Case ID: ohio-st_19/html/0162-01.html
Source: Caselaw Access Project
Author: {"author": "Brinkerhorf, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Atlantic and Great Western Railway Company v Michael Dunn.
    .‘A .corporation may be subjected to exemplary or punitive damages for tor'tious acts of its agents or servants done within the scope of their employment, in all cases where natural persons, acting for themselves, if r guilty of'like tortious acts, would be liable to such damages.
    Error to the court of common pleas of Cuyahoga county. 'Reserved in the district court.
    Dunn, the plaintiff below, in his petition alleges: That on the 5th day of July, 1865, the defendant was a .corporation doing business within the State of Ohio, and was the owner and proprietor of a certain railway line running from Cleveland, in Cuyahoga county, Ohio, to Meadville, in the State of Pennsylvania, and was then and there, at the date aforesaid, and for a long time prior thereto had been and still is, a common carrier, for hire, of passengers and their baggage over its line .of railway. That at that date, at Cleveland, he purchased of the defendant a passage on its train of cars from Cleveland to Meadville, and paid therefor the usual fare to defendant’s agent, and got on board the defendant’s cars at Cleveland, about nine o’clock in the evening of the 5th of July, 1865, and rode on the train, as he was entitled to, till he reached a point near the city of Warren, in Trumbull county, Ohio, where the defendant’s agent, and conductor of the train, in the course of his collection of fares on the train, took from the plaintiff the ticket which he received at Cleveland of the defendant’s agent, as the token of his right to a passage to Meadville; and thereafter, when the train had reached a point about thirty miles this side [west] of Meadville, the conductor of the train stopped it in an uninhabited part of the country, about the hour of midnight, and refused to carry the plaintiff or permit him to ride any farther on the train towards Meadville; and, without any just cause, illegally and violently assaulted the plaintiff and . put him off the train, and left him to take his way as best-he might to Meadville. Whereby plaintiff was damaged in the sum of three thousand dollars, for which he asks judgment.
    The defendant answered that, having no positive knowledge of the plaintiff’s purchasing a ticket and getting aboard the cars, and giving his ticket up to the conductor, and being put off the train by him, and being damaged, as stated in the petition, believes the same to be untrue, and therefore denies the allegations of the petition in regard thereto.
    At the May term, 1866, of'the common pleas, the case was tried to a jury, who found for the plaintiff, and assessed his damages at $125.
    The defendant moved for a new trial, on the grounds, that the verdict was not sustained by sufficient evidence, and was contrary to law; that the court erred in charging, the jury on questions of law material to the issue, whereby the jury was misdirected, to the prejudice of the defendant; that the verdict should have been for the defendant instead of for the plaintiff; and that the damages were excessive.
    This motion was overruled, and judgment entered on the verdict.
    It appears from the bill of exceptions, that, on the trial, the plaintiff, to maintain the issue on his part, offered evidence tending to prove, and claimed that he had proved the allega tions contained in his petition; and that the defendant, to maintain the issue on its part, gave evidence tending to prove and claimed that it had proved that plaintiff only bought a ticket from Cleveland to Warren at the time specified in the petition, and not to Meadville; that the conductor having taken up the ticket between Leavittsburg and Warren stations on defendant’s road, the plaintiff sought, by misrepresentations to the conductor, to fraudulently obtain passage to Meadville, without paying anything therefor; and that the conductor, on his refusal to produce a ticket for Meadville, or pay the price of passage from Warren, to Meadville (being compelled or required so to do by the rules of the defendant, for whom , he was acting as agent in the capacity of conductor on the train), rang the bell, and caused the train to be stopped, and requested the plaintiff to leave the cars; and that the conductor did not thrust the plaintiff from the car violently nor insultingly, and used no language of insult or indignity to the plaintiff.
    Upon these facts, so claimed to have been proven by the parties respectively, and they having rested their case, the court in charging the-jury gave them the following instructions, to wit:
    “If the plaintiff purchased a ticket from Cleveland to Meadville, and gave it up to the conductor, and the conductor ordered-him to leave the cars, honestly supposing that he had not paid his fare beyond Warren, using no personal violence or unnecessary severity in setting him off, the plaintiff is still entitled to recover for the loss of time, expense, and inconvenience necessarily and unavoidably suffered by him in consequence of being put off at the time and. place, when and where he was ordered to leave the train. If the conductor treated him in an insolent and insulting manner, he may recover sufficient to compensate him, not only for the loss of time, expense, and inconvenience occasioned by being put off, but you may go farther, and give him such damages as you in your judgment may think proper to compensate him for the injury to his sensibilities, as well as to compensate him for loss of time, expenses, and labor resulting to him from being put off. And if you find from the evidence that there were such circumstances of indignity and insult upon the part of the conductor, in expelling him from the cars, you may, in making up your verdict as to what will compensate the plaintiff, take into consideration and allow him what, in your judgment, is a fair and reasonable attorney’s fee for procuring and paying counsel to prosecute his case against the defendant.”
    The court also added to its charge above given, among other things, the following: “ The law upon this question of the allowance of attorney’s fees is laid down in 10 Ohio St. Rep. p. 282, in the case of Roberts v. Mason, as follows: ‘On this point the authorities are not uniform; but the better opinion now seems to be that in actions ex eontraotu, and in cases nominally in toil, but where no wrong, in the moral sense of the term, is complained of, the fees of counsel ought not to be included in the estimate of damages; but in cases where the act complained of is tainted by fraud, or involves an ingredient of malice or insult, the jury, which has power to punish, has necessarily the right to include the consideration of proper and reasonable counsel fees in their estimate of damages. This rule has been recognized by the old supreme court of the State on the circuit, and the rule seems to us to be in itself reasonable and just.’ ”
    The defendant excepted to the charge of the court, and it is now assigned for error.
    
