The opinion of the court was delivered by: MENCER
This civil action for damages presents a number of somewhat unsettled questions of law in the subject area of bailments with warehousemen. This discussion will revolve, in large part, around section 7-204 of the Uniform Commercial Code, 13 Pa.C.S.A. § 7204, and case law interpreting that section. The Court has before it cross motions for summary judgment and a motion by defendant Standard Terminals, Inc. (Standard Terminals) to strike the Affidavit of William N. Leiber, filed in support of plaintiff Western Mining Corporation, Limited's (Western Mining) motion for summary judgment.
Motion to Strike Affidavit
Rule 56 of the Federal Rules of Civil Procedure governs a trial court's handling of summary judgment motions. The rule states that "supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e). An affidavit which does not comply with the requirements of Rule 56(e) is subject to a motion to strike. McSpadden v. Mullins, 456 F.2d 428, 430 (8th Cir.1972); Green v. Benson, 271 F. Supp. 90, 96 (E.D.Pa.1967).
William N. Leiber is a private investigator hired by Western Mining's attorney to investigate the possibility of thefts at Standard Terminals' warehousing complex. Standard Terminals' primary objection to Leiber's affidavit is that it is based not on personal knowledge, but rather, solely on Leiber's conversations with others. The information supplied in the affidavit is in the nature of hearsay and would be inadmissible at a trial of this matter. See Fed.R.Evid. 801(c), 802. Although, as is asserted by plaintiff's counsel, our granting of the motion may be largely academic because of the existence in the record of evidence establishing the same points as are raised by Leiber's affidavit, we will strike the affidavit of William N. Leiber in order to protect the integrity of the summary judgment procedure from dilution by the introduction of evidence which would be inadmissible at trial.
Motions for Summary Judgment
Summary judgment is the appropriate disposition of a case if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The parties have spent considerable space in their briefs setting out their respective, and varying, versions of the facts of this case; however, the Court, after an independent review of the record, finds the following uncontested facts to be material to a determination of the legal issues before us.
Western Mining, the bailor, is involved in the sale of nickel products to the marketplace in North and South America; Standard Terminals, the bailee, is primarily engaged in the commercial warehousing business and operates a warehouse facility in Arnold, Pennsylvania. This warehouse facility consists of eleven warehouses and other buildings situated within a fenced-in compound of approximately five or six acres. In 1978, representatives of Western Mining and its insurer inspected the warehouse involved in the present action. Based on these inspections, use of the Arnold facility was approved for storage of Western Mining's nickel and, by letter dated October 30, 1978, Thomas Moorman, an executive vice-president of Western Mining, notified Standard Terminals of Western Mining's intention to warehouse steelmaking nickel briquettes at the Arnold facility. (Moorman Dep. at 32-33; Moorman Dep. Ex. 3). From that time through December 1982, Western Mining stored nickel at the Arnold facility, maintaining there as much as 2204.6 metric tons. (Moorman Dep. at 41). The nickel stored at Standard Terminals' warehouse came to the United States from Australia aboard ships in sealed containers. The containers were delivered from the port of entry to Standard Terminals' warehouse by common carrier. Standard Terminals would store the nickel, advise Western Mining of the amount delivered and issue warehouse receipts. Upon removal, Western Mining would notify Standard Terminals of the amount and destination of the nickel to be delivered. Standard Terminals would then remove the nickel from the warehouse, load it onto the carrier's vehicles and prepare bills of lading and other shipping documents. (Moorman Dep. at 22-29; Rotzler Dep. at 18-20; Novickoff Dep. at 8-11; Lewis Dep. at 12-15). Both Western Mining and Standard Terminals kept separate running paper inventories of the nickel and verified their records by physical inventories in approximately June and December of each year. (Lewis Dep. at 13; Novickoff Dep. at 7-11).
The warehouse receipts issued by Standard Terminals alerted Western Mining to read the reverse side of the receipts for conditions regarding Standard Terminals' bailment of the nickel. (Moorman Dep. Ex. 4). These conditions included the following.
1. Limit of Bailee's liability damage or loss is $200.00 a net ton. Should Bailor desire that side limit be increased, the storage rate shall be increased by three cents per month for each additional $100.00. Nothing herein contained shall preclude Bailor from taking out such insurance protection against fire or any other casualty as it may deem advisable.
2. Any claim by Bailor against Bailee shall be presented in writing by certified mail within a reasonable time, but in no event longer than 60 days after receipt of the goods. No action may be maintained by Bailor against Bailee for loss or damage to goods unless commenced within nine months after receipt of the goods. Bailor shall ...