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Circuit Judge of the Second Judicial Circuit of Michigan 





1 1-17-67 







Orville W. Coolidge was born in Edwardsburg, Cass County, 
Michigan, in 1839. 

After passing through the grammar schools, he entered Michi- 
gan University where he graduated in 1863, and later on in due 
course graduated from Harvard Law School in 1865 with the 
degree of LL.B. 

After graduating, he immediately entered upon the practice of 
law, locating at Niles, Michigan. His practice steadily grew and 
he participated in many important lawsuits, meeting with 
marked success. In 1893 he was singled out by his fellow prac- 
titioners and selected as Circuit Judge of the Second Judicial 
Circuit of Michigan. 

When his term of office expired, he was re-elected. Again, 
acknowledged by all to be one of the most efficient and popular 
udges, in 1905 he was re-elected, this time without opposition, 
and is now serving his third term. 

His career on the bench has been marked with distinction and 
his opinions have always been painstaking and respected. 

His service on the bench of nearly sixteen years has given him 
a distinction scarcely equalled by but few lawyers. 

His lecture on Bailments, delivered to the students of the 
American Correspondence School of Law, carries with it not only 
the expression of ripe experience, but also the thought of one 
who has throughout life maintained a high character for integrity 
and fidelity to the trust bestowed upon him. 



Bailment, which, is derived from the French word> 
"bailler," "to deliver," is denned as a delivery of per- 
sonal property by one party 'to another, to be held ac- 
cording to the purpose or object of the delivery and to 
be returned when that purpose is accomplished, or other- 
wise dealt with according to the directions of the Bailor. 
The party delivering is called the "Bailor" and the 
party receiving, the "Bailee." The principles of the 
English Law of Bailment were first systematically and 
tersely expounded in the famous opinion of Chief Justice 
Holt, one of the most eminent and enlightened of the Eng- 
lish judges in the case of Coggs vs. Bernard two centuries 
ago. In Lord Campbell's Lives of the Chief Justices of 
England, the author says that "in a short compass Holt 
expounded the whole Law of Bailment with admirable 
clearness and accuracy." The fundamental doctrines of 
the Law of Bailment as laid down by Holt still remain to 
a large extent the law both in England and the United 
States, although the Law of Bailment has since been ap- 
plied to new conditions which did not exist in Holt 's time, 
and its general scope and field of operation have been 
greatly enlarged. The immense increase in the develop- 
ment of new methods and facilities of handling and trans- 
porting goods and chattels in recent years have made the 
Law of Bailment one of great importance. 

Questions requiring nice discrimination and clear in- 
vestigation are constantly arising, growing out of the 
complicated transactions involved in the transportation 
and management of personal property by transportation 


6 American Correspondence School of Law 

companies, by land and by water, by express companies, 
wharfingers, warehousemen, banks and other classes of 

The object of this Review of the Law of Bailment is 
to give simply a general view of the fundamental princi- 
ples of the common law governing the relation of Bailor 
and Bailee. 

These principles have to some extent been modified 
by statute in different states and the rights and liabilities 
of certain classes of Bailees have been lessened or ex- 
tended thereby. 



The Contract may be oral or written, express or im- 
plied by law where no express agreement exists. It is 
essential to constitute a contract of Bailment that the 
title to the property delivered shall remain in the Bailor. 
In this respect a Bailment differs from a sale, for while 
the title to the property in the latter passes to the vendee, 
in the former it remains unchanged in the Bailor. The 
Bailee is under obligation to return the Article bailed to 
the Bailor, or to deliver it according to his directions at 
the termination of the Bailment. In a sale there is no 
obligation on the part of the vendee to return the specified 
article, but the party receiving it may return another 
thing of equal value in the form of money or otherwise. 

It is not always essential that the Bailee should return 
the identical article received by him to the Bailor. Thus 
when grain is deposited in a warehouse or elevator, to be 
commingled with other grain, the Bailee may, according 
to the custom of trade, return an equal amount of grain 
of the same kind and grade. 

So the article returned may not in certain cases be 
identical in form with that received. Thus materials may 
be sent to be manufactured into goods to be returned. So 

Law of Bailment 7 

the delivery of milk to be manufactured into cheese and 
butter for the people constitutes a Bailment. 

When property is received by one person from another 
with the understanding that the former may purchase it 
on certain terms and conditions and that if he pays for 
it within a certain specific time he shall become the owner, 
but that if he does not pay for it within the specified time 
he shall pay for the use of the article, the contract is one 
of Bailment and not of sale. 



According to the most common classification there are 
five kinds of Bailment, viz. : Deposit, Mandate, Gratui- 
tous Loan, Pledge or Pawn, and Bailments for Hire. 

