ABSENCE OF COMPENSATION TO BAILEE

23. The distinguishing feature of bailments for the bailor's sole benefit is the entire absence of any compensation (direct or indirect, express or implied) to the bailee.

Absence of Intended Compensation

In this class of bailments it is of the very essence of the contract that the proposed custody or services be gratuitous. A person becomes a bailee for hire when he takes goods into his possession for a compensation, and the nature and amount of the compensation are immaterial.25 The law will not inquire into the adequacy of the compensation, its relative value in connection with the services rendered, or the certainty of its being realized by the bailee. These questions are all left to the parties, who are the sole judges. of the benefits or advantages to be derived from their contracts. It is sufficient to make the bailment one for hire if the consideration be of any value, however slight, and even a mere contingent benefit will suffice. The real question is: Was the bailment contract made with reference to a consideration moving to the bailee? The intent of the parties is of course the important thing. This

24 Wilson v. Wilson, 16 La. Ann. 155; Lafourche & Terrebonne Nav. Co. v. Collins, 12 La. Ann. 119; Mariner v. Smith, 5 Heisk. (Tenn.) 203; Pattison v. Syracuse Nat. Bank, 4 Thomp. & C. (N. Y.) 96; Lobenstein v. Pritchett, 8 Kan. 213. But see Waterman v. Gibson, 5 La. Ann. 672. A mandatary cannot recover on a quantum meruit. Wilson v. Wilson, 16 La. Ann. 155; Preston v. Prather, 137 U. S. 604, 11 Sup. Ct. 162, 34 L. Ed. 788; First Nat. Bank v. Graham, 100 U. S. 699, 25 L. Ed. 750; WOODRUFF v. PAINTER, 150 Pa. 91, 24 Atl. 621, 16 L. R. A. 451, 30 Am. St. Rep. 786, Dobie Cas. Bailments and Carriers, 40; Devalcourt v. Dillon, 12 La. Ann. 672. The bailment was none the less gratuitous by virtue of the fact that one motive of the bailee was that the bailment might assist to hold trade in a town in which he carried on business. Bissell v. Harris & Co., 1 Neb. (Unof.) 535, 95 N. W. 779.

25 If there be compensation, express or implied, certain or uncertain in amount, the contract is a contract for hire. Newhall v. Paige, 10 Gray (Mass.) 366; Ouderkirk v. Central Nat. Bank, 52 Hun, 1, 4 N. Y. Supp. 734; Hollister v. Central Nat. Bank, 52 Hun, 610, 4 N. Y. Supp. 737; Keller v. Rhoads, 39 Pa. 513, 80 Am. Dec. 539; GRAY v. MERRIAM, 148 Ill. 179, 35 N. E. 810, 32 L. R. A. 769, 39 Am. St. Rep. 172, Dobie Cas. Bailments and Carriers, 43; Vogel & Son v. Braudrick, 25 Okl. 259, 105 Pac. 197.

26 Newhall v. Paige, 10 Gray (Mass.) 366. And see Chamberlin v. Cobb, 32 Iowa, 161; Francis v. Shrader, 67 Ill. 272; White v. Humphery, 11 Q. B. 43; VIGO AGRICULTURAL SOC. v. BRUMFIELD, 102 Ind. 146, 1 N. E. 382, 52 Am. Rep. 657, Dobie Cas. Bailments and Carriers, 42; Prince v. Alabama State Fair, 106 Ala. 340, 17 South. 449, 28 L. R. A. 716; WOODRUFF v. PAINTER, 150 Pa. 91, 24 Atl. 621, 16 L. R. A. 451, 30 Am. St. Rep. 786, Dobie Cas. Bailments and Carriers, 40.

is a question of fact, to be determined in view of all the surrounding facts and circumstances.27 The general principles as to the consideration of contracts are applicable here as elsewhere. When the bailment contract expressly provides for a consideration, there is usually little difficulty. The cases that give trouble are those in which the consideration, if any, is implied. Due weight must then be given to any surrounding facts and circumstances that tend to throw light on the real intent of the parties. Thus, in doubtful cases, the fact that the bailment was in the line of the bailee's business, for which he regularly received compensation, that the bailee was a stranger to the bailor, or that the bailment involved the expenditure of much time and trouble, would tend to prove that a consideration was intended; 28 while the fact that the bailment was outside of the bailee's regular business, that the bailee was a relative or intimate friend of the bailor, or that the bailment involved only little time and slight trouble, might indicate that no compensation was expected.29 Of course, where a consideration is express, or would otherwise be implied, the bailee could not escape the duties of a bailee for hire by a secret and uncommunicated mental reservation not to charge for his services.80

