ANNEXTURE565

Possession: Physical Control

In most cases, physical control is proven easily enough. A car delivered to a parking garage is
obviously within the physical control of the garage. But in some instances, physical control is
difficult to conceptualize. For example, you can rent a safe-deposit box in a bank to store
valuable papers, stock certificates, jewelry, and the like. The box is usually housed in the banks
vault. To gain access, you sign a register and insert your key after a bank employee inserts the
banks key. You may then inspect, add to, or remove contents of the box in the privacy of a small
room maintained in the vault for the purpose. Because the bank cannot gain access to the box
without your key and does not know what is in the box, it might be said to have no physical
control. Nevertheless, the rental of a safe-deposit box is a bailment. In so holding, a New York
court pointed out that if the bank was not in possession of the box renters property it is difficult
to know who was. Certainly [the renter] was not, because she could not obtain access to the
property without the consent and active participation of the defendant. She could not go into her
safe unless the defendant used its key first, and then allowed her to open the box with her own
key; thus absolutely controlling [her] access to that which she had deposited within the safe. The
vault was the [companys] and was in its custody, and its contents were under the same
conditions.Lockwood v. Manhattan Storage & Warehouse Co., 50 N.Y.S. 974 (N.Y. 1898).
Statutes in some states, however, provide that the relationship is not a bailment but that of a
landlord and tenant, and many of these statutes limit the banks liability for losses.
Possession: Intent to Possess
In addition to physical control, the bailee must have had an intent to possess the goods; that is, to
exercise control over them. This mental condition is difficult to prove; it almost always turns on
the specific circumstances and, as a fact question, is left to the jury to determine. To illustrate the
difficulty, suppose that one crisp fall day, Mimi goes to Sally Janes Boutique to try on a jacket.
The sales clerk hands Mimi a jacket and watches while Mimi takes off her coat and places it on a
nearby table. A few minutes later, when Mimi is finished inspecting herself in the mirror, she
goes to retrieve her coat, only to discover it is missing. Who is responsible for the loss? The
answer depends on whether the store is a bailee. In some sense the boutique had physical control,
but did it intend to exercise that control? In a leading case, the court held that it did, even though
no one said anything about guarding the coat, because a store invites its patrons to come in.
Implicit in the act of trying on a garment is the removal of the garment being worn. When the
customer places it in a logical place, with the knowledge of and without objection from the
salesperson, the store must exercise some care in its safekeeping.Bunnell v. Stern, 25 N.E. 910
(N.Y. 1890).
Now suppose that when Mimi walked in, the salesperson told her to look around, to try on some
clothes, and to put her coat on the table. When the salesperson was finished with her present
customer, she said, she would be glad to help Mimi. So Mimi tried on a jacket and minutes later

