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Arrest of supposed offenders.

Act wholly

manner of executing his authority, even had the facts been as he supposed. But they do not exclude the master's liability.

'A person who puts another in his place to do a class of acts in his absence necessarily leaves him to determine, according to the circumstances that arise, when an act of that class is to be done, and trusts him for the manner in which it is done; and consequently he is held responsible for the wrong of the person so intrusted either in the manner of doing such an act, or in doing such an act under circumstances in which it ought not to have been done; provided that what was done was done, not from any caprice of the servant, but in the course of the employment'.'

Seymour v. Greenwood 2 is another illustrative case of this class. The guard of an omnibus removed a passenger whom he thought it proper to remove as being drunken and offensive to the other passengers, and in so doing used excessive violence. Even if he were altogether mistaken as to the conduct and condition of the passenger thus removed, the owner of the omnibus was answerable. The master, by giving the guard authority to remove offensive passengers, necessarily gave him authority to determine whether any passenger had misconducted himself.'

Another kind of case under this head is where a servant takes on himself to arrest a supposed offender on his employer's behalf. Here it must be shown, both that the arrest would have been justified if the offence had really been committed by the party arrested, and that to make such an arrest was within the employment of the servant who made it. As to the latter point, however, 'where there is a necessity to have a person on the spot to act on an emergency, and to determine whether certain things shall or shall not be done, the fact that there is a person on the spot who is acting as if he had express authority is prima facie evidence that he had authority. Railway companies have accordingly been held liable for wrongful arrests made by their inspectors or other officers as for attempted frauds on the company punishable under statutes or authorized by-laws, and the like1.

But the master is not answerable if the servant takes on himself, outside though in good faith and meaning to further the master's interest, authority, master that which the master has no right to do even if the facts were as not liable. the servant thinks them to be: as where a station-master arrested a passenger for refusing to pay for the carriage of a horse, a thing outside the company's powers. The same rule holds if the par

2

1 Per Willes J., Bayley v. Manchester, Sheffield, & Lincolnshire Ry.Co.,L.R., 7 C. P.415.

7 H. & N. 355; 30 L. J., Ex. 189, 327, Ex. Ch. (1861).

3 Blackburn J., Moore v. Metrop. Ry. Co., L. R., 8 Q. B. 36, 39.

Ib., following Goff v. Gt. N. Ry. Co., 3 E. & E. 672; 30 L. J., Q. B. 148 (1861).

5 Poulton v. L. & S. W. Ry. Co., L. R., 2 Q. B. 534.

ticular servant's act is plainly beyond his authority, as where the officer in charge of a railway station arrests a man on suspicion of stealing the company's goods, an act which is not part of the company's general business nor for their apparent benefit1. In a case not clear on the face of it, as where a bank manager commences a prosecution, which turns out to be groundless, for a supposed theft of the bank's property-a matter not within the ordinary routine of banking business, but which might in the particular case be within the manager's authority-the extent of the servant's authority is a question of fact 2. Much must depend on the nature of the matter in which the authority is given. Thus an agent intrusted with general and ample powers for the management of a farm has been held to be clearly outside the scope of his authority in entering on the adjacent owner's land on the other side of a boundary ditch in order to cut underwood which was choking the ditch and hindering the drainage from the farm. If he had done something on his employer's own land which was an actionable injury to adjacent land, the employers might have been liable. But it was thought unwarrantable to say 'that an agent intrusted with authority to be exercised over a particular piece of land has authority to commit a trespass on other land 3.'

&c. for

(d) Lastly, a master may be liable even for wilful and deliberate Wilful wrongs committed by the servant, provided they be done on the trespasses, master's account and for his purposes: and this, no less than in master's other cases, although the servant's conduct is of a kind actually purposes. forbidden by the master. Sometimes it has been said that a master is not liable for the 'wilful and malicious' wrong of his servant. If 'malicious' means 'committed exclusively for the servant's private ends,' or 'malice' means 'private spite 4,' this is a correct statement; otherwise it is contrary to modern authority. The question is not what was the nature of the act in itself, but whether the servant intended to act in the master's interest.

