Involuntary Bailment : The Dilemma

THIS ARTICLE WAS WRITTEN BY ANINDITA DUTTA, A STUDENT OF  WBNUJS.

Introduction

Bailment, under the Indian Contract Act, 1872, is defined as the delivery of goods by the bailor to the bailee for a specific purpose.[1] But, bailment, as a concept, is not restricted to the realm of contract; or tort or property. The autonomous nature of bailment makes it a sui generis concept.[2] It is the bailor’s reversionary interest and the bailee’s right of exclusive possession upon which a bailment relies.[3]

The idea that bailment is independent of contract is a recent development; traditionally, bailment was believed to be a “contractual-consensual” concept.[4] The non-contractual nature of bailment arises taking into account that a bailor-bailee relationship may arise by mere possession, irrespective of a contract. Consent being one of the essentials of contract, both were thought to move hand in hand when bailment was concerned. Subsequently, the idea developed that a person may find himself in possession of another’s goods without having consented to them. In such cases, there is a lack of ‘consent’ or ‘mutual agreement’.[5]

Lack of consent can be found in cases where a person finds goods on his land; such goods having been deposited as a result of natural agencies. The mere possession of the goods imposes an obligation upon the ‘bailee’ of the goods, without having consented to it.[6] Such instances are covered under the topic of involuntary bailment.

The term ‘involuntary’, in the context of bailment, has been considered to be a result of “accident”.[7] The absence of consent since inception is termed as involuntary bailment ab initio; the other possibility being that consent was present at first, the bailment became involuntary subsequently.[8]

The concept of ‘involuntary bailment’, and the position of an ‘involuntary bailee’, is a subject of much debate and discussion because of the general law principle that “A man cannot without his knowledge and consent be considered as a bailee of property”[9]. The question that then arises is with respect to the amount of duty of care that an involuntary bailee can be subjected to with respect to the goods, he finds himself in possession of without his consent.

Involuntary Bailment: A concept under Bailment

The consensual theory, a view that bailment can exist only with the consent and volition of the possessor of goods, defeats the concept of involuntary bailment. As believed traditionally, only voluntary acceptance of possession could make the possessor a bailee. Involuntary nature of bailment was considered to contradict the law of bailment altogether and hence was excluded from the definition of bailment.

The contrary opinion relies upon ‘possession’ and ‘duty to re-deliver’ as the sine qua non of bailment; thus including ‘involuntary bailment’ under the broader topic.[10] Accepting the sui-generis nature of bailment, contract and thereby, consent can be done away with.[11] Hence, a person who finds himself in possession of another’s goods, though involuntarily, is a bailee and has a duty to redeliver them to the owner.[12]

An Involuntary Bailee’s Duty of Care

Traditional Approach

The conventional view finds its basis upon the requirement of consent. It holds that involuntary bailment contradicts the requirement of knowledge and consent in creation of contract. Such “contractual-consensual view of bailment” is based upon a mutual agreement of delivery and re-delivery of goods.[13] It has been argued that absence of consent fails to create a bailor and bailee relationship between the owner and the possessor of goods, thereby holding the involuntary bailee not liable at all.[14]

This view was upheld in Lethbridge v Phillips where a miniature painting was delivered to the defendant without his knowledge or consent. The defendant was not made liable for the damage caused to the painting. The defendant, without his consent, was not considered a bailee of the goods.[15]

An American case to the same effect is Houghton v. Lynch. The facts of the case are similar to the one above. A cask of brandy was delivered to the defendant owing to a mistake. The defendant, not having accepted the goods, was under no obligation for its storage. Without his consent, it was held, there was no consideration for any duty that might be imposed upon him.[16]

Non-Coventional Approach

An involuntary bailee, in possession of goods without knowledge or consent, is liable only for grossly negligent acts with regard to the goods. The duty of care imposed upon him relies upon the ‘reasonable care’ standard.[17] A case law on this point would be Hiort v Bott where the defendant was held to be an involuntary bailee having been delivered goods that didn’t belong to him. The reasonable standard of care, which included finding the true owner, was imposed upon him.[18] Further, it has been held that the extent of care will depend upon the facts of each case. A disregard for the traditional approach is made and it has been said that in no situation can an involuntary bailee be absolved from his obligation and duty towards the goods.[19]

