Opinion
No. 35506
Decided January 28, 1959.
Bailments — Bailor's contract with bailee for storage — Subcontract by bailee with second bailee for storage not authorized — Extent of liability of second bailee — Acceptance and storage by second bailee not conversion, when — Bailee's negligence not conversion — "Actionable negligence" construed — Person a constructive bailee, when — Liability of — Owner not bound by terms of subcontract of bailment, when.
1. Where an owner of property makes a contract with a bailee for its storage and that contract does not authorize the bailee to make a subcontract that is made with a second bailee for the storage of that property, but where the second bailee does not know and has no reason to know that the contract of bailment made with him was not authorized and that the first bailee had no power or authority to deliver the property to the second bailee pursuant to the terms of the contract made with him and where the owner of the property has not notified the second bailee of his interest in the property, the acceptance and storage of such property by the second bailee pursuant to the contract of bailment made with him will not amount to a conversion by the second bailee.
2. Mere negligence of a bailee in caring for the bailed property will not amount to a conversion.
3. A person's failure to exercise ordinary care in doing or failing to do something will not amount to actionable negligence unless such person owed to someone injured by such failure a duty to exercise such ordinary care.
4. Where, otherwise than by a mutual contract of bailment, one person has lawfully acquired the possession of personal property of another, the one in possession is, by operation of law, generally treated as a bailee of such property and may therefore be referred to as a constructive bailee.
5. Ordinarily, such a constructive bailee, like any other uncompensated bailee, does not owe to the owner of the bailed property the duty to exercise ordinary care to protect such property, and is not therefore liable to the owner thereof for mere negligence in protecting such property.
6. Where an owner of personal property alleges and proves that he delivered that property to a bailee under a contract of bailment that he made with such bailee and that such bailee thereafter delivered the property to a second bailee under a contract of bailment made between the first and the second bailees and where the contract of bailment that the owner made provides that the value of the bailed property shall be considered as not over $100 and that liability for its loss shall be limited to that amount, the owner of the property is bound by that agreement in an action against the second bailee for a loss of the bailed property alleged to have been caused merely by the failure of that bailee to exercise ordinary care for its protection.
7. In such a case, if the first bailee had no authority to make a contract of bailment with or deliver the property thereunder to the second bailee and if the owner elects to treat the first bailee as a converter for doing so, the owner cannot thereafter take the inconsistent position that he may recover from the second bailee for loss caused to the property by a mere failure of the second bailee to exercise ordinary care for its protection.
8. In a case such as stated in paragraph six of the syllabus, when the subcontract of bailment between the first and second bailees contains an agreement that the value of the property bailed shall be considered as $1 and liability for its loss shall be limited to that amount but there is no evidence that would support a conclusion that the owner either authorized or consented to or knew about the bailee agreeing to such a limitation, the owner is not bound thereby.
APPEAL from the Court of Appeals for Cuyahoga County.
This action was instituted by the plaintiff, an insurance company, to recover $1,800 that it paid to its insured, a Mrs. Bunin, on account of the loss of her fur coat which such insurance company had insured against loss. To simplify consideration of this case, Mrs. Bunin will be referred to herein as "the owner."
The petition contains the following allegations:
"In May of 1949, * * * [the owner] arranged with * * * Goldman * * * to, and did, store a certain beaver coat of the value of $1,800 during the summer months.
"Because of inadequacy of storage space * * * Goldman * * * then arranged to, and did, store the said coat * * * with the defendant, a corporation engaged in the wholesale storage of furs. It was a part of the storage contract last mentioned that the defendant's employees should pick up, store and redeliver to * * * Goldman * * * all furs handled for it by said defendant.
"On * * * November 12, 1949, * * * defendant's employees were engaged in delivering certain furs, including the said furs of * * * [the owner] to various retail establishments * * * and while so doing failed and neglected to lock or guard the panel-type truck containing said valuable cargo of furs. As a proximate result of this negligence, a person or persons unknown were able to and did enter said truck, while left so unlocked and unattended, and were able to and did remove therefrom the fur of * * * [the owner] * * *.
