# George v. Bekins Van & Storage Co.

> California Supreme Court · May 13, 1949 · 33 Cal. 2d 834

URL: https://www.frixlaw.com/law-library/cases/9537771

## Case

- **Full name:** RAYMOND GEORGE Et Al., Respondents, v. BEKINS VAN AND STORAGE CO. (A Corporation), Appellant
- **Court:** California Supreme Court
- **Decided:** May 13, 1949
- **Citations:** 33 Cal. 2d 834; 205 P.2d 1037; 1949 Cal. LEXIS 245
- **Precedential status:** Published
- **Opinion:** Dissent by Carter
- **Judges:** Traynor, Carter
- **Cited by:** 89 later opinions in the Frix Law Library

## Citator (automated)

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- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9537771

## Opinion text

CARTER, J.
I dissent.
I agree with that part of the majority opinion dealing with negligence and burden of proof, but I am unable to agree with the conclusion reached with respect to the damages to be recovered by plaintiffs or the reasons assigned therefor. I am in accord with a statement made in 37 Columbia Law Review 248, 262, to the effect that the provision of the Uniform Warehouse Receipts Act against exculpation of the warehouseman has been judicially emasculated by way of the valuation device. The conclusion reached in this case is an excellent illustration of that statement, and is, moreover, without foundation in contract law.
In October, 1943, plaintiff wife wired defendant from Oregon as follows: “Wire immediately if you will store my five rooms of valuable furniture.” She received an affirmative reply. The goods were shipped to Los Angeles by the Navy and received by defendant on or about January 22, 1944. On February 24, 1944 (over a month later), a nonnegotiable warehouse receipt was mailed to plaintiffs, together with an “identification card.” The effect of the wire, the acceptance, the delivery of the goods and the acceptance of them by defendant, and the fact that the goods remained in storage for over a month before the receipt was sent to plaintiffs, appears to have been overlooked by the majority. It was the instrument labeled “Non-negotiable Warehouse Receipt and Contract” which contained the clause purporting to limit the defendant’s *852 liability. The question first to be decided is at what time did the contract of bailment become effective ?
Section 1814 of the Civil Code provides that: “A voluntary deposit is made by one giving to another, with his consent, the possession of personal property to keep for the benefit of the former, or of a third party. The person giving is called the depositor, and the person receiving the depositary.” It would appear that the bailment became effective upon delivery of the furniture to the defendant and acceptance by it.
Upon delivery of the goods to the defendant, the mandatory provisions of the warehouse receipt statute then in effect became part of the implied contract for storage between the parties. (Voyt v. Bekins Moving & Storage Co., 169 Ore. 30 [ 119 P.2d 586 , 127 P.2d 360 ]; French v. Bekins Moving & Storage Co., 118 Colo. 424 [ 195 P.2d 968 ].) No other limitations on the common-law liability of the warehouseman can avail him unless they were brought to the attention of the bailor and assented to at the time of the bailment, or thereafter agreed to for a vahiable consideration. (French v. Bekins Moving & S. Co., supra; Brasch v. Sloan’s Moving & Storage Co., 237 Mo.App. 597 [ 176 S.W.2d 58 ] ; Colgin v. Security Storage & Van Co., 208 La. 173 [ 23 So.2d 36 , 160 A.L.R. 1107 ] ; Healy v. New York Central etc. Co., 153 App.Div. 516 [ 138 N.Y.S. 287 ].) It is the section dealing with permissive conditions which a warehouseman may insert in a receipt, issued by him, with which we are here concerned. (Uniform Warehouse Receipts Act, § 3.)
In the present case, the warehouse receipt contained this provision: “It is agreed that the storage rate charged is based upon the space occupied by the goods and upon the declared valuation herein stated, and for the purpose of fixing such charges, the Depositor declares that the value of any article, box, package, bundle or receptacle including the contents thereof, packed, transported, received, handled or stored hereunder or later received for the account of said Depositor shall not exceed ten dollars per 100 pounds per article, unless the Depositor fixes a greater value in writing at the time of the delivery thereof to this Company and the same is receipted hereon, in which event the Depositor agrees to pay an additional charge therefor. ’ ’
