231. Bailments for Sole Benefit of Bailee. Property loaned to a bailee for the latter's accommodation constitutes a bailment for the sole benefit of the bailee. A borrows B's horse to drive to Y. A pays B nothing for the use of the horse. A must exercise great care in the use of the horse, and is liable to B for slight negligence. It is no defense, in case the horse is injured while in A's possession, that A acted as an ordinarily prudent man would act under the circumstances. He must act as an ordinarily prudent man would act when exercising great care. If, from the circumstances connected with the injury to the horse, it is determined that an ordinarily prudent man would have been guilty of slight negligence in the method of handling the horse or causing the injury, A is liable to B for the injury to the horse.
A court said on this point, "A bailee who is a borrower must use extraordinary care to protect the property loaned to him, and is responsible for the slightest neglect. He must exercise all the care and diligence that most careful persons exercise in the transaction of their own affairs."
If the bailee uses the property for any purpose other than that for which it was bailed, or if he exceeds the authority of the bailor in the use of the property, he is liable for injuries resulting. For example, A borrowed B's oxen to plow up a hedge. A used the oxen to draw a load of stone. A stone rolled off the cart and injured one of the oxen. A was held liable for the injury.
232. Bailments for Benefit of Both Bailor and Bailee. The majority of bailments are for the benefit of both bailor and bailee. This class of bailments includes the hiring of personal property. A rents B's automobile for three hours, at three dollars an hour. This is an example of this class of bailments. This class also includes pledges or pawns of goods. If A pledges ten shares of stock in a corporation to his bank for a loan, this transaction constitutes this form of bailment. This also includes the hiring of a bailee to carry goods from one place to another. The most common example of this class of bailments is that of common carriers. For example, A employs B, an express company, to carry a package of jewelry from Cleveland to Chicago. The bailment is for the mutual benefit of both A and B. Any case in which one party employs another to carry goods from one place to another for compensation is included in this class of bailments, and is discussed more at length in the chapter on Common Carriers.
Hiring a person to care for personal property for compensation is included in the class of mutual benefit bailments. A traveling salesman leaving his trunk and satchel with a hotel-keeper is a common example. Where one person hires another to perform work or services on the thing bailed, the transaction constitutes a mutual benefit bailment. For example, if A leaves his overcoat with B, his tailor, to be cleaned and pressed, the transaction constitutes this form of bailment. In mutual benefit bailments the bailee has the right to use the property bailed only for the purposes of the bailment. If A rents B's automobile, he is entitled to use it during the period covered by the contract. If he rents it for a particular designated trip, he cannot use it for any other trip. In a mutual benefit bailment, when the bailee hires out the use of a chattel, there is an implied contract on his part that the chattel is fit for the purpose for which it is to be used, and that it may safely be used for such purposes. A rents B's naphtha launch for the purpose of taking a lake ride. B has carelessly supplied the wrong fuel. An explosion results, injuring A. B is liable for the injury. In mutual benefit bailments, the bailee is obliged to exercise ordinary care, and is liable for ordinary negligence.
The bailee must act as an ordinarily prudent man would act under the same conditions in protecting and caring for the property. A rents a typewriter of B. If the typewriter breaks or gets out of order during ordinary usage, B must stand the loss. If the parties to a bailment of this class specifically contract as to who shall bear the loss in case of accident, or as to the degree of care which shall be exercised, these express stipulations prevail.
233. Warehousemen and Storage Companies. A person who keeps a place for the storage of goods for a compensation is a warehouseman or storage-keeper. In a few states, public warehouses are provided for by statute. In these states, the statutes define the duties and liabilities of warehousemen. These public warehousemen are generally required to take all goods offered for storage, no matter who the owner may be, if the goods are in condition to be stored and if the storage charges are tendered.
Most warehouses operate their business as private enterprises. A few states provide by statute for public warehouses. Private warehousemen may select their customers. They are not required to accept goods for storage if they do not so desire. The government provides warehouses for the storage of goods upon which customs or duties are to be paid. These warehouses are private enterprises authorized by the government to act as government warehouses. The government requires a bond of these warehousemen for the protection of itself, but the government is in no way responsible for the warehouseman's treatment of the goods, or for breaches of contracts between the warehousemen and their customers.
Warehousemen commonly issue receipts for goods stored with them. These warehouse receipts ordinarily are made payable to the customer's order, and may be negotiated. They are not generally recognized as negotiable instruments. A few states have statutes making them negotiable instruments, but outside these jurisdictions, warehouse receipts are merely evidences of ownership of the property. The purchaser takes the same right to the property which the original bailor had, with the additional right to sue the transferor if the title proves defective.