      Ranney & Tyler for plaintiff in error:
    The court below should have instructed the jury that they must find, before they could hold the company liable for the acts of the conductor in expelling a passenger from the cars, that the company required or authorized the conductor to expel passengers having no tickets, refusing to pay fare, or for some other cause; and if it grew out of the nature of the employment, then that should have been told them.
    It might have been inferred from the nature of the agency, or if it were a rule of the company, that the conductor, under the circumstances indicated, had authority to expel passengers, thus derelict, from the cars, still it could not be presumed that the orders or authority of the company would justify or' permit the using of more force than would be requisite in expelling the party from the cars, and without insolence or unnecessary severity of any kind. In other words, the conductor would only be authorized to treat Dunn in such manner as would be justified had he failed to purchase a ticket, and actually refused to pay his fare, and when the company would have had the right to order their agent to expel him. St. L. A. & C. Railroad Co. v. Dolby, 19 Ill. 366.
    So if the conductor, going beyond his authority, wantonly assaulted or insulted the defendant it error, it was his act, and not the act of the company, and could not be made so, unless by direct orders or some kind of recognition. Story on Agency, § 456.
    The authorities do not justify the allowance of counsel fees, except in cases where exemplary or punitive damages should be allowed. 10 Ohio St. 282; 13 Howard U. S. 373; C. C. & C. Railroad Co. v. Bartram, 11 Ohio St. 469.
    Exemplary or vindictive damages cannot be recovered against a principal for the malicious or oppressive acts of the agent, when there is no evidence to show any authority for or ratification of the particular act or acts alleged to be malicious. Milwaukee, etc., Railroad Co. v. Finney, 10 Wis. 388; Hogan v. Providence and Worcester Railroad Co., 3 R. I. 88; Amiable Nancy, 10 Wheat. Cond. 322; 3 Wheat. 546; Wardrobe v. Stage Co., 7 Cal. 118; Hill v. New Orleans, Opelousas, and Great Western Railroad Co., 11 La. Ann. 292.
    
      Ah to corporations as well as individuals, it is admitted tbat tbe authorities hold the principal liable for the frauds, torts, negligences, and other malfeasances or misfeasances and omissions of duty of their agents, in the course of their employment, even although done without the knowledge or consent of the principal.
    But to what extent liable ? In damages to make an example of the principal ? In damages to punish a party who is innocent of any bad motives, acts, or intentions ? Not at all. All that the principal can be fairly called upon to do is to make good to the person injured the ordinary compensatory damages resulting from the acts of the agent. Attorneys’ fees have never been included in this class of damages. Indeed, the court below did not recognize this as a proper case for exemplary or punitive damages, but based the right of the plaintiff to recover his attorney’s fees upon the ground and under the head of compensatory damages.
    In all which, we submit, the court below erred.
    
