1. A bailment is created upon delivery of possession of personal property and the acceptance of the delivery. Did a bailment occur in this case? Explain, identifying the status of the individuals involved in this case.

2. Were Harvey Johnson and the descendants responsible to the state for the $292,000 in expenditures it spent on maintaining the collection?

Colonel Charles E. Johnson (“Johnson”) was a descendent of former United States Supreme Court Justice James Iredell, Sr. and former North Carolina Governor James Iredell, Jr. Johnson owned the Collection, which consisted of various manuscripts and documents that belonged to his ancestors. In 1910, Johnson loaned the Collection to the North Carolina Historical Commission. In a letter to R.D.W. Connor, Secretary of the Historical Commission, dated 21 December 1910, Johnson stated: “You will remember that my position in this is that I have loaned [the Collection] to the State with the right of recall and repossession at any time if I see fit.” In a letter dated 23 December 1910, Connor replied to Johnson and stated that “[i]t is thoroughly understood by the North Carolina Historical Commission that the ‘Charles E. Johnson Collection’ of manuscripts deposited by you with the Commission, was deposited merely as a loan, subject to your recall at any time you may see fit.”

In 2008, Harvey Johnson, a descendent of Johnson, discovered the 1910 correspondence and brought action for declaratory judgment under the law of bailment that he and others descendants were owners of the Collection. The state raised several defenses.

Johnson’s transfer of the Collection to the Historical Commission created a bailment, which continued after his death. Ownership of the Collection, including the right to recall the Collection, properly passed to Johnson’s descendants through his will, which bequeathed all of his property to Mrs. Johnson, and subsequently through the residuary clause included in Mrs. Johnson’s will. Plaintiffs had no viable claim against the State until after the State refused to return the Collection upon Harvey Johnson’s demand in 2008. Plaintiffs timely pursued this claim, and thus, the claim was not barred by either the statute of limitations or the doctrine of laches.

JUDICIAL OPINION

CALABRIA, Judge …

Reasonableness of the Delay and Prejudice

… [T]he State asserts that plaintiffs’ delay in demanding the return of the Collection has led to a loss of evidence which has prejudiced the State. Specifically, the State notes that the original individuals who were involved in the transfer of the Collection are no longer able to provide any evidence on the terms of the transfer or the manner in which the Collection would be treated upon Johnson’s death.…

… [T]here is clear documentary evidence to establish that Johnson loaned the Collection to the Historical Commission, which includes the terms Johnson stated were to apply to the loan. The correspondence between Johnson and Connor incontrovertibly demonstrates that Johnson was loaning the Collection to the Commission with the express right to recall and repossess the Collection at any …………………..