Source: https://supreme.justia.com/cases/federal/us/147/101/
Timestamp: 2019-04-19 14:49:56+00:00

Document:
A railroad corporation is not liable to exemplary or punitive damages for an illegal, wanton and oppressive arrest of a passenger by the conductor of one of its trains which it has in no way authorized or ratified.
against the Lake Shore and Michigan Southern Railway Company, a corporation of Illinois, to recover damages for the wrongful acts of the defendant's servants.
released, and of which, on appearing before a justice of the peace for trial on the next day, and no one appearing to prosecute him, he was finally discharged.
The declaration alleged that all these acts were done by the defendant's agents in the line of their employment, and that the defendant was legally responsible therefor, and that the plaintiff had been thereby put to expense, and greatly injured in mind, body, and reputation.
"If you believe the statements which have been made by the plaintiff and the witnesses who testified in his behalf, and they are not denied, then he is entitled to a verdict which will fully compensate him for the injuries which he sustained, and in compensating him you are authorized to go beyond the amount that he has actually expended in employing counsel; you may go beyond the actual outlay in money which he has made. He was arrested publicly, without a warrant and without cause, and if such conduct as has been detailed before you occurred, such as the remark that was addressed by the conductor to the wife in the plaintiff's presence, in compensating him you have a right to consider the humiliation of feeling to which he was thus publicly subjected. If the company, without reason, by its unlawful and oppressive act, subjected him to this public humiliation, and thereby outraged his feelings, he is entitled to compensation for that injury and mental anguish."
"I am not able to give you any rule by which you can determine that; but bear in mind it is strictly on the line of compensation. The plaintiff is entitled to compensation in money for humiliation of feeling and spirit, as well as the actual outlay which he has made in and about this suit."
you may add something by way of punitive damages against the defendant, which is sometimes called 'smart money,' if you are satisfied that the conductor's conduct was illegal (and it was illegal), wanton, and oppressive. How much that shall be the court cannot tell you. You must act as reasonable men, and not indulge vindictive feelings toward the defendant."
"If a public corporation, like as individual, acts oppressively, wantonly, abuses power, and a citizen in that way is injured, the citizen, in addition to strict compensation, may have, the law says, something in the way of smart money; something as punishment for the oppressive use of power."
The jury returned a verdict for the plaintiff in the sum of $10,000. The defendant moved for a new trial, for error in law, and for excessive damages. The plaintiff thereupon, by leave of court, remitted the sum of $4,000, and asked that judgment be entered for $6,000. The court then denied the motion for a new trial and gave judgment for the plaintiff for $6,000. The defendant sued out this writ of error.
The only exceptions taken to the instructions at the trial, which have been argued in this Court, are to those on the subject of punitive damages.
The single question presented for our decision, therefore, is whether a railroad corporation can be charged with punitive or exemplary damages for the illegal, wanton, and oppressive conduct of a conductor of one of its trains toward a passenger.
This question, like others affecting the liability of a railroad corporation as a common carrier of goods or passengers, such as its right to contract for exemption from responsibility for its own negligence or its liability beyond its own line, or its liability to one of its servants for the act of another person in its employment, is a question not of local law, but of general jurisprudence, upon which this Court, in the absence of express statute regulating the subject, will exercise its own judgment, uncontrolled by the decisions of the courts of the several states. Railroad Co. v. Lockwood, 17 Wall. 357, 368; Liverpool Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 129 U. S. 443; Myrick v. Michigan Central Railroad, 107 U. S. 102, 107 U. S. 109; Hough v. Railway Co., 100 U. S. 213, 100 U. S. 226.
of the same mind, that a jury have it in their power to give damages for more than the injury received. Damages are designed, not only as a satisfaction to the injured person, but likewise as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself."
Wilkes v. Wood, Lofft, 1, 18-19, 19 Howell's State Trials 1153, 1167. See also Huckle v. Money, 2 Wilson 205, 207; Sayer on Damages 218, 221. The recovery of damages, beyond compensation for the injury received, by way of punishing the guilty, and as an example to deter others from offending in like manner, is here clearly recognized.