Deposit is generally defined as a naked Bailment of 
goods and chattels, which are to be kept for the depositor 
without reward, and to be returned whenever the deposi- 
tor demands it. 

Mandate occurs when it is agreed that the Bailee shall 
do some particular act with regard to the article deliv- 
ered to him without reward. 

Gratuitous Loan arises when it is agreed that the 
Bailee may use the article delivered to him for a certain 
time or until demand without paying for the use. 

Pledge or Pawn is a Bailment of personal property 
when the Bailee receives and holds the article delivered 
to him as a security for the payment of some debt or for 
the fulfillment of some obligation incurred by the Bailor 
to the Bailee. 

Bailments for Hire include those kinds of Bailments in 
which the Bailee hires the use of the bailed article or in 
which he is hired by the Bailor to perform or bestow some 
labor or services upon it. The latter class includes the 
keeping of goods by a warehouseman and 'the carriage of 
goods for hire. 

8 American Correspondence School of Law 



In carrying out the trust involved in every contract of 
Bailment, a certain degree of diligence is required of the 
Bailee, the degree of diligence depending upon the nature 
of the Bailment to be hereafter referred 'to. Diligence 
in this connection is divided into three degrees, viz.: 
Ordinary Diligence, Extraordinary Diligence and Slight 

Ordinary Diligence is that diligence which persons of 
common prudence exercise over their affairs in the com- 
munity and age in which they live. The correlative term 
often used in lieu of the phrase "want of ordinary dili- 
gence" is ordinary negligence. 

Extraordinary Diligence. This is that diligence which 
very prudent persons 'take of their own concerns. The 
correlative term^for the phrase "want of extraordinary 
diligence" is slight negligence. 

Slight Diligence is that diligence which persons of less 
than common prudence or of no prudence take of their 
own concerns. The correlative term for the phrase "want 
of slight diligence" is gross negligence. 

Several courts of high authority have criticized the use 
of words denoting comparative degrees of negligence as 
of doubtful use or application. 

See N. Y. R. R, Co. vs. Lockwood, 17 Wall (U. S.), 
382; Steamboat New World vs. King, 16 How. (U. S.), 

Whether the appropriate degree of diligence has been 
exercised in a given case depends upon the circumstances 
of each particular case. Whenever the facts are at all in 
controversy the question is one of fact for the jury. In 
determining this question the age, the country and the 
condition of society, in which the Bailee lives, the cus- 
toms and usages of trade, the nature and the value of the 
thing bailed and its liability to loss or injury must be 

Law of Bailment 9 



(1) When the Bailment is solely for the benefit of the 
Bailor and the Bailee has no reward, the latter is only 
liable for the exercise of slight diligence and is therefore 
only responsible for losses occasioned by gross negli- 
gence. Thus if a person about to go away from home 
leaves an article for his own benefit and convenience with 
his neighbor without reward to the latter to be kept till 
the Bailee shall return home, the Bailee is only liable 
for the exercise of slight diligence and is responsible for 
loss of or injury to the article only in case of gross negli- 
gence on his part. 

(2) In case of gratuitous loan or when the Bailee bor- 
rows an article from the Bailor without hire or reward 
and for the sole benefit of the Bailee, the latter is respon- 
sible for the exercise of extraordinary diligence over the 
thing bailed, and is liable for losses occasioned by slight 
neglect ; thus if a person borrow a horse of another with- 
out compensation to go on a certain journey, and the 
Bailee travels in a different direction than agreed upon, 
or to a greater distance, the Bailee is liable for any in- 
jury which may occur to the horse though accidental. 
The borrower is not liable for inevitable accidents which 
could not have been foreseen and against which he could 
not guard, but he is answerable for the least neglect. 

(3) When 'the Bailment is for the mutual benefit of 
both parties the Bailee is required to exercise ordinary 
diligence and is answerable only for ordinary negligence. 
The Bailee in this class of cases in 'the absence of a 
special agreement is not generally an Insurer of the 
goods intrusted to his care. To this rule there are some 
exceptions as in the case of common carriers to which 
reference will be made hereafter. The Bailee is not liable 
for losses occasioned by dangers necessarily incident to 

10 American Correspondence School of Law 

the use of the articles intrusted to his care, .nor for the 
losses occasioned by inevitable accident or irresistible 

By inevitable accident is meant every casualty pro- 
duced by physical causes which are irresistible in their 
nature, such as fire, storm, inundation, perils of 'the sea 
or sudden death. 

Irresistible force includes the confiscation of goods by 
military authority, the injuries from a hostile army and 
losses by robbery or burglary. 

