Opinion
No. 32704.
April 26, 1937.
1. BANKS AND BANKING.
Bank which accepted diamonds for safekeeping from depositor, placed them where they would be safe against every one except officers of bank, and subsequently was unable to find them on demand for their return held liable for value of diamonds.
2. BANKS AND BANKING.
Where bank accepts special deposits and its managing officer subsequently converts securities to his own use, even though a gratuitous bailee, the bank is liable to depositor for the loss, regardless of whether such loss is occasioned by mere negligence or fraud, the act of conversion by the controlling officer being, in effect, the act of the bank itself.
3. BANKS AND BANKING.
Bank is not a gratuitous bailee where it invites and accepts special deposits as accommodation to its customers.
4. TROVER AND CONVERSION.
Parties seeking to recover values of articles lost or converted must produce dependable evidence as to value of such articles.
5. EVIDENCE.
Best evidence capable of being produced must be produced.
6. EVIDENCE.
Hearsay evidence is inadmissible.
7. EVIDENCE.
That a party produces the best evidence he has, or could be expected to have, does not exempt him from rule which requires evidence to be sufficient to satisfy jury.
8. BANKS AND BANKING.
In suit against bank for value of diamonds which had been deposited with bank for safekeeping, based on failure of bank to return diamonds on demand, evidence of persons not qualified to testify as to value of diamonds held insufficient to sustain judgment for plaintiff for amount awarded.
APPEAL from the chancery court of Tate county. HON. L.A. SMITH, SR., Chancellor.
Herbert Holmes, of Senatobia, for appellant.
The rule is well settled that in the absence of special contract, an ordinary bailee for hire is not an insurer against theft, and cannot be held liable for loss of the property by this means without negligence on his part.
Wylie v. Northampton National Bank, 119 U.S. 361, 30 L.Ed. 455, 7 Sup. Ct. Rep. 268; Louisville N.R. Co. v. Buffington, 131 Ala. 620, 31 So. 592; Copelin v. Berlin Dye Works Laundry Co., 168 Cal. 715, L.R.A. 1915C 712, 144 P. 961, 12 N.C.C.A. 362; Hebert v. Patrick, 27 Colo. App. 204, 146 P. 190; Renfroe v. Fouche, 26 Ga. App. 340, 106 S.E. 303; Mote v. Chicago N.W.R. Co., 27 Iowa 22, 1 Am. Rep. 212; Keen v. Beckman, 66 Iowa 672, 24 N.W. 270; Cass v. Boston L.R. Co., 14 Allen 448; Knights v. Piella, 111 Mich. 9, 66 Am. St. Rep. 375, 69 N.W. 92; Bagley Elevator Co. v. American Exp. Co., 63 Minn. 142, 65 N.W. 264; Corbin v. Gentry F. Cleaning Dyeing Co., 181 Mo. App. 151, 167 S.W. 1144; Grout v. Meyer, 91 Neb. 845, 137 N.W. 844; Greenberg v. Mermelstein, 188 N.Y. Supp. 250; Donlon v. Pehr, 188 N Y Supp. 522; Smith v. Maher, 84 Okla. 49, 23 A.L.R. 270, 202 P. 321; Erie Bank v. Smith, 3 Brewst. 9; Frank Bros. v. Central R. Co., 9 Pa. Super. 129; Whitemore v. Haroldson, 2 Lea, 312; Kelton v. Taylor, 11 Lea 264, 47 Am. Rep. 284, 1 Am. Neg. Cas. 933; Staley v. Colony Union Gin Co., 163 S.W. 381; Sanchez v. Blumberg, 176 S.W. 904; Tancil v. Seaton, 28 Gratt. 601, 26 Am. Rep. 380, 1 Am. Neg. Cas. 843; Firestone Tire Rubber Co. v. Pacific Transfer Co., 26 A.L.R. 217; Hutchinson v. U.S. Exp. Co., 63 W. Va. 128, 14 L.R.A. 393, 59 S.E. 949; Finucane v. Small, 1 Esp. 315; Dominion Exp. Co. v. Krigbaum, 18 Ont. L. Rep. 533, 13 Ont. Week. Rep. 364; Hill v. Stait, 23 Manitoba L.R. 832, 25 West. L.R. 475, 5 West. Week. Rep. 225, 14 D.L.R. 158.
There is no proof in this case that any servant or employee of the bank stole the diamonds, but the mere fact that the goods were stolen, if they had been, or if they were, from a bailee for hire by one of its own servants is insufficient to show negligence on the part of the bailee.
Finucane v. Small, 1 Esp. (England) 315; Schmidt v. Blood, 9 W. (New York) 268, 24 Am. Dec. 143; Copelin v. Berlin, 168 Cal. 715, L.R.A. 1915C 712.
