Case ID: ny-super-ct_39/html/0073-01.html
Source: Caselaw Access Project
Author: {"author": "By the Court.—Curtis, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ABRAHAM VAN NOSTRAND, Plaintiff and Appellant, v. THE N. Y. GUARANTY AND INDEMNITY COMPANY, Defendant and Respondent.
    I. CONTRACT BY REFERENCE.
    1. Where a written or printed contract signed by a party contains in its body a clause such as, “ subject to the conditions printed on the other side and which forms a part of this agreement,” the conditions thus referred to become a, part of the contract.
    
    1. Presumption.
    One must be presumed to know the nature of a contract he signs.
    3. Proof that the conditions referred to formed part
    OF THE CONTRACT, WHAT SUFFICIENT.
    1. Proof of the signature of the party (in the absence of other evidence) is sufficient to establish that he entered into a contract of which the conditions referred to formed a part.
    
      a. Evidence what insufficient to overcome such proof.
    
    1. Evidence which shows neither compulsion, nor fraud, nor absence of opportunity for acquiring the fullest knowledge, nor even absence of notice or knowledge.
    II. NEGLIGENCE—GROSS.
    1. Pledgee’s limiting liability to gross negligence. -
    1. What will not constitute gross negligence. Where the pledgee leaves the goods in a warehouse selected by the pledgor (which was a suitable place), under the charge of warehousemen who had previously been co-partners with the pledgor, and who had sustained good reputations up to the time of their subsequent absconding, and employs an agent who periodically visits the warehouse, and examines the goods to see that they are properly stored and protected, and kept in proper condition, Ms last visit being about a week before the absconding,
    HELD,
    that the pledgee was not guilty of gross negligence, and therefore not liable for the value of the goods stolen or misappropriated by the absconding warehousemen.
    
      Before Freedman, Curtis, and Speir, JJ.
    
      Decided February 1, 1875.
    Appeal by the plaintiff from a judgment in favor of the defendants for seven thousand nine hundred and ninety-six dollars and forty cents.
    On March 24, 1869, the plaintiff was the owner of eleven thousand six hundred and seventy-nine bushels of oats, then on storage in certain public stores belonging to Messrs. Scott & Company, located at the Atlantic Bocks in the city of Brooklyn.
    On that day the defendants loaned six thousand dollars to the plaintiff, payable in thirty days. On April 23, 1869, the loan was continued for thirty days further; and on May 22, 1869, the loan was further continued for thirty days. To secure the payment of this loan, the plaintiff pledged to, and “ confided to the management, custody, and charge of,” the defendants the eleven thousand six hundred and seventy-nine bushels of oats, endorsing and delivering to them the warehouse receipt he held tor the oats, and at the same time agreeing to pay the defendants interest upon the amount of the loan at the rate of seven per cent, per annum, and the defendants commissions and charges for their “management and charge” of the property, and “all disbursements made by the defendants on account of the said property” while in their custody.
    The defendants, on their part, agreed to take the “management, custody, and charge” of the oats, for which they were to be paid three-quarters per cent, upon the amount of such advance, over and above all disbursements, and to return the property to the plaintiff on the payment of the loan, and the charges agreed by him to be paid.
    On receiving an extension of the loan on April 23, 1869, the plaintiff paid the defendants “ forty-five dollars for taking care of the property” for the thirty days previous, and again on May 22, 1869, on obtaining the second extension, made a similar payment to the defendants for their care of the property up to that time.
    When the loan expired, June 21, 1869, a tender of the amount and interest was made to the defendants, and a demand made of the oats. No objection was made to the tender. The oats were not delivered in consequence of the occurrences hereafter stated.
    When the contract was first made, and on the occasion of each extension, and at various intermediate times, the clerk of the defendants, who had charge of such matters, went to the warehouse of Scott & Co., at the Atlantic Docks, and examined the grain and saw that it was not heated, but that it was in good condition, and was properly stored and protected from the weather. His last inspection of the grain was May 24, two days after the company had given to Van Nostrand the last extension. About a week after this Scott & Co. shut up their storehouse and absconded, and when; on the day after their disappearance, their store was examined, it was found to be empty. Both the plaintiff’s and the defendants' witnesses testified that, up to the time they ran away, Scott <& Co. were conducting business as usual, and were in fair repute and well spoken of in a business way. It was proved that, with the facilities they had at their warehouse, Scott & Co. could easily have removed the whole quantity of oats in a single night. The defendants’ clerk who had charge of the matter, saw them at their office in Wall Street on the afternoon before they absconded, and the next day, on hearing that they had gone, went at once to their warehouse. It was about May 28, or 29, when, as the plaintiff says, he heard that Scott & Co. had gone away. When the plaintiff procured the loan he made a contract in writing with the defendants. by which he agreed to repay the amount loaned with interest, and pledged the oats (eleven thousand six hundred and seventy-nine bushels) to secure the same. This contract was made subject to the following condition indorsed upon it:
    “ The New York Guaranty & Indemnity Company shall not be liable for any loss or injury resulting from depreciation, or from any other cause than the gross negligence of the company or its agents, which may happen to the property mentioned in the instrument on the other side, whilst in its custody.”
    The plaintiff claimed three thousand dollars damages. The defendants set up as a counter claim the amount of its unpaid loan to the plaintiff. For-this amount the court directed a verdict in the defendants’ favor.
    From the j'udgment entered thereon plaintiff appeals.
    
