finder of last goods

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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

FINDER OF LAST GOODS AND HIS RESPONSIBILITIES

SUBJECT

LAW OF CONTRACTS

NAME OF THE FACULTY

Mrs. CHLAKSHMI MADAM

Name ! "#e Ca$%&%a"e'

M.SHIREESHA

R(( N. ) Semes"er' *+-+- ) *ND SEMESTER

Year' s" YEAR

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ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to our lecturer Mrs. Lakshmi madam

who gave me the golden opportunity to do this wonderful project on the topic FIND! "F

L#$% &""D$ #ND 'I$ !$("N$I)ILI%I$* which also helped me in doing a lot of

!esearch and I came to know a+out so many new things I am really thankful to them.

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CERTIFICATE

TITLE OF SUBJECT' L#, "F -"N%!#-%$

NAME OF FACULTY' -'. L#$'MI M#D#M

I MAKKALA SHIREESHA here+y declare that this project case study'

FINDER OF LAST GOODS AND HIS RESPONSIBILITIES $u+mitted +y me is

an original work undertaken +y me. I have duly acknowledged all the sources from

which the ideas and extracts have +een taken. %he project is free from any plagiarism

issue.

(L#-/ 0ishakhapatnam.

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-ase (age num+er

)alfour vs. )alfour 44

Mulamchand v. state of Madhya (radesh >4?;9@ 7

$-! 243* #I! 4?;9 $- 4249 at 4222 per shah A

42

Mukundi vs. sara+sukh* IL!>4993@ ; #ll.34< 43

$tate of arnataka vs. $tellar -onstructions 4:

Damodara Mudailar vs. $ecretary of $tate for India 4;

0.!. $u+ramanyam v ). %hayappa* #I! 4?;; $-

4673/ >4?;4@ 7 $-! ;;7

4<

Fackle vs. $cottish imperial insurance -o* >499;@

73-h D 273>-#@

4<

Macclesfied corporation vs. &reat central !ly -o*

>4?44@ 2 ) :29 >-#@

4<

xall vs. (artridge 4<

%rustees* port trust of the )om+ay 0. premier

#utomo+iles* #.I.!. 4?94 $.-. 4?92

49

5ltBen vs. Nicols 49

aliaporumal (illai vs. 0isalakshmi 4?

alyani +reweries vs. $tate of ,est )engal 26

5nion of India vs. 5dho !am C $ons 24

Isaack vs. -lark 27

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)instead vs. )uck 27

Nicholson vs. -hapman 23

5nion of India vs. #mar singh 23

ABSTRACT

"ur society depends upon free exchange in the market place at every society. %he

interaction in the market all the times depends upon voluntary agreements +etween

individuals or other legal persons. $uch voluntarily agreements can never +ecome

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+inding without a legal contract. %he contract law is originated from the development

of common law. -ontract law is +ased on num+er of Latin principles* out of which

consensus ad idem most important which means agreement +etween them. # contract

is agreement two or more persons* creating an o+ligation +etween them to fulfill some

duties laid down specifically in the agreement. %his contract creates a legal

relationship of rights and duties on the parties.

#ll agreements are contracts if they are made +y the free consent of parties competent

to contract and o+jects lawful* some consideration. If lapse in the anyone of the

elements it will +e void. %he term contract* is defined in section 2>h@ of Indian

contract #ct 49


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property* and to take them into custody4. "nce finder accepts the responsi+ility for the

goods* his lia+ility is that of gratuitous of +ailee.

OBJECTIVES/AIMS OF THE STUDY

%he o+jective of the study is to understand and o+serve the finder of last goods duties

and o+ligation under the purview of Indian contract #ct 49


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4. Indian journal of research paripex research paper +y madhu sudhan das H

(osition of the Finder of the Lost &oods under the Indian -ontract #ct/ #n

#nalysis

CONCLUSION

Finder of goods is +ound to perform the duty like uasi contact.

