[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 32
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 33
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 34 Action by Natalie Allien Voyt against the Bekins Moving and Storage Company to recover for loss of valuable chattels intrusted to defendant for safekeeping. Judgment for plaintiff, and defendant appeals.
AFFIRMED. OPINION ADHERED TO ON REHEARING. 1. The motion to strike and the demurrer upon the ground that two causes of action were improperly joined were both overruled and the defendant answered over. By so doing it waived any error that may have been committed in those rulings. Craft v.Flesher, 153 Or. 348, at 350, 55 P.2d 1101, 56 P.2d 1141 (1936); Scandinavian-American Bk. v. Lumber Co., 101 Or. 151,199 P. 624 (1921); Crane v. School District, 95 Or. 644, at 651, 188 P. 712 (1920); Stanchfield Warehouse Co. v. Central R.of Oregon, 67 Or. 396, 400, 136 P. 34 (1913); Olds v. Cary,13 Or. 362, 10 P. 786 (1886); Wells v. Applegate, 12 Or. 208,6 P. 770 (1885); Green v. Taney, 7 Colo. 278, 3 P. 423 (1884);Diamond Rubber Co. v. Harryman, 41 Colo. 415, 92 P. 922, 15 L.R.A. (N.S.) 775, at 783 (1907). This disposes of the defendant's first and second assignments of error.
Defendant's third assignment is to the effect that the court erred in refusing to compel the plaintiff to elect whether she would proceed upon contract or tort. As a general proposition of law we concur in defendant's contention that an action in contract cannot be *Page 39 joined with an action in tort. Such joinder would often involve substantial inconsistencies as to issues, evidence admissible and remedy. The difficulty arises in the application rather than in the statement of the rule. In the case at bar plaintiff had but one right of recovery arising from one transaction, to-wit, the loss of the silver by reason of defendant's conduct relative to its care. There were however three legal theories or grounds of action which were conceivably available to the plaintiff: She might assert the facts giving rise to defendant's common-law undertaking as a warehouseman together with a breach of that undertaking in an action of assumpsit. She might allege a special contract imposing upon defendant duties in excess of those imposed upon a warehouseman at common law, and she might then sue in contract upon the alleged breach of the special provisions. This she might do without characterizing the defendant's conduct as negligent. Lastly, she could bring an action upon the case, asserting by way of inducement the undertaking or agreement of defendant for the purpose of establishing a duty and then asserting the negligent failure to perform the same. In the case at bar the complaint contains some allegations appropriate to each of the three theories or grounds of action. The filing of the complaint cannot therefore be deemed an election of any theory as was the case in Bank of California Nat. Ass'n v.Schmaltz, 139 Or. 163, 9 P.2d 112 (1932). But it is clear that if plaintiff proved a case upon any one of the three theories, the amount of recovery would be the same, namely, the value of the stolen silver.
As indicated there were some allegations in the complaint tending to show that plaintiff claimed the *Page 40 existence of an express contract for vault storage with an unconditional guaranty of safe return, provisions which involved obligations in excess of the common-law duty of due care, but at the end of plaintiff's case the court ruled out the theory of unconditional guaranty and announced that the case would be submitted "entirely upon the proposition of whether or not Bekins used the care which the uniform warehouse receipt act requires." That act provides:
"A warehouseman shall be liable for any loss or injury to the goods caused by his failure to exercise such care in regard to them as a reasonably careful owner of similar goods would exercise, but he shall not be liable, in the absence of an agreement to the contrary, for any loss or injury to the goods which could not have been avoided by the exercise of such care." 4 O.C.L.A., § 60-221.
Thereafter the court instructed the jury in the words of the above section, and added:
"* * * So the question here for you to determine is whether or not the defendant exercised such care as regards the property in question as a reasonably careful owner of similar goods would have exercised."
The court instructed the jury that the plaintiff in her complaint charged the defendant with negligence, and
"cannot recover for any other or different acts of negligence, if any, than those set forth in the complaint."
The court further instructed:
"* * * that the only contract between plaintiff and defendant concerning the storage of her silver which you are to consider is contained in the warehouse receipt and contract in evidence as defendant's exhibit 10. It is charged in the complaint and some *Page 41 statements have been made to you contending that plaintiff and defendant entered into a contract prior to the execution of defendant's exhibit 10 whereby defendant unconditionally guaranteed to keep the property in question safe and return the same. This matter and contention is withdrawn from your consideration. The sole question for you to consider is whether or not defendant was guilty of negligence as charged in the complaint, * * *."
It appears that any theory of special contract asserted in the complaint was withdrawn from the jury at defendant's request. The allegations in the complaint concerning a special contract being disposed of, it remains to consider whether the court erred in failing to compel an election between assumpsit on the one hand and an action on the case upon the other.
In a situation similar to the one at bar it was held that an action on the case would lie. Hamilton v. Baggage etc. TransferCo., 97 Or. 620, 192 P. 1058 (1920).
