Healy v. New York Central & Hudson River R.R. Co.

New York Supreme Court, Appellate Division · 1912 · Contracts

ContractsBailmentsbailmentbailee for hireparcel roomlimitation of liabilitynoticeassent

Facts

On November 4, 1911, the plaintiff checked a handbag at the defendant's parcel room in Albany and received a small duplicate cardboard coupon. Fine print on the back stated that the depositor expressly agreed that the company would not be liable for loss or damage exceeding ten dollars, but the plaintiff did not read it and his attention was never called to it. Later that evening, when he presented the coupon and demanded the bag, the defendant discovered that, because coupons had been mismatched by the parcel-room clerk, the bag had been delivered to another person and was never recovered. The bag and contents were worth $70.10.

Issue

Whether the defendant parcel-room operator could limit its conceded liability for the lost handbag to ten dollars based on fine-print language on the duplicate coupon when the plaintiff had no notice of that term and did not assent to it.

Rule

A bailee for hire may not bind a bailor to a printed limitation of liability on a parcel-room receipt or coupon where the limitation is unreasonable and the bailor had no notice of it, is not chargeable with such knowledge, and therefore did not assent to any special contract. A condition that impairs the bailee's obligation to exercise the care of a reasonably careful person in safeguarding the goods is not a valid term.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Patel paid 15 cents to leave her duffel bag in the parcel room of Lakefront Terminal in Cleveland while she met friends downtown. She was not traveling on the terminal's rail line and expected to pick up the bag from the same counter later that night. The clerk handed her a small claim ticket with a $10 liability cap printed in fine print on the back, said nothing about it, and the bag was later misdelivered by the attendant.

Which is the strongest reason Nina may recover the full value of the bag despite the printed cap?

Explanation. The majority treated a parcel-room deposit for later redelivery at the same place as a bailment for hire for safekeeping, not carriage. It rejected application of common-carrier rules and held the printed limitation unenforceable where the bailor had no notice, was not chargeable with knowledge, and therefore did not assent to any special contract.