rant for dining# ;is !oat was ta0en b% awaiter who h'ng it on a hoo0 behind A# when A rose to leave" the!oat was gone# ;eld" the $ro$rietor of the resta'rant was liable forthe loss#

!. "ot to ma'e any unauthori(ed use of goods.#. "ot to mi$ the goods bailed with his own goods.

. E,am$le+ A bails - bales of !otton mar0ed with a $arti!'lar mar0to B# B" witho't A:s !onsent" mi,es the - bales with other bales ofhis own" bearing a dierent mar0# A is entitled to have his - balesret'rned and B is bo'nd to bear all the e,$enses in!'rred in these$aration of the bales#

4. "ot to set up an adverse title

). &o return any accretion to the goods

*. &o return the goods



1ase st'd%

. Sunil deli!ered his car to $ahesh forrepairs. $ahesh completed the wor%" butdid not return the car to Sunil within

reasonable time" though Sunil repeatedlyreminded $ahesh for the return of car.&n the meantime a big fire occurred inthe neighborhood and the car was

destroyed. Decide whether $ahesh canbe held liable under the pro!isions of the&ndian 'ontract Act" ()*.



7IG;T2 ( BAIL(7

-# Enfor!ement of rights#

.# Avoidan!e of the !ontra!t

/# 7et'rn of the goods lent grat'ito'sl%

?# 1om$ensate from the wrong doer#



7IG;T2 ( BAILEE

Deliver% of goods to one of several >ointbailor of goods#

Deliver% of goods to bailor witho't title

7ight to a$$l% to !o'rt to sto$ deliver%

7ight to a!tion against tres$assers

Bailee:s lien



LA) 7ELATING T( LIEN

Lien means the right of a $erson to retain$ossession of some goods belonging to another'ntil some debt or !laim of the $erson in$ossession is satis&ed#

E,am$le+ A !om$an% agreed to garage the motor!ar of ; for / %ears" for an ann'al !harge# ; wasentitled to ta0e the !ar o't of the !om$an%:sgarage as and when she li0ed# The ann'al $a%ment

being in arrear the !om$an% detained the !ar of thegarage and !laimed a lien# ;eld" as ; was entitledto ta0e the !ar awa% as and when she $leased" the!om$an% had no lien#



T%$es of lien

1. +articular lien+ a $arti!'lar lien is onewhi!h is available to the bailee againstonl% those goods in res$e!t of whi!h he

has rendered some servi!e involvingthe e,er!ise of labo'r or s0ill#

. E,am$le+ A delivers a ro'gh diamond toB" a >eweller" to be !'t and $olished#

This is a!!ordingl% done# B is entitled toretain the &nished diamond till he $aidfor servi!es he has rendered#



T%$es of lien

!. eneral lien+ A general lien is a rightto retain all the goods or an% $ro$ert%of another 'ntil all the !laims of the

holder are satis&ed#. E,am$le+ The 1A have a general lien

against the boo0s of their !lients" whi!h!ome into their $ossession against the$rofessional fees" not $aid to them b%those !lients#



Dieren!e between $arti!'lar lien andgeneral lien

+articular lien eneral lien

This is a right availableto a bailee against onl%those goods in rs$e!t of

whi!h s0ill and labo'rhave been e,$ended b%him#

This is a right to retainan% $ro$ert% belongingto the other $art% in

res$e!t of an% $a%mentlawf'll% d'e" $rovidedthe $ro$ert% is in the$ossession of the $erson

e,er!ising the right# This is a right to retainthe goods onl% for a!harge for labo'rem$lo%ed or e,$ensesin!'rred '$on the goods#

This is a right to retainan% $ro$ert% belongingto the other $art% for ageneral balan!e ofa!!o'nt#



7ights of bailor and bailee against wrongdoer

-# 2'it against wrong doer

.# A$$ortionment of reliefs



inder of goods

A $erson who !omes b% an arti!le is notobliged to $i!0 it '$ or ta0e" !harge of it#

A $erson who &nds goods belonging to

another and ta0es them into his !'stod%is s'b>e!t to the same res$onsibilit% as abailee#