"* * *
"The said loss to * * * [the owner] was the direct and proximate result of the negligence of * * * defendant * * * through its officers, agents and employees, in the following respects:
"1. In failing to replace its said drivers * * * when it knew, or, in the exercise of ordinary care, should have known that such drivers had shown a careless, negligent and indifferent attitude * * *.
"2. In failing and neglecting properly to train its personnel * * * when it knew or, in the exercise of ordinary care, should have known that such improper training could result only in a careless, negligent and indifferent attitude * * *.
"3. In assigning, to work on the trucks carrying such valuable furs, drivers with insufficient training and experience to safeguard properly their valuable cargoes when they knew or, in the exercise of ordinary care, should have known that assigning such improperly trained drivers endangered the safety of the valuable cargoes * * *.
"4. In failing and neglecting to furnish proper equipment in the form of automatic locks on the doors of its trucks when it knew, or should have known, the careless, negligent and indifferent manner in which its drivers were leaving their truck doors unlocked * * *.
"5. In the failure and neglect of its drivers to lock the said truck and in leaving it unattended * * *.
"6. In the failure and neglect of either of its two drivers * * * to remain with and to properly safeguard said * * * furs.
"7. In the failure and neglect of its two drivers immediately to report the said loss to the * * * police * * *." (Emphasis added.)
In its answer, defendant alleges that, by the contract of bailment that the owner made with Goldman, a valuation of $100 was placed on the coat and thereby Goldman's liability is limited to that amount; and that Goldman, as the agent of the owner, delivered and stored the coat under a contract of bailment with defendant, and, as agent of the owner, placed a value of $1 on the coat and thereby limited defendant's liability to that amount.
The owner testified as follows:
"* * * when I placed * * * [the coat] there for storage I asked [Goldman] what is the minimum cost to me for the purpose of storage, and the minimum * * * was $3 to storage the coat, as including the valuation of only the minimum for that which would have been $100; and inasmuch as my coat was insured for the true value, I wanted to just pay the minimum for the storage, which is reasonable."
The owner further told Goldman that she had $1,800 insurance on the coat.
Plaintiff introduced into evidence the fur storage receipt given to the owner by Goldman which states that the valuation of the coat was $100 and provides so far as pertinent:
"3. Terms of storage insurance provide that liability never exceeds the agreed declared value of the goods insured as evidenced on the face of this receipt."
Plaintiff also introduced into evidence a storage receipt given by defendant to Goldman indicating receipt of a number of coats including plaintiff's coat.
The evidence discloses without dispute that this receipt was issued pursuant to a contract between Goldman and defendant which plaintiff introduced into evidence and which provides in part:
"* * * [the defendant] will place a value of $1 on any item sent in without a declared value. This shall be the extent of our bailee liability. * * *"
There is no evidence that any value was declared for the owner's coat when sent to defendant by Goldman. The service charge for storing the owner's coat under the contract between Goldman and defendant was 75 cents.
The trial court charged the jury that, if defendant failed to exercise ordinary care for the owner's coat, such failure would constitute negligence, and, if such negligence was a proximate cause of the loss of the owner's coat, plaintiff could recover, but that any recovery by plaintiff should be limited to $100.
The jury brought in a verdict for plaintiff for $1, upon which verdict, judgment was rendered for plaintiff.
On plaintiff's appeal to the Court of Appeals, that court held that, since the verdict of the jury had determined that defendant was negligent, plaintiff was entitled to recover; that, since the bailment by Goldman to defendant was made without the knowledge or consent of the owner, such bailment constituted a conversion by Goldman so that the contract between the owner and Goldman with respect to the valuation of the coat was abrogated; and that therefore plaintiff could recover from defendant for the full value of the coat. The Court of Appeals thereupon rendered final judgment for the plaintiff for $1,800, an amount which the undisputed evidence disclosed as the value of the coat. See 77 Ohio Law Abs., 11, 145 N.E.2d 844.
