Most readers are familiar with the popular reality show “Pawn Stars,” which follows the daily dealings of a family-run pawn shop in Las Vegas. In each episode, people walk into the store hoping to sell or pawn items ranging from vintage Stratocaster guitars to rare baseball cards, aiming to get top dollar for what they believe are valuable collectibles.
Interestingly, pawn shops share a legal connection with the maritime industry. Both apply the legal concept of bailments, the legal relationship that arises when we leave our valuable property in the temporary custody of another.
This business of bailments was highlighted in a recent decision from the Fifth Circuit Court of Appeals involving the sinking of a barge at dockside. A marine transportation company had delivered a barge to a loading facility. Legally, this created a bailment. Unfortunately, the barge sank at dockside. The loading facility hired a salvor to raise the barge, then sued the barge owner in a salvage claim — a demand for money after saving a vessel.
Prior to delivery, the owner had the barge cleaned and inspected, and no leaks were reported. After arrival at the facility, an employee there also inspected the barge. After examining the knuckles and void tanks, he noted no water or sunlight in the void tanks, which would have evidenced a fracture.
After the barge was raised, surveyors found a fracture 12" long and three-quarters of an inch wide on the port bow rake knuckle, which covered the void tank. The court dismissed the salvage claim because the bailment created a preexisting duty on the part of the loading facility to exercise ordinary care toward the barge. The court concluded that the loading facility lacked sufficient evidence to prove that the damage occurred before the barge’s arrival.
What can we learn from bailments? Whether you’re the “bailor” (vessel owner) or the “bailee” (facility owner), know the condition of a vessel when it arrives. A shipyard superintendent probably isn’t going to get into petty arguments over who is to blame for paint dings or oily footprints tracked through a towboat’s pilothouse with the towboat company’s fleet manager, who sends over $5 million a year in diesel repair contracts. But both sides being straightforward about the condition of a vessel at the time a bailment is created can prevent misunderstandings and help preserve longstanding relationships.
