CHAPTER V.-BAILMENTS AND COMMON

CARRIERS.

What a Bailment Is.

The placing by one person of some article of personal property in the possession of another, to be held till the special purpose of this delivery is accomplished and then to be returned, is called a Bailment.

In a sale the essential element is a change of ownership, while in a bailment the essential element is a change of possession without a change of ownership.

Common examples of bailments are loaning articles, storing goods, hiring horses or furniture or other property, carrying goods from place to place, etc.

The one who makes this temporary transfer of the possession is the bailor; and the one into whose charge it is given, is the bailee. A bailment must be made by the actual owner of the property, or by a virtual owner who has a right to its disposal.

One may become a bailee, however, without any delivery from the bailor; for instance, if he finds lost property, or if, being a trader, after selling goods, he holds them subject to his customer's order. But the bailment relation is not created if one is in wrongful possession of the property of another, as is the case in holding stolen property.

A bailment may of course be made by means of agents on both sides, and the property may be in possession of the bailee's agent during the whole of the bailment, as is usually the case among common carriers.

While the bailee is in actual possession of the property bailed, he has all the rights of owner, if some third person attempts to deprive him of his possession.

The bailment itself is a transaction entirely distinct from the contract in accordance with which the bailment is undertaken. The bailment is really only this putting the bailee into possession of property of the bailor, with a duty to return it to the bailor, or to his

order, when the special purpose for which it was delivered is accomplished. The contract for the bailment is the agreement by which this transaction is controlled, and is governed by the same principles as any other contract.

as a favor on the part either of the bailor or of the bailee, as the case may be; and consequently is a gratuitous bailment.

In accordance with the rule already stated under contracts, that a promise made simply as a favor is without consideration and therefore is not legally binding, so an agreement for a gratuitous bailment is not a binding contract, and either party may refuse to undertake the bailment. However, as soon as the bailor has given the property into the bailee's possession, the trust thus imposed makes both parties responsible for the performance of their duties as bailor and bailee respectively.

Where the Bailor alone is benefited. undertaken simply as a favor to the bailor.

Here the bailment is The bailee in this case

either stores goods, or carries them, or does work upon them (as repairing), for the bailor without charge. So long as the bailor does not pay for it, it matters not that the bailment is in the line of the bailee's regular business.

Since the bailment is a favor to the bailor, the bailee need only take slight care in looking after the bailor's property, and will only be responsible to the bailor for its loss or injury on account of his great negligence. Of course he will not be responsible at all if he does not consent to the bailment.

"Slight care" and "great negligence" are relative terms, to be applied to an actual case according to its peculiar circumstances. In most cases the bailee would not be responsible, if he took as good care of the bailor's property as he did of his own. But this is not a conclusive test; for example, a man, who was carrying money from New York to Boston for a friend, in two hand bags, missed one, and rushed on the deck of the steamer just as she was about to start, leaving the other bag on a table in the saloon; when he returned, this bag was gone too; and, though it also contained his own money, the court held him responsible.

The bailee may make stipulations with the bailor in regard to the extent of his responsibility, for instance, to enlarge it; but he cannot thus excuse himself from his liability for great negligence.

The bailee cannot sell, pledge or give away the property of the bailor, while it is in his possession. But he may charge the bailor with any necessary expenses incurred about it during the course of the bailment.

Unless the bailment is for some definite time or purpose, it may be ended at any time at the desire of either party; and the bailee must then deliver back the property to the bailor or to some third person at the bailor's order.

If, after due notice to the bailor, he fails to come and take the property, the bailee may store it at the bailor's expense.

If, before delivery to the bailor, a third person appears, claiming to be the real owner, the bailee must investigate his claims, and give up the property only to the rightful owner. If it be of great value and the ownership uncertain, the bailee should call on a court of equity to decide between the claimants.

Where the bailee alone is benefited. This is the common case of lending property to another. Here the bailor's consent is, of course, necessary to make it a bailment and not a wrongful taking.

Since the bailee's possession of the property is a favor done him by the bailor, he must take the best care of it, and is responsible to the bailor for any loss or injury caused even by his slight negligence.

This does not make him an insurer against loss or damage caused by events or accidents beyond his control. But he is responsible if he does not take all the care a very prudent man would take under the same circumstances.