"A bailor may sue in case where * * * a loss or injury to the property has occurred from the bailee's neglect. In fact, case may be brought for any breach by the bailee of duties implied by law from the existence of the relation of bailor and bailee, and if the duty alleged to have been violated is one that arises out of the relation it is no objection to an action in case that the performance of the duty has been expressly stipulated for." 8 C.J.S. 327, § 44, Notes 20 and 21. La Plante v. Du Pont,223 Mich. 343, 193 N.W. 820, 31 A.L.R. 694 (1923).
It is apparent that the court did in substance compel an election by instructing the jury that the only question before them related to the charges of negligence in the complaint. There was no surprise, no inconsistency as to the substance of the issues, evidence admissible or remedy, whether the action be viewed *Page 42 as assumpsit or case. Defendant having suffered no prejudice, there was no error in denying the motion to elect. Such motions are addressed to the sound discretion of the trial court. In the following cases motions were made to elect between contract and tort; the motions were denied and we affirmed. Kaller v. Spady,144 Or. 206, 10 P.2d 1119, 24 P.2d 351 (1933); Pattersonv. Babcock Peets, 128 Or. 476, 274 P. 903 (1929); and seeHumble Oil Refining Co. v. Ooley, (Tex.) 46 S.W.2d 1038 (1932).
The case at bar is distinguishable from Harvey v. SouthernPac. Co., 46 Or. 505, 80 P. 1061 (1905). In that case an election was necessary because the amount of relief depended upon the theory of the action (whether for common-law negligence or upon a statute authorizing additional recovery of attorneys' fees). In the case at bar the contractual allegations suggestive of an action in assumpsit were matters of inducement for the purpose of showing the duty assumed by the defendant, the breach of which constituted the alleged negligence. It is difficult to see how negligence could be alleged without asserting the defendant's duty of care or how the duty of care imposed upon a bailee could be alleged without showing a contractual relation with the plaintiff.
"* * * in actions ex delicto against a warehouseman for negligent loss or injury, it is proper to set forth the contract of bailment to show the origin of the duty, by way of inducement to the duty; * * *" 67 C.J. 564, § 250. And see 45 C.J. 1093, § 665.
No error was committed in denying the motion to elect.
In its fourth assignment of error the defendant asserts that the trial court erred in refusing to direct *Page 43 a verdict for the defendant on the ground that the plaintiff failed to introduce competent evidence supporting the contract which she alleged in her complaint. If, as we have held, the court properly submitted the case to the jury as an action exdelicto for negligence and at the defendant's request withdrew the allegations of special contract, the absence of proof of the special contract would be a circumstance favorable to the defendant. Such evidence might have been confusing to the jury. Concerning the allegations of special contract found in the complaint the defendant in its brief asserts:
"* * * that either the testimony was not admitted in evidence in support thereof or that the testimony was erroneously admitted in evidence and later rejected by the instructions of the court to the jury."
We agree to this extent that the only evidence of the special contract alleged in the complaint was eliminated by the instructions of the court. As to such evidence the objection was first raised on motion to strike. There is no merit in the fourth assignment of error.
By the fifth assignment of error defendant asserts that the warehouse receipt was the contract of the parties, that it limited plaintiff's recovery to $10 per one hundred pounds, and that since the plaintiff did not base her claim upon the warehouse receipt a verdict should have been directed for the defendant. It is to be noted that the plaintiff did not rely upon the warehouse receipt in her complaint nor did she offer it in evidence. It was received as a part of defendant's case. The defendant requested the court to instruct the jury that:
"the only contract made between plaintiff and defendant concerning the storage of her silver is contained in *Page 44 the warehouse receipt and contract in evidence as defendant's exhibit 10."
The court instructed the jury in substantially identical language. It does not however necessarily follow that the plaintiff was barred from suing on the common-law liability of the warehouseman. In support of its contention that plaintiff could not recover on her common-law action by reason of having entered (as defendant claims) into a special contract, the warehouse receipt, defendant relies upon Normile v. OregonNavigation Co., 41 Or. 177, 69 P. 928 (1902). In that case the plaintiff brought action against the defendant common carrier for negligent injury to a mule which had been entrusted to the defendant for transportation. There was no reference to any bill of lading in the complaint but the answer of the defendant set up the bill of lading as an express contract wherein it was agreed that the value of the mule did not exceed $100. It was held in substance that the agreed limitation of value was valid and that the plaintiff could not recover upon a carrier's common-law liability if there was a valid but inconsistent provision in the written contract. The court by Justice WOLVERTON said:
"* * * The plaintiff has a legal right to pursue the form of action adopted (3 Ency. Pl. Pr. 818), but, having thus made his election, he must recover upon the common-law liability, or not at all, and a valid special contract of the parties, providing or stipulating for a different or restricted liability in theparticular or particulars relied upon for recovery, will not, in reason and good practice, support the action." (Italics ours.)