This court allowed defendant's motion to certify the record, and was influenced in doing so partly because of an apparent conflict between the judgment of the Court of Appeals and the judgment of another Court of Appeals. See Employers' Fire Ins. Co. v. United Parcel Service of Cincinnati, Inc., 89 Ohio App. 447, 99 N.E.2d 794.
Messrs. McCreary, Hinslea Ray, for appellee.
Messrs. Kitchen Messner and Mr. George W. Leyshon, for appellant.
At the outset, it should be observed that this action has not been brought against Goldman, the only bailee with whom the owner of the coat dealt. Neither has there been any assignment of error in this court with respect to the failure to make Goldman a party defendant. Furthermore, no contention has been made that, and hence it is unnecessary to consider whether, the provisions of either of the two bailment contracts, with respect to the valuation of the fur coat, are invalid as against public policy. See Baltimore Ohio Rd. Co. v. Hubbard, 72 Ohio St. 302, 317, 74 N.E. 214; United States Express Co. v. Backman, 28 Ohio St. 144; Central Storage Warehouse Co. v. Pickering, 114 Ohio St. 76, 151 N.E. 39; and Kolt v. Cleveland Trust Co., 156 Ohio St. 26, 99 N.E.2d 902, 27 A.L.R. (2d), 525.
Admittedly, the rights of plaintiff insurance company, that paid the owner for loss of her fur coat, can rise no higher than her rights. United States Fire Ins. Co. v. Phil-Mar Corp., 166 Ohio St. 85, 139 N.E.2d 330.
There is no allegation that defendant ever knew or had any reason to know that Goldman was without power or authority to make any subcontract of bailment or to deliver the fur coat to defendant pursuant to the terms of such a subcontract; there is no allegation that the owner ever even notified or advised defendant of her interest in the coat prior to its loss; and there are no other allegations in the petition which could support a finding that defendant was a converter. 1 Restatement of the Law of Torts, Section 223. The mere negligence of a bailee in caring for the bailed property will not amount to a conversion. 1 Restatement of the Law of Torts, Section 224. It is apparent therefore that no cause of action against defendant for conversion has been set forth in the petition.
From the allegations of the petition, it is clear that this is an action to recover from defendant for the claimed negligence of defendant in failing to exercise ordinary care for the protection of the fur coat. The charge of the trial court so regarded it.
It is elementary that a person's failure to exercise ordinary care in doing or failing to do something will not amount to actionable negligence unless such person owed to someone injured by such failure a duty to exercise such ordinary care. See First National Bank of Greenfield v. Marietta Cincinnati Rd. Co., 20 Ohio St. 259, 5 Am. Rep., 655; Toledo Ohio Central Rd. Co. v. Bowler Burdick Co., 63 Ohio St. 274, 58 N.E. 813; Pittsburgh, Ft. Wayne Chicago Ry. Co. v. Bingham, Admx., 29 Ohio St. 364, 23 Am. Rep., 751; Hannan, Admr., v. Ehrlich, 102 Ohio St. 176, 131 N.E. 504; 38 American Jurisprudence, 652, Section 12.
Where, otherwise than by a mutual contract of bailment, one person has lawfully acquired the possession of personal property of another, the one in possession is, by operation of law, generally treated as a bailee of such property and may therefore reasonably be referred to as a constructive bailee. 6 American Jurisprudence, 237, Section 86; Dobie on Bailments and Carriers, 23, Section 11; see 34 American Jurisprudence, 636, Section 7.