The depositor here declared the goods to be valuable, and a month thereafter, after the contract of bailment arose and had been partially executed, the defendant sought to modify the contract by limiting its liability to 10 cents per pound. *853 Where is the consideration for this contract as modified? There is nothing in the record to show that defendant brought to the attention of plaintiffs at the time of the bailment the fact that if they wished to store their goods and impose liability on the bailee (in the event of loss) for the full reasonable value of the goods they must pay a higher rate.
“It frequently happens that a warehouse receipt containing a clause limiting the warehouseman’s liability is not given to the bailor simultaneously with the acceptance of the goods by the warehouseman but is sent to him at a later time, and the question then arises whether the bailor is bound by this clause regardless of the fact that he has no actual knowledge thereof. . . . The general rule seems to be that where at the commencement of the bailment no mention of the stipulation limiting the liability of the warehouseman is made, the contract cannot subsequently be changed by provisions in the warehouse receipt without the consent of the bailor.” ( 160 A.L.R. 1112 , 1117.)
Plaintiff wife, by wire, informed defendant that she considered the goods valuable. The reasonable value of the furniture was found to be $3,126.15; the liability of defendant, under the limitation clause in the warehouse receipt, was $501.40. Thus, defendant, by the limitation clause in the warehouse receipt, is modifying the original contract by providing that plaintiffs shall consider their furniture worth one-sixth of its reasonable value.
There are numerous cases from other jurisdictions, decided under the Uniform Warehouse Receipts Act, in which the courts have refused to enforce such a contract. Section 57 of the act provides that “This act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it.” The act is in effect in all of the 48 states. In Cothren v. Kansas City Laundry Service Co., (Mo.App.) 242 S.W. 167 , at 168, the court said: “Limitations of liability, even those permissible under the law, ‘must be contained in or made part of the original contract of bailment,’ for that arises upon delivery of the goods to the bailee, and the latter cannot afterward impose conditions nor limit his liability resulting from such bailment.” In Brasch v. Sloan’s Moving & Storage Co., supra, at page 60 [176 S.W.2d], the court said: “When it is said that the act becomes a part of the contract between the owner and the warehouseman, what is meant is that the agreement *854 between them must be deemed to have embodied all the various terms required by the act, as to which the parties are necessarily charged with knowledge. In other words, when the receipt is accepted, the parties are to be regarded as having mutually agreed to all the terms and conditions made mandatory by the act; but as to terms and conditions not made mandatory by the act and not inconsistent with its provisions, the parties are left free to contract as they wish, and an express meeting of the minds as to all such terms and conditions is no less essential than in any other character of contract. It follows, therefore, that as to the terms and conditions made mandatory by section 15,501 (section 2, Uniform Act), the owner, when he accepts his receipt, is constructively charged with knowledge of them since they are not alone for the advantage of the warehouseman, but inure to his own benefit as well; but as to terms and conditions not made mandatory by section 15,501, but which are merely permissive under section 15,502 (section 3), which redounds primarily to the benefit of the warehouseman, the owner is not charged with notice unless such terms and conditions are brought to his attention and he thereupon assents to them so as to make them a part of the contract between himself and the warehouseman. ’ ’ (Colgin v. Security Storage & Van Co., supra; Voyt v. Bekins Moving & S. Co., supra.)
