## Facts

- In May 1966, the wife of Donald Fischer (plaintiff) delivered a fur coat to Milton Herman (defendant), a furrier, for summer storage, creating a bailment for hire.
- After accepting the coat, Herman mailed a storage receipt to Fischer’s wife that listed the coat’s value as $100.
- There was no showing that Fischer’s wife agreed to the $100 valuation when she delivered the coat, or that the valuation term was discussed before or at delivery.
- Herman stored customers’ stored coats on racks in his factory area; coats that Herman had manufactured were stored in a vault.
- In October 1966, Fischer’s wife demanded return of the coat, but Herman could not produce it.
- Herman asserted the coat was taken in a burglary, but he was not present and relied on what an employee allegedly observed; the employee did not testify.
- Herman’s premises had a complex alarm system, but the alarms were not triggered on the night of the claimed burglary.
- An appraiser testified the coat’s value was $1,140.

## Issues

1. When a bailee for hire cannot return bailed property on demand, does the resulting presumption of negligence require the bailee to come forward with competent evidence explaining the loss, and did Herman satisfy that burden?
2. Did Herman’s burglary account—based on hearsay from a non-testifying employee and circumstances such as an untriggered alarm system—adequately explain the loss as occurring without Herman’s negligence?
3. Was Herman entitled to limit damages to $100 based on the valuation printed on a receipt mailed after the coat was accepted for storage, absent proof of the bailor’s knowing agreement?

## Decision

- Judgment was entered for Fischer after a non-jury trial.
- The court applied the rule that non-return of bailed property raises a presumption of negligence and shifts to the bailee the burden to show how the loss occurred.
- Herman did not meet that burden because his burglary explanation was not supported by legally admissible proof; it depended on an employee’s account that was not presented through testimony, and the alarm system was not triggered as the burglary story suggested it should have been.
- The court rejected Herman’s attempt to cap damages at $100 based on the mailed receipt valuation, where the valuation was not shown to be an agreed term at the time the bailment was made.
- The court awarded damages based on the proven value of the coat: $1,140.

## Legal Principles

- In a bailment for hire, the bailee owes a duty of ordinary care with respect to the bailed property.
- If the bailee fails to return the property on demand, a presumption of negligence arises against the bailee.
- The burden then shifts to the bailee to come forward with competent, admissible evidence showing how the loss occurred and that it was consistent with due care; if the bailee meets that burden, the bailor must then prove actual negligence.
- A theft or burglary explanation that rests on hearsay or otherwise inadmissible proof does not satisfy the bailee’s burden to explain the loss.
- A stated valuation or limitation of liability in a storage receipt is not effective to cap damages where it is not shown to have been part of the parties’ agreement at the time of delivery and acceptance.

## Conclusion

Fischer recovered the full proven value of his missing fur coat because Herman, as bailee, failed to produce admissible evidence explaining the coat’s disappearance without negligence, and Herman could not rely on a $100 valuation printed on a receipt sent only after the bailment had already been formed.


Fischer v. Herman, 63 Mis. 2d 44, 310 NY.S.2d 270 (1970)