We have no criticism of this ruling. But the court added: *Page 45
"* * * It is seldom that bills of lading showing the contractual and correlative relations and obligations of the carrier and shipper relative to the shipment are drafted with a view to changing or restricting all the common-law liabilities to which the carrier is subjected; and if any remain upon which an action may be founded and recovery had without coming in conflict with special limitations and restrictions, there exists no reason why the common-law action may not be maintained, notwithstanding the special contract."
Under the doctrine of this case we may inquire whether there was a common-law liability which did not come in conflict with any valid contractual provision of the warehouse receipt and upon which an action ex delicto might therefore be founded. Upon the issue of liability (as distinguished from the issue of alleged agreed value) there is no conflict. The warehouseman's duty at common law is that of ordinary or reasonable care and the same duty is expressed in the warehouse receipt. Upon the issues actually litigated, there was therefore no conflict between the common-law liability on the one hand and that specified in the warehouse receipt upon the other, unless it be found in the clause concerning the limitation of value.
We now consider the validity of that clause. It was not necessary for plaintiff suing on the common-law liability of the warehouseman to plead or introduce in evidence the warehouse receipt. If there was a special contract restricting the common-law liability of the warehouseman it devolved upon the warehouseman to allege and prove it. Such was the holding of the court in the Normile case, supra. It is true that this was said concerning a common carrier but the same rule should be applied to a warehouseman. In its answer the defendant has affirmatively alleged that it was a corporation *Page 46 "engaged in the general business of maintaining a warehouse and warehouse facilities for the storage of general goods." That such a business is affected with a public interest and may be and in fact is regulated by law cannot be denied. Exporters' Traders'Compress Warehouse Co. v. Bargainer, (Texas) 45 S.W.2d 563 (1932); Reaves Warehouse v. Commonwealth, 141 Va. 194,126 S.E. 87 (1925); Gray v. Central Warehouse Co., 181 N.C. 166,106 S.E. 657 (1921); Munn v. People of Illinois, 94 U.S. 113,24 L. Ed. 77 (1876). Though not held to an insurer's liability as in the case of a common carrier the alleged contracts of a warehouseman purporting to limit the amount of recovery against it for its own negligence should be carefully scrutinized in the light of public policy.
The defendant asserts that the Normile case is directly in point and we accept its authority. In that case the plaintiff contended that the alleged agreement as to value was void as being contrary to sound public policy. The court said:
"* * * If void, the defendant's common-law liability remains unchanged and unrestricted in that particular, and the special contract cannot stand in the way of plaintiff's recovery by the common-law form of action."
It was held that the agreement in that case was not contrary to public policy and was binding upon the parties. But the reasons for the decision are significant. That decision holds that a common carrier cannot by special agreement validly stipulate against liability for loss of property entrusted to it for carriage if occasioned by its own negligence. The same is true of a public warehouseman. But it is also established that parties may under certain circumstances enter *Page 47 into a contract stipulating the value of the goods, if the contract is "fairly and honestly made as a basis of the carrier's charges and responsibility." (Normile v. Oregon Nav. Co., supra.) Even in the event of the defendant's negligence such an agreement, if valid, will bind the shipper to the agreed valuation of his goods. The court then gave consideration to the kind of an agreement limiting recovery for negligence which will be held valid. Justice WOLVERTON, speaking for the court, said:
"If the purpose of the contract was merely to place a limit on the amount for which the defendant shall be liable, — that is to say, exempt it in any measure from full liability, as respects the value of the property concerned, — then clearly, as to any losses resulting from negligence, it cannot be helped; and this upon the ground that it would not be just and reasonable. Quasi public functionaries are especially held to fair dealing, and when acting as public carriers, with the advantages between them and the shipper standing very much to their side, they cannot be allowed to enter into any contract relative to the business in which they are engaged unless it is just and reasonable; and a contract exempting from liability based upon negligence cannot be so characterized. If, however, upon the other hand, the stipulation as to the value is fairly and honestly made as a basis of the carrier's charges and responsibility, it will be sanctioned as a proper and lawful contract. It is confidently asserted by high authority * * * that it can make no difference whether the valuation expressed in the contract is one previously named by the shipper on requirement of the carrier, or one inserted in the contract by the carrier without being named by the shipper, but acquiesced in by him. In either case it becomes a part of the contract, on which the minds of the parties meet,and on which they act." (Italics ours.) *Page 48
The court refers to the impracticability of fixing one rate applicable to shipments of different value, and says:
"* * * an agreement fairly entered into upon this idea between carrier and shipper would appear to meet all the requirements of the law. So, in the case at bar, if the plaintiff freely, and without restraint, — that is, was laboring under no such inequality of conditions as that he was compelled to enter into the contract whether he would or not, in order to have his stock carried — executed the contract in question, he is bound by the stipulations as to value."
The court then examined the specific transaction between the parties showing "the considerations and circumstances under which the contract was entered into." The court observes that:
"* * * There was no effort at the immediate time to obtain a different rate, nor was there any effort whatever to secure a different agreement as to values."