Reasonable care includes within its ambit taking care of the owner’s goods as one takes of his own.[20] Further, an involuntary bailee is not liable to personally re-deliver the goods to the owner; what is expected of the bailee is to bring to the owner’s knowledge the bailee’s possession of bailor’s goods.[21] In Campbell v Redstone, mortgagee became an involuntary bailee of goods left on the mortgaged property. The mortgagor’s failure to retrieve the goods, despite requests by the bailee, discharged the liability of the bailee.[22]

The duty to take care of goods, which the bailee has no knowledge of, arises when he becomes aware of his possession of the goods.[23] It has been stated that the amount of care required of an involuntary bailee is dependent upon the role of the bailor in effecting such bailment.[24] Involuntary bailees should have the burden of disproving negligence on their part, as in the other cases of bailments.[25]

Disposal of goods– A person in possession of goods, voluntarily or involuntarily, is expected to find the true owner of the goods and make the goods available to the bailor. A bailee in possession of goods can dispose them when absolutely necessary, but must abstain from “wilful damage”. An effort to notify the bailor of the disposal or the sale must be made by the bailee.[26] A case where importance of ‘necessity’ was highlighted is Sachs v. Miklos. The bailee notified the bailor regarding the sale of the goods. The bailor had no knowledge of the letter, thereby being unaware about the sale. The court held that the sale of the goods wasn’t absolutely necessary, holding the bailees liable for conversion.[27] The bailees, in the same case, argued that the letter amounted to a reasonable notice and the bailor’s consent to the sale was implied. The argument was defeated because the bailor’s silence couldn’t have been taken to mean his approval.[28]

Goods, when on another’s land, lead to trespass and interfere with the property-owner’s rights. The owner, an involuntary bailee, is entitled to remove the goods with reasonable care.[29] Further, a disposal is permissible when the goods are perishable in nature.[30] These general law principles have been applied to cases of voluntary bailments; and will similarly apply to involuntary bailments too.[31]

Occupier’s duty of care– The liability of an occupier vis-à-vis goods that are present on his property, or have been deposited there by natural forces or by the negligence of the owner of the goods arises based on “constructive knowledge” of the presence of such goods.[32] Therefore, shopkeepers are held liable for goods negligently left in shops[33]; and hotel keepers are liable for the property of its guests[34]. The principle of duty of care is founded on the notions of ‘delivery’ and ‘possession’; the goods being delivered to the occupier, thereby, transferring possession and creating an involuntary bailment.

Voluntary Bailment becomes Involuntary– Not all bailments are involuntary since inception. A common carrier, a voluntary bailee, begins to play the role of an involuntary bailee when the consignee denies accepting the goods. This happened in the case of Heugh v. L&NW Ry Co, where the carriers became involuntary bailees with no fault or consent on their part. The Court held that they, as involuntary bailees, would be expected to maintain reasonable care standard.[35]

A voluntary bailee may become an involuntary bailee upon the expiry of the time period specified for the bailment. Consent is deemed to have exhausted upon such lapse. The change in the nature of bailment estops the bailor to impose any obligation on the involuntary bailee; his liability being exempted upon taking reasonable care of the goods.[36]

Bailment may also become involuntary upon a repudiatory breach on part of the bailor, thereby reducing the amount of care required by the bailees. In such a case, the extent of care would be lowered, but the bailees would still have to exercise reasonable care towards the goods with “a duty not to convert or inflict wilful damage on the goods, and a duty not to be grossly negligent in relation to them.”[37]

Converse– The converse may be true in cases where consent of the ‘bailee’ is absent at the time he acquires possession but subsequently, accepts such possession to become a voluntary bailee. In Chesworth v Farrer, the plaintiff’s goods were kept on the property when the defendant took possession of it. The defendant was an involuntary bailee initially, but acquiesced to the plaintiff’s goods making the bailment voluntary.[38]

Restitution

The law of restitution, with respect to involuntary bailment, doesn’t offer a unanimous view. It had been traditionally argued that in cases of involuntary bailment, since there is no duty to take care of the goods, there arises no question of restitution.