The weight of authority appears to support the proposition that, at least, in actions based on negligence, the ultimate burden, as Mr. Wigmore's phrase puts it, the burden in the sense of the risk of nonpersuasion — of proving negligence, is ordinarily upon the bailor, where he is seeking to recover for the loss of property which it is conceded, or which the evidence tends to show with reasonable certainty, has been stolen while in the possession of the bailee.
Lampley v. Scott, 24 Miss. 582; Fleming v. Northampton National Bank, 62 How. 177, Fed. Cas. No. 4862A; California, 179 Cal. 63; Colorado, 146 P. 190; Illinois, 198 Ill. 584; Maine, 138 Am. St. Rep. 345; Massachusetts, 7 Allen 98; Michigan, 66 Am. St. Rep. 375; Minnesota, 65 N.W. 264; Missouri, 218 S.W. 403; Nebraska, 95 N.W. 779; New York, 176 N.Y. Sup. 341; Texas, 163 S.W. 381; Claflin v. Meyer, 75 N.Y. 260, 31 Am. Rep. 467; Firestone Tire Rubber Co. v. Pacific Transfer Co., 120 Wn. 665, 208 P. 55.
There is no proof in the record of the case at bar that the bank was negligent in selecting and keeping E.C. Turley, W.H. Newton, Mr. Ballard, or Mr. Covington, in its employ, and as well said in the Firestone case, supra, the burden is on the bailor to show negligence in this respect on the part of the bailee.
Caldwell v. Hall, 60 Miss. 330.
We think that stating the case most strongly in favor of the Callicotts and admitting for the sake of argument that the Citizens Bank was a bailee that there is a failure on the part of the appellees to prove their case, either by showing a special contract or special deposit by which the bank assumed liability, or showing that the bank was guilty of some negligence in some manner, and if negligence was shown, many of our courts have held it must be more than passive negligence, that is, it must be such as would amount to gross negligence. They did not prove any special contract whatever, but the most that was proven was that one of the complainants, Mr. Billy Callicott, delivered the diamonds one night to his friend, Mr. Turley, telling him to put them in the bank, and Mr. Turley kept them that night and on the next day put them in an absolutely safe place where the money of the bank was kept, inside the screw door safe of the vault. If Mr. Callicott was the bailor, then there was certainly no special contract. If Mr. Turley was the bailor, there is no consideration passing, and the most the bank could be is a gratuitous bailee. In any event under the record in this case, there certainly could be no liability on the bank, and these innocent stockholders whose bank did not profit one cent directly or indirectly should not be held liable.
Neither Mrs. Harry Callicott or Mr. Callicott were able to give facts as to the value or the fair market value of the diamonds lost, and were able only to express an opinion, and that opinion was gained from Brodnax and was not their own opinion. Mr. Callicott frankly admitted that he gained his information from Brodnax, and this was done by correspondence. The proof should have been as to the fair market value of the diamonds either on the day that they were unlawfully converted or on the day they failed to return them when called on to do so.
Merchants Wharf Boat Assn. v. Woods, 3 So. 249; Columbus G.R. Co. v. Coleman, 160 So. 277, 172 Miss. 514; Board of Levee Comrs. v. Dillard, 25 So. 292.
If the witnesses did not know the fair market value of the diamonds in question, it is certainly not competent for them to say what the fair market value was, and they could not by quoting from what some man in Brodnax said fix the value of these diamonds, the man in Brodnax never having seen them.
King v. King, 134 So. 827; Masonite Corp. v. Dennis, 168 So. 613; Western Union Tel. Co. v. Goodman, 146 So. 128; Long v. Griffith, 74 So. 614; Hall v. Clopton, 56 Miss. 555; Allen v. Lenoir, 53 Miss. 321; Herron v. Bondurant, 45 Miss. 683, 115 So. 555.
James McClure, of Sardis, for appellees.
The evidence fully establishes the relationship of bailor and bailee under the law.
6 Am. Jurisprudence, page 140, par. 4; 3 R.C.L. 72, par. 2; Grenada Bank v. Moore, 131 Miss. 339, 95 So. 449.
A chancellor's decision on the facts of a case will be sustained by the Supreme Court unless it be manifestly wrong.
Grace v. Pierce, 127 Miss. 831, 90 So. 590, 21 A.L.R. 1035; Gulf Transp. Co. v. Fireman's Fund Ins. Co., 121 Miss. 655, 83 So. 730, 9 A.L.R. 1307.
The evidence supports the finding of the Chancellor that the defendant Bank negligently failed to return to complainants the diamonds in question.
An essential feature of a bailment is the agreement to return the subject matter of the bailment, either on demand or at the agreed time, or if not returned, to account for the property to him from whom the bailee has received it. It implies a trust that as soon as the purpose of the bailment is answered the bailed property shall be restored to the bailor and in the absence of an expressed agreement by the bailee to return the bailed property to the bailor, the law implies such an agreement.
