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on a servant injured by an accident.
Langan v. Great Western Ry. Co. (1874), 30 L. T. N. S. 173, Ex. Ch., affirming 26 L. T. N. S. 577; P. 245.
Beer v. London & Paris Hotel Co. (1875), L. R. 20 Eq. 412. Secretary of company authorised agent to execute contract of sale, both within Statute of Frauds and Companies Act, 1867.
As to servant's authority to give receipts, Thorold v. Smith (1700), 11 Mod. 87; Bridges v. Garrett (1869), 38 L. J. C. P. 242; and Coleman v. Riches (1855), 16 C. B. 104. As to tender to servant being equivalent to tender to master, Moffatt v. Parsons (1814), 5 Taunt. 307; and Wilmott v. Smith (1828), Mood. & Malk. 238. As to admissions by servants, Garth v. Howard (1832), 8 Bing. 451; and Great Western Ry. Co. v. Willis (1865), 34 L. J. Ch. 195.
SERVANTS' LIABILITY TO THIRD PERSONS.
SERVANTS incur no liability on contracts made through them if they contract as their masters' agents.
Servants are subject to the ordinary liabilities of agents. They are not liable if they contract as agents, but if they contract as principals-if they pledge their own credit, if they exceed their authority, or if they contract without authority, they are personally answerable (a). If, in entering into a contract, a servant do not disclose the fact that he is acting for his master, those with whom he deals may sue either him or his master. To whom credit was given will be a question for a jury if the servant be sued (b). The settled principle is that "persons who induce others to act on the supposition that they have authority to enter into a binding contract on behalf of third persons, on it turning out that they have no such authority, may be sued for damages for the breach of an implied warranty of authority" (c).
(a) Cherry v. Bank of Australasia (1869), 38 L. J. P. C. 49; 17 W. R. 1031; Story on Agency, sec. 264.
(b) Fisher v. Marsh, 34 L. J. Q. B. 177.
(c) Cockburn, C.J. in Richardson v. Williamson (1871), L. R. 6 Q. B. p. 279, and 40 L. J. Q. B. 145, referring to Collen v. Wright, 7 E. & B. 301; 26 L. J. Q. B. 47; 8 E. & B. 647; 27 L. J. Q. B. 215; Down
man v. Jones, 9 Jur. (1845), 454. Apparently, according to the authorities, a servant would be responsible when he entered into a contract under the belief, bond fide but erroneous, that he had authority; Randell v. Trimen (1856), 18 C. B. 786; 25 L. J. C. P. 307; Smout v. Ilbury (1842), 10 M. & W. 1; Kelner v. Baxter (1866), L. R. 2 C. P. 174.
A servant is not liable to third persons for negligence or acts of non-feasance or omission, but he is liable for acts of misfeasance.
This distinction has been established since 1701, when it was stated by Holt, C. J., in Lane v. Cotton (d). It has been justified on various grounds. Thus, it is said that it is a consequence of the fact that there is no privity between the servant and the party injured. 'In respect to nonfeasances, or mere neglects in the performance of duty, the responsibility must therefore arise from some express or implied obligation between particular parties standing in privity of law or contract with each other, and no man is bound to answer for any such violations of duty or obligation except to those to whom he has become directly bound or amenable for his conduct" (e).
When a servant sold goods wrongfully or, in other words, was guilty of conversion, he was held liable as a tort feasor, and he was not excused because he disposed of them for his
(d) 12 Mod. 488. The exact limits of the doctrine are hard to define, and the authorities are not at one. Mr. Wood thus states the rule recognised in America at p. 674 of his "Law of Master and Servant": "The servant is never liable to third persons for his failure to perform his master's obligations; but for his own wrongful or negligent acts he is liable to third persons injured thereby, either alone or jointly with his master." Mr. Wharton, on the other hand, states that the servant is not liable where there is negligence, but is so when malice exists. Story thus states the rule: "The agent is also personally liable to third persons for his own misfeasances and positive wrongs; but he is not in general (for there are exceptions) liable to third persons for his own nonfeasance or
omissions of duty in the course of his
master's use (h). So, too, a servant was held guilty of conversion of certain goods in the following circumstances: the goods of a bankrupt were sent after bankruptcy to the defendant, a clerk in the employment of one Heathcote, and the defendant delivered them to Heathcote. The clerk, it was held, was guilty of conversion, though he acted from unavoidable ignorance, and for his master's benefit (i). On the other hand, refusal by a servant of an insurance company to deliver up to the plaintiff goods, the property of the plaintiff, in a warehouse, of which the servant kept the keys, was not conversion ().