7ights of &nder of goods+

-# 7ight of lien

.# 7ight to s'e for reward#

/# 7ight to sale+

i# If the owner !annot with reasonablediligen!e be fo'nd" or

ii# If fo'nd" he ref'ses to $a% the lawf'l!harges of the &nder" or

iii# If the goods are in the danger of $erishingor of losing the greater $art% of their val'e#



(bligations of &nder ofgoods+

-# ;e m'st ta0e reasonable !are of thegoods#

.# ;e m'st not 'se the goods for his own

$'r$ose#/# ;e m'st not mi, the goods with his own

goods#

?# ;e m'st tr% to &nd o't the owner of thegoods#



Liabilit% of ;otel4ee$ers" Inn 0ee$ers"!ommon !arriers+

The liabilit% of a hotel 0ee$er or an inn0ee$er in res$e!t of goods belonging toa g'est is that of bailee of goods#

B% se!# -F-" A hotel 0ee$er sho'ld ta0eas m'!h !are of the goods as a $r'dentman wo'ld ta0e of his own goods 'ndersimilar !ir!'mstan!es#ss



Termination of bailment+

-# (n the e,$ir% of the $eriod#

.# (n the a!hievement of the ob>e!t#

/# In!onsistent 'se of goods#

?# Destr'!tion of the s'b>e!t matter#

F# Grat'ito's bailment

H# Death of the bailor or bailee#



Pledge

The bailment of goods as se!'rit% for$a%ment of a debt or $erforman!e of a$romise is !alled @Pledge:#

The bailor is" in this !ase" !alled the+ledger: or +awmor: and the bailee is !alled the @+ledgee-" or +awnee-.se! -9.*#



A Pledge is a bailment for se!'rit%#

It is a s$e!ial 0ind of bailment#

E,am$le+ If A borrows 7s . from B and

0ee$s his wat!h as se!'rit% for $a%mentof the debt" the bailment of wat!h is a$ledge#



Dieren!e between bailment and $ledge

+ledge Bailment

-# Pledge is the bailment ofgoods as a se!'rit% for the$erforman!e of a s$e!i&!

$romise" i#e# the $a%ment of adebt or $erforman!e of a$romise#

-# Bailment is for a $'r$ose ofan% 0ind#

.# B% the defa'lt b% the$awnor to re$a% the debt" the

$awnee ma%" after givingnoti!e to the $awnor" sell thegoods $ledged with him#

.# The bailee ma% eitherretain the goods or s'e for his

!harges#

/# The $awnee has no right to'se the goods $ledged with

him#

/# The bailee ma% do so if theterms of bailment so $rovide#



7ights and D'ties of Pawnor and Pawnee

ights of pawnee/

-# 7ight of retainer#

.# 7ight of retainer for s'bse<'ent advan!es#

/# 7ight to e,traordinar% e,$enses#?# 7ight against tr'e owner" when the $awnor:s

title is defe!tive#

F# Pawnee:s rights where Pawnor ma0es defa'lt

se! -9H*+i# ;e ma% &le a s'it against the $awnor '$on the

debt or $romise#

ii# ;e ma% sell the goods $ledged after giving the

$awnor a reasonable noti!e of sale#



7ights and D'ties of Pawnor and Pawnee

ights of pawnor/

-# 7ight to get ba!0 goods#

.# 7ight to redeem debt#

/# Preservation and maintenan!e of thegoods#

?# 7ights of an ordinar% debtor#



Pledge b% non owners

In the following !ases even a nonowner !an!reate a valid $ledge+

1. +ledge by mercantile agent.

!. +ledge by seller or buyer in possessionafter sale.

. E,am$le+ 2 sells - bags of wheat to B"deliver% and $a%ment of $ri!e to be made in

the ne,t three months# Before the goods aredelivered to B" 2 $ledges the goods with P whoa!ts bona&de and has no noti!e of the $riorsale# The $ledge is valid#



#. +ledge where pawnor has a limitedinterest.

. E,am$le+ &nds a $en on a road and

$ledges it with P for 7s# .# had"however" in!'rred 7s# - in getting the$en re$aired# The owner !an get the$en b% $a%ing 7s# - to P#

4. +ledge by co owner in possession.

). +ledge by person to possessionunder a voidable contrat.

2.2 Bailment and Pledge

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