[IN THE COURT OF APPEAL.]

RUTTER v. PALMER.

[1922. R. 2096.]

Bailor and Bailee - Deposit for Sale - Motor-car - "Customer's sole Risk" - Negligence of Bailee's Servant.

The owner of a motor-car deposited the car for sale on commission with the keeper of a garage upon the terms of a printed document containing the clause: "Customers' cars are driven by your staff at customers' sole risk." The car was sent out by the garage keeper in charge of one of his drivers to be shown to a prospective purchaser, and was injured owing to the negligence of the driver.

In an action by the owner of the car against the keeper of the garage:-

Held, that the above clause protected the defendant from liability for the negligence of his servants, and that the action failed.

McCawley v. Furness Ry. Co. (1872) L. R. 8 Q. B. 57 approved and applied.

Judgment of Lord Trevethin C.J. reversed.

APPEAL from the judgment of Lord Trevethin C.J. on the trial of an action without a jury.

The plaintiff was the owner of a Le Gui four-seated motorcar which he had placed in the hands of the defendant, a motor-car dealer who kept a garage at Tooting, for sale on commission either by private treaty or public auction. The car was placed with the defendant on February 7, 1920, on the terms of an agreement in writing which contained the following clauses:-

"Unless you" - i.e., the defendant - "give a receipt for the goods stating the same to have been delivered to you in perfect condition in every respect, you will not be responsible for any damage whatever to the goods whilst in your possession. ....

"Customers' cars are driven by your staff at customers' sole risk. ...."

On February 10, 1920, at about 5.30 P.M. the car was sent out by the defendant in charge of a driver to be shown to a prospective purchaser. It was being driven along Plough Lane, Wimbledon. It was fitted with smooth tyres. The

streets were slippery and the car was being driven at an unreasonably fast speed. It skidded along the tram-lines in Plough Lane and came into violent collision with an electric standard belonging to the London United Tramways Co. and the car and the electric standard were both seriously damaged.

The plaintiff claimed 160l. damages. The defendant denied negligence and pleaded that the car was being driven at the plaintiff's sole risk.

The Lord Chief Justice held that the car was damaged by the negligence of the defendant's driver, and held further that the clause in the contract stipulating that customers' cars were driven at customers' sole risk did not operate to exempt the defendant from liability for the negligence of his driver. He therefore gave judgment for the plaintiff.

The defendant appealed.

Croom-Johnson for the appellant. A bailee may exempt himself from liability for the negligence of his servants. There is no law which forbids him from so doing: Stewart v. London and North Western Ry. Co. (1); Lewis v. Great Western Ry. Co. (2); Travers & Sons v. Cooper. (3) The only question is whether he has used apt words to express the intention. Where his liability is that of a common carrier some skill may be necessary in drafting the exempting clause; but where, as in this case, his liability springs from one source only, for example, from negligence, the same precision is not required and a less elaborate form of words will serve: McCawley v. Furness Ry. Co. (4); Gibaud v. Great Eastern Ry. Co. (5); Reynolds v. Boston Deep Sea Co. (6)

In the circumstances of this case the words "at customers' sole risk" can have only one meaning - namely, that the appellant will not be liable for the negligence of his drivers. [He also cited Cordey v. Cardiff Pure Ice Co. (7)]

(1) (1864) 3 H. & C. 135.

(2) (1877) 3 Q. B. D. 195.

(3) [1915] 1 K. B. 73.

(4) L. R. 8 Q. B. 57.

(5) [1921] 2 K. B. 426, 434.

(6) (1922) 38 Times L. R. 429.

(7) (1903) 88 L. T. 192.

Shakespeare and Montague Berryman for the respondent. A bailee who intends to excuse himself from liability for negligence must do so in plain and unambiguous terms. Merely general words will not suffice. In Price v. Union Lighterage Co. (1) words exempting the defendants "from any loss of or damage to goods which can be covered by insurance" were held not to protect them from the negligence of their servants. In Travers & Sons v. Cooper (2) the words exempted the defendant from liability "for any damage to goods however caused which can be covered by insurance." Kennedy L.J. said (3): "In the present case .... there can be no doubt that the defendant had at least the duty not to be negligent in regard to the carriage of the goods in his lighter, and he was negligent. Is he protected by the terms of the special contract from the consequences of that negligence to the owner of the goods? But for the words 'however caused' I am of opinion that he would not be, and that the decision of this Court in Price v. Union Lighterage Co. (1) affirming the judgment of Walton J. (4), which is referred to by Pickford J. in his judgment in the present case, would bind us so to hold. In that case, however, there were no such words as 'however caused.'" There are no such words in the present case. The Pearlmoor (5) and James Nelson & Sons v. Nelson Line, Ld. (6), are to the same effect. The distinction relied on by the appellant between the common carrier and the bailee who accepts goods for sale is not borne out by the authorities and was expressly negatived by Phillimore L.J. in Travers & Sons v. Cooper. (7) The conflict of judicial opinion shows that the words "at customers' sole risk" are not so plain and unambiguous as to relieve the appellant from liability for the negligence of his servants. The clause must be read with some limitation; otherwise it would exempt the appellant from liability if one of his clerks took the car out for his own amusement. It

(1) [1904] 1 K. B. 412.

