Summary
holding warehouse receipt containing limitation of liability mailed 20 days after delivery of stored goods not binding
Summary of this case from Delavau v. Eastern America Trans. WareOpinion
No. 33038
Decided March 18, 1953.
Bailments — Property delivered to warehouseman for storage — No receipt then given limiting warehouseman's responsibility — Receipt thereafter sent bailor limiting warehouseman's liability — Not binding on bailor, when.
Where a person stores property with a warehouseman, the nature of which property is obvious, and at the time of the delivery of such property for storage no receipt, containing any limitation as to the value of such property or the responsibility of the warehouseman therefor, is given to the bailor, a purported warehouse receipt sent to the bailor 20 days after such delivery and containing a limitation upon the warehouseman's responsibility is not binding upon the bailor, where he is unaware of the terms of the limitation and has not assented to them, and there is no evidence as to the whereabouts of the property at the time the purported warehouse receipt is issued. ( Central Warehouse Co. v. Pickering, 114 Ohio St. 76, distinguished.)
APPEAL from the Court of Appeals for Franklin county.
On March 3, 1950, appellant herein, Grain Dealers National Fire Insurance Company, hereinafter designated plaintiff, instituted an action in the Court of Common Pleas of Franklin County against appellee herein, The Union Company, hereinafter designated defendant.
In its petition plaintiff says that it is an Ohio corporation, and that defendant is an Ohio corporation engaged in the business of, inter alia, receiving furs, fur coats and other garments for cleaning and other services.
Plaintiff alleges further that on May 5, 1949, Mrs. W.T. Bentz was the owner of a certain mink fur coat of the value at least of $1,642; that on that date the coat was delivered into the possession of defendant under a contract of bailment to the effect that defendant would cause the coat to be cleaned and glazed and redelivered to Mrs. Bentz when the work was performed, or as soon thereafter as reasonably practicable; and that Mrs. Bentz agreed to pay therefor a consideration of $8.50, plus storage charges, upon redelivery of the coat.
Plaintiff alleges further that on October 17, 1949, Mrs. Bentz demanded the return of the coat from defendant; that defendant failed to redeliver such coat to Mrs. Bentz; that defendant has ever since failed to redeliver such property; and that Mrs. Bentz has fully performed all the conditions of the contract of bailment by her to be performed.
Plaintiff alleges further that, prior to delivery of the coat to defendant, plaintiff had insured the coat against loss or damage; that it has paid to Mrs. Bentz, under its policy of insurance, the sum of $1,642; and that by virtue of such payment plaintiff, as assignee of Mrs. Bentz, became subrogated to the extent of such payment.
As a second cause of action, there is alleged a conversion of the property by reason of its being sent outside of Ohio for cleaning.
Defendant filed an answer alleging that on or about May 5, 1949, it received from Mrs. Bentz a certain fur coat pursuant to a contract of bailment wherein it was agreed that the value of the coat was $100; that the liability of defendant for the loss of or damage to such coat should be limited to such amount; that the consideration agreed to be paid by Mrs. Bentz to defendant under such contract was fixed and agreed to by defendant on the basis of such limitation of its liability; and that the loss of the coat was without fault on its part.
Plaintiff filed a reply in which it denies that the consideration agreed to be paid by Mrs. Bentz to defendant was based upon the limitation of liability and alleges affirmatively that no limitation of liability was agreed to by Mrs. Bentz on or about May 5, 1949, when she surrendered possession of the coat to defendant.
The cause came on for trial before a jury. Testimony was offered by plaintiff to show the delivery of the coat, as pleaded, and Mrs. Bentz testified that three of her coats were picked up on May 5, 1949, by the Retail Merchants Delivery, admittedly the agent of defendant; that a white cardboard receipt for each coat was given her by the delivery company; and that thereafter, on or about May 25, 1949, she received by mail from defendant a so-called storage receipt for each coat. The receipt for the mink fur coat, No. 16955, was introduced in evidence and is substantially as follows:
It contains the name and address of Mrs. Bentz, the name and address of the defendant, the date of issue, and the following:
"Amount "Garment mink coat "Accepted value $100 Storage 3.00 Clean and glaze 8.50 "Has own insurance "Holl "Work authorized, subject to the terms on back hereof, which are hereby agreed to "Customer's "Signature order The Union Co. By Paul Monahan."
