Millhiser v. Beau Site Co.

• Decision Date: 11 July 1929
• Citation: 251 N.Y. 290,167 N.E. 447
• Parties: MILLHISER v. BEAU SITE CO.
• Court: New York Court of Appeals Court of Appeals

251 N.Y. 290

167 N.E. 447

MILLHISER

v.BEAU SITE CO.

Court of Appeals of New York.

July 11, 1929.

Action by Regina V. G. Millhiser against the Beau Site Company. From a judgment of the Appellate Division (224 App. Div. 594, 231 N. Y. S. 549) which modified129 Misc. Rep. 855, 223 N. Y. S. 733, defendant appeals.

Judgment affirmed.

Appeal from Supreme Court, Appellate Division, First department.

John McKim Minton, Jr., and Harold R. Medina, both of New York City, for appellant.

William O. Gennert, of New York City, and George H. Eichelberger, of Cleveland, Ohio, for respondent.

Charles J. Campbell, of New York City, for New York State Hotel Ass'n et al., amici curiae.

HUBBS, J.

The defendant operates the Biltmore Hotel in New York City. It has 200 safety deposit boxes provided for the use of guests. The plaintiff, a transient guest, delivered to the clerk at the desk a package containing jewelry of the value of $369,800. She did not notify him of the value of the package. He gave her a key to a safety deposit box and placed the package in it. The box could only be unlocked by the use of a master key and the key given to the plaintiff, or a duplicate thereof. Later the plaintiff called for the package. When the box was opened it was found that jewelry to the value of $50,000 was missing. Thereafter the clerk who had received the package from the plaintiff was convicted of stealing the missing jewelry.

The defendant had posted in the public rooms and guest rooms a notice which read: ‘A safe is provided in the office of this hotel for the use of guests in which money, jewels or other valuables may be deposited for safe-keeping.’ No other or different notice was posted. The question for determination is whether the defendant is liable for $50,000, the value of the jewelry stolen, with interest, or whether its liability is limited to $250 by section 200 of article 12 of the General Business Law (Laws of 1909, ch. 25; Consol. Laws, ch. 20), as it read at that time.

At common law an innkeeper was liable as an insurer of the property of guests lost by theft, unless the loss was occasioned by the negligence or fault of the guest. Hulett v. Swift, 33 N. Y. 571, 88 Am. Dec. 405;Wilkins v. Earle, 44 N. Y. 172, 4 Am. Rep. 655. In order to relieve innkeepers of the heavy burden placed upon them by the common law, the Legislature enacted chapter 421 of the Laws of 1855. Rosenplaenter v. Roessle, 54 N. Y. 262. That statute provided that when any hotel shall provide a safe and ‘shall notify the guests thereof, by posting a notice, [stating the fact that such safe is provided, in which such money, jewels or ornaments may be deposited], in the room or rooms occupied by such guest,’ and the guest shall fail to deposit the property, an innkeeper shall not be liable therefor. Under that statute it was decided that the common-law liability continued in case the hotel failed to post the notice as required by the statute. Hancock v. Rand, 94 N. Y. 1, 46 Am. Rep. 112. Also that a guest could not recover the value of such articles when stolen if the hotel had posted the notice and the guest had failed to deliver the articles to the hotel for safe-keeping. Hyatt v. Taylor, 42 N. Y. 258.

The section was amended by chapter 227 of the Laws of 1883 by requiring the notice to be posted in the office and public rooms and in the public parlors, instead of in the bedrooms as theretofore. It was again amended by chapter 284 of the Laws of 1892 by adding a provision to the effect that a hotel shall not be required to receive for safe-keeping articles of more than $500 in value, and if a guest shall deliver for safe-keeping in the safe such property, the hotel shall not be liable ‘for any loss thereof, sustained by such guest, by theft or otherwise, in any sum exceeding the sum of two hundred and fifty dollars, unless by special agreement in writing by proprietor or manager.’ The section was again amended by chapter 305 of the Laws of 1897 in a respect not material in this case. By section 200 of article 12 of the General Business Law (Laws of 1923, ch. 417) the section was re-enacted without change in regard to the notice to be posted, but increasing the limited liability from $250 to $500.

The Appellate Division has decided that section 200 of article 12 of the General Business Law (Laws of 1909, ch. 25) does not protect the defendant or limit its liability because the jewelry was stolen by an employee of the defendant, thereby limiting the effect of the section to cases where the property of the guest placed with a hotel for safe-keeping in a safe is stolen by some one not an employee of the hotel. We cannot agree with that construction of the section. There is nothing in the wording of the section which suggests such a limitation of its meaning. It is plain and unambiguous and provides that: ‘Said proprietor, manager or lessee shall not be liable for any loss thereof, sustained by such guest or traveller by theft or otherwise, in any sum exceeding the sum of two hundred and fifty dollars, unless by special agreement in writing with such proprietor, manager or lessee.’ The purpose of the section is to protect the hotel from an undisclosed excessive liability.

The plaintiff left with the desk clerk jewelry of the value of $369,800 without notifying the clerk of its value, or in any way giving the defendant an opportunity of declining to accept the risk involved, as the section permitted it to do. The risk that the package might be stolen by an employee was greater, possibly, than that it might be unlawfully taken by some one not in the service of the defendant. The facts in this case illustrate the great liability which could be placed upon a hotel under the construction which has been given to the section. It was to enable hotels, without notice of value, to avoid liability, that the section provides that if a guest desires to impose a liability greater than $250, notice must be given of the value of the property deposited, and a written agreement entered into making the hotel liable for more than that...