Ordinarily such constructive bailee will receive nothing from the owner of the property and will have no right to recover from such owner anything for what he does in caring for such property so that he is in effect an uncompensated or so-called gratuitous bailee. 6 American Jurisprudence, 237, Section 86; Dobie on Bailments and Carriers, 51, Section 22. Hence, there is no more reason for the law imposing upon such constructive bailee any duty to the owner with respect to care for such property than there is for imposing such a duty on any other unncompensated or so-called gratuitous bailee. As a result, no greater duty is ordinarily imposed upon such a constructive bailee. 6 American Jurisprudence, 238, Section 86 (constructive bailee "regarded as a gratuitous bailee"); 6 American Jurisprudence, 358, Section 252 ("general agreement among the authorities that * * * reasonable to expect the bailee's obligation of care to be less onerous where he acts without reward than where he is compensated"); Dobie on Bailments and Carriers, 34, Section 16 ("degree of care exacted of * * * bailee varies directly with * * * benefit accruing to * * * bailee from * * * bailment. When * * * bailor receives all * * * benefit * * * and * * * bailee none, * * * standard of care is * * * lowest").
Although a compensated bailee owes to his bailor a duty to exercise ordinary care to protect the bailed property, an uncompensated or so-called gratuitous bailee does not owe to his bailor a duty to exercise such care to protect the bailed property.
Paragraph one of the syllabus of Griffith v. Zipperwick, 28 Ohio St. 388, reads:
"In case of a deposit of property, to be kept by the bailee without reward and returned to the depositor on demand, the law holds such a bailee liable only for losses arising from his gross negligence."
Paragraphs three and four of the syllabus of Toledo Ohio Central Rd. Co. v. Bowler Burdick Co., supra ( 63 Ohio St. 274), state that there can "not" be such "gross negligence" unless there is "that gross neglect of duty which amounts to wilfulness and evinces a reckless disregard of the rights of others."
The opinion by Scott, J., in First National Bank v. Marietta Cincinnati Rd. Co., supra ( 20 Ohio St. 259), at 280, even indicates that one, having duties such as those of an uncompensated bailee, may be held only for damage caused by his wilfulness or "wantonness."
Notwithstanding the syllabus of Griffith v. Zipperwick, supra, there has been considerable criticism of the subdivision of negligence into degrees. See Payne, Dir. Genl., v. Vance, 103 Ohio St. 59, 133 N.E. 85. See also Dobie on Bailments and Carriers, 35, Section 16; 6 American Jurisprudence, 348, Section 245. However, in the instant case it is only necessary to determine whether defendant did or did not owe to the owner a duty to exercise ordinary care in protecting her fur coat. It is not necessary to consider what, if any, lesser duty of care defendant owed to the owner with respect to protecting her fur coat. In deciding this case, it is sufficient to recognize, as all the authorities apparently do, that an uncompensated or so-called gratuitous bailee does not owe to the owner of the bailed property a duty to exercise ordinary care and hence is not liable for mere negligence with respect to the care of such property. Griffith v. Zipperwick, supra ( 28 Ohio St. 388); 7 Ohio Jurisprudence (2d), 110, Section 26; 6 American Jurisprudence, 360, Section 254; Dobie on Bailments and Carriers, 65, Section 29.
The petition alleges merely that defendant failed to exercise ordinary care for the protection of the owner's coat and that defendant was therefore negligent; and, under the court's charge, the verdict of the jury obviously represents merely a finding that defendant failed to exercise such ordinary care and that defendant was therefore negligent. Thus, the petition does not contain allegations and the verdict does not represent a finding that would support a judgment against a defendant who did not have a duty to exercise ordinary care for the protection of the owner's fur coat.
In order to establish defendant's duty as one to exercise the degree of care that the petition alleges that defendant failed to exercise, i.e., the duty to exercise ordinary care for the protection of the owner's fur coat, it was necessary for plaintiff to allege and prove either (1) a contract of bailment between that owner and defendant expressly providing therefor (admittedly there never was such a contract) or (2) that there was a bailment by or on behalf of that owner to defendant under which defendant was to be compensated for its services, so that the law would imply a duty of defendant to that owner to exercise such care. 6 American Jurisprudence, 290, Section 172. See Dobie on Bailments and Carriers, 34 to 36, Section 16.
Plaintiff has done that by alleging and proving the owner's contract of bailment to Goldman and a subcontract of bailment by Goldman to the defendant.