      Hutchins & Ingersoll, for defendant in error,
    cited Story on Agency, § 452, as laying down the true doctrine on the question before the court; and referred to Railroad Co. v. Keary, 3 Ohio St. 207, as a case in which the rule as given by Story was adopted and applied.
   Brinkerhorf, C. J.

The question presented by the record in this case is, whether a corporation may be held liable to exemplary or punitive damages for such acts, done by its agents or servants acting within the scope of their employment, as would, if done by an individual acting for himself, render him liable for such damages.

That such damages may, in a proper case, be recovered against an individual party acting for himself, is settled in this State by the case of Roberts v. Mason, 10 Ohio St. R. 277, to which the court below, in its charge to the jury, referred ; but whether the same doctrine is, in any case, applicable to corporations acting through their servants or agents, is a question which has not heretofore been determined in this State by the court of last resort. The question is one of much practical importance, both to corporations and the public with which they deal and come in contact, and we have endeavored to give to it a careful consideration ; and having done so, a majority of the court find ourselves constrained to answer the question in the affirmative.

In our deliberations on the question, and looking to the adjudications of courts outside of Ohio, we find no settled or decidedly preponderant course of decision upon it. The cases are irreconcilably conflicting; and the only aid we can derive from them is through the suggestions of legal principles which they contain.

The foundation principle which governs these cases, it seems to us, is found in the maxim gui fadt jper dUmm fadt jper se. The act of the servant, done within the scope and in the exercise of his employment, is in law the act of the master himself.

And this legal unity of the principal and agent,” says the supreme court of Mississippi, in New Orleans, Jackson and Great Northern R. R. Co. v. Bailey (40 Miss. R. 453), "in respect to the wrongful or tortious, as well as the rightful acts of the agent, done in the course of his employment, is an incident which the law has wisely attached to the relation, from its earliest history.”

And Blackstone in his Commentaries says, The master may be frequently a loser by the trust reposed in his servant, but never can be a gainer; he may frequently be answerable for his servant’s misbehavior, but never can shelter himself from punishment by laying the blame on his agent. The reason of this is still uniform and the same, — that the wrong done by the servant is looked upon in law as the wrong of the master himself; and it is a standing maxim, that no in an shall be allowed to make any advantage of his own wrong.” Yol. i. page 431.

In Story on Agency the law is thus stated: “ It is a general doctrine of law, that, although the principal is not ordinarily liable (for he sometimes is) in a criminal suit for the acts or misdeeds of his agent, unless, indeed, he has authorized or co-operated in those acts or misdeeds, yet he is held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, torts, negligences, and other malfeasances or misfeasances, and omissions of duty, of his agent, in the course of his employment, although the principal did not authorize, or justify, or participate in, or, indeed, know of such misconduct, or even if he forbade the acts, or disapproved of them. In all such cases the rule applies, respondeat superior; and it is founded upon public policy and convenience; for in no other way could there be any safety to third persons in their dealings, either directly with the .principal, or indirectly with him through the instrumentality of agents. In every such case, the principal holds out his agent as competent, and fit to be trusted; and thereby, in effect, he warrants his fidelity and good conduct in all matters within the scope of the agency.” Sec. 452.

Now this general doctrine, as to the legal identity of principal and agent, is fundamental. It is established. We are not at liberty to ignore or disregard it.; and no one even dreams that it ever will, or ever ought to be, abrogated. And resting as it does on sound principles of public policy and regard for the public convenience and safety, it seems to me to apply with peculiar propriety to corporations — which áre capable of action only through the medium of agents,' and which touch, infringe upon, and come in contact with individual persons and the public, only by means of their agents and servants.

In Philadelphia, Wilmington, and Baltimore R. R. Co. v. Quigley, 21 Howard's U. S. Rep. 202, it was held that a railroad corporation might be guilty of acting maliciously, and so render itself liable to damages for the publication of a libel, although it acted, and could act, only through the medium of agents. And Campbell, J., delivering the opinion of the court in that case, says: “ The result of the cases is, that for acts done by the agents of a corporation, either in contractu or in delicto, in the course of its business and of their employment, the corporation is responsible, as an individual is responsible in similar circumstances.” And it is furthermore noticeable in that case, that the charge of the circuit court to the jury, to the effect that they were at liberty to award exemplary or punitive damages, was held to be erroneous, solely for the reason — as in P., Ft. W. and C. Railroad Co. v. Slusser, decided by us at this term—that the facts by which the wrongful act was characterized did not make a proper case for the application of the rule on the subject, had it been done by a natural person.