-'#(%!I#%I"N/

%he project deals with the each chapter following ways.

4 chapter deals with the importance of contracts* types of contracts* introduction part

2 chapter deals with the essential elements of contract

7 chapter deals with the uasi contacts

3 chapter deals with the +ailment and +aillee and +ailor* responsi+ilities and duties of

+ailor

: chapters of deals with the finder of last goods and his responsi+ilities and section of

Indian contract #ct* 49


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saleJ. In the same way* when we leave our vehicle at a workshop for repair* we enter

into Ethe contract of )ailment etc. contracts are several types we are dealing with

different types of contracts in daily life.

ach contract creates some rights and duties upon the contracting parties. %he Indian

contract #ct deals on the contracting parties. %he o+jective arising out of a contract ishonored and that legal remedies are made availa+le to an aggrieved party against the

guilty party.

)ased on

(erformance

)ased on formation )ased on validity )ased on time 5nder the

common law

5nilateral

)ilateral

xpress -ontract/

>#ccording to

$ec.? of the #ct@

Implied -ontract

8uasiH-ontract

H -ontract

0alid -ontact G

$ec2>h@

0oida+le -ontract

$ec.2>I@

0oid

-ontract$ec.2>j@

0oid #greement

$ec.2>g@

Illegal -ontract

5nlawful -ontract

5nenforcea+le

-ontract

xecutory

xecuted

Formal

contracts

$imple

-ontracts

2) ESSENTIAL ELEMENTS OF CONTRACT

DFIN#%I"N$ "F -"N%!#-%

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$almondH defines H E-ontract is an agreement creating and defining o+ligations

+etween the parties.

,illiam #nson defines H E# legally +inding agreement made +etween two or

more persons +y which rights are acuired +y one or more to acts or for+earances

on the part of other or others.

$ir Fredrick (ollock defines G Every agreement and promise enforcea+le at law

is a contract.

'als+uryJs Laws of ngland E#n agreement made +etween two or more

persons* which is intended to +e enforcea+le at law.

$ec.2 >h@ of Indian -ontact #ct 49#@ #n #greement and >offer and acceptance@/

very promise and every set of promises* forming the consideration for each

other* is an agreement2. very -ontract is an agreement* +ut every agreement is

not a -ontract. #n agreement +ecomes a contract when the following conditions

are satisfied.

>)@ nforcea+ility at Law

$ection46 of Indian contract #ct defines the essential elements of contracts/ E#ll

agreements are contracts if they are made +y the free consent of the parties*

competent to contract* for a lawful consideration and with a lawful o+ject and are

not expressly declared to +e void.

lements/

4. #greement >section2>e@@

2. intention to create legal o+ligations7

7. -onsiderationO$ec2>d@ C $ec.2:

2 $ection 2>e@ of Indian contract #ct* 49


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3. (arties -ompetent to -ontractO$ec.44 C 42

:. Free -onsentO$ec.47H22

;. Lawful "+ject.$ec.27H76

#@ # uasiHcontract is not a real contract

>)@ It is not +ased on expenses or implied intentions of the parties

>-@ It is not +ased upon the offer and acceptance rule

>D@ It lacks one of the essentials of a valid contract i.e. consent of the parties.

>@ It does not arise from any formal agreement +ut is imposed +y law

>F@ %he right under it is availa+le against specific person>s@ and not against the

world.

>&@ # suit for its +reach may +e filed in the same way as in case of a general

contract.

N"%/ In nglish law* uasi contracts are also known as constructive contractsP

xample/ -haran pays some money to $ai +y mistake. It is actually due to !am. $ai

must refund the money to $hiva.

# uasi contract +elongs to an entirely different legal category* having

nothing to do with genuine contracts* express or implied. %hese are a

heterogeneous collection of cases having little in common that the fact one person

is entitled to recover money or property from the other in order that a just should

+e reached. $uch right does not depend upon the agreement or promise.

