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Bailment

The rightful possession of goods by

one who is not the owner

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Bailment what it isnt

Not a contract, but might have a contractinvolved

Not a tort, but tortious conduct might beinvolved

Not a sale, because the goods are onlytemporarily in the bailees possession

Not a licence, because obligations areimposed on the bailee in a bailment

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Bailment

Transfer of legal possession (delivery) of

personal property to a bailee temporarily

For a specific purpose

Goods to be returned to the bailor (or a 3P ifbailor so directs)

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Types of Bailment

Coggs v Bernard (1703)

6 forms of bailment (borrowed from Roman

law) Duty of care and levels of liability vary

depending upon the type of bailment

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Levels ofLiability - Ziff

0 1 2 3 4 5

Involuntary Bailment

Gratuitous Bailment

Bailee for reward

Mutual Benefit

Duty of care owed bybailee

Bailee benefit

Bailor benefit

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Bailment - Remedies

Contract Tort Bailment

Damages for breach Damages for injury Return of the good or

damages

Limited by privity of

contract

Limited to those to whom

a duty of care is owed

Can pursue claim against

sub-bailees

Exclusion clauses may limit

liability

Exclusion clauses may limit

liability

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Is this a Bailment? - Delivery

Bailor voluntarily transfers possession of thegood to the bailee temporarily

Generally, Bailee accepts possession of thegood, but sometimes the Bailee is inpossession of the good involuntarily

THE QUESTION:

Does the putative bailee have such intent andphysical control over the good so as to havepossession of the good?

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Is this a Bailment? Delivery to

bailee? If No Is it a licence?

If no, may only be a licence see Ashby v

Tolhurst; e.g. park at city meter

Without the licensors permission, the leavingof the good would be trespass

No obligations on licensor to be vigilant

against theft or damage

Licensor may not steal or detain good or cause

damage by positive act

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Is this a Bailment? Delivery to

bailee? If yes Is it a sale?

If yes, but the possession of the good has

passed permanently then no bailment exists

It is a SALE see Crawford v Kingston [1952]

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Crawford v Kingston [1952]

The plaintiff gave him cows and agreed that

Murray could from time to time sell and

replace any of the cows long as there was

returned to the plaintiff the number of cattle

originally agreed upon

Murray did, during a period of six years, sell

and replace some of the cows and this was

done with the knowledge and concurrence of

the plaintiff.

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The Issue:

The substantial question for determination is

whether the transaction was a bailment or asale.

Delivery of cows had occurred.

Was Murray the beneficial owner of the stock ordid he merely have possession as bailee while

the property remained in the plaintiff?

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When the original chattel delivered is to be

returned in the same or an altered form the title

does not pass but the transaction constitutes a

bailment with the title in the bailor,

If the transaction . . . permits the possessor to

return another chattel of equal value or to pay

the money value thereof, the relation ofvendorand purchaser is created and the title to the

property passes to him and is in him.

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The essential difference

between bailment and sale is

the locus of the title.

Who is bearing the risk of loss?

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It is not upon the exercise of dominion, notsubject to control, but upon the fact ofhavingsuch dominion that beneficial ownershipdepends.

Murray, having such dominion in the property ofthe cattle, was not bound to exercise it in anyparticular way or at any particular time, but hishaving had such power to use the stock as his

own and for his own purpose and profit is whollyirreconcilable with the notion of acting as a baileerather than that of beneficial owner.

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Cases cited in favour of a SALE:

Carpenter v Griffin (1841) (lease of farm included

cows of equal age & quality to be returned at end

of lease);

Reed v Abbey (1873) (1869 - sheep in as good

condition & age as when taken to be returned in

1871) had the right to dispose of the animalsand to subject them to seizure and sale for his

debts

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Cases cited in favour of BAILMENT:

Busse v Edmonton Grain & Hay [1932] (grain

stored receipt under Canada Grain Actsame quantity, grade & kind of grain to be

returned whenever required by bailor

insured by bailor bailee used some rest

burned insurance proceeds to bailor

Note: specifically a bailment under the ACT

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. . . the Court [found] that the legal

title passed to Murray so as to give

him the right to dispose of the cattleand to subject them to seizure and

sale for his debts

HELD: SALE by Crawford, NOT

BAILMENT OF COWS to Murray

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Bailment? Or Licence?

In order for there to be a bailment, the care and

control of the good must be transferred to the

bailee

If the control is not transferred, then there is no

bailment --- only a licence

A licence can be created by express words as in

Ashby v Tolhurst

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ASHBY v TOLHURST

[1937] (COURT OF APPEAL)

"Received 1s.

The proprietors do not take any responsibility for

the safe custody of any cars or articles thereinnor for any damage to the cars or articles

however caused. ... all cars being left in all

respects entirely at their owners' risk. Owners

are requested to show ticket when required."

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Ashby v Tolhurst

Facts: Plaintiff parked his car in the lot where

there was an attendant. Though he had

locked the car before leaving it, access could

be obtained by putting a hand through the

windscreen and it could be driven away.

[Later] The car was not there. the attendant

said that he had just given the car to the

plaintiff's friend.

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Ashby v Tolhurst

Plaintiff argued:

1.handing over of the car by the defendants'

servant to a stranger without production of the

ticket was a conversion by misdelivery;

2. the proprietors could not divest themselves of

the position of bailees with words alone;

3. in the circumstances the conditions of thereceipt did not exempt the defendants from

liability.

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Ashby v Tolhurst

Defendants argued:

1. There was a contract & it was not bailment

2. Its terms were contained in the receipt giventhe plaintiff and posted on the lot

3. The relationship of the parties was licensor &

licensee on the terms contained in the conditions

4. The car was left at plaintiffs own risk and the

owners of the parking ground were exempt from

liability.