discovered her coat gone. Is this a bailment? Many courts, including the New York courts, would
say no. The difference? The salesperson was helping another customer. Therefore, Mimi had a
better opportunity to watch over her own coat and knew that the salesperson would not be
looking out for it. This is a subtle distinction, but it has been sufficient in many cases to change
the ruling.Wamser v. Browning, King & Co., 79 N.E. 861 (N.Y. 1907).
Questions of intent and control frequently arise in parking lot cases. As someone once said, The
key to the problem is the key itself. The key is symbolic of possession and intent to possess. If
you give the attendant your key, you are a bailor and he (or the company he works for) is the
bailee. If you do not give him the key, no bailment arises. Many parking lot cases do not fall
neatly within this rule, however. Especially common are cases involving self-service airport
parking lots. The customer drives through a gate, takes a ticket dispensed by a machine, parks his
car, locks it, and takes his key. When he leaves, he retrieves the car himself and pays at an exit
gate. As a general rule, no bailment is created under these circumstances. The lot operator does
not accept the vehicle nor intend to watch over it as bailee. In effect, the operator is simply
renting out space.Wall v. Airport Parking Co. of Chicago, 244 N.E.2d 190 (Ill. 1969). But a slight
change of facts can alter this legal conclusion. Suppose, for instance, that the lot had an attendant
at the single point of entrance and exit, that the attendant jotted down the license number on the
ticket, one portion of which he retained, and that the car owner must surrender the ticket when
leaving or prove that he owns the car. These facts have been held to add up to an intention to
exercise custody and control over the cars in the lot, and hence to have created a
bailment.Continental Insurance Co. v. Meyers Bros. Operations, Inc., 288 N.Y.S.2d 756 (Civ. Ct.
N.Y. 1968).
For a bailment to exist, the bailee must know or have reason to know that the property exists.
When property is hidden within the main object entrusted to the bailee, lack of notice can defeat
the bailment in the hidden property. For instance, a parking lot is not responsible for the
disappearance of valuable golf clubs stored in the trunk of a car, nor is a dance hall cloak room
responsible for the disappearance of a fur wrap inside a coat, if they did not know of their
existence.Samples v. Geary, 292 S.W. 1066 (Mo. App. 1927). This result is usually justified by
observing that when a person is unaware that goods exist or does not know their value, it is
inequitable to hold him responsible for their loss since he cannot take steps to prevent it. This
rule has been criticized: trunks are meant to hold things, and if the car was within the garages
control, surely its contents were too. Some courts soften the impact of the rule by holding that a
bailee is responsible for goods that he might reasonably expect to be present, like gloves in a coat
checked at a restaurant or ordinary baggage in a car checked at a hotel.
Key Takeaway
A bailment arises when one person (a bailee) rightfully holds property belonging to another (a
bailor). The law of bailments addresses the critical links in the movement of goods from the
manufacturer to the end user in a consumer society: to the storage and transportation of goods.
Bailments only apply to personal property; a bailment requires that the bailor deliver physical
control of the goods to the bailee, who has an intention to possess the goods and a duty to return
them.

Exercises
1. Dennis takes his Mercedes to have the GPS system repaired. In the trunk of his car is a
briefcase containing $5,000 in cash. Is the cash bailed goods?
2. Marilyn wraps up ten family-heirloom crystal goblets, packages them carefully in a
cardboard box, and drops the box off at the local UPS store. Are the goblets bailed
goods?
3. Bob agrees to help his friend Roger build a deck at Rogers house. Bob leaves some of
his toolswithout Bobs noticingaround the corner of the garage at the foot of a
rhododendron bush. The tools are partly hidden. Are they bailed goods?
21.2 Liability of the Parties to a Bailment
Learning Objectives
1. Understand how the bailees liability arises and operates.
2. Recognize the cases in which the bailee can disclaim liability, and what limits are put on
such disclaimers.
3. Understand what duty and liability the bailor has.
4. Know other rights and duties that arise in a bailment.
5. Understand the extent to which innkeepershotel and motelsare liable for their guests
property.
Liability of the Bailee
Duty of Care
The basic rule is that the bailee is expected to return to its owner the bailed goods when the
bailees time for possession of them is over, and he is presumed liable if the goods are not
returned. But that a bailee has accepted delivery of goods does not mean that he is responsible
for their safekeeping no matter what. The law of bailments does not apply a standard of absolute
liability: the bailee is not an insurer of the goods safety; her liability depends on the
circumstances.
The Ordinary Care Rule
Some courts say that the bailees liability is the straightforward standard of ordinary care under
the circumstances. The question becomes whether the bailee exercised such care. If she did, she
is not liable for the loss.

