A bailment is the delivery of a personal property by a bailor to a bailee. The bailee keeps the property in trust for a specific purpose. The foundation of a bailment lies in the contract entered into between the bailor and the bailee. The agreement of the parties may be express, implied or quasi and constructive[i]. The property must be returned when the special purpose is accomplished or until the bailor reclaims it[ii].
In a suit for damages to a boat left with a person for repair or storage, the relevant law is the law of bailments. Where bailment is for the mutual benefit of the parties, the bailee is to exercise ordinary and reasonable care in protecting the boat. A bailee’s duty to protect a ship changes automatically after termination of the bailment. A bailee is liable for damage to the boat due to his/ her willful and gross negligence.
The liability of a bailee is determined in accordance with the contractual benefit arising from the bailor-bailee relation. When bailment is for mutual benefit, a bailee is to take reasonable care and caution[iii]. Thus a bailee who rented a boat from a boat livery operator should exercise ordinary and due care in the use of the boat. However, if the bailment is for the sole benefit of the bailee, the bailee is to exercise extraordinary care. When a bailment is for the sole benefit of the bailor, it is a gratuitous bailment and the bailee is only liable if he/she is guilty of gross negligence[iv].
The rights, duties, and liabilities of a bailor and a bailee must be determined from the terms of the contract between the parties, whether express or implied. Thus, a bailee is liable for loss resulting from the breach of his contract to keep the property in a particular manner or at a particular place[v]. Thus, in bailments for the sole benefit of the bailor, the bailee will be liable only for gross negligence. In bailments for the mutual benefit of both the parties, he/she will be liable for ordinary negligence. In bailments for the exclusive benefit of the bailee, he/she will be liable even for slight negligence[vi]. However, in the absence of a specific statute or an express contract, the bailee is not an insurer and is liable only for such loss or damage to the property as proximately results from his/her failure to exercise ordinary care for its safe keeping[vii].
When a bailor sues a bailee for loss of the thing bailed and charges a bailee with negligence, the question arises whether the bailor must affirmatively show negligence or whether the bailee must affirmatively show due care[viii]. According to the law of bailment, the burden of proof for establishing negligence rests on on the bailor and remains with him/her throughout the trial. A plaintiff makes out a prima facie case by offering proof that the property was left in the possession of a bailee and the property was not returned. The burden shifts to the bailee, when he/she alleges that damages was caused to bailees property. It is necessary for a bailee to explain that he/she cared for the property. The bailee should also explain the circumstances under which he/she failed to return the property[ix]. A prima facie presumption of negligence on the bailee’s part arises from the bailor’s proof that the bailed article was delivered in good condition and was returned damaged or not returned at all[x]. The presumption does not cast upon the bailee the ultimate burden of proving how the damage occurred. It is a rebuttable presumption. The burden of proceeding with the evidence shifts to bailee and the bailee may rebut the presumption in two ways:
- By showing how the disaster in fact occurred and that the damage in no way is attributable to his/her negligence;, or
- He/she exercised requisite care with respect to the bailed article[xi].
Liability for negligence is based upon conduct involving unreasonable risk to another. Negligence must be established by affirmative evidence tending to show that such the conduct exercised fell below the standard represented by the conduct of reasonable men under same or similar circumstances. In circumstances where loss or damage resulted from fire, theft or disappearance, storm, sinking, or fall, liability has been imposed on the operator of a marina or boatyard for loss of or damage to a pleasure boat left for storage or repairs.
[i] Adair v. Roberts, 276 S.W.2d 565 (Tex. Civ. App. Texarkana 1955)
[ii] Weinberg v. Wayco Petroleum Co., 402 S.W.2d 597, 599 (Mo. Ct. App. 1966)
[iii] Millers Mut. Ins. Ass’n v. Atkinson Motors, Inc., 240 N.C. 183 (N.C. 1954)
[iv] Rosen v. Village Chevrolet, Inc., 63 Misc. 2d 174, 176 (N.Y. Civ. Ct. 1970)
[v] Bozell & Jacobs, Inc. v. Blackstone Terminal Garage, Inc., 162 Neb. 47 (Neb. 1956)
[vi] Hanes v. Shapiro & Smith, 168 N.C. 24 (N.C. 1915)
[vii] McKissick v. R. Connelly Jewelers, Inc., 41 N.C. App. 152 (N.C. Ct. App. 1979)
[viii] Buntin v. Fletchas, 257 F.2d 512 (5th Cir. Miss. 1958
[ix] Fidelity & Guaranty Ins. Corp. v. Ballon, 280 A.D. 373 (N.Y. App. Div. 1952)
[x] Seaboard Sand & Gravel Corp. v. Elmhurst Contracting Co., 159 F.2d 860 (2d Cir. N.Y. 1947)
[xi] Richmond Sand & Gravel Corp. v. Tidewater Constr. Corp., 170 F.2d 392 (4th Cir. Va. 1948)