Opinion ID: 1542328
Heading Depth: 1
Heading Rank: 2

Heading: Effect of bailment.

Text: The Insurance Company relies strongly upon decisions and text books holding that a bailee for hire cannot exculpate himself from the effects of his own negligence in relation to the goods bailed, by a contract to that effect. This court, in Lake Union Dry Dock & Machine Works v. United States, 79 F.2d 802, 803, held that a shipyard repairing a vessel was a bailee liable for negligence in case of the loss of the vessel by fire but this decision, and others holding such a contract to be a bailee for hire, does not require the court to apply the rules of general law applicable thereto in the case of a maritime contract. In 27 R.C.L. 997, § 57, and in 8 Corp. Jur. Sec., Bailments, § 26, and 6 Cor.Jur. 1112, § 44, 4 Cal.Jur. 17, § 11, it is said that a bailee for hire can contract against liability except for his own negligence. See also, 25 Cal.Jur. 959, § 16, citing Cal.Civ. Code, § 1858e, as to damage by fire. To some extent the cases cited to the texts above are based upon the public character of a warehouseman and upon the offer to the public of a contract containing such limitation. It is held that to permit the bailee to contract against his own negligence is in conflict with public policy. The law of California, as stated in Dieterle v. Bekin, 143 Cal. 683, 77 P. 664, supra, and Wilson v. Crown Transfer & Storage Co., 201 Cal. 701, 258 P. 596, precludes a warehouseman from contracting against the effects of its own negligence with reference to the goods stored. The appellee contends that the rule generally applicable to bailees for hire is applicable to the contract of the Motor Car Company because of its relation to the public, that is, because it holds itself out as doing a repair business. As we have said, we can see nothing in the relations between the parties which would prevent them from negotiating a contract at arm's length and, consequently, nothing which would prevent them from exculpating the Motor Car Company from damages for injuries to the vessel resulting from its negligence while in possession. The practical effect of the agreement between the parties was to give the Motor Car Company the benefit of the fire insurance coverage of the owner of the gasoline launch during the short period necessary for the removal of one engine and the installation of another. It is true that the contract does not mention insurance but if, as seems likely, the parties had such insurance in mind, it is certainly an anomaly to permit the insurance company to recover from the Motor Car Company on the ground that the insured had no right to make such a contract. However, we do not base our decision upon the fact that there was fire insurance in the case at bar.