Justia U.S. Law Case Law New Jersey Case Law New Jersey Superior Court, Appellate
Division - Published Opinions Decisions 1950 Marsh v. American Locker Co., Inc.
Marsh v. American Locker Co., Inc.
Annotate this Case
7 N.J. Super. 81 (1950)
72 A.2d 343
SAMUEL MARSH, JEROME MARSH AND IRVING MARSH, TRADING AS S. MARSH &
SON, PLAINTIFFS-APPELLANTS, v. AMERICAN LOCKER COMPANY, INC., A
CORPORATION, DEFENDANT-RESPONDENT.
Superior Court of New Jersey, Appellate Division.
Argued February 27, 1950.
Decided March 22, 1950.
*82 Before Judges JACOBS, EASTWOOD and JAYNE.
Mr. Charles Handler argued the cause for the appellant (Mr. Martin Wm. Wallace, on the brief).
Mr. John E. Selser argued the cause for the respondent (Mr. John M. Mehler, attorney).
The opinion of the court was delivered by JACOBS, S.J.A.D.
This is an appeal from a judgment of dismissal entered in the Law Division at the close of the
plaintiff's case.
Mr. Irving Marsh was the only witness. He testified that he is a member of S. Marsh & Son, a
partnership engaged in the jewelry business at Newark, and had purchased costume jewelry in
New York City invoiced at $2,743.70. The jewelry *83 was in a package which he carried to the
Pennsylvania Railroad Station, intending to take a train to Newark. Upon learning that the next
train would not leave for about forty-five minutes, he looked for a "place to put this package"
while he had lunch. He saw a vacant locker in the large open space between the main waiting

room and the outgoing trains, placed his package in the locker and, after inserting a dime and
turning the key, tried the door to see that it was locked and removed the key. Having used the
lockers on earlier occasions he was familiar with their operation and, although he denied that he
had read the contents, he knew that the front of the lockers bore directions as to the amount to be
inserted and other written material. He had lunch, returned to obtain his package, inserted his key
and found that the package was gone. He went to the railroad baggage room and advised of his
loss. He returned with an attendant to the locker, discovered nothing significant, and then
examined the luggage in bins located in the baggage room. He was asked to wait and examine
packages being removed by attendants from lockers after they had remained there for more than
twenty-four hours; he did so but did not locate his package. He thereafter filed a formal claim
and was offered the sum of $10 which was refused.
Thereafter the plaintiffs instituted their action alleging in the First Count that the defendant had
breached its agreement to keep their goods safely and, in the Second Count, that the defendant
was under a duty to keep their goods safely and had negligently failed to do so. At the close of
the plaintiffs' testimony the lower Court granted the defendant's motion for dismissal. In support
of their contention that this action was erroneous, the appellants rely mainly upon the contention
that there was a common law bailment which was sufficient under the First Count to withstand
the defendant's motion without any affirmative evidence of negligence (New Jersey Mfr's. Ass'n.
Fire Insurance Co. v. Galowitz, 106 N.J.L. 493 (E. & A. 1930)); in addition, they urge that there
was affirmative evidence of negligence under the Second Count.
*84 Although conflicting views have been expressed by the authorities as to whether common
law bailments necessarily arise out of contract, they all recognize the need that there be
possession of the property by the bailee. See 4 Williston, Contracts (Rev. Ed. 1936), pp. 2888,
2890; Brown, Personal Property (1936), pp. 225, 230. Determination as to where possession lies
is ordinarily not difficult where exclusive physical control has been transferred to and assumed
by the bailee. Cf. Lebkeucher v. Pennsylvania Railroad Co., 97 N.J.L. 112 (Sup. Ct. 1922);
affirmed, Lebkuecker v. Pennsylvania R. Co., 98 N.J.L. 271 (E. & A. 1922); Restatement, Torts,
216. However, it becomes troublesome as situations arise involving facts and considerations
which depart from the traditional ones presented in the earlier cases. See Jones, The Parking Lot
Cases, 27 Geo. L.J. 162, 178 (1938), where the author extensively reviewed the pertinent cases
to support his thesis that the issue of whether the delivery of a car to a parking lot amounts to a
bailment on the one hand or a license or privilege on the other will turn on the amount of control
exercised by the parking lot operator. Cf. Malone v. Santora, 135 Conn. 286, 64 A.2d 51 (Sup.
Ct. 1949); Carothers v. Bowles, 148 F.2d 554, 556 (Em. C.A. 1945); cert. denied, 325 U.S. 875
(1945). Similarly, when dealing with the safe deposit cases, Professor Williston stresses that
although the depositor is given a key "the box is left in a place which is wholly within the
possession and control of the other party and not accessible to the depositor without the former's
consent." Williston, supra, p. 2923. See Lockwood v. Manhattan Storage & Warehouse Co., 28
App. Div. 68, 50 N.Y.S. 974 (App. Div. 1898).