This was decided by the Exchequer Chamber in Limpus v. London General Omnibus Company", where the defendant company's driver had obstructed the plaintiff's omnibus by pulling across the road in front of it, and caused it to upset. He had printed instructions not to race with or obstruct other omnibuses. Martin B. directed the jury, in effect, that if the driver acted in the way of his employment and in the supposed interest of his employers as against a rival

Edwards v. L. & N. W. Ry. Co., L. R., 5 C. P. 445; cp. Allen v. L. & S. W. Ry. Co., L. R., 6 Q. B.65.

2 Bank of New South Wales v. Owston (J. C.), 4 App. Ca. 270. Bolingbroke v. Swindon Local Board, L. R., 9 C. P. 575 (1874). See per Blackburn J., 1 H. & C. 543.

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1 H. & C. 526; 32 L. J., Ex. (1862). This and Seymour v. Greenwood (above) overrule M'Manus v. Crickett, 1 East, 106,

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Fraud of agent or servant.

in their business, the employers were answerable for his conduct, but they were not answerable if he acted only for some purpose of his own and this was approved by the Court1 above. The driver 'was employed not only to drive the omnibus, but also to get as much money as he could for his master, and to do it in rivalry with other omnibuses on the road. The act of driving as he did is not inconsistent with his employment, when explained by his desire to get before the other omnibus.' As to the company's instructions, the law is not so futile as to allow a master, by giving secret instructions to his servant, to discharge himself from liability 2.

That an employer is liable for frauds of his servant committed without authority, but in the course of the service and for the employer's purposes, was established with more difficulty; for it seemed harsh to impute deceit to a man personally innocent of it, or (as in the decisive cases) to a corporation, which, not being a natural person, is incapable of personal wrong-doing3. But when it was fully realized that in all these cases the master's liability is imposed by the policy of the law without regard to personal default on his part, so that his express command or privity need not be shown, it was a necessary consequence that fraud should be on the same footing as any other wrong. So the matter is handled in our leading authority, the judgment of the Exchequer Chamber delivered by Willes J. in Barwick v. English Joint Stock Bank.

'With respect to the question, whether a principal is answerable for the act of his agent in the course of his master's business, and for his master's benefit, no sensible distinction can be drawn between the case of fraud and the case of any other wrong 5.'

This has been more than once fully approved in the Privy Council, and may now be taken, notwithstanding certain appearances of conflict, to have the approval of the House of Lords also. What has been said to the contrary was either extra-judicial, as going beyond the ratio decidendi of the House, or is to be accepted as limited to the particular case where a member of an incorporated company, not having ceased to be a member, seeks to charge the

1 Williams, Crompton, Willes, Byles, Blackburn JJ., diss. Wightman J.
2 Willes J., I H. & C., at p. 539.

This particular difficulty is fallacious. It is in truth neither more nor less easy to think of a corporation as deceiving (or being deceived) than as having a consenting mind. In no case can a corporation be invested with either rights or duties except through natural persons who are its agents.

It makes no difference if the fraud includes a forgery: Shaw v. Port Philip Gold Mining Co., 13 Q. B. D. 103.

V.

5 L. R., 2 Ex. at p. 265.

• Mackay v. Commercial Bank of New Brunswick, L. R., 5 P. C. 412 (1874); Swire
Francis, 3 App. Ca. 106 (1877).

Addie v. Western Bank of Scotland, L. R., 1 Sc. & D. 145, dicta at pp. 158, 166, 167.
Houldsworth v. City of Glasgow Bank, 5 App. Ca. 317.

company with the fraud of its directors or other agents in inducing him to join it1.

The leading case of Mersey Docks Trustees v. Gibbs2 may also be referred to in this connexion, as illustrating the general principles according to which liabilities are imposed on corporations and public bodies.

fraud of a

There is abundant authority in partnership law to show that a Liability of firm is answerable for fraudulent misappropriation of funds, and firm for the like, committed by one of the partners in the course of the partner. firm's business and within the scope of his usual authority, though no benefit be derived therefrom by the other partners. But, agreeably to the principles above stated, the firm is not liable if the transaction undertaken by the defaulting partner is outside the course of partnership business. Where, for example, one of a firm of solicitors receives money to be placed in a specified investment, the firm must answer for his application of it, but not, as a rule, if he receives it with general instructions to invest it for the client at his own discretion 3. Again, the firm is not liable if the facts show that exclusive credit was given to the actual wrong-doer. In all these cases the wrong is evidently wilful. In all or most of them, however, it is at the same time a breach of contract or trust. And it seems to be on this ground that the firm is held liable even when the defaulting partner, though professing to act on behalf of the firm, misapplies funds or securities merely for his own separate gain. The reasons given are not always free from admixture of the Protean doctrine of making representations good,' which is now, I venture to think, exploded.