3 R.C.L., page 114, par. 27, page 88, par. 17, page 115, par. 38; 6 American Jurisprudence, page 453, par. 373, page 454, par. 374, page 455, par. 375, and page 457, par. 376; Y. M.V.R.R. Co. v. Hughes, 94 Miss. 242; Meridian Fair Exposition Assn. v. N. Birmingham St. Ry. Co., 12 So. 555.
I submit that the complainants by making positive proof of the delivery of the diamonds to the defendant for safe keeping and of the demand for the return and the failure of the return created a prima facie presumption of negligence on the part of the defendant and thereafter it became the duty of the defendant Bank to explain why it was unable to return to complainants the diamonds in question and the circumstances surrounding its inability so to do.
Had the defendant returned the diamonds in question to complainants, there would have been no necessity for the law suit or if the defendant had produced the diamonds, the same could have been submitted for examination and valuation by the experts which appellant's counsel contends are the only parties qualified to testify with reference to the value of the same. However, it must be borne in mind that the defendant has wrongfully failed to return or produce the diamonds and, therefore, is the one who has made it impossible to have the expert view these diamonds and value the same.
If this court should hold that only an expert can testify as to the value of the diamonds in question in a case like the one under review, then, it would be tantamount to the court saying that a person may benefit by his own wrong in converting the diamonds to his use and failing to produce or deliver the same to the owner.
There can be no question that upon demand being made of the defendant and it failed to return the diamonds in question to the complainants that the defendant breached its contract with complainants and cannot escape liability on this account because of the difficulty there may be in finding a perfect measure of damages. It is sufficient under the law if the evidence furnishes data upon an approximate estimate of the amount of damages.
Gathens v. Howard, 122 Miss. 355, 84 So. 240; Hudson v. Continental Cas. Co., 142 Miss. 388, 107 So. 520; Union v. J.R. Buckwater Lbr. Co., 136 Miss. 414, 101 So. 561; Dyer v. Hobert, 150 Miss. 857, 117 So. 244; Board of Levee Comrs. v. Nelms, 82 Miss. 416; I.C.R.R. Co. v. LeBlanc, 74 Miss. 626.
Complainants are not required to prove exact value of diamonds.
Carberry v. Burns, 68 Miss. 573; Hetzel v. Baltimore O.R.R. Co., 169 U.S. 26, 42 L.Ed. 648; Wells v. National Life Assn., 53 L.R.A. 33, 39 C.C.A. 476; Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 71 L.Ed. 686; Critchfield v. Julia, 77 C.C.A. 297, 147 Fed. 65, 51 L.Ed. 332; Delta Table Chair Co. v. Y. M.V.R.R. Co., 105 Miss. 861, 63 So. 273; W.T. Adams Mach. Co. v. South State Lbr. Co., 56 So. 826; Montgomery Ward Co. v. Hutchinson, 159 So. 862.
Argued orally by Herbert Holmes, for appellant, and by James McClure, for appellee.
Mrs. W.C. Callicott, deceased, at her death, owned a pair of blue white diamond earrings, and, on the night of her death her husband, W.C. Callicott, delivered them to E.C. Turley, then the cashier of the bank, to be placed in the bank. E.C. Turley took them the following morning to the bank and placed them in a screw safe on a shelf where the bank kept its large cash and other valuables. Subsequently, E.C. Turley resigned as cashier, and W.H. Newton, assistant cashier, succeeded him, and, during the period Newton was cashier, the diamond earrings were shown to some member of the family and were kept in this screw safe, which was a safe place against every one except the officers of the bank. The said diamond earrings were placed in the bank in November, 1931, and were kept there until late in 1935, when demand was made for them and the bank was unable to find them. In the latter part of 1935, Newton was discharged or suspended from the bank because of his excessive use of intoxicating liquors, and, while he was at home taking treatment to cure him of this habit, the diamond earrings were missed, and an officer of the bank was sent to interview him, and he stated to this officer that they would be found at a place on the shelf in the screw safe, but a diligent search failed to locate them.
Consequently, suit was instituted against the bank for the value of the diamonds, and on final hearing judgment was rendered against the bank for $1,700, from which this appeal is prosecuted.
It is contended that the bank was not liable for the value of the diamonds because they were delivered to E.C. Turley at night, after banking hours, and that there was no showing that the bank was authorized, by its charter, to receive diamonds, or other valuables, for safekeeping.
The proof shows that it was customary for the bank, at the request of its depositors, to take papers and other valuables of like nature, for safekeeping. It is not shown that it kept any other diamonds than the ones involved in this litigation, but the bank, acting through its cashier, did take and place in the screw safe valuables of its customers for safekeeping. Callicott had an account at the bank prior thereto, and during all the period involved in the case, between the reception of the diamonds by the bank and demand for their return.