Rut, the legal identity of the master and servant being admitted, and the legal consequence — that the master is responsible in damages for the wrongful acts of the servant done within the scope of his employment, the particular question still remains, whether such damages can properly and legally transcend the measure of compensation merely; or may they, in a proper case, be given to the extent of exemplary or punitive damages, as in cases against a natural person ? In answer to this query, it is proper to inquire what is the ground of reason and principle on which exemplary damages are allowable in any case ? ' The answer is ready and clear. Nobody will dispute it. It rests not on the ground of abstract or theoretical justice, but on the ground of public policy — a policy which seeks to promote the public safety; to punish, through the medium of a civil proceeding, a fraudulent, malicious, insulting, or wilful wrongdoer, and to hold him up as a warning example to others, to deter them from offending in like manner. Now, why do not the same considerations of piublic policy apply as well to corporations as to natural persons ? I am unable to see why they do not. Corporations, embodying, as they often do, the concentrated wealth and influence of many individuals, certainly may have the power to do injury at least equal to that of natural persons; and it seems to me that the history of corporations affords no satisfactory guaranty that they may not use that power' for purposes inimical to individual and public interests, unless restrained by a consciousness of amenability to effective legal penalties.

The legislative policy of our State has been exceedingly liberal towards railroad corporations, in delegating to them, to a liberal extent, its sovereign power of eminent domain; in the unlimited discretion accorded to them in the selection ef their routes; in the legal facilities afforded them for raising the means for the construction of their roads; in authorizing consolidations with other companies, and in the enactment of penal statutes for their protection. . Directly and incidentally they contribute much to the wealth and convenience of our people; but the wealth that controls them is largely held by persons outside of our State, and is constantly changing hands; and individual stockholders feel but little personal responsibility for wrongs which may be done by their servants to individuals placed within their power. Practically, they have almost a monopoly of the means of travel. Millions of persons annually pass under the control and within the power of their servants. And unless the public, through the medium of our laws, retain the means to exercise an effective restraint upon any tendency to wrongdoing to which they may be subject, and especially in respect to the care, or the want of it, with which their, servants may be selected, it seems to me there is so much danger of the abuse of power in this direction as to forbid the recognition of a distinction between them, acting through agents, and individuals acting in their own proper persons, in respect to the liabilities consequent upon tortious action. The actual management of such corporations is apt to fall into the • hands of either a single individual, or of a small and closely associated number of individuals; and the danger is that such persons will be led by a spirit of nepotism or personal favoritism, or by false notions of economy leading them to fix the compensation for the services of their servants at a rate inadequate to secure the services of competent and trustworthy men, to forget the higher and paramount duty due to the public in this particular, unless the stern, but just and discriminating, hand of the law is kept constantly visible before them.

Delivering the opinion of the supreme court of New Hampshire on this question, Perley, C.J., says: “ If a corporation like this railroad is guilty of an act or default, such as, in the case of an individual, would subject him to exemplary damages, we think the same rule must be applied to the corporation.” . . . “According to the general theory of the common law, crimes are prosecuted and punished by the State alone. Individuals are not supposed to have any private interest in the punishment of public offences. And so, on the other hand, as a general rule, the plaintiff in a civil action recovers a mere compensation for his private injury.” He adds, It is, however, extremely well settled that exemplary or vindictive damages may in certain cases be recovered ; and this is perhaps in accordance with the legislative policy which has given pecuniary penalties in-numerous instances to private prosecutors of certain offences. Where the wrong done to the party partakes of a criminal character, though not punishable as an offence against the State, the public may be said to have an interest that the wrong doer should be prosecuted and brought to justice on a civil suit; and exemplary damages may in such cases encourage prosecutions where a mere compensation for the private injury would not repay the trouble and expense of the proceeding.” Hopkins v. The Atlantic and St. Lawrence Railroad, 36 N. H. R. 9.

We cannot say, as in the case of the P., Fort W. and C. R. R. v. Slusser, above referred to, that this is not a case for exemplary damages, for the evidence is not fully set forth in the record; and the facts which the bill of exceptions declares the evidence of the plaintiff below tended to prove are such as authorized the court to submit the question to the consideration of the jury.

Judgment affirmed.

Scott and White, JJ., concurred.

Welch and Day, JJ., dissented.

(See page 590.) 
      
       Ante, p. 157.