fault of

3. There remains to be considered the modification of a master's Injuries to servants by liability for the wrongful act, neglect, or default of his servant when the person injured is himself in and about the same master's fellowservice. It is a topic far from clear in principle; the Employers' Liability Act, 1880, has obscurely indicated a sort of counter

1 Ib., Lord Selborne at p. 326, Lord Hatherley at p. 331; Lord Blackburn's language at p. 339 is more cautious, perhaps for the very reason that he was a party to the decision of Barwick v. English Joint Stock Bank. Shortly, the shareholder is in this dilemma: while he is a member of the company, he is damnified by the alleged deceit, if at all, solely in that he is liable as a shareholder to contribute to the company's debts: this liability being of the essence of a shareholder's position, claiming compensation from the company for it involves him in a new liability to contribute to that compensation itself, which is an absurd circuity. But if his liability as a shareholder has ceased, he is no longer damnified. Therefore restitution only (by rescission of his contract), not compensation, is the shareholder's remedy as against the company: though the fraudulent agent remains personally liable.

2 L. R., 1 H. L. 93 (1864-6).

3 Cp. Blair v. Bromley, 2 Ph. 354, and Cleather v. Twisden, 24 Ch. D. 731, with Harman v. Johnson, 2 E. & B. 61.

› servants.

Ex parte Eyre, 1 Ph. 227. See more illustrations in my 'Digest of the Law of Partnership,' art. 24.

·

I have discussed it in Appendix L. to Principles of Contract,' 3rd ed. (N. in 4th ed.) See now Maddison v. Alderson, 8 App. Ca., at p. 473.

Common

master's

principle, and introduced a number of minute and empirical exceptions, or rather limitations of the exceptional rule in question. That rule, as it stood before the Act of 1880, is that a master is not law rule of liable to his servant for injury received from any ordinary risk of immunity. or incident to the service, including acts or defaults of any other person employed in the same service. Our law can show no more curious instance of a rapid modern development. The first evidence of any such rule is in Priestley v. Fowler1, decided in 1837, which proceeds on the theory (if on any definite theory) that the master 'cannot be bound to take more care of the servant than he may reasonably be expected to do of himself;' that a servant has better opportunities than his master of watching and controlling the conduct of his fellow-servants; and that a contrary doctrine would lead to intolerable inconvenience, and encourage servants to be negligent. According to this there would be a sort of presumption that the servant suffered to some extent by want of diligence on his own part. But it is needless to pursue this reasoning; for the like result was a few years afterwards arrived at by Chief Justice Shaw of Massachusetts by another way, and in a judgment which is the fountain-head of all the later decisions. The accepted doctrine is to this effect. Strangers can hold the master liable for the negligence of a servant about his business. But in the case where the person injured is himself a servant in the same business, he is not in the same position as a stranger. He has of his free will entered into the business and made it his own. He cannot say to the master, You shall so conduct your business as not to injure me by want of due care and caution therein. For he has agreed with the master to serve in that business, and his claims on the master depend on the contract of service. Why should it be an implied term of that contract, not being an express one, that the master shall indemnify him against the negligence of a fellow-servant, or any other current risk? It is rather to be implied that he contracted with the risk before his eyes, and that the dangers of the service, taken all round, were considered in fixing the rate of payment. This is, I believe, a fair summary of the reasoning which has prevailed in the authorities. With its soundness we are not here concerned. It was not only adopted by the House of Lords for England, but forced by them upon the reluctant Courts of Scotland to make the jurisprudence of the two countries uniform 3. No such doctrine appears to exist in the law of any other country in Europe.

Reason

given in the later

cases.

1

3 M. & W. 1. All the case actually decided was that a master does not warrant to his servant the sufficiency and safety of a carriage in which he sends him out.

2 Farwell v. Boston & Worcester Railroad Corporation, 4 Met. 49.

3 See Wilson v. Merry, L. R., 1 Sc. & D. 326.

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