Author Name:   anubha.nliu

Indian Contract Act: person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as that of a bailee

Position Finder of Goods under Indian Contract Act

The act of placing property in the custody and control of another person usually by agreement in which the bailee is responsible for its safe keeping and return is called bailment. Examples: bonds left with the bank, autos parked in a garage, animals lodged with a kennel, or a storage facility (as long as the goods can be moved and are under the control of the custodian).

The duties and liability of a finder is treated at par with the bailee. The finder’s position, therefore, has been considered along with bailment.

As the legal provision in the Indian Contract Act in itself says that responsibility of the finder of goods would be replica of the responsibility of the finder of goods would be replica of the responsibility of a bailee in a contract of bailment.

Brief review of quasi contract
There are certain situations wherein certain persons are required to perform an obligation despite the fact that he hasn’t broken any contract nor committed any tort. For instance, a person is obligated to restore the goods left at his home, by mistake, and keep it in good condition. Such obligations are called quasi-contracts.

68 to 72 provide for five kinds of quasi-contractual obligations:
1. Supply of necessities [s.68]
2. Payment by interested persons [s.69]
3. Liability to pay for non-gratuitous acts [s.70]
4. Finder of goods [s.71]
5. Mistake of coercion [s.72]

Supply of necessities [S.68]
When necessities are supplied to a person who is incompetent of contract or to someone who is legally bound to support, the supplier is entitled to recover the price from the property of the incompetent person.

Payments by interested persons [S.69]
A person who is interested in the payment of money which another is bound by law to pay and who therefore pays it is entitled to be reimbursed by the other.

Liability for non-gratuitous act [S.70]
Section 70 creates liability to pay for the benefit of an act which the doer did not intend to do gratuitously. Where a person does something for another person not intending to do so gratuitously and such person is entitled to enjoy benefits from it. And then such a person who has used the thing has to compensate the other or restore or deliver the thing.

Finder of goods [S.71]
Section 71 lays down the responsibility of a finder of goods. The duties and liability of a finder is treated at par with the bailee. The finder’s position, therefore, has been considered along with bailment.

Mistake or coercion [S. 72]
Section 72 states that payments or delivery made under mistake or coercion must repay or return the thing delivered.

Finders are bailee
A finder of good is a bailee there of as such bound by the duty of reasonable care. He does not have the right to sue the owner for compensation for trouble and expenses voluntarily incurred by him to preserve the goods and find the owner. Early English cases disallowed not only compensation, but also right to lien for expenses. Thus where:

A finder fed a dog for 20 days and claimed 20s. for the same. The court said he would be guilty of trover if he refused to deliver unless paid for his keeping. Similarly for another case:

A quantity of timber, placed in a dock on the bank of a navigable river, being accidently loosened, was carried by the tide to a considerable distance. The defendant, finding it in that situation, voluntarily conveyed it to a place of safety.

He was held not entitled to lien on the timber for the trouble or expense, but was liable in trover for refusing to deliver.

Duties of Bailee:
1. Duty of reasonable care:
Care to be taken by bailee [s. 151]
All care as a man of ordinary prudence is to be taken by the bailee.

Uniform Standard of Care
This section lays down a uniform standard of care for “all cases of Bailment”. Originally in English law “liability in bailment was absolute. It wasno excuse for the bailee to say that the damage or failure to return was due to no fault of his own; he was liable in any case”.Thus where goods were delivered to a bailee for safe custody and he was robbed of them, the court held them liable, saying “it is the delivery which chargeth him to keep at his peril”.The first concession was given to gratuitous bailee.

In R v Viscount Hertfordthat “if money be given to one to keep generally without consideration and if the person be robbed, he is discharged”.Further in subsequent cases absolute liability was confined to carriers only and bailees owed only a duty to reasonable care.

In India, section 151 prescribes a uniform standard of care in all cases of bailment, i.e, a degree of care which a man of ordinary prudence would takeoff his own goodsof the same type and under same circumstances and if the bailee fails to do so he is held liable for loss of goods.

Bailee when not liable for loss,etc,of thing bailed [s.152]
The bailee in the absence of any special contract, is not responsible for loss, if he has taken amount of care required.

Loss by theft
Where the bailor’s goods are stolen from the custody of the bailee, he will be liable if there has been negligence on his part.

