If a person finds some goods that do not belong to him, he is known as a finder of lost goods. It is his duty to make efforts to find the actual owner of the goods so that the goods can be surrendered to him. In this blog, we have discussed the legal position of a finder of lost goods.
Position of a bailee
According to the provisions of law, the legal status of the finder of lost goods under the Indian Contract Act is the same as that of the bailee, even if the contract of bailment comes into play from a contract for some specific purpose that is not the case for lost goods. In a literal sense, his position is only that of a custodian of the goods. He cannot dishonestly take it for his own use, nor can he transfer it to anybody for personal benefit. He is required by law to take proper care of the goods until the rightful owner is found. Of course, exceptions are there as to when he can sell them.
Retention of goods until compensation is received
Where the owner has offered a specific reward for the recovery of goods, the finder is entitled to that. In relation to this, the finder can sue the owner for that reward and can exercise the right of lien over the goods until that time. That is, he can retain the goods until the reward is received.
But if no such reward is offered, the finder of lost goods has a right to retain the goods in his possession until and unless he receives compensation from the real owner. The compensation is for the trouble caused and expenses incurred by him in finding the owner and in preserving the goods.
However, the finder cannot sue the real owner for such compensation. He only has a right of lien.
Ownership of goods
Except for the true owner, the ownership of goods found in a public place, vests in the finder. If someone picks lost goods from the floor of a shop, or accidentally finds banknotes of a stranger, he shall be entitled to such goods as against the whole world, except for the true owner.
Rights of a finder of lost goods
The finder of lost goods has the following rights:
1. Right of lien:
As stated earlier, the finder can retain the goods in his possession until he is paid by the owner for expenses incurred. Thus, he shall have a right of lien against the goods found. This right is available until the time the finder gets compensation for any trouble experienced and expenses incurred by him in finding the owner and preserving the goods. However, he has no right to sue the real owner for such compensation (Section 168). He can exercise his right of lien unless he receives the compensation.
2. Right to sue for reward:
In the case where the real owner has declared a reward for the recovery of goods, the finder will have a right to sue the owner for such reward(s). Until the time he receives the reward, he will hold a right of lien against the goods. That is, he can retain the goods in his possession until he gets the reward.
3. Right of sale:
In some circumstances as per Section 169, the finder of lost goods will have a right to sell the goods found by him. This right is available when:
- The owner cannot be found with reasonable diligence.
- The owner is found but he refuses to pay the lawful charges of the finder in connection with preserving the goods and finding out the owner.
- The goods are in danger of being perished or losing their value substantially.
- The lawful charges of the finder in connection with preserving the goods and finding out the owner amount to 2/3rd of the value of the goods.
Duties of a finder of lost goods
- He must take reasonable care of the goods found.
- He should not utilize the goods for his personal use.
- He should not mix the goods of the real owner with his own goods.
- It is his duty to find the real owner and to surrender the goods found. For instance, if a visitor finds a gold ring at a birthday celebration and informs the host and a few other guests about it, he has fulfilled his obligation to find the owner. He can keep the ring in the legal position of a bailee if he is unable to find the owner. The goods may also be sold if the owner cannot be found with reasonable diligence.
The obligation of a finder of goods belonging to someone else is that of a bailee. This means he must take as much care of the goods as a person of ordinary prudence would take of his own property of the same type. The finder is simply a bailee in the view of the true owner of the goods, and he is not permitted to utilize them for his own purposes. If the owner is found, the goods must be given back to him. The finder is entitled to be compensated for any expenses he may have incurred in preserving and maintaining the goods. Where a reward has been declared by the owner, the finder holds a right to sue the owner for such reward.
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