Court Opinion

ID: 9662927
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:23:36.742104+00
Date Added: 2024-06-11T18:14:44.046951
License: Public Domain

Steele Hays, Justice, dissenting. Notwithstanding the fact that the appellees expressly agreed “to hold Farmers Bank harmless for loss of currency or coins” left in the safety deposit box, the trial court refused to permit the introduction of that provision in the trial of this case. Thus that evidence was excluded from the jury. The majority opinion asserts that Arkansas law “clearly supports the trial court’s decision.” I respectfully disagree. The majority relies entirely on two decisions of this court [Middleton & Sons v. Frozen Food Lockers, 251 Ark. 745, 474 S.W.2d 895 (1972) and Gulf Compress Company v. Harrington, 90 Ark. 256, 119 S.W. 249 (1909)] and one decision of the United States District Court for the Eastern District of Arkansas, Williams v. United States, 660 F. Supp. 699 (1987). However, none of those decisions is on the point we are being asked to decide. Those cases recite the general principle that exculpatory clauses are not favored in the law and are strictly construed because they tend to induce a want of care and allow a party to avoid liability of a common law duty. 57A Am. Jur. 2d Negligence § 49 (1989). But exculpatory clauses are not invalid per se. The law is aptly summarized in 17 C.J.S. Contracts § 262 (1963): It is generally held by many jurisdictions that one may contract for such exemption, except where prohibited by statute or some overriding consideration, of public policy, particularly when the obligee is under no disadvantage by reason of confidential relationship, disability, inexperience, or necessities of the situation. As otherwise expressed, in cases where the public interest of some statutory prohibition are not involved, it is permissible for a party to contract to absolve himself from liability for future negligence. Yet the majority opinion offers no statutory prohibition against this type of exculpatory clause nor makes any attempt to analyze whether public policy overrides a provision the parties themselves found agreeable. Certainly none of the three cases cited provides that authority. Williams v. United States, supra, is a suit under the federal tort claims act. Admissibility of the exculpatory clause was not an issue. The trial judge, sitting as a jury as required under the act, considered the provision and held that it was not sufficiently explicit to defeat liability for the death of a child caused by the negligence of agents of the United States. Nor do the Harrington and Middleton cases, supra, afford a stronger base for the majority position. If anything, they give support to the argument that the jury is entitled to consider such provisions under appropriate instructions of the law. In Harrington, Gulf (a public warehouse) accepted Harrington’s thirty-four bales of cotton for storage, issuing receipts which recited “not responsible for loss by fire, acts of Providence, natural shrinkage, old damage, or failure to note concealed damage.” The cotton was destroyed by a fire caused by Gulfs negligence. Harrington sued and his recovery was affirmed on appeal. Again, admissibility of the exculpatory clause as evidence was not an issue, Gulf was seeking to uphold the cause as a matter of law. Moreover, the clause in that case was an attempt to exclude all liability for loss or damage attributable to a wide variety of causes, whereas the provision now before us purports only to exclude liability for loss to a particular type ofproperty — coins and currency. Thus, Gulf knew exactly the nature and value of the property it was accepting, whereas, the bank contends it was not privy to the contents of its depositors’ lock boxes and in that circumstance there is a greater need for latitude in contracting for reasonable limits on the type of property deposited. The clause in Harrington was overbroad and failed to inform the bailor that the bailee was excluding liability not only for fire for which a bailee would not be accountable (such as arson or fire which spread from other premises), but was also excluding fire which was the result of the bailee’s own negligence. In that situation this court held, correctly, that if the bailee was seeking to avoid liability for its own negligence that must be clearly stated. No similar deficiency exists in this case. The language in Harrington was addressed entirely to potential causes of loss, whereas the language here does not advert to causes, but to a particular type of property, coins and currency, property with a high risk factor. This case more nearly resembles the Middleton case. In Middleton, the bailor, stored 18,000 pounds of meat in Cato’s frozen food locker under an agreement, according to Cato, that the storage was “at Middleton’s risk.” The meat rotted and Middleton sued for the value of his meat and Cato counter-sued for damage to his plant and business. The jury declined to award damages to either and on Middleton’s appeal the case was reversed and remanded because of error by the trial court in instructing the jury that if it found the meat was stored “at Middleton’s risk” it should find for Cato. The admissibility of the exclusionary clause was not disputed either before the trial court or the appellate court — its admissibility was a foregone conclusion — but the instruction given had the effect of upholding the clause as a matter of law by telling the jury that if it found the storage was “at Middleton’s risk”, it must find for Cato. That was error. The jury should have been instructed that under the law such provisions must be clear and explicit and strictly construed against Cato, the party seeking to rely on it. So instructed, the jury could then decide whether the clause met those requirements of the law. Additionally, here the trial court rejected as irrelevant proffered testimony by Ms. Connie Ford, branch manager of the bank, that she told the bank’s customers that coins and currency were not to be kept in the box, only documents such as wills and deeds. While the appellees take issue with that assertion, it was of course for the jury to determine whether the bank knew it was being made the custodian of coins and currency and, if so, to determine the extent of its exposure to a loss arising from such custody. That consideration was sensibly analyzed in relation to exculpatory clauses by the concurring opinion in Real Good Food Stores, Inc. v. First National Bank of Oregon, 276 Or. 1057, 557 P.2d 654 (1976), involving liability for night deposits: [U]sually, the bailor, after transferring possession of the goods to the bailee, is unaware of the disposition made of his property. For this reason the bailor is entitled to a presumption of negligence on the part of the bailee if the goods are not returned upon demand. And for the same reason, it may be unreasonable to allow a public bailee to disclaim responsibility for stored goods by an exculpatory claiise. But where the bailee has no knowledge of the value or contents of stored goods or even that goods have been entrusted, as here, a different rule is called for. [Emphasis in original.] That reasoning, I submit, is soundly applicable to safety deposit boxes. Unlike bailments generally, a safety deposit box holder has access to the contents of the box which is at least equal to, and probably greater than, that of the bank. Neither can acquire the box itself without the other, but once acquired, the customer then has access to the contents in the privacy of a booth, or at least beyond the ken of the bank employees. What is removed from or added to the box is largely a matter which the customer alone determines. In view of the foregoing it seems to me to be especially tenuous to conclude that this provision is against public policy, assuming that is the implicit holding of the majority. In Bene v. New York Life Insurance Co., 191 Ark. 714, 87 S.W.2d 979 (1935), we said: As to whether a contract is against the public policy is a question of law for the court to determine from all the circumstances of each case. Persons should not be unnecessarily restricted in their freedom to make contracts, and a court will not hold that a contract is void, as being contrary to public policy, unless the contract binds one to do something which is injurious to the public interest. I find nothing injurious to the public interest in permitting a jury to determine from all the evidence whether these parties are bound under the applicable law by the agreement they entered into. Holt, C.J., and Turner, J., join this dissent.