We think the bank was liable for the value of the diamonds under the facts shown in the record under the authority of the case of Grenada Bank v. Moore, 131 Miss. 339, 95 So. 449, where it was said that, where a bank accepts special deposits, and its managing officer subsequently converts the securities to his own use, even though a gratuitous bailee, the bank is liable to the depositor for the loss, regardless of whether such loss is occasioned by mere negligence or fraud, the act of conversion, by the controlling officer, being, in effect, the act of the bank itself. This case is also authority for the proposition that the bank is not a gratuitous bailee where it invites and accepts special deposits as accommodation to its customers. We think the proof was ample to sustain liability.
However, in our opinion, the proof is insufficient to sustain the amount of the judgment. It was not shown what the diamonds involved in the case at bar were worth at the time of Mrs. Callicott's death or what they cost, nor was it shown, by any dependable testimony, as to what was their quality, except that they were two carat diamonds of good appearance and sparkle, with no visible to the eye defect therein. Mr. Callicott testified that, while he bought the diamonds for his wife, he was not a judge of diamonds. The son of Mr. Callicott and his wife undertook to testify that the son's wife owned diamonds of similar color and sparkle, but smaller, which they took to Brodnax, in Memphis, Tenn., and that her diamonds were valued at $1,109, and she undertook to say, by comparison, that the diamonds owned by Mrs. Callicott at the time of her death were worth $2,250; but she frankly admitted that she was not an expert as to the value of diamonds. The son also had a diamond purchased some years ago from Brodnax, and he testified that he wrote in 1933 to Brodnax as to the value of his diamond, but neither the son nor his wife disclosed who made these valuations, or produced a person competent to testify as to the nature and quality of diamonds. The son testified that he had the ability to distinguish a real from a fake diamond, but admitted that he was no expert and did not know the market value of diamonds.
Another party testified that, in 1919, he bought a couple of diamonds on the Coast, one seven-eighths carat, and the other less in size, paying for one $100 and for the other $65.
It was also shown that the diamonds involved in this litigation were purchased several years before the death of Mrs. Callicott, from a Memphis firm which had gone out of business, but there was no effort, so far as the record shows, to discover any of the parties in that firm, nor where the books were. There were no depositions taken of any person dealing in diamonds to establish actual values of either the diamonds involved in this litigation, or the diamonds owned by the son's wife.
The proof in the case is that the value of diamonds varies greatly at different periods, much depending, not only upon the quality, but upon the financial condition of the people who buy such valuables.
In a case dealing with subjects like diamonds, it is highly important that persons with competent knowledge thereof be produced to testify as to value. The majority of people are not competent judges of such values.
It is familiar learning that it is the duty of parties seeking to recover values of articles lost or converted to produce dependable evidence as to their value, and it is also a familiar rule that the best evidence capable of being produced must be produced.
In Jones on Evidence (3 Ed.), sec. 387, at page 584, it is said that the essentials are, "First, a knowledge of the intrinsic properties of the thing, Secondly, a knowledge of the state of the markets."
None of the witnesses produced here sufficiently qualified to testify as to the nature, quality, or market value of the diamonds at the time the demand was made upon the bank for their redelivery to the owners. In 22 C.J., section 682, page 578, it is said that: "While witnesses are not required to be expert or skilled in the strict and severe sense of the term in order to give opinions on value, and while there is no inflexible rule defining how much a witness must know in order to be so qualified, it must be made to appear that he has had, and utilized, means superior to those available to the jurors, for forming an intelligent opinion. In most instances an owner is deemed qualified by that relationship to testify to the value of common classes of property. The primary qualification of other witnesses is adequate acquaintance with that class of property, whether real or personal, and knowledge of the market thereof."
It is, of course, familiar learning that hearsay evidence is not admissible. Illinois Cent. R.R. Co. v. Ruffin (Miss.), 3 So. 578; Barclay v. Smith (Miss.), 36 So. 449; Board of Levee Commissioners v. Nelms, 82 Miss. 416, 34 So. 149. In Alabama V.R.R. Co. v. Searles, 71 Miss. 744, 16 So. 255, it was said that the fact that a party produces the best evidence he has, or could be expected to have, does not exempt him from the rule which requires evidence sufficient to satisfy the jury. See, also, on a comparison of values the cases of State Highway Comm. v. Buchanan, 175 Miss. 157, 158, 165 So. 795, 166 So. 537; Board of Levee Commissioners v. Dillard et al., 76 Miss. 641, 25 So. 292; Mississippi Digest, Evidence, Key No. 474; and Whitfield v. Whitfield, 40 Miss. 352; 22 C.J. 575, section 680.
From what has been said, it follows that the judgment as to liability is affirmed, but the case is reversed and remanded for a new trial on the question of value.
Affirmed in part, and reversed and remanded in part.