Having so elected to rely on the owner's contract of bailment and her bailee's subcontract of bailment to impose such a duty of ordinary care of defendant to the owner, plaintiff is at least bound by the agreement made by the owner of the coat that the value of the coat shall be considered as not over $100, an agreement that the owner's testimony clearly shows she intended to make and an agreement that is admittedly found in the written contract of bailment that that owner did make with Goldman. Central Storage Warehouse Co. v. Pickering, 114 Ohio St. 76, 151 N.E. 39.
Thus, if plaintiff takes the position that there was no contractual privity between the owner of the coat and defendant, we are necessarily led to the conclusions that defendant did not owe to the owner of the fur coat the duty to exercise ordinary care to protect that coat; and that, since the allegations of the petition will only support a finding that defendant merely failed to exercise such ordinary care, plaintiff can recover nothing. In order to establish that the law imposed upon the defendant a duty to exercise the degree of care for the protection of the coat that the petition alleges defendant failed to exercise, i.e., the duty to exercise ordinary care, it was necessary for plaintiff to have the owner rely upon the contract of bailment between the owner of the coat and Goldman and a subcontract of bailment between Goldman and defendant; and the plaintiff, having so elected to have the owner rely on those contracts, is at least bound by such owner's own agreement, which she intended to and did make in the contract of bailment with Goldman, that the value of the coat was $100.
In order to avoid the owner's agreement that the value of the coat should be considered as $100 and liability for its loss limited to that amount, which agreement is found in the contract of bailment between the owner and Goldman, the Court of Appeals determined that that contract was abrogated because Goldman converted the coat when he delivered it to defendant. It is reasonably arguable that there are allegations in the petition which could support a conclusion that Goldman converted the coat when it delivered the coat to defendant. If we assume that the allegations of the petition could support that conclusion, nevertheless it is apparent from the allegations of the petition that neither plaintiff nor the owner of the fur coat ever elected to treat Goldman as a converter. If the owner of the coat had elected to do so and had been correct in so contending, then the owner would have had a right against Goldman to recover for the value of the coat. Conkle v. George K. Scott Co., Inc., 147 Ohio St. 487, 72 N.E.2d 82; Aetna Casualty Surety Co. v. Higbee Co., 80 Ohio App. 437, 76 N.E.2d 404, 174 A.L.R. 1429; annotation, 99 A.L.R., 266. In electing to treat Goldman as a converter, the owner of the coat would necessarily have had to recognize the coat as having been converted by and thereby as having become the property of Goldman. Sammis v. Sly, 54 Ohio St. 511, 519, 44 N.E. 508, 56 Am. St. Rep., 731. Thus, where a bailee of personal property does something that may amount to a conversion of that property, if the owner elects to treat the bailee as a converter, the owner thereby in effect requires "a forced sale of the property to the" bailee. Prosser on Torts (2d), 66, Section 15. If the coat had thus become the property of Goldman, then obviously neither the owner nor plaintiff could now, without taking an inconsistent position, recover anything from defendant on account of its damage. Any cause of action on account of such damage would then be vested in Goldman.
This would depend on whether authority to make a subcontract of bailment may be implied when the words used in the owner's contract of bailment are considered in the light of the facts and circumstances under which that contract was made. The question almost always arises in an action to hold the original bailee as a converter. See annotation, 174 A.L.R., 1436; Rourke v. Cadillac Automobile Co., 268 Mass. 7, 167 N.E. 231; 23 Michigan Law Review, 196.
Furthermore, if the Court of Appeals was correct in considering the contract of bailment between the owner and Goldman as abrogated, the consequence would necessarily be no contractual relationship between the owner of the coat and defendant; and, as hereinbefore pointed out, defendant would then have owed to the owner of the coat no duty to use ordinary care for its protection; and, since the allegations of the petition are that defendant merely failed to exercise such ordinary care, plaintiff could recover nothing.