Shop-keepers, inn-keepers, restaurant proprietors and 
bath-house keepers are obliged to exercise ordinary care 
in the protection of property entrusted to their keeping 
as an incident to their business. They are not liable how- 
ever for losses occasioned by accident or by some cas- 
ualty which occurred without their fault. The same prin- 
ciple applies to an artisan to whom is entrusted mate- 
rials to work up into manufactured articles for the Bailor. 

This principle applies in general to all cases of locatum 
or hired services in connection with a chattel. Locatum 
has been divided into four classes : (1) Hiring of a thing 
for use as hiring a horse and buggy at a livery stable. 
(2) Hiring of work to be done on a chattel as hiring a 
tailor to make a suit of clothes from cloth furnished. (3) 
Hiring of care and service to be rendered about a specific 
chattel to be kept by the Bailee for him as in the case of 
a warehouseman, inn-keeper and men who pasture cattle 
for hire. (4) Hiring of the carriage of goods. 

In all these classes ordinary care is required of the 
Bailee and he is liable for all losses occasioned by ordi- 
nary negligence on his part. 



If the article be lost or injured while in the possession 
of the Bailee the presumption, according to the weight 
of modern authority is that the loss or injury occurred 

Law of Bailment 11 

through the default of the Bailee and the burden of proof 
falls on the Bailee to show that he exercised the degree of 
care required by the particular contract of Bailment, or 
that the loss occurred from some cause which prima facie 
excuses him. 

A Bailee may by special agreement, as a general rule, 
limit the extent of his liability but it seems to be estab- 
lished by the weight of authority that he cannot go so 
far as to prevent his liability for losses occasioned by his 
own negligence. 

So the Bailee may enlarge his liability by special agree- 
ment so far even as to become an insurer of the property. 

The Bailee is liable for the conversion of the property. 
This embraces an unauthorized use of the article, such as 
using it in a different way or for a longer time than that 
contemplated by the contract. Thus where one hires a 
horse to go for a specified distance, and he goes beyond 
that distance, he becomes liable for an unlawful conver- 
sion of the horse. So the Bailee cannot sell, pledge, mort- 
gage or exchange the property, and if he do so he is liable 
for a conversion. The Bailee has no right to use the 
property in any way not contemplated by the parties to 
the contract of Bailment. 

The Bailee, until the termination of the Bailment, has 
a special property or possessory right and interest in the 
article bailed, and may maintain replevin to recover -pos- 
session from a person wrongfully taking the property or 
maintain trespass or trover against any person interfer- 
ing with his possession. As a general rule the Bailee is 
estopped from denying the title of the Bailor in the prop- 
erty bailed. This rule however is subject to some quali- 
fication. Where a third person claims title to the prop- 
erty the Bailee may choose to have the title tried at law, 
but if he does so, he undertakes the defense at his peril. 
He can in no case, however, set up title himself or avail 
himself of the title for his own benefit; he is not liable 
however for conversion when a paramount title to that 

12 American Correspondence School of Law 

of the Bailor has been established or when the property 
has been taken from him by due process of law. 

Either party may maintain an action against a third 
person for any wrong done to the property bailed, but a 
recovery by one is a bar to a recovery by the other. The 
Bailor may recover possession of the property if sold, 
pledged or mortgaged by the Bailee to a third person 
who has taken possession, unless the Bailor has done 
some act which estops him from claiming the prop- 
erty. This may occur when the Bailee has asserted his 
ownership to the property with the knowledge of a Bailor 
and without objection on the part of the latter. So it may 
occur when the Bailor has allowed the Bailee to so use 
and manage the property as to amount to a publication 
to the world that the Bailee is the owner. 



If work and labor are bestowed by the Bailee upon the 
article bailed he is entitled to compensation unless the 
circumstances are such that it can be reasonably inferred 
that the services were to be rendered without compensa- 
tion. In the absence of an express agreement the law 
will imply a promise to pay what the services are reason- 
ably worth. 


The Common Law always recognized the right of a 
tradesman or an artisan to have a specific lien upon the 
particular article delivered to him for the purpose of 
having work done upon it, for the price or value of the 
work done. The right to this lien has however been ex- 
tended to all cases where value has been conferred upon 
the thing bailed by his skill and labor, when such lien was 
not inconsistent with the terms of the contract. 

This lien is confined to the particular demand which 
the Bailee has for work and labor done upon or about the 

Law of Bailment 13 

article bailed. He has no lien as a general rule upon such 
articles for services rendered at another time or occa- 
sion for the Bailor. In a few exceptional cases a general 
lien has been allowed to secure the payment of a balance 
arising from mutual dealings. Thus Factors, Insurance 
Brokers andWharfingers have been allowed a lien for a 
balance arising from mutual dealings. 