The court also observed that as a result of long experience the shipper was familiar with the terms of the shipment as to value, and concluded:
"* * * we can see nothing in the immediate circumstances attending the shipment and execution of the bill of lading that savors of restraint or unfairness on the part of the defendant in requiring its (the bill of lading) execution on the part of Schrader. * * * and there was no evidence tending to show that it was not freely and fairly executed by the parties involved."
An eminent authority indicates that a similar rule should be applied in the case of public warehousemen:
"* * * No warehouseman may by contract relieve himself from the consequences of his negligence. It is possible, however, that he may limit the amount for which he is liable, by an express contract, the provisions *Page 49 of which have been fairly accepted, with notice, by thebailee." 4 Elliott on Contracts, p. 338, § 3099. (Italics ours.)
In the case of Donlon Bros. v. Southern Pacific Co., 151 Cal. 763, 91 P. 603, 11 L.R.A. (N.S.) 811, 12 Ann. Cas. 1118, (1907), the decision of the court is indicated by the headnote which is as follows:
"A contract between a railroad company and a shipper, reasonable and voluntarily entered into by the parties, the primary purpose of which was, as the rates of transportation charged by the railroad were measured by the valuation of the property shipped, to fix an agreed valuation on such property as a basis upon which freight rates should be charged and paid, on condition that in case of loss the railroad's liability should be measured by such agreed valuation, is to be construed as an agreement fixing the valuation of the property shipped, and not as a contract limiting the liability of the railroad; and in case of loss through the gross negligence of the railroad, its liability cannot exceed the valuation so fixed."
In its opinion the court said:
"* * * While it is true that the actual value of property may in fact be in excess of an agreed valuation in a contract, and as to that excess it may be said that the carrier is exonerated from liability, this does not render the contract, otherwise fairlyentered into fixing the agreed valuation, invalid." (Italics ours.)
While this was a case against a common carrier the language just quoted was copied and cited with approval in McMullin v.Lyon Fireproof Storage Co., 74 Cal. App. 87, 239 P. 422 (1925), a case involving the liability of warehousemen and citing the Uniform Warehouse Receipts Act. In the McMullin case an *Page 50 agreement as to the value was properly held binding because the plaintiff, by an application for storage,
"in effect, asked for a low rate of storage because of the low valuation placed on the packages."
The case is cited here because of its adoption of the doctrine of the Donlon case, supra.
It is to be noted that in the Normile case the bill of lading was signed by the shipper at the time of shipment.
There is nothing in Rosenwald v. Oregon City TransportationCo., 84 Or. 15, 163 P. 831, 164 P. 189 (1917); Zoller Hop Co.v. Southern Pacific Company, 72 Or. 262, 143 P. 931 (1914), orWells v. Great Northern Ry. Co., 59 Or. 165, 114 P. 92, 116 P. 1070, 34 L.R.A. (N.S.) 818 (1911), cited by the defendant which weakens the authority of the Normile case.
What are the circumstances relating to the alleged agreement concerning value in the case at bar? The defendant Bekins testified that he knew that the trunk contained silver. He admitted that upon the trunk was a label which read: "For storage in safety vaults." The defendant admitted the receipt of plaintiff's Exhibit 1 in which it was advised that Mrs. Voyt had a steamer trunk of "expensive silver which she wants placed in a vault."
The undisputed testimony also showed that plaintiff had a conversation with an employee of the defendant company who came to her place and received from her the chattels in question. Defendant objected that there was no evidence that this employee was authorized to make contracts for the defendant company and the trial court sustained this objection. Evidence was received however concerning the conversation between *Page 51 the plaintiff and said employee for the purpose of showing notice to the defendant company of the contents of the trunk. The undisputed testimony of the plaintiff is to the effect that she told the employee that the trunk contained silver which was very valuable, priceless heirlooms, and that it was worth thousands of dollars. This employee of the defendant never testified and Mrs. Voyt's evidence upon the point stands uncontradicted. The testimony of Mr. Bekins establishes that his company had notice of the substantial value of the trunk of silver weighing approximately 250 pounds. The following excerpt from the transcript is important:
"Q. The general practice in that case, then, would have been that you would put Mrs. Voyt's trunk in with the rest of her stuff, wouldn't it?
A. Not necessarily. Apparently the fact that it was silver, and Dunham had said that it was expensive silver, that we thought, well, we better take a little better care of it than to have it just go in open storage, and we had it in the office or wherever we thought it was safer, where our employees and all could see it.