This question is a practical and often a close one when a patron on the premises of another, in a transaction involving a financial consideration, makes use of facilities supplied for his convenience

27 Lobenstein v. Pritchett, 8 Kan. 213; Mariner v. Smith, 5 Heisk. (Tenn.) 203; Pattison v. Syracuse Nat. Bank, 4 Thomp. & C. (N. Y.) 96; Kincheloe v. Priest, 89 Mo. 240, 1 S. W. 235, 58 Am. Rep. 117. In Height v. State (Tex. Cr. App.) 150 S. W. 908, a bailment of a piano in consideration of the right of the bailee's child to use the piano, was held to be a bailment of hiring, and not gratuitous. See, also, Vogel & Son v. Braudrick, 25 Okl. 259, 105 Pac. 197. 28 Pattison v. Syracuse Nat. Bank, 4 Thomp. & C. (N. Y.) 96; Kirtland v. Montgomery, 1 Swan (Tenn.) 452; Second Nat. Bank v. Ocean Nat. Bank, 11 Blatchf. 362, Fed. Cas. No. 12,602; Rea's Adm'x v. Trotter, 26 Grat. (Va.) 585. If a package containing money be handed to the captain of a steamboat, which is in the habit of charging freight for carrying remittances of money, without informing him of its contents, and the package is lost, the owners of the vessel are not liable. Mechanics' & Traders' Bank v. Gordon, 5 La. Ann. 604. Public officers who receive property in the course of their official duty are held to be bailees for hire. Aurentz v. Porter, 56 Pa. 115; Browning v. Hanford, 5 Denio (N. Y.) 586; Witowski v. Brennan, 41 N. Y. Super. Ct. Rep. 284; Moore v. Westervelt, 27 N. Y. 234; Wood v. Bodine, 32 Hun (N. Y.) 354. 29 Dart v. Lowe, 5 Ind. 131; Lafourche & Terrebonne Nav. Co. v. Collins, 12 La. Ann. 119. A mere volunteer, under no legal obligation to take and store goods, who accepts the temporary custody of them without any agreement on the subject, has no lien on them for storage. Rivara v. Ghio, 3 E. D. Smith (N. Y.) 264.

30 Second Nat. Bank v. Ocean Nat. Bank, 11 Blatchf. 362, Fed. Cas. No. 12,602; Kirtland v. Montgomery, 1 Swan (Tenn.) 452.

33

by such other person in connection with this transaction. Thus where a customer in a tailor's shop leaves his clothes in a dressingroom to try on the clothes made by the tailor,31 or where the patron of a restaurant 32 or barber-shop hangs up his hat or overcoat. If it is conceded that there is sufficient delivery to constitute a bailment, the courts, in the absence of exceptional circumstances, usually hold the bailment one for mutual benefit, on the ground. that the price paid in the principal transaction includes also the services incidental thereto.84

Special Bank Deposits

Special bank deposits, or the gratuitous deposit of gold, stocks, even money, or other things of value, with a bank, on the understanding that the identical things deposited are to be returned, constitute, perhaps, the most important class of bailments for the bailor's sole benefit.35 Such deposits are not uncommon, though

31 Rea v. Simmons, 141 Mass. 561, 6 N. E. 699, 55 Am. Rep. 492. See, also, Bunnell v. Stern, 122 N. Y. 539, 25 N. E. 910, 10 L. R. A. 481, 19 Am. St. Rep. 519; WOODRUFF v. PAINTER, 150 Pa. 91, 24 Atl. 621, 16 L. R. A 451, 30 Am. St. Rep. 786, Dobie Cas. Bailments and Carriers, 40.

32 Ultzen v. Nicols, 1 Q. B. 92; Buttman v. Dennett, 9 Misc. Rep. 462, 30 N. Y. Supp. 247; Simpson v. Rourke, 13 Misc. Rep. 230, 34 N. Y. Supp. 11; Goff v. Wanamaker, 25 Wkly. Notes Cas. (Pa.) 358.

