231 Pa. Super. 174 | Pa. Super. Ct. | 1974
Opinion by
This case is before us on appeal from a lower court order granting Continental Bank's motion for summary judgment.
The facts as alleged by the appellant show that on the evening of June 16, 1973, Max Shectman prepared a bank deposit of $5,669.00 in receipts from his business, Phillips Home Furnishings, Inc. He then picked up his wife at her place of employment and proceeded to an office of Continental Bank [hereinafter Bank], where he had done his banking for nearly thirty years.
In response to the understandably anxious inquiries of its customer, the Bank showed Mr. Shectman a copy of the “Night Depository Agreement” signed by him the previous year. The Agreement states in pertinent part:
“1. Bank grants to the undersigned the privilege of using the Night Depository gratuitously and solely as an accommodation to the undersigned; and the exercise of the privilege by the undersigned will be at the sole risk of the undersigned. Bank will employ such safeguards ... as it deems proper, without any liability to the undersigned for their sufficiency.
"
“4. Bank shall be under no liability with respect to anything placed in the Night Depository, except for the amount of cash and checks actually taken into its possession upon opening the Night Depository Safe. In the event of any dispute as to whether or not the said bag dropped down the chute and entered the Night Depository Safe, or came into the possession of Bank, the report of the employee of Bank who shall open the Safe upon the following business day shall be conclusive and binding upon the undersigned.
“5. The relationship of debtor and creditor between Bank and the undersigned shall not arise until the Night Deposit bag has been opened .. . and the contents found therein counted and credited to the account of the undersigned. Until that time, Bank shall be obligated to exercise toward the Night Deposit bag and its
The Bank, relying upon this agreement, refused to credit the account of the appellant; and the appellant brought an action in assumpsit for failure to credit its account and in trespass for conversion. The court below found the Night Depository Agreement to be legal and binding; found that thereunder the appellant was bound by the report of the Bank’s employee who opened the safe;
I
The first issue thus presented is whether a bank may contractually absolve itself from all liability in connection with the use of a night depository facility, so that its customers are required to use the facility at their sole risk. Other courts which have examined this question have concluded that there is nothing inherently wrong with permitting a bank to make its Night Depository Service available under terms and conditions which place the risk of loss on the customer. Valley Nat'l Bank v. Tang, 18 Ariz. App. 40, 499 P.2d 991 (1972); Irish & Swartz Stores v. First Nat'l Bank, 220 Or. 362, 349 P.2d 814 (1960); Kolt v. Cleveland Trust Co., 156 Ohio St. 26, 99 N.E.2d 902 (1951); see Bernstein v. Northwestern Nat'l Bank, 157 Pa. Superior Ct. 73, 41 A.2d 440 (1945), allocatur refused, 159 Pa. Superior Ct. xxv (1947) (liability in absence of agreement) ; Bowling Corp. v. Long Island Nat'l Bank, 292 N.Y.S.2d 562, 57 Misc. 2d 337 (Nassau County 1968); Lacour v. Merchants Trust & Sav. Bank, 153 So. 2d
In Pennsylvania, however, the rule has developed, albeit somewhat obscurely, that the bailor-bailee relationship is one in which the law will protect the former party from attempts by the latter to exculpate himself from the consequences of his own negligence. See, e.g., Atkins v. Racquet Garage Corp., 177 Pa. Superior Ct. 94, 110 A.2d 767 (1955) (“A bailee cannot stipulate against liability for his own negligence.”) This rule is particularly applicable here because neither party disputes that the relationship created by the use of the Night Depository was one of bailment. Not only does the contract itself identify the relationship as a bailment, but also the characteristics of the relationship compel the law to reach the same conclusion. In Bernstein v. Northwestern Nat’l Bank, supra, the only Pennsylvania case involving a night depository service, this Court held that the relationship between the bank and the customer in the use of the night depository service was one of bailment reciprocally beneficial to both parties; and the same relationship exists in this case. See Smalich v. Westfall, 440 Pa. 409, 269 A.2d 476 (1970) (A bailment is the delivery of personalty for the accomplishment of some purpose upon a contract) ; Sparrow v. Airport Parking Co., 221 Pa. Superior Ct. 32, 289 A.2d 87 (1972) (A bailment is the delivery of goods in trust upon a contract).
