Hanover Ins. Co. v. Alamo Motel

• Decision Date: 19 April 1978
• Docket Number: No. 59886,59886
• Citation: 264 N.W.2d 774
• Parties: The HANOVER INSURANCE COMPANY, Appellant, v. ALAMO MOTEL et al., Appellees.
• Court: Iowa Supreme Court

Page 774

264 N.W.2d 774

The HANOVER INSURANCE COMPANY, Appellant, v. ALAMO MOTEL et al., Appellees.

No. 59886.

Supreme Court of Iowa.

April 19, 1978.

John D. Randall and Ronald W. Wendt of John D. Randall Law Offices, Cedar Rapids, for appellant.

J. W. Albright of Simmons, Perrine, Albright & Ellwood, Cedar Rapids, for appellees.

Considered by MOORE, C. J., and MASON, RAWLINGS, LeGRAND and REYNOLDSON, JJ.

REYNOLDSON, Justice.

In this appeal, as a matter of first impression, we are required to interpret Iowa's statutes limiting the ancient law of innkeeper liability.

November 5, 1974, jewelry valued at $89,628 was stolen from a room in Alamo Motel, Coralville, which had been rented to a jewelry company's sales agent. Plaintiff insurance carrier paid the jewelry company $50,000 and became subrogated in that amount to the insured's claims.

October 6, 1975, plaintiff filed petition against the motel corporation, its owners and operators who are hereafter collectively referred to as "defendant." Plaintiff in three divisions alleged defendant was liable on theories of negligence, strict innkeeper liability, and implied contract.

Defendant, answering, asserted several affirmative defenses. Included was division seven, which alleged if plaintiff suffered any loss or injury in any of the ways alleged in the petition then defendant's liability would in no event exceed the amounts fixed by § 105.4, The Code, 1975. Pursuant to rule 105, Rules of Civil Procedure, defendant then moved for adjudication of the law point raised in division seven.

Following hearing, trial court ruled liability of defendant for property loss sustained by its guest was absolutely limited to a sum prescribed by the § 105.4 formula. In this case the maximum amount recoverable would be $500, defendant being willing to concede the two jewelry containers might be classified as trunks.

We granted permission to appeal from trial court's interlocutory order. See present rule 2(a), Rules of Appellate Procedure.

Plaintiff contends trial court erred in ruling § 105.4 is an "absolute overall limitation on the liability of hotelkeepers and innkeepers."

We agree, and therefore reverse and remand.

I. Plaintiff contends § 105.4 does not limit an innkeeper's liability for loss of or injury to "valuables" or precious articles, described in § 105.1, The Code, as "money, jewelry, articles of gold or silver manufacture, precious stones, personal ornaments, documents of any kind, or other similar property." Plaintiff argues § 105.4 merely limits liability relating to loss of or damage to property other than § 105.1 precious articles or valuables.

The issue requires us not only to examine this legislation in its historical setting, but to follow the evolution of statutory changes to arrive at the legislative intent and purpose.

At common law the innkeeper was held responsible for a guest's property to an extent as strict and severe as common carriers. de Saric v. Miami Caribe Investments, Inc., 512 F.2d 1013, 1016 (5th Cir. 1975); Link-Simon, Inc. v. Muehlebach Hotel, Inc., 374 F.Supp. 789, 792 (W.D.Mo.1974); Annot., Innkeepers Loss of Guest's Property, 37 A.L.R.3d 1276, 1279 (1971); 40 Am.Jur.2d, Hotels, Motels, Etc., § 127, pp. 1000-1001 (1968); 43 C.J.S. Innkeepers § 13, p. 1153 (1945). The rule devolved from the Roman era and was designed to protect travel and commerce in times of highwaymen who were often in league with innkeepers "Rigorous as this law may seem, and hard as it may actually be in some instances, it is, as Sir William Jones observes, founded on the principle of public utility, to which all private considerations ought to yield. Travellers, who must be numerous in a rich and commercial county, are obliged to rely almost implicitly on the good faith of innkeepers; and it would be almost impossible for them, in any given case, to make out proof of fraud or negligence in the landlord. The Roman praetor held innkeepers responsible for the goods of their guests, on the same principle of public utility. It was necessary, says Ulpian, in commenting on the edict of the praetor, to confide largely in the honesty of such men; and if they were not held very strictly to their duty they might yield to the temptation to commit a breach of trust. They were bound to answer for all losses, and damages happening even without their default, unless they were fatal losses, occurring from vis major or irresistible force." 2 Kent's Commentaries, p. 975 (14th ed. 1896)

See also Minneapolis Fire & Marine Ins. Co. v. Matson Nav. Co. 44 Haw. 59, 61, 352 P.2d 335, 337 (1960); Shifflette v. Lilly, 130 W.Va. 297, 300-302, 43 S.E.2d 289, 290-291 (1947).