The modern approach, relying upon the duty of reasonable care on part of an involuntary bailee, should favour bailee’s right to restitution for having taken due care of goods in his possession, provided he took all reasonable steps to mitigate the loss.[39]

Conclusion

The sui generis nature of bailment enables it to arise out of contract, tort or property, being limited to none of these concepts. The contractual nature of bailment gives rise to the consensual view of bailment. It is submitted that this notion is inapt owing to the autonomy of the concept of bailment; therefore, the need for ‘consent’ can be disregarded in non-contractual instances of bailment. It is not the absence of consent that defeats bailment; but the presence of ‘possession’ that creates it. A person in possession of another’s chattel becomes an involuntary bailee, not having consented to such possession. The involuntary bailee is subjected to the obligation and duty to take care; such standard being lower than that imposed upon voluntary bailees.[40] The bailee is expected to take due care according to his “own abilities and resources”,[41] and refrain from acts of gross negligence and wilful damage. The concept of involuntary bailment has been explained, in this project, with regard to the English Law. An extension of such principles to the Indian Law should impose upon an involuntary bailee a standard of reasonable care, as under §151 of ICA, 1872. Bailment comes with a duty to re-deliver but, it is sufficient that an involuntary bailee notifies the bailor about his possession of bailor’s goods.[42] He is obliged to take care of the goods only upon his knowledge of possession of the goods, and not before.[43]

Thus, the most apt way of defining bailment, taking into account both possession and consent, would be to explain it as a relationship created when “a bailee either receives possession or consents to receive possession of goods of another”.[44]

[1] The Indian Contract Act, 1872, §148.

[2] Samuel Stoljar, The Conception of Bailment, 7 Res Judicatae 160 (1955-57).

[3] Nilima Bhadbhade, The Indian Contract and Specific Relief Acts 1484 (14^th ed., 2012).

[4] Alice Erh-Soon Tay, The Essence of a Bailment: Contract, Agreement or Possession?, 5 Sydney Law Review 239 (1966).

[5] Charles E. Cullen, The Definition of Bailment, 11 St. Louis Law Review 257 (1926).

[6] Ibid.

[7] Bailment, Black’s Law Dictionary (10th ed. 2014).

[8] Norman Palmer, Palmer on Bailment 728 (3^rd ed., 2009).

[9] Joseph Chitty, Chitty on Contracts 247 (H.G.Beale, 32^nd ed., 2015).

[10] William K. Laidlaw, Principles of Bailment, 37 Commercial Law Journal 134 (1932). See Norman Palmer, Palmer on Bailment 704-5 (3^rd ed., 2009).

[11] Supra note 5.

[12] Supra note 10.

[13] Supra note 4.

[14] Palmer, supra note 8, 703.

[15] Lethbridge v Phillips, (1819) 2 Starkie 544.

[16] Houghton v. Lynch, 13 Minn. 85 (1868).

[17] Chitty, supra note 9, 247.

[18] Hiort v. Bott, L. R. 9 Ex. 86 (1874).

[19] Williston on Contracts, 55 The Law Quarterly Review 189 (1939).

[20] Palmer, supra note 8, 710.

[21] Palmer, supra note 8, 721-22.

[22] Campbell v Redstone Mortgages Ltd, (2014) EWHC 3081 (Ch).

[23] Supra note 10.

[24] Supra note 10.

[25] Palmer, supra note 8, 721.

[26] Palmer, supra note 8, 742.

[27] Sachs v. Miklos (1948) 2 KB 23.

[28] Ibid.

[29] Jones v Gospel & White, (1998) 76 P. & C.R. D43.

[30] Palmer, supra note 8, 743.

[31] W V H Rogers, Winfield and Jolowicz on Tort 755-56 (17^th ed., 2006).

[32] Palmer, supra note 8, 713-4.

[33] Myron J. Nadler, Delivery of Possession: Liability of Shopkeeper for Loss of Article Left in Reception Room, 47 Michigan Law Review 268 (1948).

[34] Liability of Restaurant Keepers for the Loss of Guest’s Personal Property, 22 The Yale Law Journal 617 (1913).

[35] Heugh and another v. The London and North Western Railway Company, (1870) LR 5 Ex 51.

[36] Palmer, supra note 8, 735-6.

[37] JJD SA v Avon Tyres Ltd (Unreported, 23 February 2000, CA).

[38] Chesworth v Farrer, (1967) 1 Q.B. 407.

[39] Palmer, supra note 8, 727.

[40] Supra note 4.

[41] Palmer, supra note 8, 726.

[42] The Indian Contract Act, 1872, §151.

[43] Palmer, supra note 8, 719. See William K. Laidlaw, Principles of Bailment, 37 Commercial Law Journal 134 (1932).

[44] W. G. Paton, Duty in Gratuitous Bailment, 1 University of Queensland Law Journal 17 (1948-51).