On the back of the storage receipt, the following printed material appears, the first two paragraphs being in heavy black type:
"Notice"The customer accepts the receipt as correct in all respects, unless the customer notifies us in writing within ten (10) days after the date of issue thereof, of any error or irregularity therein.
"It is agreed that this receipt supersedes any temporary or interim receipt given by us to the customer.
"The property described on the face hereof, we agree to take on storage and to have effected for the benefit of the customer insurance on each article listed in the receipt which shall, in terms usual to such insurance cover against loss by fire and theft for the accepted value set opposite each item, which accepted value shall also be stated to be the uimit [ sic] of our liability for any loss of or damage to said article. It is further agreed that the provisions of this receipt shall inure to the benefit of our insurance company to the same extent that they inure to the benefit of ourselves. It is also agreed that the provisions of the receipt shall not extend in kind or amount the insurance provided by our insurance policy.
"We do not hold ourselves responsible for any loss or damage caused directly or indirectly by enemy attack, by armed forces, invasion, insurrection, rebellion, revolution, civil war, usurped power or confiscation by order of any government or public authority, by an act of God or any cause beyond our control.
"It is further agreed that in case of loss or damage we are to have the option of putting the property in as good condition as when received by us; or of replacing with materials of like kind or quality; or of paying the accepted value as stated on the face of the receipt, whichever is least, but in any event not for more than the accepted value of the property. We are not responsible for deterioration, or discoloration from natural causes, or inherent vice.
"The property described on the face of the receipt will be delivered to the customer only, but it is agreed that we may at our option surrender the property to any person presenting this receipt, in which event such person shall be conclusively presumed to be the agent of the customer and delivery to such person shall be deemed a delivery to the customer.
"Storage left in our vaults after December 31st of any year will have a new receipt issued for the ensuing season upon the same basis of compensation, terms and conditions as herein provided. If the charges are unpaid after the expiration of the second season, and remain unpaid for a period of two months after request for payment is sent by registered mail to the customer's herein stated or last known address, we shall have the right to sell said property without further notice at public or private sale for our charges.
Signed
The Union Co."
The only witnesses in the case were Mrs. Bentz and Harold Jensen, comptroller and secretary of the defendant, who testified concerning the business of defendant and identified the storage receipt. The former testified that she called defendant to pick up her coats, which it did through the Retail Merchants Delivery; that in July or August defendant called her for the number of her receipt; that in September she went to defendant's place of business and requested redelivery of her coats; that defendant never redelivered the mink coat; that she instructed defendant by telephone to have her coats stored and the mink coat cleaned; that after the coats had been picked up she received a receipt for them some weeks later; that she never read any of the printed matter contained in the receipt; that she was a regular customer of defendant; and that the delivery man made no inquiries concerning the value of the coats, merely giving his identification receipts for the coats which he took.
At the end of plaintiff's case, defendant rested and moved the court to direct the jury to return a verdict for defendant on the second cause of action and on the first cause of action to direct the jury that the maximum amount for which it could return a verdict for plaintiff was $100.
Plaintiff moved the court to direct a verdict for plaintiff for $1,642, whereupon the jury was dismissed and the matter submitted to the court.
The court found for plaintiff in the sum of $100 on the first cause of action and found for defendant on the second cause of action.
A motion for new trial was overruled, and judgment was entered on the verdict.
An appeal was prosecuted to the Court of Appeals, which court affirmed the judgment of the Court of Common Pleas.
The cause is before this court upon the allowance of a motion to certify the record.
Messrs. Isaac Postlewaite, for appellant.
Messrs. Knepper, White Dempsey and Mr. Richard L. Miller, for appellee.
The Court of Appeals held that the storage receipt issued by defendant substantially complied with the Uniform Warehouse Receipts Act (Section 8457 et seq., General Code); that such receipt constituted a contract between Mrs. Bentz and defendant, without an express assent by Mrs. Bentz to the limitation of liability therein contained; and that the liability of defendant was limited to the stated value, namely $100.
Some of the statutes covering the issuance of warehouse receipts in Ohio are:
Section 8457. "Warehouse receipts may be issued by any warehouseman."
Section 8458. "Warehouse receipts need not be in a particular form, but every such receipt must embody within its written or printed terms:
"1. The location of the warehouse where the goods are stored.
"2. The date of issue of the receipt.
"3. The consecutive number of the receipt.
