Peet v. Roth Hotel Co.
191 Minn. 151, 253 N.W. 546 (1934)

  • Peet left a fancy ring with the desk clerk at the Roth Hotel. She gave instructions for the ring to be delivered to a jeweler named Hotz, but the ring was lost by the desk clerk, Edwards.
    • Edwards failed to inform either Peet or Hotz that the ring had gone missing.
  • Peet sued Roth as the bailee of the ring.
    • The ring was a bailment, Peet was the bailor, and Roth was the bailee.
  • The Trial Court found for Peet and awarded damages of $2140. Roth appealed.
    • The Trial Court found that Roth was legally a bailee, and was therefore responsible for the loss of the ring.
  • The Minnesota Supreme Court affirmed.
    • Roth argued that in order for there to be a bailment, there must be mutual assent on both parties. Since Roth never agreed to become a bailee, he can’t be held responsible.
      • Courts have consistently held that if you do not assent to take control of a bailment, you are not a bailee.
      • In this case, the Minnesota Supreme Court found that the desk clerk assented for the hotel.
    • Roth argued that the hotel was not a bailee, because they did not know how valuable the ring was. However, the Court found that as long as the desk clerk assented to take control of a ring, it didn’t matter how valuable it was.
      • In other bailment cases, the verdict usually turned on fact such as valuable diamonds sealed inside a generic envelope. There, the bailee had no way of knowing what was inside. But in this case the desk clerk knew that he was holding a valuable ring.
    • The Court also found that the bailment was mutually beneficial.
      • Roth argued that the hotel got nothing in return for taking care of the ring. But the Court found that they took the ring as part of their regular business services, and they generated goodwill and return customers by performing such services.
        • In the past, a bailee that gets a reciprocal benefit from the bailment was under a duty to exercise ordinary care.
          • Like when you borrow someone’s lawnmower to mow your lawn.
        • In the past, a bailee that does not get a reciprocal benefit from the bailment was just under a duty to refrain from gross negligence.
          • Like when some guy at the train station tells you to watch his suitcase for a minute.
        • The Court rejected such distinctions and now holds everyone to the ordinary care standard.
  • There is an exception to the ordinary care standard. If the bailee delivers the bailment to the wrong person, they are absolutely liable, even if they used ordinary care.