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# contract implied in law or a uasi contract is not a real contract or as it is

called* a consensual contract. # uasi contractual cause of action involves an

alleged promise to pay* which is purely fictitious. %he promise is imposed the

implications of law* apart and without regard to the pro+a+le intention of the

parties* and sometimes even against the clear expression of dissent. -onstructive

contracts are not true contracts at all* the essential elements of consent is a+sent.

%he expression of uasi contract is truly a misnomerO for it has little or no affinity

with contract. 8uasi contract give rise a situation where an o+ligation or duty is

cast upon the parties +y law* +ut not +y the terms of the contract to which they

have given assent.3

%he +asis of uasiHcontract lia+ility is unjust enrichment and the lia+ility arises +y

implication of law* and not out of any agreement as in the case of contract. 'ence

apparently the term uasi contract is rather misleading and is apt confusion.

#nson has written that the term E8uasi G contract is not a happy term :. $ir

Fredrick has preferred the term constructive contract; .(ollock and Mulla have

also remarked Eit is pro+a+ly +ecause is a misnomer. It will not like a formal

contract.

Distinctive features of uasi contracts.

#nson has pointed out the following three distinctive features of uasi contract.

A. R&0#" " s1m ! m$e2.

$uch a right is always a right to money* and generally* though not always to a

liuidated sum of money4?;9@ 7 $-! 243* #I! 4?;9 $- 4249 at 4222 per shah A.

:

#nson law of contract* 27rd

dition* page 26:; (rinciples of contract 7rd edition*p.:9?< #nson law of contract * 27rd edition* p:9?

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It doesnJt arise from any agreement of the parties concerned* +ut is imposed +y the

law* so that in this respect a uasiHcontract resem+les a tort.

C. R&0#"s a6a&(a4(e $(2 a0a&$s" a 3ar"&71(ar 3ers$ r 3ers$s.

It is a right which is availa+le not* like the rights protected +y the law of torts* against

the entire world* +ut against the particular person* persons only* so that in this respect*

it resem+les a contractual rights.

%he following sections of the Indian contract #ct* 49


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+e reasona+ly necessary suited to minorJs condition in life e.g. # watch or

+icycle. )ut the articles of luxury are +y no means necessaries.

xpenses of minor education* his sisterJs marriage* and expenses incurred in

funeral of minorJ parents* expenses incurred for the necessaries litigation* etc.

have generally held as necessaries. xpenses of minor marriage have also held to

+e necessaries.9

$-%I"N ;?/ # person who is interested in the payment of money which another

is +ound +y law to pay* and therefore pays it is entitled to +e reim+ursed +y the

other.

For example* ) holds land in )engal* on a lease granted +y #* the amindar. %he

revenue paya+le +y # to the government +eing in arrear* his land is advertised for

sale +y &overnment. 5nder the revenue law* the conseuences of such sale will +e

the annulment of )Js lease. )* to prevent the sale and the conseuent of his own

lease* pays the &overnment the sum due from #. # is +ound to make good to )

the amount such paid.

$-%I"N 4@ # person does lawfully anything for another person or delivers anything to

him

>2@ 'e does not intend to do so gratuitously.

>7@ $uch other person enjoys the +enefit thereofO and

>3@ $uch person is +ound to compensate the former.

Illustrations/

9 Mukundi vs. sara+sukh* IL!>4993@ ; #ll.34<

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#@ #* a tradesman* leaves goods at )Js house +y mistake. ) treats the goods as his

own. 'e is +ound to pay # for them.

)@ # saves )Js property from fire. # is not entitled to compensation from )O if*

the circumstances show that he intended to act gratuitously.

%he provisions of $ection 2@ it must +e done +y a person not intending to act gratuitously and

(3)%he person for whom the act is done must enjoy the +enefit of it.

Illustrations of section #@ #* a tradesman* leaves the goods at )Js house +y mistake. ) treats the goods at

his own. 'e +ound to pay # for them.