"4. A statement whether the goods received will be delivered to the bearer, to a specified person, or to a specified person or his order.
"5. The rate of storage charges.
"6. A description of the goods or of the packages containing them.
"7. The signature of the warehouseman, which may be made by his authorized agent.
"8. If the receipt is issued for goods of which the warehouseman is owner, either solely or jointly or in common with others, the fact of such ownership, and
"9. A statement of the amount of advances made and of liabilities incurred for which the warehouseman claims a lien. * * *"
Section 8459. "A warehouseman may insert in a receipt, issued by him, any other terms and conditions, provided that such terms and conditions shall not:
"1. Be contrary to the provisions of this chapter. (Sections 8457 to 8509, General Code.)
"2. In any wise impair his obligation to exercise that degree of care in the safekeeping of the goods entrusted to him which a reasonably careful man would exercise in regard to similar goods of his own."
Section 8463 provides that a nonnegotiable receipt shall have plainly placed upon its face by the warehouseman issuing it the words, "nonnegotiable" or "not negotiable," and where that is not done a purchaser of the receipt for value thinking it negotiable may treat it as such.
Section 8464 provides that a warehouseman, in the absence of some lawful excuse, is bound to deliver the goods upon demand provided the holder of the receipt offers to pay the warehouseman's charges and surrender the receipt.
It is argued by plaintiff that the receipt in the instant case, which is not designated a warehouse receipt, does not substantially comply with the warehouse-receipts statutes, and that, because services were to be performed in cleaning the fur coat in connection with the storage, defendant was not thereby a warehouseman, even though it did issue a receipt.
The receipt given by defendant and the terms printed on the back thereof indicate that, as to the fur coat involved in this case, storage was the primary purpose of the bailment.
The courts below relied upon the decision of this court in the case of Central Storage Warehouse Co. v. Pickering, 114 Ohio St. 76, 151 N.E. 39.
In that case Pickering stored with a warehouse company a bundle of rugs worth $200 and at the time the goods were stored was given a warehouse receipt, so designated, which limited the liability of the warehouse company to $25.
The warehouse company was not advised as to the contents of the bundle, at the time it was delivered in storage, or of its value. Pickering's attention was not called to the paragraph in the receipt which limited the liability of the warehouse company to $25.
This court, in the syllabus, held as follows:
"1. By virtue of the provisions of Sections 8457, 8458, and 8459, General Code, a warehouseman's receipt in compliance with those sections issued for goods stored, becomes a contract between the parties, and the person receiving and holding such receipt, even though he does not sign the same or otherwise expressly assent to its terms and conditions, is chargeable with knowledge of such terms and conditions, and is bound by the same, provided the same be not contrary to the provisions of those sections and other related sections, and further provided that such terms and conditions do not in any wise impair the obligation of the warehouseman `to exercise that degree of care in the safekeeping of the goods entrusted to him which a reasonably careful man would exercise in regard to similar goods of his own.'
"2. Terms and conditions in a warehouse receipt and contract, which limit the responsibility of the warehouseman for any article or package listed on such receipt while in such warehouse or being carted to or from the same by it to the sum of $25, unless the value thereof is made known at the time of storing, noted on such receipt, and the payment of a higher storage therefor, do not constitute an exemption from liability for want of due care, but constitute a reasonable and enforceable method of fixing a due proportion between the amount for which the warehouseman becomes responsible and the charges collected by him, and for protecting the warehouseman against extravagant valuations in case of loss."
The judgment in the Pickering case was concurred in by four judges, two judges remaining silent and one judge writing a vigorous dissenting opinion. The dissenting opinion states that a simple insertion in a warehouse receipt as to a limitation of value does not constitute a contract, where such insertion is not assented to by the bailor; and that the provisions of Section 8459, General Code, authorizing but not compelling a warehouseman to insert other terms and conditions in a receipt do not constitute such terms and conditions a contract with the bailor unless they are brought to his attention and he has assented thereto.
The dissenting opinion states further:
"* * * the warehouseman never told the plaintiff or his agent, so far as the evidence discloses, that there was any term in this contract of bailment with regard to valuation of goods in a parcel at higher than $25. The plaintiff was entitled to accept the receipt for what it purported to be, namely, a paper evidencing his title to the goods stored and evidencing his payment of the required storage fees, and is not rightfully bound by this term, of which he was not apprised."