A lien will not attach for services unless the parties to 
the Bailment contemplate compensation for services, 
although the law may imply a legal liability to pay the 
reasonable value of such service. 

The lien may be lost or waived by the voluntary sur- 
render of the property by the Bailee or by giving credit 
to the Bailor, or by accepting a third person as the payor. 



At common law the lien could be enforced only by 
keeping possession of the property till payment was made 
and no sale could be made by the Bailee to secure the 
payment of his services unless a special agreement to 
that effect had been made. Courts of Equity have allowed 
rules to be made in order to enforce the lien in cases 
where a custom or usage had become well established 
with regard to a particular trade. 

Generally however statutes have been enacted in the 
different states providing a remedy to enforce a Hen by 
public sale. 



It is the duty of the Bailee to return the property bailed 
to the Bailor at the time agreed upon for the termination 
of the Bailment. 

When the time is not regulated by agreement the re- 
delivery must be made within a reasonable time after de- 


14 American Correspondence School of Law 

mand. What is a reasonable time after demand must be 
determined by the circumstances of each particular case. 

Non-delivery is excusable in case the property has 
been destroyed without the fault of the Bailee or by some 
act over which he had no control, or when the property 
has been taken by due process of law, or by a person 
having paramount title or in case the title of the Bailor 
has terminated. 

It is the duty of the Bailee to give notice to the Bailor 
of seizure of the property by process. 



The Bailment may be terminated by the following 
causes: (1) By the expiration of the time for which the 
article was bailed. (2) By the destruction of the article 
bailed or because it became unfit for the purpose for 
which it was bailed. (3) By the accomplishment of the 
object for which the article was bailed. (4) By a rescis- 
sion of the contract upon grounds recognized as valid by 
the law of contracts. (5) By an act of illegal conversion 
of the property by the Bailee. 

When the Bailment is for the benefit of both parties 
and the contract specifies no time for fulfillment, either 
party may terminate the Bailment by giving notice, the 
party receiving the notice having a reasonable time with- 
in which to comply. The same rule applies to a case of 
Bailment where it is made for the sole benefit of the 

So the death of either party may terminate the Bail- 



Finder of Lost Goods. The finder of lost goods be- 
comes a depositary. He can defend his rights as against 
all but the true owner." It is his duty to restore the goods 

Law of Bailment 15 

to the true owner when discovered. He is not entitled 
to compensation unless he has been put to necessary ex- 

Inn-keepers. An Inn-keeper is one who keeps his house 
open regularly and for reward for the lodging, refresh- 
ing and entertaining of travelers. Saloons, restaurants 
and boarding houses are not regarded at common law 
as inns. 

The common law was very rigid in requiring the inn- , 
keeper to keep the goods of his guests safely. He was 
liable for any loss of goods which was not occasioned by 
the act of God, the public enemy or the negligence of the 
guest or his servants. 

This rule has been modified by some authorities which 
have held that the Inn-keeper is not liable for losses 
occasioned by accidental casualties or riots. 

The common law liability has been modified in many 
states by statutes limiting his liability among other things 
to ordinary baggage necessary for the journey and suit- 
able to the guest's station in life. 

The Inn-keeper has a lien to secure the payment of his 
charges on the goods deposited by his guest. 



A common carrier is one whose business it is to trans- 
port goods for hire and who holds himself ready to carry 
them for all persons who apply and pay the hire. The 
transportation may be by land or water. A private or 
special carrier is one who undertakes to carry goods for 
reward for special persons or on special occasions and 
who does not make hired transportation his general call- 
ing. Within the term "Common carriers" are embraced 
railroad companies, ferry-men, canal boatmen and owners 
of carrying vessels. 

The subject of common carriers is one of vast scope. 

16 American Correspondence School of Law 

Our purpose in this Review is only to set forth briefly 
the general and underlying principles which govern the 
rights and liabilities of common carriers as Bailees of 
goods and chattels. 