Burden of Proof
The burden of proof is on the bailee to show that he was exercising reasonable care and if he can prove this he will not be liable.If the bailee places before the court evidence to show that he had taken reasonable care to avoid damage which was reasonably foreseeable or had taken all reasonable care to avoid damage which was reasonably precautious to obviate risks which were reasonably apprehended, he would be absolved of his liability.

Loss due to act of Bailee’s servant
Where the act has been due to bailee’s servant, he would be liable if the servant ‘s act is within the scope of his employment. In Chashire v Bailey, it was said that the bailee was bound to bring reasonable care to the execution of every part of duty accepted.

Bailee’s own goods lost with those of Bailor
Where the bailee’s own goods are lost along with those of the bailor, the bailee would naturally contended that he was taking as much care of the bailor’s goods as of his own. The fact that the bailee is generally negligent with his own goods is no justification for his negligencetowards the bailee’s goods , unless the bailor is is aware is aware of his habits and, therefore, knew what to expect.Even in such cases the proper inquiry s whether proper care had been taken.

Misdelivery by Railway
Goods were delivered to an unautherised person on production of an indemnity bond which which turned out to be bogus.Date of arrival of goods and termination of transit were not available by the railway adminis tration for the purpose of showing that that neither consiger nor consignee had claimed the goods within a week of their arrival. Thus there was nothing to exonerate the railway administration of its liability.

Involuntary bailee
A person who has come into possession of a chattel through no act of his own and without his consent is an involuntary bailee.

Contract to Contractory
It is still debatable whether or not a bailee can contracthimself out of the duty prescribed by section 151, or whether a contract of bailment can exempt the bailee from his liability of negligence? The argument is built chiedly on the ground that section 152 opens with the remark:”in the absence of any special contract”.

2. Duty not to make unauthorized use:
Liability of bailee making unauthorized useof goods bailed
If the bailee makes any use of goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them.

Termination of bailment by bailee’s act inconsistent with conditions
A contract of bailment is avoidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment.

3. Duty not to mix
The bailee should maintain the separate identity of the bailor’s goods. He should not mix his own goods with those of the bailor and without his consent. If the goods are mixed with the consent with the consent of the bailor, both will have a proportionate interest in the mixture thus produced.

Effect of mixture with bailor’s consent,of his goods with bailee’s
If the bailee with the consent of the bailor, mixes the goods of the bailor with his own goods, the bailor and the bailee shall have an interest, in proportion to their respective shares in the mixture thus produced.

Effect of goods, without bailor’s consent when the goods can be separated
If the bailee, without bailor’s consent mixes his good with own’s and when the goods can be separated; the properties remain with the respective parties but the bailee is bound to bear the expense of separation and any damage arising from the mixture.

Effect if mixture, without bailor’s consent, when the goods can not be separated
If the bailee, withot the consent of the bailor, mixes the goods of the bailor with his own goods, in such a manner that it is impossible to separate the goods bailed from other goods and deliver them back, the bailor is entitled to be compensated by the bailee for the loss of the goods.

4. Duty to return
Return of goods bailed, on expiration of time or accomplishment of purpose

Is the duty of the bailee to return, or deliver according to the bailor’s direction, the goods bailed, without demand, as soon as the time for which they were bailed has expired, or the purpose for which they were bailed has been accomplished.

Bailee’s responsibility when goods are not duly returned
If by the default of the bailee, the goods are not returned, delivered or tendered in proper time he is responsible to the bailor for any loss of goods at that time.

Termination of gratuitous bailment
Where the lending of goods is gratuitous the bailor may at any time require return of goods even he lent them for a specified time or purpose.

Restoration of goods lent gratuitously
The lender of a thing may at any time require return of goods even he lent them for a specified time or purpose.But if , on the faith of such loan, the borrower has acted in such a manner that the return of the thing would cause him loss, the lender must, indemnify the borrower for the amount in which the loss so occasioned exceeds the benefit so derived.

Termination of gratuitous bailment by death
A gratuitous bailment is terminated by death of either the bailor or the bailee.

Bailment by several joint owners
If joint owners of goods bail them the bailee may deliver them back to, or according to the directions of, one joint owner without the consent of all, in the absence of any agreement to the contrary.

