Bailment — Lessee of Chattel Holding Over.
Where owner leased machine at a fixed charge per day, reserving right to cancel lease, and thereafter lessee having objected to such rate, owner demanded its return, but lessee continued to hold and use the machine, and lessor elected not to treat this as a conversion, lessee was liable at the rate fixed under the original agreement, since a bailee holding over after bailment has ended, does so under original agreement. p. 205
Under the rule by which courts are reluctant to construe as a tort that which could be justified as a contract, and the rule that a bailee may not take advantage of his own wrong, bailee who acquired machine at a fixed charge per day, held liable to pay rental therefor under original agreement rather that a reduced rate on quantum meruit. p. 205
Decided December 7, 1942.
JOHNSON, J., delivered the opinion of the Court.
This is an appeal from a judgment of the Superior Court of Baltimore City in favor of the plaintiff for the sum of $655 and costs in an action for the rental value of machinery, tried by the court. The appellant had claimed $1,425, or a rental of $15 per day for ninety-five days.
On June 5, 1941, appellant leased an Excello boring machine at $15 per day, reserving the right to cancel the lease on twenty-four hours' notice. Appellee, having possession of the machine, used it twenty-four hours daily until July 1, 1941, when it wrote appellant that it considered $15 per day as high and offered $110 per month. This sum appellant refused, calling attention to the fact that the machine had been used under a specific rental charge and notified appellant of the termination of the lease. But appellee failed to return the machine, retained possession and continued to use it twenty-four hours per day up to and including September 8, 1941. Appellant elected not to treat this as a conversion but as a continuation of the original agreement and brought this suit. The court allowed $15 per day for twenty-five days and $4 per day for seventy days. Appellee has not appealed. The question is whether the trial court was in error in allowing only $4 per day for seventy days, thus reducing the claim to a quantum meruit. In this holding we think the trial court was in error, since in our opinion a bailee, the bailment having ended, who continues to hold and use the goods does so under the original agreement. In other words, he is in a position comparable to that of a tenant holding over after the expiration of the term. Benje v. Creagh's Adm'r, 21 Ala. 151, 155; Edgar v. Parsell, 184 Mich. 522, 151 N.W. 714, Ann. Cas. 1917A, 1160; 8 C.J.S., Bailments, p. 324, Sec. 41 c; 6 C.J., Bailments, p. 1146, Sec. 105; 4 Elliott on Contracts, 1913 Ed., Sec. 3005; Schouler on Bailments and Carriers, 2d Ed., p. 170, Sec. 159. See also Fetting Mfg. Jewelry Co. v. Waltz, 160 Md. 50, 152 A. 434; Restatement of Contracts, Sec. 72 (2), Comment b and Illustrations 6 and 8; 1 Williston, Contracts (Rev. Ed.), Sec. 91D; 6 Williston, Contracts (Rev. Ed.), Sec. 1856.
The origin of this well settled rule seems to have been in the reluctance of courts to construe as a tort what could be justified as a contract, and its existence is fully justified as not allowing a bailee to take advantage of his own wrong. As suggested in appellant's brief, our theory of legal morality does not permit a bailee to demand that what may be given a lawful effect must be held tortuous.
It becomes unnecessary to consider appellant's exceptions which were taken to the admission in evidence of a lease which expired before suit was brought, as showing the reasonable value of the machine. In our judgment they are well taken.
Judgment reversed and judgment de novo in favor of appellant, the Fast Bearing Company, for the sum of $1,425, with interest from date, and costs.