The bailee may make special stipulations as to the extent of his liability; but the law will not let him in this way exempt himself from his duty to take great care, or from his responsibility for slight negligence.

The bailee must not sell, pledge, give away or lend the property, nor use it for other than the purpose for which he borrowed it. By treating the property in any of these ways he becomes absolutely responsible to the bailor for it.

The bailor has the right to end the bailment at his pleasure (unless perhaps where the loan is for a definite time or purpose). If the bailee fails to return the property at the bailor's rightful demand, he then becomes absolutely responsible for it.

Bailments for Hire.- Where a bailment is undertaken for hire, it is a business transaction in which both bailor and bailee are benefited. The agreement of both parties to the bailment is necessary before it can be undertaken, and this agreement is a binding contract by reason of the consideration of their mutual promises.

In this class of bailments the bailee is under obligations to take ordinary care of the property; or in other words, he is responsible to the bailor, if he fails to take such care as an ordinarily prudent man of the same trade usually takes.

The bailee must not give away or sell the bailor's property; but, unless the contract calls for his personal use or possession of the property during the bailment, he may transfer his interest as bailee to another, or allow another to use it.

Hired Services about the Property. In these transactions the bailee takes charge of the property (warehousemen, safe deposit companies, grain elevators, etc.); or does some work on it by way of repairing or altering (carpenters, blacksmiths, painters, etc.); or carries it from place to place where the carrier is not a common carrier.

The bailor has a right to require the exercise of ordinary skill on the part of the bailee. The bailee, on the other hand, is entitled to reasonable pay for his work, if none has been agreed upon.

Formerly it was held by the courts that, if the property was destroyed by some inevitable accident, the bailor, besides bearing the loss, had to pay the bailee also. But the tendency is now to consider the bailment at an end on such an event. If the property is destroyed by the bailee's fault, the bailee must pay for it and lose his compensation too. But if it is injured simply, and is still of any value to the bailor, the bailee's liability will be reduced by so much. The same would be true in case a bailee failed to complete work on the bailor's property and the property was still of value to the bailor.

The bailee must of course use ordinary care, which is to be determined by the circumstances in each case. He will not then be liable for any loss or damage not occasioned by his own negligence. But in case of an accident he must endeavor to make the loss as little as possible. He may make special stipulations in regard to his responsibility, but he cannot thereby excuse himself from his obligation to take ordinary care.

During the bailment the bailee is entitled to an undisturbed possession of the property, and he must meet any ordinary expenses incurred in caring for the property. He is responsible for the damages done by the property while in his possession (as in the case of one pasturing cattle for another).

At the end of the bailment, the bailee must deliver up the property to the bailor, or to his order, taking due care if a third person sets up a rival claim. Until he is paid for his services, how

ever, the bailee has a lien on the property for his pay. ceases as soon as the bailee parts with the possession.

This lien

Hired Use of Property. Examples of this class of bailments are the common ones of hiring horses, furniture, boats, etc.

The bailor and bailee here have substantially the same rights and duties as in the case of hired services, with this distinction, that here the bailee pays for the bailment and therefore has no lien as before.

If, for example, it is a horse which is hired, ordinary care would include proper feeding, careful driving, safe hitching, etc.; and if the bailee drives to a different place or beyond the place fixed by the agreement, he then becomes absolutely responsible for any loss or damage. The bailor, on his part, must not let a vicious or dangerous horse without notice.

When the time fixed for the bailment is ended, or if no time is fixed, on a demand from the bailor, the property must be delivered back in good condition, reasonable wear and tear excepted. If the bailee then fails to deliver up the property, he holds it at his own risk in case of any loss or damage.

Pledge. A Pledge is the depositing of personal property with another to secure the payment of a debt owed to him, or the fulfillment of a contract made with him.

The bailor is now called the pledgor; and the bailee, the pledgee. The two most familiar examples of a pledge are, borrowing money on articles by pawning them, and collateral security transac tions. A pawn is a depositing of property with another to secure an advancement of money, the property to be redeemed by a repayment of the money, with interest usually. A collateral security is a pledge for the additional security of some debt or contract, only to be resorted to after default on the pledgor's part; for example: if A held