Q. How did you know from Dunham's letter that this was the particular trunk that contained that silver?
A. Well, I don't know; we must have known it because it was the trunk.
Q. Your truck driver must have told you, then, possibly?
A. I don't know; it might be; it might be the letter."
If to the foregoing circumstances it be added that the warehouse receipt was not sent to Mrs. Voyt until about two weeks after the goods had been accepted by the company and the further fact that she was never requested to nor did she ever sign the warehouse receipt, *Page 52 it becomes conclusively established that the provision inserted by the company as to an alleged agreed value of $10 per hundred pounds was not fairly and honestly made as the basis of the defendant's charges and responsibility. It is not such a stipulation "freely and fairly executed by the parties involved" as is referred to in the Normile case. The undisputed testimony demonstrates that there was in fact a declaration of a higher value than $10 per hundred pounds. Defendant was notified that the silver was worth "thousands of dollars," which at the least indicates a valuation of not less than $2,000. Whether the warehouse receipt under these circumstances ever became the contract of the parties need not be decided in this case, for the particular stipulation concerning the agreed value was invalid in any event.
In the case of Hollister Bros. v. De Werd Milling Co.,62 S.D. 62, 251 N.W. 805 (1933), the warehouse receipt contained a provision which was invalid because contrary to the provisions of the warehouse statute. The court said:
"* * * We are of the opinion, therefore, that the said third paragraph is without any binding effect whatsoever, and that thereceipt must be considered as though the said third paragraph hadnever been attempted to be made a part thereof." (Italics ours.)
In the case of McGregor v. Oregon R. N. Co., 50 Or. 527,93 P. 465, 14 L.R.A. (N.S.) 668 (1908), the plaintiff shipper brought an action against the carrier upon its common-law liability as in the case at bar. The defendant set up affirmatively that by contract the defendant's liability was limited to $5 per hundred weight for household goods, etc., and that prior to the shipment the rates under which the goods were shipped had been *Page 53 established by the defendant for their transportation upon the character and value thereof. The shipment was destroyed by fire. The bill of lading upon which defendant relied was not sent to the plaintiff until after the loss of the goods. The court said:
"* * * There is a vast difference between consenting to the terms expressed in a bill of lading before the shipment, if such consent can be implied from the mere fact of receiving it without the signature of the consignor, and a case like the one at bar, where the jury has found that there was no consent to receive the bill of lading at some future time, nor to make the contract included therein."
Again the court said:
"Under the verdict of the jury we must presume that plaintiff neither consented nor authorized his name to be signed to this receipt, and under the rule as substantially stated and recognized in this State in Seller v. Steamship Pacific, 1 Or. 409 (Fed. Cas. No. 12,644), nothing short of an express stipulation will constitute such an agreement."
In the case of Seller v. Steamship Pacific, 1 Or. 409 (1861), cited in the McGregor case, it was contended by the carrier that by the terms of the receipt issued, the steamship was exempted from liability as insurer and was required only to exercise ordinary diligence. The shipper had accepted the receipt without signing it and without being requested to do so. The court by Judge Deady held that it was bound by the authority of the case of The New Jersey Steam Navigation Co. v. Merchants' Bank, 6 How. R. 344, 12 L. Ed. 465, and said:
"* * * In that case the court held, that a common carrier might, by special agreement with the shipper, limit his liability as an insurer, but not for the negligence of himself or servants. But they further held, *Page 54 that `the burden of proof lies on the carrier' to show such an agreement, and that `nothing short of an express stipulation, by parol or in writing, should be permitted, to discharge him from duties which the law has annexed to his employment. The exemption from these duties should not depend upon implication or inference, founded on doubtful and conflicting evidence, but should be specific and certain, leaving no room for controversy between the parties.'"
While the foregoing was said with reference to the limitation of liability as an insurer the doctrine was expressly approved in the McGregor case, supra, where the limitation related to an alleged agreed valuation of the goods.
The case of Wells v. Great Northern Ry. Co., 59 Or. 165,114 P. 92, 116 P. 1070, 34 L.R.A. (N.S.) 818 (1911), appears to qualify the right of a carrier to limit his liability as an insurer by holding that the contract to that end should be express, reasonable and just. The case is important by analogy. Again it has been said:
"* * * Where the contract is complete prior to issuance of a receipt limiting liability to an agreed value, and the bailor's attention is not called to such limitation, it cannot be considered that the bailor consents to a change in the contract and he is not bound by the limitation clause in the receipt." 67 C.J. § 98, p. 505.
In the case of England v. Lyon Fireproof Storage Co., 94 Cal. App. 562, 271 P. 532 (1928), the plaintiff bailor sued the defendant warehouse company on account of the negligent loss of certain goods. Consideration was given to the effect of a warehouse receipt, which provided:
"* * * The responsibility of this warehouse for any piece or package, or its contents, is limited to the *Page 55 sum of $25, unless the value thereof is made known at the time of the storage, and receipted for in the schedule, and an additional charge made for the higher valuation. * * *."
