It’s not uncommon for people to loan out their vehicles to friends and especially family. In fact, it’s so common, most do not even realizing they are “loaning” a vehicle or that the vehicle they are driving is “borrowed” from the legal owner.
Family vehicle, but one legal owner
Take for example a husband and wife. They own a family vehicle. It just so happens that the vehicle is titled in the husband’s name only. Therefore, the husband is the legal owner.
One day, while the wife is driving the vehicle, a third-party causes a wreck and damages the vehicle. The wife is not at fault. The third-party driver is at-fault and is liable for the cost of repair.
Question: can the wife sue the driver that caused the damage? Or must the husband file the suit, since he is the legal owner of the property.
Answer: Both can file suit.
The obvious is that the husband as legal owner of the property can file suit against the driver who is liable for the damage.
But a lesser known fact is that the wife has status to file suit and seek repair costs from the person responsible for causing the damage. This is because the law considers the wife to be a bailee.
A bailee is a person in lawful possession or receipt of property, with control over the property, but to whom legal ownership does not transfer. In other words, when you borrow a vehicle from a friend, you are responsible for that vehicle and have authority to make decisions over it (whether to stop and fill up the tank) and may also take action on behalf of the owner of the vehicle (such as filing a claim with the third-party’s insurance carrier to recover damage).
“A bailee in possession of the subject matter of the bailment, even a borrower or a gratuitous bailee, may bring an action against third persons who wrongfully injure, destroy, cause the loss of, or convert the bailed property.” 9A Am.Jur.2d Bailments Sec. 211.
So there you have it. The owner of the vehicle need not be the one who files suit to recover damages (although he of course can and in some case may prefer to do so). The person who was driving the car at the time the wreck happened can go ahead and be the one who pursues the claim.
Bailee is also responsible to the Bailor
Here is another related topic. Just as the bailee has standing to sue, he also has a legal duty to take reasonable care of the property. This means that the person borrowing the car is responsible to the owner to properly care for the car while borrowing it.
This concept is especially true when the bailee is hired to work on the car.