The majority opinion concedes that at the time the bailment took place, plaintiff’s goods were stored under an implied contract by which defendant would have been liable for their reasonable value. The goods were in storage for over one month before the receipt was issued. Plaintiffs paid, as the storage rate for that month, the sum of $7.60. This is the same rate that was paid thereafter for' the valuation of $501.40 which was placed on the goods in the receipt issued by the bailee. This brings to light the fact that a bailor may, in consideration of reduced liability on the part of the bailee, pay a reduced rate. The effect of the holding in the majority opinion is to say that a partially executed contract may be modified by one of the parties without a new consideration. This is not the law, either in cases involving warehouse receipts, or other types of contracts.
"There can be no doubt of the principle contended for by the appellant that an agreement adding to the terms of an existing agreement between the same parties, and by which new and onerous terms are imposed upon one of the parties without any compensating advantage, requires a consideration *855 to support it; though this, of course, may consist either in a new consideration or in some favorable modification of the original contract. . . . ‘But . . . the variation of a contract is as much a matter of contract as the original agreement’ (Feterman v. Parker, 10 Ired. 474 ) ; and a contract for such variation, equally with other contracts, requires a consideration.” (Main St. etc. Co., v. Los Angeles Trac. Co., 129 Cal. 301, 305 [ 61 P. 937 ]; Peachy v. Witter, 131 Cal. 316 [ 63 P. 468 ] ; 6 Cal.Jur. 185; Anderson v. Adler, 42 Cal.App. 776 [ 184 P. 42 ]; Bonifacio v. Stuart, 52 Cal.App. 487 [ 199 P. 69 ]; Bassi v. Springfield Fire etc. Ins. Co., 57 Cal.App. 707 [ 208 P. 154 ]; Krobitzsch v. Middleton, 72 Cal.App.2d 804 [ 165 P.2d 729 ]; Berkowitz v. Tyderko, Ltd., 13 Cal.App.2d 561 [ 57 P.2d 173 ] ; Voyt v. Bekins etc., Co., supra; State ex rel. Terry v. Ace Storage & Moving Co., (Mo.App.) 135 S.W.2d 363 ; 42 A.L.R. 987 , 996, 1101; 43 A.L.R. 1451 , 1454.) In the latter note is found the following statement: ‘ ‘ And a new agreement supplementing or modifying an existing contract is in legal contemplation an independent contract, requiring for its validity all the elements of a contract.” In Maryland Casualty Co. v. First Nat. Bank, 82 F.2d 465 , after issuance and delivery of a bank robbery policy, a rider was attached thereto restricting coverage on money not under time-lock protection to 15 per cent of the total robbery insurance without reduction or concession in cost, and the rider was held unenforceable for lack of consideration.
The rule stated in Wilson v. Crown Transfer etc. Co., 201 Cal. 701, at 714 [ 258 P. 596 ], that “The right of warehouse owners to limit their liability by such a notice is given in order that they may protect themselves from unreasonable and excessive demands for loss of goods without any previous knowledge of their real value. No such reason for applying this rule applies in the present action. The appellant was fully advised by respondents as to the true value of their goods. Appellant was, therefore, in a position to protect itself by giving the respondents’ property the care and supervision its rather large value required, and to make a charge therefor based upon such valuation,” is applicable here. [Emphasis added.] Defendants were advised and knew of the valuation placed by plaintiffs upon the goods. It was defendant’s responsibility to make a charge for storage commensurate with that valuation if it wished to protect itself. But defendant chose to attempt to modify the contract by arbitrarily placing upon the goods a valuation of 10 cents per pound and making *856 a charge in accordance therewith. I submit that this attempted modification • of the contract which arose upon the receipt and acceptance of the goods by defendant and which was executed more than a month thereafter was void for want of consideration. A void contract gives rise to no rights or liabilities, and is unenforceable, and it would seem quite immaterial whether the plaintiffs accepted the warehouse receipt or not. A bare promise to accept less than that to which one is entitled under a contract is not binding. (Hughes v. Davis, 40 Cal. 117 ; Pierson v. McCahill, 21 Cal. 122 ; Restatement of the Law of Contracts, § 75.) “ fW] ant of consideration renders a contract unenforceable.” (Gregson Estate, 96 Cal.App. 767 [ 274 P. 991 ]; 6 Cal.Jur. 186.) An agreement void for lack of consideration is, in effect, no agreement. (Bliss v. Richardson, 12 Cal.App.2d 380, at 385 [ 55 P.2d 591 ].)