(2) [1915] 1 K. B. 73.

(3) [1915] 1 K. B. 93.

(4) [1903] 1 K. B. 750.

(5) [1904] P. 286.

(6) [1907] 1 K. B. 769.

(7) [1915] 1 K. B. 100.

should be read subject to the condition that damage is not caused by the appellant's servants.

Croom-Johnson was not called upon in reply.

BANKES L.J. This appeal raises a question upon the true construction of an owner's risk clause in a garage proprietor's contract. At first sight I thought there was much to be said in favour of the Lord Chief Justice's decision, supported as it is by a dictum of Kennedy L.J. in Travers & Sons v. Cooper (1), but further consideration has satisfied me that a contract relating to the driving of a motor-car and the risk therein involved is a contract of a special kind presenting features which distinguish it from a contract of carriage by a railway company or a common carrier. A common carrier is liable for the acts of his servants whether they are negligent or not; an ordinary bailee is not liable for the acts of his servants unless they are negligent. If a common carrier would protect himself from responsibility for all acts of his servants he must use words which will include those acts which are negligent; because words which would suffice to protect him from liability for acts properly done by his servants in the course of their service may fall short of protecting him from their negligent acts. But if an ordinary bailee uses words applicable to the acts of his servants, inasmuch as he is not liable for their acts unless negligent, the words will generally cover negligent acts, although such acts are not specially mentioned, because otherwise the words would have no effect. Moreover it is well known to be the common practice for the owners of motor-cars to insure themselves against all risks in connection with the car, that is to say against damage done not only to the car but by the car, and damage caused not only by negligent acts but by innocent acts as well.

I turn now to the contract; it is a garage proprietor's contract and it contains a number of printed conditions upon which he agrees to receive the goods - in this case a motor-car. One clause is designed to protect the garage

(1) [1915] 1 K. B. 93.

proprietor against injury to the car while on his premises. It runs thus: "Unless you give a receipt for the goods stating the same to have been delivered to you in perfect condition in every respect you will not be responsible for any damage whatever to the goods whilst in your possession." That clause does not apply here; but there is another clause which says: "Customers' cars are driven by your staff at customers' sole risk." The car was taken out by a driver of the appellant to be shown to a prospective purchaser. While it was being so driven it came into collision with a lamp-post, and both the car and the lamp-post were seriously damaged. The Lord Chief Justice found that the accident was caused by negligent driving. In giving judgment for the respondent he remarked that the clause construed literally was wide enough to cover negligent driving by a member of the appellant's clerical staff, and that some limitation must be placed upon its meaning. I agree to this extent, that the words "your staff" must mean "your regular driving staff," and the clause must be read as if it ran: "Customers' cars are driven by your drivers at customers' sole risk." If that is not introduced for the purpose of protecting the garage proprietor from the negligent acts of his driver, it is hard to see what effect it has beyond being a mere statement of the general law. Mr. Shakespeare invited us to read into this clause an exception of damage caused by the driver's negligence. I do not think we could do that, even if it were desirable to do so; but I see no reason for doing it. The clause may well have been inserted in the contract to bring home to the customer that it is for him to insure against accidents in which the car may be concerned. The principle of the carriers' cases does not apply to bailees of this class, and still less to a bailee of a motor-car who for special reasons is unwilling to accept the risk of damage. For these reasons I think the appeal must be allowed.

SCRUTTON L.J. I agree. This is one of those difficult cases where in a contract of bailment a clause exempting the bailee from liability is said to exempt him from liability

for the negligence of his servants although negligence is not in terms mentioned. As a matter of history there are two lines of cases which it is difficult to reconcile. First there are the cases of contracts by railway companies for carriage at owner's risk and carriage at the company's risk which introduce the provisions of the Railway and Canal Traffic Act, 1854. Contracts for carriage at owner's risk, if they are just and reasonable, have been held to protect the companies against negligence though not expressly mentioned. Then there are the cases of contracts for carriage by ship or barge. The owner of the vessel being prima facie liable for the unseaworthiness of his vessel and for the negligence of himself and his servants, when the question is how far a clause exempting him from liability, without mentioning either seaworthiness or negligence, will exempt him from liability for one or the other, the Courts insist more strictly on the liability of the shipowner. In Travers & Sons v. Cooper (1) an attempt was made by Phillimore L.J. to reconcile these two lines of authority by distinguishing cases in which immunity depends on the cause of the loss from cases in which it depends on the kind of the loss; but the suggested distinction, the subtlety of which the Lord Justice regretted, is a very fine one. For the present purposes a rougher test will serve. In construing an exemption clause certain general rules may be applied: First the defendant is not exempted from liability for the negligence of his servants unless adequate words are used; secondly, the liability of the defendant apart from the exempting words must be ascertained; then the particular clause in question must be considered; and if the only liability of the party pleading the exemption is a liability for negligence, the clause will more readily operate to exempt him: Reynolds v. Boston Deep Sea Co. (2) This was a contract by a garage keeper to sell a car on commission. To induce a purchaser a trial of the car may be necessary, and that involves the driving of the car by the servants of the garage keeper. What is his liability in these circumstances? He is only liable for his own negligence and the negligence of

(1) [1915] 1 K. B. 73, 101.