33 Dilberto v. Harris, 95 Ga. 571, 23 S. E. 112. See, also, Trowbridge v. Schriever, 5 Daly (N. Y.) 11.

34 See cases cited in three preceding notes. See, also, the following cases, all involving the liability of keepers of bathing houses: Tombler v. Koelling, 60 Ark. 62, 28 S. W. 795, 27 L. R. A. 502, 46 Am. St. Rep. 146; Levy v. Appleby, 1 City Ct. R. (N. Y.) 252; Bird v. Everard, 4 Misc. Rep. 104, 23 N. Y. Supp. 1008; Sulpho-Saline Bath Co. v. Allen, 66 Neb. 295, 92 N. W. 354, 1 Ann. Cas. 21; Walpert v. Bohan, 126 Ga. 532, 55 S. E. 181, 6 L. R. A. (N. S.) 828, 115 Am. St. Rep. 114, 8 Ann. Cas. 89.

25 Smith v. First Nat. Bank in Westfield, 99 Mass. 605, 97 Am. Dec. 59; First Nat. Bank of Carlisle v. Graham, 79 Pa. 106, 21 Am. Rep. 49; First Nat. Bank of Allentown v. Rex, 89 Pa. 308, 33 Am. Rep. 767; Lancaster County Nat. Bank v. Smith, 62 Pa. 47; Scott v. National Bank of Chester Valley, 72 Pa. 471, 13 Am. Rep. 711; De Haven v. Kensington Nat. Bank, 81 Pa. 95; Dearborn v. Union Nat. Bank of Brunswick, 61 Me. 369; Maury v. Coyle, 34 Md. 235; First Nat. Bank v. Graham, 100 U. S. 699, 25 L. Ed. 750; GRAY v. MERRIAM, 148 Ill. 179, 35 N. E. 810, 32 L. R. A. 769, 39 Am. St. Rep. 172, Dobie Cas. Bailments and Carriers, 43; Manhattan Bank v. Walker, 130. U. S. 267, 9 Sup. Ct. 519, 32 L. Ed. 959; Pattison v. Syracuse Nat. Bank, 80 N. Y. 82, 36 Am. Rep. 582; Mutual Acc. Ass'n of the Northwest v. Jacobs, 141 Ill. 261, 31 N. E. 414, 16 L. R. A. 516, 33 Am. St. Rep. 302; Giblin v. McMullen, L. R. 2 P. C. 317; Bank of Blackwell v. Dean, 9 Okl. 626, 60 Pac. 226; Moreland v. Brown, 86 Fed. 257, 30 C. C. A. 23. See Morse, Banks and Banking, §§ 189-203. In the absence of any explanatory evidence, an instrument signed by a depositary, by which he acknowledges that a third person has deposited with him for "safe-keeping" a certain number of dollars in gold coin, which depositary is to "return whenever called for," will be held a special deposit

36

not so numerous as formerly, owing to the tremendous development of safe-deposit companies, which for a compensation make a specialty of providing facilities for this class of business. There is great conflict among the courts as to many of the rules of law governing special deposits, and the confusion is further heightened by the judges, owing to their loose and inaccurate use of language. Certain principles, however, seem to be well established. Corporations doing a general banking business have an implied power to receive such special deposits, even though they are gratuitous, for safe-keeping. Even as to a national bank, a contract creating such a deposit is not beyond its corporate powers. Though such a deposit is within the powers of a banking corporation, in order that the deposit may be binding in the bank, it must be created by the board of directors, or by some officer of the bank with the authorization of the directors, either express or implied, as in the case of the cashier habitually receiving such deposits, while the directors, knowing of such habit, allow it to continue. Since the reception of deposits for safe-keeping, however, lies rather outside of the ordinary business of a bank, no officer, either ministerial or executive, without the express or implied authority of the directors, can bind the bank (though he may render himself personally liable) by contracts for such bailments.

39

38

The degree of care which the bank must exercise in the case of special deposits is by many courts placed at ordinary care,40 while others, with better reason, it would seem, require (as in the case

Wright v. Paine, 62 Ala. 340, 34 Am. Rep. 24. By a subsequent contract a special deposit may be turned into a general one. Chiles v. Garrison, 32 Mo. 475. An agreement that the depositary shall pay interest on the deposit makes the transaction of special deposit one of open account. Howard v. Roeben, 33 Cal. 399.