In Gilson v. Pennsylvania Railroad Co., 86 N.J.L. 446 (Sup. Ct. 1914); affirmed, 87 N.J.L. 690
(E. & A. 1915), the plaintiff had hung his overcoat on a costumer in the defendant's restaurant
while he was having lunch. When he looked for it after he had completed his lunch it was gone
and he later instituted an action against the defendant to recover its value. The Court held that
there was no bailment, pointing out that the plaintiff had not transferred "the exclusive *85
possession of the coat to the defendant" and that it had remained under his primary control. In
Zucker v. Kenworthy Brothers, Inc., 130 N.J.L. 385 (Sup. Ct. 1943), the plaintiff, for a
consideration, had stored his automobile in the garage of the defendant company which was
engaged in the moving and hauling business. The plaintiff had been furnished with a key to the
garage and he came as he chose. The Court, in holding that the relationship was that of landlord
and tenant rather than bailment, quoted with approval the principles expressed in 6 Am. Jur. 154,
188, of which the following appears to be the most pertinent:
"On the other hand, if there is no such delivery and relinquishment of exclusive possession, and
his control and dominion over the goods is dependent in no degree upon the co-operation of the
owner of the premises, and his access thereto is in no wise subject to the latter's control, it is
generally held that he is a tenant or lessee of the space upon the premises where the goods are
left."
In Cornelius v. Berinstein, 183 N.Y. Misc. 685, 50 N.Y.S.2d 186 (Sup. Ct. 1944), Justice Searl in
nonsuiting the plaintiff expressly applied the foregoing to support his conclusion that there was
no bailment where the evidence indicated that the missing property had been placed by the
plaintiff in his locker at the defendant's bowling center. The plaintiff had a key to the locker and
the defendant had a master key which fit all of the several hundred lockers in the premises. See
also Kelemen v. American Locker Company, Inc., 182 N.Y. Misc. 1058, 47 N.Y.S.2d 411 (City
Ct. 1944); Dyer v. American Locker Company, Inc., 72 N.Y.S.2d 451 (Sup. Ct. App. Term 1947),
where recovery was denied in actions to recover the value of property taken from lockers
operated by the defendant American Locker Company, Inc.
The appellants recognize that the common law bailment principles were established in situations
dissimilar from those presented in the modern locker cases but urge that there is no justifiable
reason for declining to apply them. In the typical common law bailment, possession of property
in good condition was transferred from the bailor to some human *86 being representing the
bailee. Upon failure to return the property in equally good condition, the bailor was generally
entitled to maintain his action and to call upon the bailee to account for the property or its
deterioration. This manner of approach was eminently fair since the bailee had the control of the
property and presumably nothing would have happened to it if he had used due care. Cf. Seavey,
Res Ipsa Loquitur: Tabula in Naufragio, 63 Harv. L. Rev. 643, 647 (1950). In addition, it may be
noted that if the bailee had desired to limit the extent of his responsibility he had ample
opportunity to do so by contractual arrangement at the time of the transfer of possession. Brown,
supra, at p. 299.