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Ashby v Tolhurst

At trial, the parking ground owner lost.

The court held the car was bailed to the lot andthe attendants misdelivery was conversion.

The defendant appealed that decision.

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Ashby v Tolhurst

Defendant Appellant Argued:

1. The plaintiff must be taken to have left thecar on the parking ground at his own risk and

to have paid only for a licence to do so, sothat no liability was imposed on theproprietors of the car park.

2. If it was a bailment, then the conditions onthe ticket suffice to relieve the defendantsfrom all liability

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Ashby v Tolhurst

Plaintiff Respondent Argued:

The fundamental question here is, what was the

relation between the parties?

1. There was clearly a contract of bailment or, atany rate, that there was sufficient evidence toentitle the county court judge to draw theinference that this was so.

2. The defendants admitted the deposit of the carand the attendant's negligence. The admission ofnegligence connotes certain duties.

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Ashby v Tolhurst

Plaintiff Respondent further argued:

3. About the conditions on the ticket:

a) It is inconsistent with the relationship of

licensor and licensee that the defendants shouldrequire the protection of the conditions, butentirely consistent with the relationship of bailorand bailee.

b) The conditions are not enough to relievethe defendants from liability for the negligence oftheir servant: see London and North Western Ry.Co. v. Neilson [1922] 2 A. C. 263, 271

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Ashby v Tolhurst

What did the plaintiff respondent say the wordson the ticket meant if not a license?

1. the car is left at the owner's risk cannot

mean anything but the risk of accidental loss. Itshould not cover such a risk as that thedefendants' servant should give away the car to astranger. That was not contemplated.

2. The words of the conditions in the ticket aregeneral words and not sufficient to giveprotection from liability in all circumstances.

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Ashby v Tolhurst

THE JUDGMENT:

The first thing to do is to examine the nature

of the relationship between the parties

Was it a bailment of the car or merely a

licence granted by the defendant for theplaintiff to leave the car in the defendants

place?

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Ashby v Tolhurst

The court considered

1. If the giving of a ticket signified the

possession of the car had passed to theparking ground and

2. The significance of the words on the ticket

both as they apply to the creation of the

relationship and to the limiting of liability

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Ashby v Tolhurst

HELD: (on the question of whether possessionpassed)

It would be rather a surprising result if, when a

man left his car on land like this and paid 1s. forthe privilege of doing so, possession passed in away in which it certainly would not pass if he leftit in a public park in a square in London and paidthe attendant 6d. for the ticket. In such a case

possession, it seems to me, clearly would notpass; I quite fail to see why possession shouldpass in a case such as this.

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Ashby v Tolhurst

Romer, J.:

The defendants made it as clear as writing can

make it in the ticket which was delivered tothe plaintiff that they would not take any

responsibility for the safe custody of any car

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Ashby v Tolhurst

Held: (looking at the ticket given the Plaintiff)

Reading the document as a whole, including

its own description of itself, namely "Car parkticket," it really means no more than this: the

holder of this ticket is entitled to park his car

in the Seaway Car Park, but this does not

mean that the proprietors are going to beresponsible for it.

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Ashby v Tolhurst

Held further:

The relationship was a relationship oflicensor

and licensee alone

That relationship carries no obligations on the

part of the licensor towards the licensee in

relation to the chattel left there

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Ashby v Tolhurst

OBITER: (because the court decided it was a

licensee-licensor relationship)

Even if the true relationship of the partieswas that of bailor and bailee, the obligations

normally imposed upon a bailee may be cut

down to the extent, and only to the extent,

that the conditions on a ticket prescribe.

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Ashby v Tolhurst

Interpreting the words on the ticket (if it were a bailment):

Those words would permit a negligent custody, they

protect the bailee in a case where damage is negligently

done to the car by himself or by his servant. . . . imposeno obligation on the bailee to provide an attendant to

look after the car . . . impose no obligation on the bailee

or his attendant, if he provided one, to take any active

step whatsoever to prevent somebody from removing

the car who had no title to remove it, even if it was done

under the eyes of the bailee or the eyes of his attendant.

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The Ashbyv Tolhurstticket said

"Received 1s.

The proprietors do not take any responsibility for

the safe custody of any cars or articles thereinnor forany damage to the cars or articles

however caused. ... all cars being leftin all

respects entirely at their owners' risk. Owners

are requested to show ticket when required."

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The power of the Ashbyv Tolhurstwording on the ticket

Is the language of the conditions sufficient to

protect the defendants?

Green, J: In my opinion it is wide enough to

protect the defendants not merely in respect

of the acts of third persons but in respect of

the acts of their own servants.

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Ashby v Tolhurst wording

if the owners of the park put their servant there,even if they put him there with instructions tosee that he does not hand over the car to

anybody but the true owner, and if the servant inthe performance of that duty performs itnegligently, and, acting under a misapprehensionwhich a little more care might have prevented,

hands over the car to the wrong person, that. . .is one of the risks which, on the true construction

of this document, the car owner takes.

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The power of the Ashbyv Tolhurst

wording on the ticket

Admitted by the defendant:

If the attendant standing a yard away

from the car saw somebody who theyknew had no title to do so removing it,

they would be under no obligation

whatever to move one finger to stop it.

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Ashby v Tolhurst the obiter

Green, J:

Assuming, (contrary to my view), that thereis a contract of bailment, the owners of the

park are exempt from liability if, when thecar is delivered out of their park (assumingalways that it was delivered), it is negligentlydelivered to the wrong person. That is theway in which I think these conditions shouldbe construed.

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The Ashby v Tolhurst legacy

Later parking lot owners who wanted to limit

their liability relied on the wording from the

Ashby v Tolhurst ticket. The court construes

exculpatory clauses strictly against those who

are trying to rely on them to limit liability.

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