Among other goods stored with the defendant were seven cases of whiskey. There was no evidence that the bailor made any specific declaration of value of the liquor but the court found that the defendant knew that the crates contained liquor "and had ample reason to know of its approximate value." At the trial it was stipulated to be worth $400. Concerning the other articles for which suit was brought the court found that there was no evidence that the defendant had knowledge of either their identity or value. In this situation the court held that the $25 limitation of value applied as to the articles whose identity and value were unknown to the defendant but that the $25 limitation did not apply as to the liquor, the approximate value of which was known to the defendant. There is nothing in the opinion to indicate that the value of the whiskey was listed in the receipt and yet the full value thereof was recovered. It is upon the doctrine of this case that Professor Williston comments as follows:
"There is a conflict of authority as to whether subdivision (b), above, prohibits a warehouseman from limiting his liability for damages to, or loss of, the goods to a specified sum unless a higher value is declared and an increased charge paid. The better view supports such a limitation if the requisites for the formation of a contract are satisfied. California has introduced a distinction denying validity to such a contract if the warehouseman knows the nature of the goods and should, therefore, know that the value exceeds the sum fixed, but upholding the contractual limitation where he does not possess such knowledge. Certainly, the above provision would seem to buttress *Page 56 the general common-law view declaring invalid any attempt to limit liability to a stated amount by mere notice." 4 Williston on Contracts, (Rev. Ed.) p. 2927, § 1046.
There is another consideration which militates against the validity of the clause limiting value to $10 per one hundred pounds. In the absence of such clause the bailor would be entitled to recover the full value of the goods. Since it was incumbent on the defendant to allege and prove under the law of contracts the limitation upon which it relied, it of course became necessary to show consideration and a meeting of minds upon the bargain. Defendant was therefore required to show that the storage charges were fixed on the basis of the agreed limitation of value of $10 per one hundred pounds of silver and that the minds of the parties met on that basis. If an extra charge was in fact made by reason of the known and declared greater value, then the $10 limitation clause would not prevent recovery of the full value of the goods, even though otherwise valid. Under the evidence the plaintiff may have reasonably believed that an extra charge had in fact been made. The evidence shows that she knew the contents of the warehouse receipt after its belated delivery and knew the amount charged for storage, but it does not show that she knew the basis upon which her storage charge was computed. Defendant contends that it charged the low rate on the basis of the $10 valuation, but assuming this to be the case the point now made is that since the defendant had been advised of substantial value in the silver it could not fairly charge the low rate based on a $10 valuation and then claim that there was a bargain and a meeting of minds thereon without in some manner bringing home to the plaintiff the fact that the rate charged was based on *Page 57 a $10 valuation. If the low rate was in fact applied in consideration of the $10 valuation there is nothing to show that plaintiff knew it. How then was there a meeting of minds?
It is true that the statute, 4 O.C.L.A. § 60-203, provides that a warehouseman may insert in a receipt any other terms and conditions provided they are not contrary to the provisions of the act and provided they do not impair the obligation of reasonable care, and it is true that a warehouse receipt ordinarily constitutes the contract between the parties, but the right to insert additional terms and conditions does not give to such terms the force of contract unless the minds of the parties can be fairly said to have met thereon.
If the warehouse receipt contains only the provisions required by statute the bailor would be presumed to know the contents thereof and to consent thereto, but if the warehouseman elects to insert additional provisions in excess of statutory requirements the question of consent thereto should be determined by the ordinary law of contracts.
In the case of Litchman v. Broadway Storage Co. Inc.,51 R.I. 443, 155 A. 524 (1931), the action was in assumpsit by the bailor against the warehouseman. The Uniform Warehouse Receipts Act was cited. The defendant by a special plea alleged that it had accepted the goods for storage under an agreement embodied in a nonnegotiable receipt delivered to the plaintiff, one condition of which was that the defendant should not be liable for any damages caused by fire. Defendant received the goods on February 2. On the night of February 13 defendant mailed the warehouse receipt to the plaintiff. The goods were consumed by fire on the early morning of February 14, *Page 58 on which day also the plaintiff received through the mails the warehouse receipt. The warehouse receipt contained special conditions not included in those required by statute; among others the provision that it should not be liable for fire. The court held that the plaintiff was not bound by the conditions in the warehouse receipt. It cited the provisions of the Uniform Warehouse Receipts Act authorizing the insertion of other terms or conditions not required by statute, and said:
"In the instant case there was no agreement or understanding between the parties with respect to the issuance of a receipt by the warehouseman. The rights and duties of the parties on the delivery of the goods as a consequence were established by the statute with such other lawful conditions, if any, as the parties agreed to. Defendant did not agree with plaintiff to become an insurer of his goods; defendant's agent agreed only to take proper care of the goods."
At the foot of the warehouse receipt in the case at bar the following words appear in black type:
"This Warehouse Receipt and Contract has been examined and is hereby accepted as correct and satisfactory."
followed by a blank for the signature of "Owner."
It is apparent that the defendant prepared the receipt and contemplated that the owner should accept the same in writing, but the receipt being delivered to plaintiff two weeks late was never signed by her.
