Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Joseph H. Reinfeld Inc. v. Griswold and Bateman Warehouse Co.

Decided: January 28, 1983.

JOSEPH H. REINFELD, INC., A NEW JERSEY CORPORATION, PLAINTIFF,
v.
GRISWOLD AND BATEMAN WAREHOUSE CO., A DELAWARE CORPORATION, DEFENDANT



Griffin, J.s.c.

Griffin

[189 NJSuper Page 142] While the product involved in this case is not unique in New Jersey, the legal issue is.

Three hundred and thirty-seven cases of Chivas Regal Scotch Whiskey were stored for plaintiff Reinfeld by defendant Griswold and Bateman in its bonded warehouse. A proper warehouse receipt was issued. After complying with governmental tax and duty requirements, Reinfeld sent its truck to pick up the merchandise. Forty cases were missing. Plaintiff sued in both negligence and conversion for the wholesale market value of the whiskey, $6,417.60. Plaintiff presented evidence of his delivery, demand and the subsequent failure by defendant to return the bailed goods. Plaintiff then claimed that the burden of producing evidence shifted to defendant to explain the disappearance. Defendant claimed that plaintiff's prima facie case had only raised the presumption of negligence. Defendant admitted liability for negligence and asserted a limit by contract to 250 times the monthly storage rate, a total of $1,925.

N.J.S.A. 12A:7-204(2) permits a warehouseman to limit his liability for negligent "loss or damage" to the bailed goods if stated in the storage agreement. The statute reads: "No such limitation is effective with respect to the warehouseman's liability for conversion to his own use." (Emphasis supplied). Since plaintiff had sued in both negligence and conversion, plaintiff argued that without an explanation of the disappearance of the goods by defendant, plaintiff's prima facie case raised a presumption of both negligence and conversion. Therefore, the contractual limitation on liability would not apply.

As hereinafter set forth, an inadvertent misdelivery is a conversion. Can a bailee simply refuse to explain a disappearance and then have his liability limited by N.J.S.A. 12A:7-204? If so, what will prevent a dishonest warehouseman from stealing the goods entrusted to his care and then saying, "I don't know what happened but I admit my negligence." He would then pay only the amount limited by contract and pocket the difference.

A bailee who accepts responsibility for goods should have the burden of producing evidence as to the fate of those goods. To hold otherwise would place an impossible burden on a plaintiff.

How is a plaintiff to present sufficient evidence of conversion when knowledge of the fate of the goods is available only to defendant? This court holds that plaintiff has presented a prima facie case of conversion and the burden of going forward or producing evidence as to what happened to the whiskey shifts to defendant.

This position is supported by language in Mueller v. Technical Devices Corp., 8 N.J. 201, 207 (1951): "A demand and refusal do not of themselves amount to a conversion, but are evidence from which a jury may find that a conversion had been committed."

This issue was addressed by the New York Court of Appeals in I.C.C. Metals, Inc. v. Municipal Warehouse Co., 431 N.Y.S. 2d 372, 50 N.Y. 2d 657, 409 N.E. 2d 849 (1980).

In I.C.C. plaintiff delivered metal to be stored by defendant. The storage contract contained a limitation on liability. Upon demand, defendant informed plaintiff that the metal had been stolen "through no fault of defendants," 431 N.Y.S. 2d at 375, 50 N.Y. 2d at 662, 409 N.E. 2d at 852, so liability was limited by the contract terms. The court held that unless a bailee can "make a sufficient showing in support of its suggested explanation of the loss," the bailee is liable for conversion and the contractual limitation does not apply. 431 N.Y.S. 2d at 376-77, 50 N.Y. 2d at 665, 409 N.E. 2d at 853-54. The explanation proffered by the warehouse in such a case must be supported by sufficient evidence and cannot be merely the product of speculation and conjecture. "It is not enough to show that defendant bailee used reasonable care in its system of custody if mysterious disappearance is the only 'explanation' given." Footnote 3, 431 N.Y.S. 2d at 377, 50 N.Y. 2d at 665, 409 N.E. 2d at 854. (citation omitted). This ruling by the court was predicated on "practical necessity" since it is the bailee who is in the best position to explain the loss of the property. 431 N.Y.S. 2d at 377, 50 N.Y. 2d at 665, 409 N.E. 2d at 854.

Thus, the burden of producing evidence is shifted to defendant, but the burden of proof that the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.