(2) 38 Times L. R. 429.

his servants. If an accident happened without his negligence or that of his servants he would not be liable; but if it happened through his or his servants' negligence he would be liable. In these circumstances he introduces this clause into the contract of his customer: "Customers' cars are driven by your staff at customers' sole risk." There are two obvious limitations to be imposed upon the meaning of those words: First "staff" must mean "driving staff"; secondly "driven" must mean driven for the purpose of the bailment, namely, the purpose of selling the car. The clause does not mean that the garage keeper is to be free from liability if a member of his clerical staff takes the car out for pleasure. So limited, the clause, which is regularly inserted in all contracts by garage keepers to sell cars for customers and to run them for that purpose, can have only one meaning, and that is that the owner of the car must protect himself by insurance against accidents for which without the clause the garage keeper would be liable, that is against accidents due to the negligence of the garage keeper's servants. Mr. Shakespeare contended that the clause was ambiguous and must be construed strictly against the party relying upon it, and to show that it is ambiguous he cited the judgment under appeal, the judgment of Walton J. in Price v. Union Lighterage Co. (1), and the judgment of Buckley L.J. in Travers & Sons v. Cooper (2), and said that if those learned judges held that equivalent words were insufficient to protect against negligence it could not be said that the words in this contract did in clear terms protect against negligence. I addressed that same argument to the House of Lords in Rosin and Turpentine Import Co. v. Jacob (3), where the meaning of another exempting clause came in question, but their Lordships held that the meaning of the clause was clear to them and that they must act upon their view, notwithstanding that others might find the clause ambiguous. I must follow that course, and as I see no ambiguity in this clause I must hold that the appeal should be allowed.

(1) [1903] 1 K. B. 750.

(2) [1915] 1 K. B. 73.

(3) (1910) 102 L. T. 81.

ATKIN L.J. I agree. I accept the proposition that if a party to a contract would exempt himself from liability he must express himself in plain words. There is a class of contracts in which words purporting in general terms to exempt a party from "any loss" or to provide that "any loss" shall be borne by the other party, have been held insufficient to exempt from liability for negligence. Those are contracts of carriage by sea or land. The liability of the carrier is not confined to his acts of negligence or those of his servants; it extends beyond liability for negligence; therefore when a clause in the contract exempts the carrier from any loss it may have a reasonable meaning even though the exemption falls short of conferring immunity for acts of negligence. That is the reason at the root of the shipping cases. The same reason does not so often apply to the railway cases because, when acting as carriers, railways generally come under special legislation. But where in the circumstances a railway company is exposed to one kind of liability only, and that is a liability for negligence, there if the parties agree that the risk of loss or damage is to be borne by the passenger or the owner of goods they must intend to exempt the company from liability in the only event which is likely to expose them to liability; that is the negligence of their servants. I do not think the principle can be better stated than it is by Cockburn C.J. in McCawley v. Furness Ry. Co. (1), where the railway company gave to the plaintiff, a drover, a free pass enabling him to travel with his cattle "at his own risk." A carrier of passengers, unlike a carrier of goods, is only liable for negligence. The plaintiff brought an action for personal injuries sustained by him in a collision on the defendants' railway. The defendants pleaded the terms of the free pass; and the plaintiff replied that the accident happened by reason of the gross and wilful negligence of the defendants. The point was raised neatly on a demurrer to the replication. The replication was held bad. Cockburn C.J. said: "The terms of the agreement under which the plaintiff became a passenger exclude everything for

(1) L. R. 8 Q. B. 57, 59.

which the company would have been otherwise liable. They would have been liable for nothing but negligence, and they would have been liable for negligence whether gross or of a minor degree; and so far, under ordinary circumstances, the passenger would have been carried at their risk. But it was agreed that the plaintiff should be carried at his own risk, which must be taken to exclude all liability on the part of the company for any negligence for which they would otherwise have been liable." That applies directly to the present case. The clause containing the words "customers' sole risk" is aimed particularly at the special risk incurred by the appellant when a customer's car is being driven by the appellant's servants. That is the risk of liability for negligence, and it was intended to be thrown upon the owner of the car.

Solicitors for appellant: Taylor, Willcocks & Co.

Solicitor for respondent: F. J. Berryman.

W. H. G.