In order to establish defendant's duty as one to exercise ordinary care for protection of the owner's coat, it was essential for plaintiff to establish some contractual privity between the owner and defendant. This the plaintiff obviously attempted to do by the allegations of the petition, which apparently recognize that the owner's contract with Goldman did, as defendant's answer alleges, authorize Goldman to enter into a subcontract for bailment of the coat with defendant. However, there is no allegation in the petition or any evidence in the record that would support a conclusion that the owner either authorized or consented to or knew of Goldman's agreeing in such a contract of bailment that the value of the coat should be considered as being less than $100. Hence, under our holding in Agricultural Ins. Co. v. Constantine, 144 Ohio St. 275, 58 N.E.2d 658, paragraph three of the syllabus, the owner would not be bound by any agreement in that subcontract of bailment so "limiting the bailee's liability * * * in the absence of anything to indicate that the * * * [owner] either expressly or impliedly assented to such" liability-limiting agreement. See also Grain Dealers National Fire Ins. Co. v. Union Co., 159 Ohio St. 124, 111 N.E.2d 256.
Defendant may reasonably argue that it should not have any liability imposed upon it for a failure to exercise ordinary care for the protection of this coat in excess of that for which defendant contracted. However, defendant was admittedly in the business of wholesale fur storage and must have known that some of the coats to be sent by Goldman to defendant for storage were owned by others. If defendant was willing to rely on the representation that Goldman in effect made with respect to this fur coat ( i.e., that he had authority to contract with defendant for limitation of defendant's liability on the basis of valuation of the coat at only $1), any resulting loss to defendant by reason of defendant's greater liability would appear to be a matter for adjustment in legal proceedings between defendant and Goldman.
If plaintiff disregards the contract of bailment made by the owner with Goldman and argues that defendant owed a duty to such owner to use ordinary care to protect the coat because that was defendant's business and defendant was paid 75 cents by Goldman for doing so, plaintiff is then taking the position that there was no contractual relationship or contractual privity between the owner and defendant. If plaintiff relies on the payment of that 75 cents to make defendant a compensated bailee, it is apparent that defendant is such a compensated bailee owing such duty of ordinary care only to Goldman who paid defendant and with whom defendant contracted and not to the owner of the coat whom plaintiff would then be treating as a stranger to defendant. Also, it may be observed that the 75-cent payment was compensation only for performing the services to be performed in picking up, storing and delivering the coat, and for undertaking in addition a risk of potential liability in taking care of a $1 coat, and not for undertaking the much greater risk of potential liability in taking care of an $1,800 coat. In other words, plaintiff would be trying to get something for which no one had paid.
The allegations of the petition are that defendant merely failed to exercise ordinary care for the protection of the coat. Unless plaintiff relies upon the contract of bailment between the owner and Goldman and Goldman's authority thereunder to contract with defendant for care of the coat, there is no basis whatever for imposing upon defendant a duty to exercise ordinary care for the protection of the coat. If plaintiff does so rely on that contract of bailment between the owner of the coat and Goldman, as the allegations of its petition clearly indicate it did, then plaintiff's recovery cannot exceed $100. However, as hereinbefore pointed out, there is no justification for binding the owner by that part of the agreement between Goldman and defendant that provides that the value of the coat should be considered as only $1.
Our conclusions are that the trial court was correct in regarding this action as what the petition clearly indicates it is, i.e., an action to recover damages proximately resulting from a breach of defendant's duty to exercise ordinary care for the protection of the coat, a duty necessarily based upon the alleged and proven two contracts of bailment; that the trial court was therefore correct in charging the jury that, if defendant failed to exercise ordinary care for the owner's coat, such failure would constitute negligence, and, if such negligence was a proximate cause of the loss of the owner's coat, plaintiff could recover, but that any recovery by plaintiff should be limited to $100; that the Court of Appeals was correct in its holding that the undisputed evidence requires a finding that the value of the coat was in excess of $100; but that the Court of Appeals was in error in its holding that plaintiff could recover more than $100 by disregarding the first contract of bailment, both because plaintiff's petition indicates a reliance on that contract and because, without that contract, defendant would have owed to the owner of the coat no duty to exercise ordinary care for its protection and the allegations of the petition would then have justified the recovery of nothing from defendant. It follows that the judgment of the Court of Appeals must be modified by reducing its amount to $100, and, as so modified, that judgment is affirmed.