5. Duty not to set up jus tertii
The bailee is not entitled to set up, as against the bailor’s demand, the defence of jus tertii, that is to say ,that the goods the goods belong to a third person.

Bailee not responsilble on re-delivery to bailor without title
If the bailor has no title of goods, and the bailee in good faith, delivers them back to, or according to the directions of the bailor, the bailee is not responsible to the owner in respect of such delivery.

Right of third person claiming goods bailed
If a person other than the bailor, claims goods bailed, he may apply to the court to stop the delivery of the goods to the bailor, and to decide the title to the goods.

6. Duty to return increase
In absence of any contract to the contrary, the bailee is bound to return to the bailor natural increases or profit accruing to the goods during the period of bailment.

Bailor entitled to increase or profit from goods bailed
In absence of any contract to the contrary, the bailee is bound to deliver to the bailor, or according to his directions, any increase or profit which may have accrued from the goods bailed.

Duties of Finder of goods:
The duties and liability of a finder is treated at par with the bailee. The finder’s position, therefore, has been considered along with bailment. Sumarising the duties of finder of goods thus:
1. Duty of reasonable care
# Care to be taken by Finder of goods [s. 151]
# Finder of goods when not liable for loss, etc, of thing bailed [s.152]

2. Duty not to make unauthorized use
# Liability of Finder of goods making unauthorized use of goods bailed[s154]
# Termination of bailment by Finder of good’s act inconsistent with conditions[s153]

3. Duty not to mix
# Effect of mixture with owner’s consent, of his goods with Finder of good’s[s.155]
# Effect of goods, without owner’s consent when the goods can be separated[s.156]
# Effect if mixture, without owner’s consent, when the goods can not be separated[s167]

4. Duty to return
# Return of goods found, on expiration of time or accomplishment of purpose[s.160]
# Finder of good’s responsibility when goods are not duly returned[s.161]
# Restoration of goods lent gratuitously[s.159]
# Termination of gratuitous bailment by death[s.162]
# Bailment by several joint owners[s.165]

5. Duty not to set up jus tertii
# Finder of goods not responsilble on re-delivery to owner without title[s.166]
# Right of third person claiming goods found[s.167]


6. Duty to return increase
# Owner entitled to increase or profit from goods found[s.163]

Rights of finders
Sections 168 and 169 protect the interest of a finder in two ways.Section 168 allows the finder retain the goods against the owner until he receives compensation for trouble and expense. Further where the owner has offered a specific reward for the return of the goods lost, the finder may sue for reward and may retain the goods until he receives it.

Section 169 allows the finder to sell the goods in certain circumstances. Where a thing which is commonly the subject of sale is lost, if the owner cannot be found with reasonable diligence, or if he refuses, upon demand, to pay the lawful charges of the finder, the finder may sell the goods in the following cases:

# When the thing is in danger of perishing or losing the greater part of its value, or
# When the lawful charges of the finder, in respect of the thing found amount to two-thirds of its value.

Sections 168 and 169 (FINDER)
[s.168 ] May sue for specific reward offered.
The finder of goods has no right to sue the owner for compensation for trouble and expense voluntarily incurred to him to preserve the goods and to find out the owner; but he may retain the goods against the owner until he receives such compensation; and where the owner has offered a specific reward for the return of the goods lost, the finder may sue for reward and may retain the goods until he receives it.

[s.169]When the finder of thing commonly on sale may sell it.
When a thing which is commonly the subject of sale is lost, if the owner cannot with reasonable diligence be found, or if he refuses, upon demand, to pay the lawful charges of the finder, the finder may sell it:

Ø When the thing is in danger of perishing or losing the greater part of its value, or

Ø When the lawful charges of the finder, in respect of the thing found amount to two-thirds of its value.

Conclusion
Finder of goods is a part of quasi contract or certain relation resembling to those created by a contract. Here it would be worth noting that finder of goods has the same criteria of responsibilities and duties towards the innocent parties as given to the bailee. This is something which is mentioned in the Indian Contract Act 1872 under section 71 which reads as under:

“A person who finds goods belonging to another, and takes them into his custody, is subject to the same responsibility as that of a bailee.”

The  author can be reached at: anubhashrivastava@legalserviceindia.com

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