While there is no Iowa decision directly on point, it appears common-law strict liability prevailed early in Iowa. In Lyon v. Smith, 1 Morris Iowa Reports 244 (1843), Lyon alleged his son had stayed at Smith's house "had his horses put up, and tarried all night as a guest, and that in the morning two bridles, valued at six dollars, and one saddle, valued at fifteen dollars, were lost, and could not be found." Id., at 244. Chief Justice Mason's opinion permitted Smith to escape liability on the ground he was not a common innkeeper. But it did not question the rule that had he been an innkeeper he would have been "responsible as an insurer of all the property of his guests, which may have been left in his keeping." Id., at 246.

Innkeepers sought to limit the liability. The first effort in Iowa appeared in Laws 18th G.A., Ch. 181 (1880). Following certain amendments the revised statute appeared as § 6525 in the 1921 Code:

"Keepers of hotels, inns, eating houses and steamboat owners, who constantly have in their hotel, inn, eating house or steamboat, a metal safe, or vault in good order and fit for the custody of money, jewelry, articles of gold or silver manufacture, precious stones, personal ornaments, documents of all kinds, and other similar property, and who keeps on the door of the sleeping rooms used by guests suitable locks or bolts and proper fastenings on the transoms and windows of said rooms, and keeps posted up in a conspicuous place in the office or other public room in the guest's apartment therein, printed notices, stating that such places for safe deposit are provided for the use and accommodation of the inmates thereof, shall not be liable for the loss or injury suffered by any guest, in an amount to exceed one hundred dollars, unless said guest has offered to deliver such valuables to said hotel, inn, eating house, or steamboat keeper for custody in such metal safe or vault, and said hotel, inn, eating house, or steamboat keeper has omitted or refused to take and deposit same in such safe or vault and give such guest a receipt therefor. Provided, however, that the keeper of any hotel, inn, eating house, or steamboat shall not be required to receive from any one guest for deposit in such safe or vault any property exceeding the market value of five hundred dollars.

"The liability of the keeper of any hotel, inn, eating house or steamboat, for loss of or injury to personal property placed by his guests under his care, other than that described in the preceding paragraph, shall be that of a depository for hire; and in no event shall liability exceed two hundred fifty dollars for each trunk and its contents, one hundred fifty dollars for each valise and its contents, fifty dollars for each box, bundle or package and its contents and not exceeding one hundred dollars for any and all other miscellaneous effects of each guest * * *."

(emphasis supplied)

It should be noted at this stage of the statute's evolution, limitation of liability as to precious articles or "valuables" was treated in the first paragraph; the second paragraph addressed itself solely to property "other than that described in the preceding paragraph." As to the latter class of property, which might be classified as baggage, two limitations applied. First, the liability of the innkeeper "shall be that of a depository for hire." Second, the total liability could not exceed the dollar limitations specified in that paragraph for each "trunk," "valise," "box," "bundle" or "package."

In the 1924 Code revision the above statute was broken into several sections which essentially appear in the same form in The Code, 1975:

"105.1 Liability for precious articles safe deposit. No keeper of any hotel, inn, or eating house, nor the owner of any steamboat, shall be liable to any guest for more than one hundred dollars for the loss of or injury to any money, jewelry, articles of gold or silver manufacture, precious stones, personal ornaments, documents of any kind, or other similar property, if such keeper or owner at all times provides:

1. A metal safe or vault, in good order and fit for the safekeeping of such property.

2. Locks or bolts on the door and proper fastenings on the transoms and windows of the sleeping quarters used by guests.

3. Printed notices posted up in a conspicuous place in the office or other public room and in the quarters occupied by guests, stating that such places for safe deposit are provided for the use and accommodation of guests and patrons."

"105.2 Exception. The limited liability provided in section 105.1 shall not apply where:

1. A guest has offered to deliver such valuables to said keeper or owner for custody in such metal safe or vault, and

2. Said keeper or owner has omitted or refused to receive and deposit the same in such safe or vault and give such guest a receipt therefor.

But such keeper or owner shall not be required to receive from any one guest for deposit in such safe or vault, property having a market value of more than five hundred dollars."

"105.3 Nature of liability. The liability of such keeper or owner for loss of or injury to personal property placed by any guest in his care, other than that described in sections 105.1 and 105.2, shall be that of a depository for hire."

"105.4 Limitation...