>)@ # saves )Js property from fire. # is not entitled to compensation from )* if the

circumstances show that he intended to act gratuitously.

Damodara Mudailar vs. $ecretary of $tate for India ? /

Facts/ a num+er of villages were irrigation waters from a tank. $ome of the

villages were under direct state tenancy* others under amindhars. %he? IL! >49?:@ 49 Mad 99

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&overnment carried out repairs to the tank for its preservatives. %he Bamindaras

also enjoyed the +enefits of the repairs.

Audgment/ they were accordingly held lia+le to make proportional contri+ution

towards the expenses of repair. %here is no intended to act as gratuitously so they

were +ound to pay the amount.

!am (ravesh (rasad vs. $tate of )ihar46 /

# high way work was allotted on emergency +asis. %he cost of work was

sanctioned +y the superintending engineer. )ut no allocation of funds was made.

%he work was completed. It was held that the state could not leave the contractor

high and dry. %he statement compensates him. %he work was not supposed to have

+een done on gratuitous +asis. %he amount as sanctioned and recommended must

+e paid. $uch a claimant should not +e compelled to go into litigation.

%echnicalities should not come in the way of su+stantive work.

%he $upreme -ourt has further held that where a contractor whose work has +een

accepted +y the other party claims compensation under an oral agreement* which

he is not a+le to prove* he would still +e entitled for compensation under section


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road and although the corporation had without success reuested the defendant to

carry out the repairs. %hey were still volunteers47. %here was no legal compulsion

on them to carry out the repairs. %he only compulsion was the damage +eing done

to the road and the expenditure made +y them in protecting the road may give

remedy under some other principles +ut not defiantly under uasiHcontract.

xall vs. (artridge43 /

'ere the plaintiff had left his carriage upon the premises in which the defendant

was living as a tenant. %he landlord lawfully seiBed all the goods on the premises

including the carriage for nonHpayment of rent and would have sold them in

execution of his claim. %he plaintiff paid the outstanding rent to +ack his carriage

and then sued for the defendant for the amount. 'e was entitled to it.

4) BAILMENT, BAILEE AND BAILOR

)ailment consists in delivery of goods i.e.* mova+le property* +y one person* who

is generally the owner thereof* to another person for some purpose.

$-%I"N 439/ # +ailment is the delivery of goods +y one person to another for

some purpose* upon a contract that they shall* when the purpose is accomplished*

+e returned or otherwise disposed of according to the directions of the persons

delivering them. %he person delivering the goods is called the +ailor. %he person

to whom they are delivered is called the +ailee.

ssential elements of )ailment/

i. Delivery of goods for some purpose.

ii. !eturn of the goods after the purpose is achieved* or their disposal

according to the +ailorJs directions.

De(&6er2 ! 0%s !r sme 31r3se'

$-%I"N 43?/

47 Macclesfied corporation vs. &reat central !ly -o* >4?44@ 2 ) :29 >-#@43 >4


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If a person assumes the custody of another personJs goods* even without any formal

agreement* this is difficult to constitute +ailment.4:

!eturn of the goods after the purpose is achieved* or their disposal according to the

+ailorJs directions.

$ince $ection


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%he goldsmith is considers as +ailee as notQ

Audgment/

%he gold smith was not lia+le* the court saying E#ny +ailment that could +e gathered

from the facts must +e taken to have come to an end as soon as the plaintiff was put in

possession of the melted gold. Delivery is necessary to constitute +ailment. %he mere

leaving of +ox in the defendantJs house* when the plaintiff herself took away the key

cannot certainly mean of the provision in section 43? so the defendant was not held

lia+le.

De(&6er2 mea$s "ra$s!er ! 3ssess&$ ! "#e 0%s !rm $e 3ers$ " a$"#er.