A common carrier is under obligation to carry all 
goods tendered to it for transportation, if it holds itself 
out as willing to carry such goods and is tendered proper 
charges. The goods must be transported promptly and 
within a reasonable time. If there is unreasonable de- 
lay in the transporting and the delivery of the goods the 
carrier is liable for whatever losses may result to the 
shipper as a proximate consequence of the delay. What 
is unreasonable delay is a question of fact which must 
be determined from the circumstances of each particular 
case, such as the* state of the weather, the mode of con- 
veyance, the character of the freight, the season of the 
year, the distance to be transported, and the ordinary 
facilities of transportation. It is the duty of a Railroad 
Company not only to accept goods tendered by individual 
or private shippers but also from connecting lines of 
transportation, providing that the goods are such as are 
ordinarily shipped by Railroad Companies and the trans 
poration is according to the usual course of business. 
The carrier may by public advertisement within proper 
and reasonable limits designate and fix the nature of the 
articles which it proposes to transport, and the kind of 
cars and conveyanees which must be used to transport 
certain classes of goods. He may refuse to carry danger- 
ous articles, such as dynamite, and also goods that are 
so defectively packed as to entail extra risk. The accept- 
ance of goods by the carrier however is a waiver of all 
rights to object on these grounds. 

Law of Bailment 17 



A common carrier of goods is regarded as an insurer 
for the safe transportation and delivery of the goods en- 
trusted to it for carriage. In this respect the degree of 
liability of common carrier differs from that of Bailees 
in general. To this rule there are some exceptions. 

The common carrier is not liable for losses occasioned 
by the act of God or by the public enemy. The act of 
God or inevitable accident is such irresistible disaster as 
results at once from natural causes and which cannot be 
attributed to human agency. This will embrace damage 
by earthquakes*, tempests, floods, lightning, sudden frosts 
and similar occurrences. The act of God must be the prox- 
imate cause of the injury in order to excuse the carrier 
and the carrier must himself be free from contributory 
negligence. Accidents from fire, explosions and collisions 
are not regarded as an act of God. 

The carrier is not liable for losses occasioned by an 
armed force large enough to render resistance fruitless, 
nor for those occasioned by Indian tribes in a state of 
war, by pirates and privateers. By the weight of author- 
ity the common carrier is .not liable for losses occasioned 
by mobs when it has exercised reasonable care in taking 
precautionary measures. 



The common carrier may limit his common law liability 
by special contract but it has been held by many courts 
that he cannot be allowed to prevent his liability for his 
negligence by stipulation. It is well established that he 
cannot exempt himself from liability for losses occasioned 
by his own gross negligence. The Supreme Court of the 
United States has held that the common carrier cannot 

18 American Correspondence School of Law 

limit his liability by special contract so far as to release 
him from responsibility for losses occasioned by his own 
negligence, although the contract may be valid, in the 
state where made. 

A general public notice is not sufficient. The modifica- 
tion of the common law liability must be brought home 
to the notice of the shipper or approved by him before 
the shipment is made. 

What constitutes notice to the shipper has been the 
subject of some controversy in the Courts. It seems to 
be held by the weight of authority in the United States 
that when the shipper accepts a receipt or a Bill of 
Lading from the common carrier which contains a limi- 
tation of the common law liability such instrument is 
binding on the shipper, when it is not unreasonable or 



A warehouseman is one who receives and stores goods 
and chattels as a business for compensation and profit. 

The warehouseman is under obligation to provide a 
building for storage, reasonably safe and suitable for 
the purpose and safe against common and ordinary occur- 
rences. He must use ordinary care and diligence in the 
protection of the property entrusted to him. What con- 
stitutes ordinary care must be determined from the sur- 
rounding facts and circumstances. Local usage or custom 
may govern the degree of care required. 

The warehouseman is not liable for losses of goods by 
fire which are not the result of his own negligence. Nor 
is he liable for loss by theft when he has exercised ordi- 
nary care. 

When grain is deposited in a mass a warehouseman 
must deliver to the depositor an equal amount of the same 
quality deposited. 

Law of Bailment 19 


An express company is regarded as a common carrier 
and is therefore liable for all losses or damages done to 
goods intrusted to it for transportation unless such loss 
or damage was occasioned by the act of God or the public 

If the shipper fraudulently conceals the real nature or 
value of the goods and thereby misleads the express com- 
pany the company in any event is liable only for the ap- 
parent value of the goods. The express company how- 
ever, is generally bound to make inquiry as to the value 
of the goods and the shipper must make a true answer. 

The express company is under obligation to deliver the 
goods to the consignee or his duly authorized agent at his 
residence or place of business. This may be varied by 
custom or usage at small way stations when the business 
is small. In such cases the goods may be held at the sta- 
tion to be delivered there to the consignee upon prompt 
notice of the arrival of the goods. The custom however 
must be reasonable, of long continuance and notorious. 

If the consignee refuses to or neglects to receive the 
goods and pay the express charges when sent C. 0. D. the 
company then ceases to be a common carrier and assumes 
the obligations of a warehouseman. The company must 
however notify the consignor at once that the goods are 
held subject to his order.