      Hutchins & Clinch, attorneys, and Edward S. Clinch, of counsel, for appellant, urged;
    I. As ordinary bailees for hire, defendants were bound to use the care required of pledgee's, but having received extra compensation for “their management, custody, and charge ” of the property, they were bound to use extraordinary care and diligence (Arent v. Squire, 1 Daly, 347).
    II. The theft of goods, while in the possession of a pledgee or bailee, is presumptive evidence of negligence (Jones on Bailment, 44; Pothier on Oblig. 620: Chicopee Bank v. Philadelphia Bank, 8 Wall, N. S. 641: Schwerin v. McKie, 5 Robt. 404; Arent v. Squire, 1 Daly, 347).
    ■ III. The facts in the case constitute no answer to the charge of the negligence; the bailee is bound to-take better care of the goods than the bailor had taken, if the bailor were not a prudent man (Jones on Bail/m. 
      82, 83; 2 Kent’s Com. 580; Doorman v. Jenkins, 2 Adolph & Ellis, 256).
    IV. The defendants can not escape liability except for gross negligence, under the first condition printed on the back of the contract between' them and the plaintiff, unless they first bring home to the plaintiff knowledge of the terms of the condition, and then show his assent thereto. This they did not attempt to do. (Blossom v. Dodd, 43 N. Y. 464; Dorr v. N. J. Steam Navigation Co., 43 N. Y. 264; Dana v. Munroe, 38 Barb. 528.)
    
    V. The burden of proof is on the defendants, especially in those cases where there has been a total default in the delivery, and where the action is on contract. The defendants, to succeed, should have then shown they had not been guilty of negligence (Cairnes v. Robbins, 8 Mees & Wels, 258; McKenzie v. Cox, 9 Carr & Payne, 632; Platt v. Hibbard, 7 Cow. 497; Arent v. Squire, 1 Daly, 347; Schwerin v. McKie, 5 Rob. 404; Day v. Riddle, 16 Ver. 48; Phillips on Ev. Cairnes’ & Hill’s Notes, p. 633).
    VI. Irrespective of any questions heretofore suggested, as the case stood when the defendants closed, it was for the jury to say whether the defendants had been guilty of. any negligence in the care of the property. Whether a party has been guilty of negligence is alway a question to be determined by the jury (Story on Bailm. 15; Doorman v. Jenkins, 2 Adolph & Ellis, 256; Vaughan v. Menlove, 3 Bing., N. C. 468, 475; Brown v. N. Y. C. R. R. Co., 31 Barb. 385; Moore v. Westervelt, 21 N. Y. 103; Welling v. Judge, 40 Barb. 193; Oldfield v. N. Y. & Harlem R. R. Co., 14 N. Y. 310, 312; Hegan v. Eighth Ave. R. R. Co., 15 N. Y. 380; Van Horn v. Kermit, 4 E. D. Smith, 457; Bush v. Miller, 13 Barb. 489; Wells v. Steam Nav. Co., 8 N. Y. 375).
    VII. A judge may direct a verdict only in such cases where a verdict by the jury against the opposite party would be set aside as against the weight of evidence. If the jury, in this cause, had found that the omission of the defendants to look after nearly twelve thousand bushels of oats in the month of May, for over a week, when stored in a public warehouse, with no evidence of the employment of a watchman, and with the liability of oats in that season of the year to become heated and rotten, was negligence, such as a prudent man would not be guilty of, the appellate court would not disturb the verdict (Schanck v. Morris, 2 Sweeney, 464; Fish v. Davis, 62 Barb. 122; St. John v. Mayor, 6 Duer. 315; Ross v. The Mayor, 4 Rob. 49).
    