It may be suggested that the case of Central Storage WarehouseCo. v. Pickering, 114 Ohio St. 76, 151 N.E. 39 (1926) (not cited in the briefs), is opposed to this conclusion and that since the Pickering case cites the Uniform Warehouse Receipts Act it is *Page 59 incumbent upon us to follow it. This was a case in which the plaintiff sued in trover alleging negligence of the defendant. The warehouse receipt contained provisions substantially similar to the $10 limitation in the case at bar. As in the case at bar the receipt was signed only by the warehouseman, but it was delivered at the time the goods were received in storage. The court cited the provision of the warehouse act to the effect that a warehouseman may insert in a receipt any other terms and conditions not contrary to the provisions of the act, and which do not impair the warehouseman's obligation of reasonable care. The court then said:
"The necessary result of enacting a statute providing for a uniform warehouse receipt, and further providing that a warehouseman may insert terms and conditions in such receipt with well-defined limitations, is to give to a warehouse receipt the effect of a contract between the parties."
We agree that a warehouse receipt, together with additional terms inserted therein by the warehouseman, may constitute a contract between the parties, but it is flying in the face of every principle of the law of contracts to assert that the statutory permission to insert additional terms in and of itself renders such terms binding as a contract unless there is consideration therefor and the minds of the parties meet thereon.
The crucial element in the case at bar is the fact of the actual knowledge communicated to the warehouseman concerning the identity and substantial value of the silver. In the Pickering case, supra, the exact opposite was true. That court said:
"* * * The record discloses no testimony that the storage company was advised of the contents of *Page 60 the bundle at the time it was delivered in storage, or that the defendant was advised of the value of the bundle."
We concede the desirability of uniform construction under the Uniform Warehouse Receipts Act, but uniformity of decision is a virtue only when based on similarity of fact. We are neither bound nor persuaded by the Pickering case.
Even if we were to assume that the Pickering case is in point upon the facts we find its authority greatly weakened by the able dissent of Justice Florence E. Allen, who said:
"(1) Section 4-A of the warehouse receipt does not, by simple insertion in the receipt, the receipt being accepted, constitute a contract under the General Code.
"(2) There was no meeting of the minds upon the provision that the warehouseman should be liable for damages up to the sum of $25, and no more, unless the value thereof was made known at the time of storing and a higher storage rate paid therefor, and hence no contract was made between the parties upon that point."
Again Justice Allen said:
"* * * In other words, I think the essential elements of a simple contract are not changed by the statute, as to terms permitted under section 8459. To hold otherwise is to put the bailor at the complete mercy of the warehouseman, and section 8459 was written with no such purpose."
The case of Taussig v. Bode Haslett, 134 Cal. 260,66 P. 259, 54 L.R.A. 774, 86 Am. St. Rep. 250 (1901), frequently cited, is distinguishable from the case at bar. In that case the bailor sued the warehouseman alleging negligence whereby 181 gallons of spirits *Page 61 were lost by leakage. Upon delivery of the goods defendant issued its receipt which provided: "Loss or damage by * * * leakage * * * at owner's risk." It was held that the bailor was bound by the terms of the receipt, it being his duty to read it. The court clearly stated that this provision "would not exempt it (the warehouseman) from liability for leakage due to its fault, * * *." The provision of the receipt however "did exempt it from the duty of watching these casks to detect leakage caused by defects in the casks, or resulting from any cause other than improper handling or storage." The court distinguished the warehouseman's case from certain common carrier cases which refused to exempt the carrier from liability by mere notice not expressly assented to by the shippers, and said:
"* * * The case of warehousemen is entirely different. There is no public policy to be infringed by stipulations limiting their liability for loss or deterioration caused by the inherent qualities of the articles stored, or by defects in the vessels containing them."
This conclusion of the California court was obviously correct, but it does not necessarily, or at all, follow that there is no public policy involved in attempted stipulations fixing the value of warehoused goods lost by negligence at a sum far below actual known and declared value; nor did the Taussig case involve any element of a reduced rate claimed to be valid in consideration of an agreed low value. We concede that a warehouseman may have greater bargaining rights than a common carrier in many respects. Our conclusion here is based on the specific facts of the case at bar. *Page 62
The following authorities while not directly in point tend to indicate that stipulations as to value to be valid must be inserted prior to or at the time of the bailment: Williams v.Gallagher Transfer Storage Co., 170 La. 461, 128 So. 277 (1930); Keyes-Marshall Bros. Livery Co. v. St. Louis H.R.Co., 113 Mo. A. 144, 87 S.W. 553 (1905); State v. Ace Storageand Moving Co., (Mo.) 135 S.W.2d 363 (1940); Belzer v. DaubStorage Warehouse Van Co., 130 N.Y. Supp. 153 (1911);Guillaume v. General Transatlantic Co., 100 N.Y. 491,3 N.E. 489 (1885); Jacobson v. Art Storage Moving Co., 16 N.Y. Supp. 2d 906 (1939).
Under the circumstances of the instant case the mere retention by plaintiff of the belated warehouse receipt did not manifest an acceptance of the provision in question, especially in view of the fact that the defendant required the presentation of the warehouse receipt in the event that the goods were withdrawn.