It has been already stated that a servant who executes unlawful orders will be liable. Individual expressions to the contrary in old reports cannot be regarded as law (1).
"Can it be maintained as a proposition of law," said Westbury, L. C., in Cullen v. Thompson's trustees (m), "that a servant who knowingly joins with and assists his master in the commission of a fraud, is not civilly responsible for the consequences? All persons directly concerned in the commission of a fraud are to be treated as principals. No party can be permitted to excuse himself on the ground
(h) Perkins v. Smith (1752), Sayer, 40.
(i) Cary v. Webster (1716), 1 Stra. 480. An action against a clerk by a person who had paid him money; the defendant had paid it over to his employer, but did not make further ntry; no action. But if he had not paid it over, the plaintiff would have had his option either to charge him or the company.
"A conclusion no doubt correct, whatever may be thought of the reason that the plaintiff may charge' the servant, because till the money is paid over, the servant receives it to his use." Stephens v. Elwall (1815), 4 M. & S. 259; Cranch v. White (1835), 1 Scott, 314. What would be conversion in a principal may not be such in a servant. See Mires v. Solebay, 2 Mod. 245; Alexander v. Southey (1821), 5 B. & Ald. 247;
and Lee v. Bayes (1856), 18 C. B. 607. In the last mentioned case, Jervis, C.J., observed: "As between master and servant, or perhaps as between principal and agent, where the servant or agent receives from his master or his principal goods, which belong to a third person, on their being demanded of him by such third person, he is entitled to say: 'I received them from my master or my principal; and I require a reasonable time to ascertain whether the party making the demand is the real owner;' and such qualified refusal would not be evidence of a conversion, so as to render him liable."
(k) Alexander v. Southey (1821), 5 B. & Ald. 247.
(1) Story on Agency, sec 310. (m) (1862), 4 Macq. 424; R. v. Mutters (1865), 34 L. J. M. C. 54.
that he acted as the servant of another; and the reason is plain, for the contract of agency or of service cannot impose any obligation on the agent or servant to commit or assist in committing a fraud."
In Mill v. Hawke (n), it was held that a surveyor required by statute to obey the orders of a highway board was liable for trespasses committed in the course of obeying the orders of the Board. So, too, it is said that if a clerk of works who superintends the erection of buildings give directions which result in the darkening of ancient lights, he will be liable (0).
It is laid down in an American case (p) that one servant cannot maintain an action against another for negligence, while they are engaged in a common employment; and in Southcote v. Stanley (q), there is a dictum by Pollock, C. B., to the same effect. But the reasoning upon which this decision proceeds is open to question, and has never been acted upon in this country.
A master who suffers damage by reason of his servant's negligence or misconduct may, of course, bring an action against him (r).
(n) (1875), L. R. 10 Ex. 92; 44 L. J. Ex. 49.
(0) Wilson v. Peto (1821), 6 Moor. 43. Compare Stone v. Cartwright (1795), 6 T. R. 411.
(p) Albro v. Jaquith (1855), 4 Gray, 99; Wood, 675.
(g) (1856), 1 H. & N. 250. See Wright v. Roxburgh (1864), 2 M. 748, where the contrary was decided.
(r) Countess of Salop v. Crompton (1600), Croke, Eliz. 757 (action of trespass against shepherd, who killed sheep intrusted to his charge); Hussey v. Pacy (1666), 1 Lev. 189 (a servant who knowingly caused his master to break a certain covenant, liable to an action on the case): Savage v. Walthew (1706), 11 Mod. 135; Story on Agency, sec. 310.