      Barney, Butler & Parsons, attorneys, and Thomas H. Hubbard, of counsel, for respondent, urged
    I. The defendant was pledgee of the grain. As such, it was, by the rules of the common law, liable-only for the exercise of ordinary care in respect to the property pledged (Story on Bailm. § 332; Hyland v. Paul, 33 Barb. 241). This being the case, the defendant, as pledgee, can not be held liable for loss by the theft or fraud of Scott & Co., against which the exercise of all its care was no protection (Story on Bailm. §§ 39, 334, 335, 338; 2 Kents Com. *580, *581; Redf. on Car. § 661).
    II. But beyond the protection afforded it by the-rules of the common law, the defendant had by special contract limited its liability to losses which should arise from the gross negligence of itself or its agents. This limitation it had the right to make (Wells v. Steam Nav. Co., 2 N. Y. 204; Dorr v. N. G. Steam, Nav. Co., 11 N. Y. 485, p. 491; Smith v. N. Y. Cent. R. R. Co., 24 N. Y. 222, p. 223).
    III. There was no disputed question of fact in the-case. There being no disputed question of fact, it was-proper for the court to direct a verdict (Wharton on Neg., § 420, and cases there cited).
   By the Court.—Curtis, J.

The plaintiff and defendants entered into a contract by which the liability of the latter for the oats pledged, is limited to such losses only as shall arise from their own negligence or that of their agents. The parties had a right to enter into such a contract, and having done so are bound by it, unless some lawful reason exists by which the plaintiff is released from this provision of it.

It was claimed on the argument, that the plaintiff had no knowledge of the terms of this condition printed on the back of the contract, and never saw it, or assented to it, and that the defendants failed by any evidence to bring this knowledge home to the plaintiff.

The evidence that the plaintiff signed a contract containing such a condition, and referred to in the body of it as “being printed on the other side,” is, in the absence of other proof, enough to establish his liability under it. The plaintiff must be presumed to know the nature of the contract he signed, when he received the check for six thousand dollars from the defendants. His testimony “that the company produced the paper and caused me to sign it, and I then delivered it to them,” is perhaps not intended as a lucid statement of a common business transaction, but it fails to show any compulsion or any absence of notice or knowledge of its contents, or absence of opportunity for acquiring the fullest knowledge. To sustain the views urged in this respect on the part of the plaintiff, would be to endorse a doctrine that would prejudice the enforcement of all ordinary contracts.

The question only remains for consideration, whether there has been any gross negligence in respect to the property pledged by the defendants. The place-where it was deposited was suitable. It had been selected by the plaintiff himself, and it was in charge of persons who had been previously co-partners in business with the plaintiff, and who had sustained, up to the time of their absconding, good reputations. The defendants also had other grain in the same stores, and also had an agent who visited, with reasonable diligence, the property in question, and saw that it was protected from the weather, and from heating, and deterioration from other causes.

What more could be reasonably expected from persons who give the most careful attention to property, even of their own.

The defendants exercised that full measure of care which the civil law designates as that ‘quae diligens pater-familias in suis rebus praestare solet.”

Gross negligence has been defined as “ that omission of care, which even the most inattentive and thoughtless men never fail to take of their own concerns.” No such omission as this, has been shown in the slightest degree, on the part of the defendants or their agents. It must be held, that the plaintiff failed to prove any gross negligence in regard to the property pledged, and this, by the condition of the contract, disposes of the appeal.

It is unnecessary for the purpose of deciding this case, to inquire as to whether there was any negligence at all on the part of the defendants. But the impression is very strong that there was none, and that the ancient and just principle should apply, “Si creditor sine vitió suo argentum pignori datum perdiderit, restituere id non cogitur.”

The judgment appealed from should be affirmed, with costs to the respondent.

Freedman and Speir, JJ., concurred.