## Facts

- Bill Morrow and Charles R. Goslee were coin collectors who kept a substantial portion of their collection at Morrow’s home in Hot Springs, Arkansas.
- Due to high insurance costs, they sought large safety-deposit boxes but could not find any locally.
- In June 1971, they reserved three large safety-deposit boxes at First National Bank of Hot Springs’ new building, paying the standard rental fee ($25 per box), with an expectation the boxes would be available within 30–60 days.
- Morrow told bank employees he especially wanted the boxes by September 1, when his teenage son would leave for college, and bank personnel promised to notify him when the boxes became available.
- The bank became aware, at least generally, that the coin collection was valuable (including information suggesting value of at least $12,000).
- On Saturday, September 4, 1971, burglars broke into Morrow’s home and stole coins valued at $32,155.17.
- On the next business day, Morrow learned the boxes had been available since August 30; a bank employee explained the bank did not notify him because it “didn’t have time.”
- The collectors placed remaining coins in the boxes and sued the bank for the value of the stolen coins, alleging the bank’s failure to give promised notice caused their loss.

## Issues

1. Whether the bank could be held liable for consequential damages for the stolen coins based on an alleged tacit agreement to assume responsibility for that loss if it failed to provide notice of box availability.
2. Whether the bank’s failure to notify could be treated as a tort (misfeasance) rather than nonperformance of a contractual promise (nonfeasance), permitting tort recovery for the theft by third parties.

## Decision

- The Arkansas Supreme Court affirmed summary judgment for the bank.
- The court held the collectors failed to show a tacit agreement by the bank to be liable for the theft-related consequential damages.
- The court rejected tort liability because the complained-of conduct was nonfeasance in performing a contract, and no independent tort duty required the bank to protect the collectors from third-party theft before any bailment.

## Legal Principles

- In Arkansas, consequential (special) contract damages are not recoverable merely because the defendant could foresee them; recovery requires evidence of a tacit agreement that the defendant accepted liability for such damages.
- A standard commercial transaction at an ordinary price, without additional consideration or risk allocation, generally does not support an inference that the promisor accepted extraordinary liability for consequential loss.
- A failure to perform a contractual promise is typically nonfeasance and does not become a tort absent an independent duty recognized by tort law.
- A bank’s general business relationship with a customer does not, without more, impose a tort duty to prevent losses caused by third-party criminal acts outside any bailment or custodial relationship.

## Conclusion

The court limited the dispute to contract law and held that, without evidence the bank tacitly agreed to insure the collectors against theft at home, the bank’s failure to give notice did not support consequential damages; the same conduct also did not establish an independent tort duty supporting tort recovery.


Morrow v. First Nat’l Bank of Hot Springs, 261 Ark. 568, 550 S.W.2d 429 (Ark. 1977)