Bankers Warehouse Company v. Bennett
365 P.2d 889, 148 Colo. 323, 1961 Colo. LEXIS 415 (1961)
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Rule of Law:
In a bailment for hire, when a bailor shows that goods were delivered to the bailee in good condition and were returned in a damaged state, a presumption of negligence arises, and the burden shifts to the bailee to produce evidence that the damage was not caused by its failure to exercise reasonable care.
Facts:
- Bennett, a dealer in nuts, stored approximately 25,000 pounds of nut meats at Bankers Warehouse between March and June 1956.
- The nut meats were in good, marketable condition when delivered to the warehouse.
- Bankers Warehouse issued three separate warehouse receipts to Bennett upon delivery.
- The warehouse receipts included a provision stating the warehouse would not be responsible for loss from any cause not originating in the warehouse or beyond its control.
- When Bennett retrieved the nut meats, they were contaminated with a foreign odor and taste similar to naphthalene (moth balls), rendering them unsaleable.
Procedural Posture:
- Bennett (plaintiff) sued Bankers Warehouse (defendant) in a trial court for damages resulting from alleged negligence.
- Bankers Warehouse answered, denying negligence and filing a counterclaim for unpaid storage fees.
- After a trial to the court (a bench trial), the court found in favor of Bennett and entered a judgment for $16,428.52.
- Bankers Warehouse, as plaintiff in error (appellant), appealed the trial court's judgment to this court.
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Issue:
Does a presumption of negligence arise against a warehouseman when a customer proves that goods were delivered in good condition but were returned in a damaged condition, thereby shifting the burden to the warehouseman to show it was not negligent?
Opinions:
Majority - Mr. Justice Moore
Yes, a presumption of negligence arises against the bailee. When a bailor establishes that goods were delivered in good condition and returned damaged, a prima facie case of negligence is made. The court reasoned that the transaction was a bailment, governed by a statute requiring a warehouseman to exercise the care a reasonably careful owner of similar goods would exercise. Since the nut meats were delivered in good condition and returned contaminated, a presumption of negligence arose against Bankers Warehouse. This presumption shifts the burden of going forward with evidence to the bailee, who is in the best position to know what happened to the goods while in its custody. Bankers Warehouse failed to present evidence to overcome this presumption and show that the contamination occurred without its negligence.
Analysis:
This decision solidifies the burden-shifting framework for negligence claims in bailment cases within the jurisdiction. It relieves the bailor of the often impossible task of proving a specific negligent act by the bailee, who has exclusive control over the property. By establishing that proof of delivery in good condition and return in a damaged state creates a presumption of negligence, the ruling places a significant evidentiary burden on warehouse operators and other bailees. This precedent forces bailees to maintain careful records and practices to be able to demonstrate their exercise of due care if goods are damaged.