As the annotation in 160 American Law Reports, page 1112, at 1117, points out, the decided cases draw a distinction between situations where the warehouse receipt and contract is given at the time of the receipt of the goods and those where the goods are accepted and subsequently the contract and receipt is made out. The cases cited in support of the following statement found in the majority opinion involve the situation where the receipt was given at the time of delivery of the goods: “The validity of such valuation clauses does not depend on the relationship between the actual value and the stipulated value, or on whether the carrier or bailee has knowledge that the actual value is greater than the stipulated value.” In Mering v. Southern Pacific Co., 161 Cal. 297, at 300 [ 119 P. 80 ], plaintiff shipped a mare over defendant’s railroad lines under a special contract, and “As executed the contract was entirely acceptable to the plaintiff at the time. Its provisions were thoroughly discussed between plaintiff, who was a practicing attorney, and the agent of the defendant, before it was executed.” Donlon Bros. v. Southern Pacific Co., 151 Cal. 763, at 764 [ 91 P. 603 , 12 Ann.Cas. 1118, 11 L.R.A.N.S. 811 ], involved the shipment of horses. It appears that plaintiff applied to defendant for the transportation of the animals. “The result of the negotiations between them was that Delaney chartered for forty two dollars a whole ear to transport the horses, and a certain document in relation thereto was executed by himself and the agent of the defendant.” In Page v. Ace Van & Storage Co., 87 Cal.App.2d 294 [ 196 P.2d 819 ], plaintiff and the agent of defendant dealt on a face to face basis, and the “work order” and “eer *857 tificate” were signed by plaintiff at the time of the delivery of the goods to the defendant’s agent. In Wilson v. Crown, etc. Co., 201 Cal. 701 [ 258 P. 596 ] (a case which does not appear to be authority for the statement quoted), the receipt for the goods was delivered after they were deposited with defendant.
In the United States Supreme Court cases cited in the majority opinion as authority, the parties were in mutual agreement, and the receipt or bill of lading appears to have been delivered to the shipper at the time the goods were delivered. In Reid v. Fargo, 241 U.S. 544 [ 36 S.Ct. 712 , 60 L.Ed. 1156 ], the situation was slightly different from that under consideration here. The shipper delivered a car to an express company, informing it that the car was worth $3,900; the express company delivered the car to a steamship company to be sent to New York, and accepted a bill of lading limiting the liability of the steamship company to $100. The express company was held liable for the loss of the car by the steamship company for any deficiency over and above the $100 limited liability imposed on the steamship company because the express company knew of the great value of the car. Pierce Co. v. Wells Fargo & Co., 236 U.S. 278 [ 35 S.Ct. 351 , 59 L.Ed. 576 ], involved parties who had had previous dealings. When the cars were delivered to the railroad, the agent of the automobile company accepted a bill of lading in which there was no declaration of value and which contained a limitation of liability on the part of the railroad to $50 per car. This omission (since the cars previously shipped had been valued at a high rate) was expressly called to the attention of the agent who replied that it was an intentional omission and the result of a new policy of his company. In Hart v. Pennsylvania Railroad Co., 112 U.S. 331 [ 5 S.Ct. 151 , 28 L.Ed. 717 ], horses were delivered to the carrier by the shipper and a bill of lading containing a limitation of liability was delivered to the shipper.
There is no doubt that, as stated by the majority, the validity of the valuation clauses does not depend on the relationship between the actual value and the stipulated value, or whether or not the bailee has knowledge of the actual value of the goods, but the statement must be qualified. The validity and enforceability of such limitation clauses depend upon the law of contracts which prescribes, among other things, that there must be mutual assent and consideration, and that *858 these are essential elements of a binding and enforceable contract.
For the reasons above stated, I would affirm the judgment as rendered. Bach side is to bear its own costs on appeal.
Shenk, J., and Schauer, J., concurred.
The opinion and judgment were modified to read as above and respondents’ petition for a rehearing was denied June 9, 1949. Shenk, J., Carter, J., and Schauer, J., voted for a rehearing.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9537771. Public record. Not legal advice.