Judgment modified and, as modified, affirmed.
STEWART, MATTHIAS and HERBERT, JJ., concur.
WEYGANDT, C.J., ZIMMERMAN and BELL, JJ., dissent.
On the facts developed in the trial of this cause, Bunin's insurer, as subrogee and standing in her shoes, could have brought its action against Goldman the bailee to recover its loss on the basis of conversion. Bunin as bailor, in reliance on Goldman, contracted with him for the storage of her fur coat, and when he, without her knowledge, assent or acquiescence, placed her coat in the hands of and under the control of Paramount, a total stranger to Bunin, the original contract of bailment was violated and terminated, a conversion occurred, and Goldman could have been proceeded against accordingly. See the basic cases of Laverty v. Snethen, 68 N.Y. 522, 23 Am. Rep., 184; and Boldewahn v. Schmidt, 89 Wis. 444, 62 N.W. 177. Of similar import are Dolphin v. Davis, 183 Ill. App. 118; Geren v. Hollenbeck, 66 Ore., 104, 132 P. 1164; and Engels v. Samuel Neuhoff Furs, Inc., 96 N.Y. Supp. (2d), 537, 276 App. Div. 599.
There is nothing in the evidence to indicate that Bunin knew or was advised that it was the custom of Goldman to place fur costs, left with him for storage, in the hands of others for that purpose, nor was any general custom of that kind shown to exist. Compare Wood v. Frank Graham Co., 91 Ga. App. 621, 86 S.E.2d 691; and Rourke v. Cadillac Automobile Co. of Boston, 268 Mass. 7, 167 N.E. 231.
Bunin's insurer elected not to treat Goldman as a converter and pursue him as such but elected to proceed against Paramount on the ground that through its carelessness and neglect the coat was stolen and lost. In my opinion, such procedure was authorized. It is a well recognized general rule of law that one who deals with a bailee in respect to bailed property does so at his peril, and a bailor as the general owner of the property may assert his title in an appropriate action directly against a third person who has come into the possession of the bailed property and has misused or harmed it with resultant damage to the bailor's reversionary interest. 6 Corpus Juris, 1147 et seq., Bailments, Section 106 et seq.; 8 Corpus Juris Secundum, 313, 372, Bailments, Sections 39, 56; 6 American Jurisprudence, 441, Section 349, and cases cited in the notes.
Often, as here, the action against such third person is predicated on negligence, and the absence of any contractual relationship between the bailor and the one causing the injury is immaterial. Royal Stein, Inc., v. B.C.U. Holding Corp., 127 N.Y. Supp. (2d), 886, 283 App. Div. 700.
In the case of Grossman Chevrolet Co., Inc., v. Enockson (N.D.), 86 N.W.2d 644, it is said in the opinion at page 646:
"The question then is: May a bailor maintain an action against a stranger to the bailment, for damages to a bailed chattel caused by a stranger's negligence? Unquestionably such an action may be maintained."
It was found by the jury in the instant case that the theft of the fur coat was attributable to Paramount's negligence, and it is not in dispute that the actual value of the coat was $1,800; it was insured for that amount and that is the sum paid by the insurer to Bunin.
The original contract of bailment between Bunin and Goldman carried an agreed valuation of $100 on the fur coat. Paramount was wholly unconnected with that transaction and was an unknown and unapproved outsider as far as Bunin was concerned. In this negligence action against Paramount, it is not in a position to assert and rely on the $100 valuation mentioned above, nor could the $1 valuation given the coat in the contract between Goldman and Paramount affect Bunin in any way.
As I view the matter, the judgment of the Court of Appeals herein is correct and should be affirmed.
WEYGANDT, C.J., and BELL, J., concur in the foregoing dissenting opinion.