36 Foster v. President, etc., of Essex Bank, 17 Mass. 479, 9 Am. Dec. 168; Marine Bank of Chicago v. Chandler, 27 Ill. 525, 81 Am. Dec. 249; Scott v. National Bank of Chester Valley, 72 Pa. 471, 13 Am. Rep. 711; Lancaster County Nat. Bank v. Smith, 62 Pa. 54; First Nat. Bank of Muskogee v. Tevis, 29 Okl. 714, 119 Pac. 218.

37 First Nat. Bank v. Graham, 100 U. S. 699, 25 L. Ed. 750.

38 Lloyd v. West Branch Bank, 15 Pa. 172, 53 Am. Dec. 581; First Nat. Bank of Lyons v. Ocean Nat. Bank, 60 N. Y. 278, 19 Am. Rep. 181; Chattahoochee Nat. Bank v. Schley, 58 Ga. 369; Foster v. President, etc., of Essex Bank, 17 Mass. 479, 9 Am. Dec. 168; Scott v. National Bank of Chester Valley, 72 Pa. 471, 13 Am. Rep. 711.

39 First Nat. Bank of Carlisle v. Graham, 79 Pa. 106, 21 Am. Rep. 49; Chattahoochee Nat. Bank v. Schley, 58 Ga. 369; First Nat. Bank of Muskogee v. Tevis, 29 Okl. 714, 119 Pac. 218.

40 First Nat. Bank of Mansfield v. Zent, 39 Ohio St. 105; Maury v. Coyle, 34 Md. 235,

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of other bailments for the bailor's sole benefit) only slight care When the act resulting in the loss of, or injury to, the thing deposited is the act of an officer of a corporation, the corporation is not responsible therefor (according to well-known principles of agency), unless such act is within the scope of the employment of such officer, or unless the directors or other supervising corporate authority with knowledge of his unfitness either employed or retained such officer. When the act of the officer is not a mere negative or careless one, but rather a fraudulent or felonious one (as where the cashier steals the thing deposited), the question of the liability of the bank, in the absence of negligence in employing or retaining the officer, is a much-mooted one. The question, of course, is one of agency. In a leading American case, Foster v. President, etc., of Essex Bank, the bank was held not liable. This case, though frequently followed, has in other cases been severely criticised. Where the cashier is the officer charged with the supervision of the thing deposited, and has therefore access to the safe in which it is kept, it would seem that the modern conception, at least, of the scope of an agent's employment is broad enough to render the bank liable.

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41 First Nat. Bank of Muskogee v. Tevis, 29 Okl. 714, 119 Pac. 218; First Nat. Bank v. Graham, 100 U. S. 699, 25 L. Ed. 750; Chattahoochee Nat. Bank v. Schley, 58 Ga. 369; Ouderkirk v. Central Nat. Bank of Troy, 119 N. Y. 263, 23 N. E. 875; Foster v. President, etc., of Essex Bank, 17 Mass. 479, 9 Am. Dec. 168; Pattison v. Syracuse Nat. Bank, 80 N. Y. 82, 36 Am. Rep. 582. The language of the courts in defining the terms used to designate the measure of care here is frequently inaccurate, wrong and even contradictory. 42 17 Mass. 497, 9 Am. Dec. 168.

43 The doctrine of Foster v. President, etc., of Essex Bank was criticised in Preston v. Prather, 137 U. S. 604, 11 Sup. Ct. 162, 34 L. Ed. 788. The court, in speaking of thefts by bank employés of special deposits made in the bank, said: "The doctrine of exemption from liability in such cases was at one time carried so far as to shield the bailees from the fraudulent acts of their own officers and employés, although their employment embraced a supervision of the property, such acts not being deemed within the scope of their employment." And that case was followed in GRAY v. MERRIAM, 148 Ill. 179, 35 N. E. 810, 32 L. R. A. 769, 39 Am. St. Rep. 172, Dobie Cas. Bailments and Carriers, 43. And see L'Herbette v. Pittsfield Nat. Bank, 162 Mass. 137, 38 N. E. 368, 44 Am. St. Rep. 354; Scott v. National Bank of Chester Valley, 72 Pa. 471, 13 Am. Rep. 711; First Nat. Bank of Allentown v. Rex, 89 Pa. 308, 33 Am. Rep. 767. See 2 Street, Foundations of Legal Liability, pp. 276,