In Downs v. Sley System Garages, 129 Pa. Superior Ct. 68, 69, 194 A. 772, 773 (1937), we stated the “well-
We, however, will not rest our decision upon so thin a reed because we find a much stronger foundation in the bank-customer relationship and the public policy which encircles it and similar relationships.
Generally, a written contract defines the extent of the obligations of contracting parties, Miller v. Weller, 288 F.2d 438 (3d Cir.), cert denied, 368 U.S. 829 (1961), and a valid exculpatory clause will preclude recovery. Jamison v. Ellwood Consol. Water Co., 420 F.2d 787 (3d Cir. 1970). It was recognized long ago that parties may contractually absolve themselves from liability for the consequences of their negligent acts. Maving v. Todd, 4 Camp. 225, 171 Eng. Rep. 72 (1815); see, e.g., Dilks v. Flohr Chevrolet, 411 Pa. 425, 192 A.2d 682 (1963) (“the validity of a contractual provision which exculpates a person from liability for his own acts of negligence is well settled”); Commonwealth v. Monumental Properties, Inc., 10 Pa. Commonwealth Ct. 596, 314 A.2d 333 (1973).
However, the law also recognized that lying behind these contracts is a residuum of public policy which is antagonistic to carte blanche exculpation from liability, e.g., Employers Liab. Assur. Corp. v. Greenville Business Men’s Ass’n, 423 Pa. 288, 224 A.2d 620 (1966); Crew v. The Bradstreet Co., 134 Pa. 161, 19 A. 500 (1890); and thus developed the rule that these provisions would be strictly construed with every intendment against the party seeking their protection. See, e.g., Kotwasinski v. Rasner, 436 Pa. 32, 258 A.2d 865 (1969); Neville Chem. Co. v. Union Carbide Corp.,
Those instances in which courts refuse to enforce exculpatory clauses fall beyond the sphere of agreements “between persons relating entirely to their private affairs” Dilks v. Flohr Chevrolet, supra at 434, 192 A.2d at 687, cf. K & C, Inc. v. Westinghouse Elec. Corp., 437 Pa. 303, 263 A.2d 390 (1970); Wedner v. Fidelity Security Systems, Inc., 228 Pa. Superior Ct. 67, 307 A.2d 429 (1973)
We, therefore, conclude that we must reject the reasoning of those courts which have found agreements similar to the one hereunder consideration not to be inimical to the public interest; and hold that a bank cannot contractually exculpate itself from the conse
II
In view of our holding that the exculpatory provisions are invalid as a matter of law, we must now determine whether the court correctly granted the motion for summary judgment. We hold that it did not. “A summary judgment is to be entered only in the clearest of cases where there is not the slightest doubt as to the absence of a triable issue of material fact.” Granthum v. Textile Machine Works, 230 Pa. Superior Ct. 199, 201-202, 326 A.2d 449, 451 (1974); Prince v. Pavoni, 225 Pa. Superior Ct. 286, 302 A.2d 452 (1973). Although the complaint does not allege negligence on the part of the Bank, it does allege that the Bank received the funds and refused to credit the account of the ap
Judgment reversed with a procedendo.
Pa. R.C.P. 1035.
Affidavits of the two employees who jointly opened the safe and found no bag belonging to the appeUant were filed with the motion for summary judgment.
The rule permitting exculpation from liability for negligent conduct assumes an arm’s length bargained-for agreement. See Galligan v. Arovitch, 421 Pa. 301, 219 A.2d 463 (1966); cf. Southwest Forest Indus., Inc. v. Westinghouse Elec. Corp., 422 F.2d 1013 (9th Cir.), cert. denied, 400 U.S. 902 (1970) (applying Pennsylvania law).
Cf. Elderkin v. Gaster, 447 Pa. 118, 288 A.2d 771 (1972) (sale of new home accompanied. by implied warranty of habitability); Hoffman v. Misericordia Hospital, 439 Pa. 501, 267 A.2d 867 (1970) (implied warranty of fitness accompanies blood transfusion) ; Hassab v. Central Soya, 432 Pa. 217, 246 A.2d 848 (1968) (abolishing vertical privity requirement in breach of warranty actions); Reitmeyer v. Sprecher, 431 Pa. 284, 243 A.2d 395 (1968) (recognizing responsibility of landlord for injury, to tenant resulting from certain defects in the premises); Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966) (adopting strict liability in tort for vendor of defective products).
The section permits parties by agreement to set standards for measuring ordinary care so long as the standards are not “manifestly unreasonable;” but no such standards were set in the agreement before us.