De(&6er2 $ee% $" 4e a7"1a(. I" ma2 sme"&mes 4e a 7$s"r17"&6e r s2m4(&7

%e(&6er2.

%he delivery of goods* in a +ailment* only for some purpose* e.g.* for safe custody* for

carriage* or repair* etc. when the purpose is accomplished* the goods are to +e

returned or otherwise disposed of according to the directions of the person delivery

them.

alyani +reweries vs. $tate of ,est )engal

49

)ailment of goods is always made for some purpose and is su+jected to the condition

that when the purpose is accomplished the goods will +e returned to the +ailor or

disposed of according to his mandate. If the person to whom the goods are delivered

is not +ound to restore them to the person delivering them or deal with them his

directions* their relationship will not +e that of +ailor and +ailee. # +ailment is also

distinguished from sale* exchange and +arter. In these transactions what is transferred

is not mere possession* +ut also ownership and* therefore* the person +uying is under

no o+ligation to return.

%he facts of the case are* in a sale of +eer +ottles* one of the terms was that the price

of the +ottles would +e refunded on the +uyer returning the +ottles. %he transaction

was held to +e a sale of the +ottles and not +ailment.

D5%I$ "F )#IL

49 #.I.!. 4??9 $.-.


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# +ailee has to o+serve the following duties.

I. Duty to take care of goods +ailed. >$ection 4:4@

II. Duty not to make unauthoriBed use of the goods. >$ection4:3@

III. Duty not to mix +ailorJs goods with his own goods. >$ection 4:: C4:; @

I0. Duty to return the goods on fulfillment of the purpose

0. Duty to deliver to the +ailor increase or profit on the goods +ailed.

5nion of India vs. 5dho !am C $ons4?

Facts/ where a part of the food grains stored at a )aileeJs were damaged +y floodsunprecedented in the history of place. $o )ailor claimed for damages.

Audgment/ #ccording $ection 4:2 of the Indian contract #ct he was not lia+le.

$ection 4:2/ )ailee when not lia+le for loss* etc* of thing +ailed. G %he +ailee* in the

a+sence of any special contract* is not responsi+le for the loss* destruction or

deterioration of the thing +ailed. If he has taken the amount of care of it descri+ed in

section 4:4. nature* uantity and +ulk of the goods +ailed* the purpose of +ailment*

facilities reasona+ly availa+le for safe custody and the like* will +e taken into account

for determining whether proper care has taken or not.

!I&'%$ "F )#IL/

I. !ight to recover necessary expenses incurred on +ailment. >$ection 4:9@

II. !ight to recover compensation from the +ailor. >$ection 4


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# person* who finds the goods +elonging to another and takes them in his custody* is

su+ject to the same responsi+ility as a +aillee.

"nce the finder of last goods +elonging to another takes the goods into his custody* he

is treated under the law as a +ailee and section $ection 4;9@

II. !ight of claiming the reward* if announced +y the owner >$ection 4;9@

III. !ight to sell the goods found >$ection 4;?@

I. R&0#" ! (&e$ 8Se7"&$ 9:

#ccording to the $ection 4;9* a finder of goods has no right to sue the owner for

trou+le and expenses voluntarily incurred +y him to preserve the goods and to find the

owner. 'e has* however* the right of particular lien in respect of those goods. 'e may

26 $ection 4;9 of Indian contract #ct* 49


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retain the goods against the owner until he receives compensation for the trou+le and

expenses voluntarily incurred +y him to preserve the goods and to find the owner.

II. R&0#" ! 7(a&m&$0 "#e re5ar%, &! a$$1$7e% 42 "#e 5$er 8Se7"&$ 9:

It has +een noted a+ove that the finder has right to retain the goods until he is paid the

compensation for the trou+le and expenses voluntarily incurred +y him to preserve the

goods and find the owner. In addition to that

III. R&0#" " se(( "#e 0%s !1$% 8Se7"&$ ;:

,hen a thing which is commonly the su+ject of sale is los* if the owner cannot with

reasona+le diligence +e found* or if he refuses* upon demand* to pay the lawful

charges of the finder* the finder many sell it.