We recognize that there are conditions under which the receipt and retention without objection of the warehouse receipt by the bailor may be properly found to bind him to the terms thereof; whether by mutual consent and consideration or by estoppel need not now be determined. We do not reject that doctrine. But we do say that upon the undisputed facts in this case, having been given actual knowledge of the substantial value of the silver, the defendant had a duty in the alternative either to list it at a known higher value at an appropriate storage rate, thereby subjecting himself to liability as at common law for the higher value thereof in case of negligent loss, or if he chose to propose in his warehouse receipt that the goods be *Page 63 stored at a nominal agreed value of $10 per hundredweight, then he should bring home to the bailor not only the rate of charge but also that such rate was the lower rate to be charged in consideration of bailor's assent to an agreed low valuation of the goods. An alleged agreement fixing at $25 the value of silver actually worth $4,184.50 is so disproportionate that it would amount in fact to a contract impairing the obligation of the warehouseman to exercise due care, thereby violating the mandate of the statute (4 O.C.L.A. § 60-203), unless the warehouseman, knowing the substantial value, brings home to the bailor not only the rate to be charged but also that it was a reduced rate to be applied as part of a bargain in which plaintiff was to agree to this extraordinary low valuation. This the defendant never did.
In the case of Wilson v. Crown Transfer Storage Co.,201 Cal. 701, 258 P. 596 (1927), the bailor sued the warehouseman for failure to return certain goods. Eighteen months after it accepted the goods the defendant delivered to the bailor a receipt with a $25 valuation clause substantially identical to the one in the case at bar. It does not appear that any value in excess of $25 per package was listed in the receipt. Among other reasons for its conclusion the court said:
"* * * Then there is evidence to the effect that respondents declared the true value of their goods and offered appellant an itemized list thereof at the time they were delivered to the warehouse and were informed by appellant that such a list was not necessary. It is true respondents did not at that time formally offer to comply with the notice in the receipt limiting appellant's liability for the reason, apparently, that appellant had never brought this notice either directly or indirectly to their attention at the time of the storage *Page 64 of the goods, and did not even indirectly do so until 18 months after it accepted the goods. It was, of course, not appellant's fault that the goods were attached and the receipt given to the sheriff, who held them under attachment, but this did not relieve appellant of the duty, if it desired to limit its liability for the loss of the goods, of bringing home to the respondents notice that the goods were accepted and held under such limited liability."
From American Jurisprudence, under the title "Bailments" we quote the following:
"In general, provisions of a contract under which the ordinary obligations of bailment are enlarged or restricted should be specific and clearly expressed, for as a rule the courts are reluctant to limit, or to extend, rights or liabilities which the law generally attaches to such a relation, unless pursuant to a manifest intention of the parties as expressed in, or necessarily implied from, their contract. The liability of the bailee, for example, may be greatly varied by special contract, but it is not to be enlarged or restricted by words of doubtful meaning." 6 Am.Jur. 276, § 180.
Under this ruling we are of the opinion that the $10 limitation clause in the instant case was not sufficiently specific, in that it did not state that the rate charged was based on the $10 limitation of value.
Since the limitation of value clause was invalid, the issues which should have been and were submitted to the jury are identical whether arising upon the common-law undertaking of a warehouseman or upon the provisions of the warehouse receipt.
What has been said disposes of assignments Nos. 5, the last half of 6, and 8, 9 and 10. Assignment No. 7 was expressly abandoned. By assignment of error *Page 65 No. 6, repeated in assignment No. 10, defendant complains of the following instruction given by the court:
"Your attention has been called to a portion of the warehouse receipt which provides for a limitation of defendant's liability to ten dollars per one hundred pounds. I instruct you that this restriction is not applicable to any negligent act or acts of the defendant or its agents or employees. In other words, if you find in this case that the defendant was negligent as charged in the complaint and such negligence caused the loss of the property in question, then you cannot apply this limitation of liability but must disregard it."
In giving this instruction the trial court was apparently of the opinion that a stipulation as to the agreed value of goods is void if the goods were lost through the negligence of the warehouseman. If the court intended to and did so instruct it was error. Under the Normile case a valid contractual provision as to agreed value fairly arrived at is binding notwithstanding the negligent loss of the goods by the defendant. However, the consideration of the jury was by this instruction in fact limited to the question of negligence, and since we have already held that in the instant case there was no valid contractual agreement concerning value fairly arrived at, it follows that the case was submitted to the jury upon the proper issues. Though the issues may have been selected by reason of an incorrect theory of the law they were nevertheless correctly defined. Evidence concerning the special provision in the warehouse receipt was surely not prejudicial to the defendant who introduced it, and it was properly withdrawn from the jury though for an incorrect reason. The defendant was given every opportunity to present its side of the case. The jury determined that the defendant was negligent and found *Page 66 the value of the stolen silver. We find no error which substantially affected the rights of the appellant. 2 O.C.L.A. § 10-810.
The judgment is therefore affirmed notwithstanding the erroneous instruction.
KELLY, C.J., and BAILEY and LUSK, JJ., concur.