Assuming that the receipt in the present case substantially complies with the warehouse-receipts statutes, there is one vital difference between the facts of the Pickering case and those in the present one, and that is the time which elapsed between the delivery of Mrs. Bentz's coat to defendant and the date of the receipt which defendant sent to her.
In the Pickering case, at page 79, it is stated that the receipt in that case was delivered to Pickering at the time the goods were stored, whereas in the present case the fur coat was delivered to the defendant for cleaning and storage on May 5, 1949, but the receipt issued by defendant was dated May 25, 1949, 20 days later, and sent through the mail to Mrs. Bentz who had never signed or read it. There is a complete absence of evidence that the terms of the receipt containing the so-called limitation of liability were ever called to her attention.
In the Pickering case, this court held that under the Warehouse Receipts Act a limitation of liability in a receipt which is delivered at the time of the storage of the goods constitutes a contract.
Some of the members of this court are of the opinion that if the exact facts of the Pickering case should again come before the court the judgment therein should be re-examined, but we are of the opinion that that judgment must be confined to those facts.
In the present case the receipt, which it is alleged constituted a contract and not a mere memorandum of a previous agreement, was issued 20 days after the delivery of the coat to defendant, and, for aught that appears in the record, there is no evidence as to the whereabouts of Mrs. Bentz's coat during that time, after she handed it over to the delivery company when everything about the coat was obvious, as distinguished from the bundle in the Pickering case, the contents of which, according to the opinion, were not known to the warehouseman. In the instant case, the coat may well have been lost or damaged before the warehouse receipt was issued, and the receipt might be considered as an attempted limitation of liability with reference to property which had already disappeared.
The exact situation was presented in the case of Voyt v. Bekins Moving Storage Co., 169 Oregon, 30, 83, 119 P.2d 586, 127 P.2d 360. In that case a trunk filled with sterling silver alleged to be worth thousands of dollars was delivered to a warehouseman and a receipt containing an agreed-valuation provision was sent to the bailor about two weeks after the goods had been accepted by the warehouseman. The court held that the bailor was not bound by the warehouse receipt, for the reason that the limitation-of-liability provision was invalid in the absence of evidence that she had signed or otherwise approved the terms thereof.
The Pickering case is criticized in the Voyt case, and it is conceded that the former is not in accord with the weight of authority.
The general rule with reference to the situation presented in the present case is stated in 160 A.L.R., 1117, as follows:
"It frequently happens that a warehouse receipt containing a clause limiting the warehouseman's liability is not given to the bailor simultaneously with the acceptance of the goods by the warehouseman but is sent to him at a later time, and the question then arises whether the bailor is bound by this clause regardless of the fact that he has no actual knowledge thereof.
"Contrary to the situation where the warehouse receipt is given at the same time the goods are received (see supra, III), the question whether a bailor is bound by a limitation of liability clause which is contained in a warehouse receipt given to him after the goods have been stored with the warehouseman and of which he has no actual knowledge has been answered by the courts several times. The general rule seems to be that where at the commencement of the bailment no mention of the stipulation limiting the liability of the warehouseman is made, the contract cannot subsequently be changed by provisions in the warehouse receipt without the consent of the bailor." (Citing many cases.)
In the present case reference is made to the cases of Agricultural Ins. Co. v. Constantine, 144 Ohio St. 275, 58 N.E.2d 658, and Lumbermen's Mutual Ins. Co. v. F.Z. Cikra, Inc., 155 Ohio St. 421, 99 N.E.2d 81.
In the Constantine case, this court did not apply the Warehouse Receipts Act, the delivery of an automobile having been treated simply as a bailment and there being an attempt to exempt the bailee from all liability to the bailor.
In the Cikra case, which also involved a loss of furs, there was evidence that the furs were lost during repairs, which loss was covered in a separate contract from the one for storage, and the Warehouse Receipts Act was not applied.
Since in the present case no receipt containing a limitation of liability was given to Mrs. Bentz by defendant at the time of her storage of the goods, defendant could not, 20 days later, bind her to such a limitation of liability, where she had no knowledge of such attempted limitation and never assented thereto.
The judgment of the Court of Appeals is reversed and the cause is remanded to the Common Pleas Court for entry of judgment for plaintiff in accordance with this opinion.
Judgment reversed.
WEYGANDT, C.J., MIDDLETON, TAFT, MATTHIAS, HART and ZIMMERMAN, JJ., concur.