#. ,hen the thing is in danger of perishing or losing the greater part of its value*

or

). ,hen the lawful charges of the finder* in respect of the thing found* amount to

two thirds of its value.

6) CASE LAWS RELATING TO FINER OF LAST GOODS

Isaack vs. -lark 24

# finder of goods is a +ailee thereof as much +ound +y the duty of reasona+le

care. 'e has under no higher duty that of. In that case* the court said finders of last

goods were +aileeJs. %hey have +een taken proper and reasona+le care of goods.

%he +aileeJs duty is to delivery the goods safely.

)instead vs. )uck22

Facts/ # finder fed a dog for 26 weeks and claimed for damages 2os.

Audgment/ the owner of the dog was not at all entitled to pay +ecause the finder of

lost goods does not have the right to sue the owner for compensation for trou+le and

expenses voluntarily incurred +y him to preserve goods and to find out the owner 27.

24

>4;4:@ 2 )ulstr 76;22 >4


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Nicholson vs. -hapman23

Facts/ a uantity of tim+er* placed in a dock on the +ank of a naviga+le river*

+eing accidently loosened* was carried +y the tide to a considera+le distance. %he

defendant* finding* it in that situation* voluntarily conveyed it to place of safety. In

that case* if he refused to delivery the goods unless money paid* he will +e guilty

of trover. 'e was held not entitled to lien on the tim+er for the trou+le or expense*

+ut was lia+le in trover for refusing to deliver.

%rover/ %rover is a form of lawsuit in commonHlaw countries for recovery of

damages for wrongful taking of personal property. %rover +elongs to a series of

remedies for such wrongful taking* its distinctive feature +eing recovery only for

the value of whatever was taken* not for the recovery of the property itself. arly

trover cases involved the keeping or taking of a +ailment +y the +ailee. %rover

actions freuently concerned the finding of lost property. It could also involve

cargo on ships* such as those lost at sea and later found. %rover often involved

cases in which the Rmost correctR owner could +e determined. For instance* if an

envelope of +ank notes or currency were to +e found* the court would attempt to

identify the true owner. "ften this would prove to +e impossi+le. In that case* the

finder would +e the next +est owner and +e considered the possessor. %rover cases

have +een descri+ed as RfinderJs keepers* losers weepersR

5nion of India vs. #mar singh2:

Facts/ a railway authority which took his its custody wagons containing the

plaintiffJs goods and which was left across the +order in (akistan +ecame the

contractual within the meaning of section 4


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consumed all stuff. Later owner find* they were entitled to pay one third of

amount.

ii. !aju finds raghu watch* which was very costly. 'e had taken the reasona+le

care to preserve it. "ne day the entire property of !aju was stolen +y the

%hefts* along with !aju property* raghu watch was stolen. In that case* he was

not entitled to compensate the !aghu.

iii. $haran finds a -haran missing daughter. -haran announced the priBe money

for who will +e the find his daughter. $haran finds his daughter without any

acknowledgment of notice or announcement. Later on he claimed for damages

incurred. %he owner >daughter father@ was not entitled to pay.

iv. $ai finds 0ijay purse* in that #%M cards* money* passports* some important

receipts were there. $ai finds the true owner >0ijay@* later he delivery it* +ut

passport was not there. $ai duty is to delivery the goods as )ailee.

7) CONCLUSION

%he finder of last goods is a person who finds the goods of another +ut not knowing

the true owner at that time. 'e is +ound +y the law to take appropriate care of goodsuntil the true owner is found. In literal sense* his position is a mere a custodian of the

goods. Finder of last goods is a part of uasi contract or certain relation created +y a

contract. %he finder of last goods has the same duties like +ailee. %his mentioned in

the Indian contract #ct 49


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finder of last goods

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