The foregoing may be contrasted with the transaction before us. No human being acting on the
defendant's behalf participated or received possession of the plaintiff's property. The defendant
had no means of knowing whether a package had been placed in the locker, whether Mr. Marsh
had properly locked it or whether he had removed a package which he had placed therein.
Through his exclusive operation of the locker and possession of the key, Mr. Marsh, rather than
the defendant, retained primary physical control of the package. Although the defendant also had
access for the purpose of removing property remaining more than twenty-four hours, this was not
intended to and did not in fact operate to withdraw the primary control afforded to Mr. Marsh
during his proper occupancy of the locker. Cf. Broaddus v. Commercial National Bank, 113
Okla. 10, 237 Pac. 583 (Sup. Ct. 1925); Wells v. West, 212 N.C. 656, 194 S.E. 313 (Sup. Ct.
1937). The only means available to the defendant of entering into a specific contractual
arrangement, by way of direction, limitation or otherwise, was by setting it forth on the face of
the locker. This was done and, although Mr. Marsh knew it was there, no attempt was made to
establish its provisions and he testified that he had not read it. Unlike a parcel room case where
delivery is made to a human being (Lebkeucher v. Pennsylvania Railroad Co., supra), the
defendant had no further opportunity of bringing home to the plaintiffs the matters expressed on
the front of the locker.
*87 We have reached the conclusion that the plaintiffs did not establish a common law bailment
sufficient to withstand the defendant's motion of dismissal without any affirmative showing of
negligence or other proof of contractual relationship between the parties. It seems to us that a
contrary view would afford greater protection to those who choose to avail themselves of the
automatic facilities at nominal charge than they ought reasonably anticipate and would subject
the legitimate business operations of the defendant to claims of unlimited amount without
knowledge of the facts or substantial opportunity of denial.
The remaining question is whether there was sufficient evidence to support the plaintiffs' claim
that, apart from bailment principles, the defendant had not discharged its obligation to exercise
due care. There was no proof whatever that the locker and the lock furnished by the defendant
were not of proper standard or in suitable working order. Mention is made of the fact that the
lockers were unguarded. That was obvious to all, including Mr. Marsh, and he nonetheless chose
to use the facility. The testimony that packages which had remained over twenty-four hours were
being withdrawn and were examined by Mr. Marsh pursuant to the defendant's invitation was not
accompanied by any significant evidence that this operation was conducted in negligent manner.
The mere happening of the loss did not indicate fault on the defendant's part and we agree with
the lower Court's finding that "there has been no negligence established."
The judgment of the Law Division is affirmed.

4. The case of Lasalgoan Merchants Bank vs. Prabhudas Hathibhai is one the first where
the Courts started imposing the obligations of a bailee even without a contract.
Lasalgaon Merchants Co-op Bank vs. Prabhudas Hathibhai [AIR 1966 Bom 134]
Facts: Some packages of tobacco were kept in a godown of a partnership firm. The packages
were pledged to the plaintiff bank. Some of the partners in the firm had failed to clear their
income tax dues. Accordingly, the Income Tax Officer ordered the seizure of the goods belonging
to them and the godown was locked by the officials of the Income Tax Deptt. The key of the
godown was handed over to the police. Then came some heavy rains. The roof of the godown
leaked and the tobacco packages were damaged.
Held: It was the duty of the government officials to take the steps that any prudent manager
would take of the goods under him. It was held that the government did indeed stand in the
position of bailee and it had to prove that reasonable care was taken and the damage was due to
reasons or forces beyond their control. In this case, heavy rains were not necessarily amount to
an act of God and the government was held liable.
To create a bailment, the bailee must intend to possess and in some way physically possess or
control the bailed goods or property. In a situation where a person keeps the goods in possession
of another person but in fact, continues to have control over such goods, there is no delivery for
the purpose of bailment.
2. Kaliaporumal Pillai vs. Visalakshmi AIR [1938 Mad 32]
Facts: A lady, A, gave her jewelry to a goldsmith to melt and use in making new jewelry for her.
Every evening, A received the semi-finished jewelry from the goldsmith and put it in a box in the
goldsmiths room. Then, A would lock the box herself and leave the goldsmiths place with the
key in her possession. One night, the box so locked was stolen from the room and the jewelry
within it was lost. A brought an action against the goldsmith.
Held: The goldsmith was not liable as any bailment in this case came to an end when the lady
received the semi-finished jewelry from the goldsmith every evening. Leaving the locked box in
the defendants premises was not enough to constitute delivery under Section 149 especially
since the lady kept the keys with herself. Without legal possession, there cannot be any bailment
and there was no duty on the goldsmith to take care of the box.