In this Court the doctrine is well settled that in actions of tort the jury, in addition to the sum awarded by way of compensation for the plaintiff's injury, may award exemplary, punitive, or vindictive damages, sometimes called "smart money," if the defendant has acted wantonly, or oppressively, or with such malice as implies a spirit of mischief or criminal indifference to civil obligations; but such guilty intention on the part of the defendant is required in order to charge him with exemplary or punitive damages. The Amiable Nancy, 3 Wheat. 546, 16 U. S. 558-559; Day v. Woodworth, 13 How. 363, 371; Philadelphia &c. Railroad Co. v. Quigley, 21 How. 202, 62 U. S. 213-214; Milwaukee & St. Paul Railway v. Arms, 91 U. S. 489, 91 U. S. 493-495; Missouri Pacific Railway v. Humes, 115 U. S. 512, 115 U. S. 521; Barry v. Edmunds, 116 U. S. 550, 116 U. S. 562-563; Rio Grande Railway v. Harris, 122 U. S. 597, 122 U. S. 609-610; Minneapolis & St. Louis Railway v. Beckwith, 129 U. S. 26, 129 U. S. 36.
judgment of this Court in the case of The Amiable Nancy, 3 Wheat. 546.
"Upon the facts disclosed in the evidence, this must be pronounced a case of gross and wanton outrage, without any just provocation or excuse. Under such circumstances, the honor of the country and the duty of the Court equally require that a just compensation should be made to the unoffending neutrals for all the injuries and losses actually sustained by them and if this were a suit against the original wrongdoers, it might be proper to go yet further and visit upon them, in the shape of exemplary damages, the proper punishment which belongs to such lawless misconduct. But it is to be considered that this is a suit against the owners of the privateer, upon whom the law has, from motives of policy, devolved a responsibility for the conduct of the officers and crew employed by them, and yet, from the nature of the service, they can scarcely ever be able to secure to themselves an adequate indemnity in cases of loss. They are innocent of the demerit of this transaction, having neither directed it nor countenanced it nor participated in it in the slightest degree. Under such circumstances, we are of the opinion that they are bound to repair all the real injuries and personal wrongs sustained by the libellants, but they are not bound to the extent of vindictive damages."
3 Wheat. 16 U. S. 558-559.
"It is true, juries sometimes very properly give what is called 'smart money.' They are often warranted in giving vindictive damages as a punishment inflicted for outrageous conduct; but this is only justifiable in an action against the wrongdoer, and not against persons who, on account of their relation to the offender, are only consequentially liable for his acts, as the principal is responsible for the acts of his factor or agent."
To the same effect are The State Rights, Crabbe 42, 47-48; The Golden Gate, McAllister 104; Wardrobe v. California Stage Co., 7 Cal. 118; Boulard v. Calhoun, 13 La.Ann. 445; Detroit Post Co. v. McArthur, 16 Mich. 447; Grund v. Van Vleek, 69 Ill. 478, 481; Becker v. Dupree, 75 Ill. 167; Rosenkrans v. Barker, 115 Ill. 331; Kirksey v. Jones, 7 Ala. 622, 629; Pollock v. Gantt, 69 Ala. 373, 379; Eviston v. Cramer, 57 Wis. 570; Haines v. Schultz, 50 N.J.Law 481; McCarthy v. De Armit, 99 Penn.St. 63, 72; Clark v. Newsam, 1 Exch. 131, 140; Clissold v. Machell, 26 Upper Canada Q.B. 422.
The rule has the same application to corporations as to individuals. This Court has often, in cases of this class as well as in other cases, affirmed the doctrine that for acts done by the agents of a corporation in the course of its business and of their employment, the corporation is responsible in the same manner and to the same extent as an individual is responsible under similar circumstances. Philadelphia &c. Railroad Co. v. Quigley, 21 How. 202, 62 U. S. 210; National Bank v. Graham, 100 U. S. 699, 100 U. S. 702; Salt Lake City v. Hollister, 118 U. S. 256, 118 U. S. 261; Denver & Rio Grande Railway v. Harris, 122 U. S. 597, 122 U. S. 608.
"The logical difficulty of imputing the actual malice or fraud of an agent to his principal is perhaps less when the principal is a person than when it is a corporation; still, the foundation of the imputation is not that it is inferred that the principal actually participated in the malice or fraud, but, the act having been done for his benefit by his agent acting within the scope of his employment in his business, it is just that he should be held responsible for it in damages."
Lothrop v. Adams, 133 Mass. 471, 480-481.
21 Vroom (50 N.J.Law) 484-485. Whether a principal can be criminally prosecuted for a libel published by his agent without his participation is a question on which the authorities are not agreed, and where it has been held that he can, it is admitted to be an anomaly in the criminal law. Commonwealth v. Morgan, 107 Mass. 199, 203; Regina v. Holbrook, 3 Q.B.D. 60, 63-64, 70, 4 Q.B.D. 42, 51, 60.
No doubt, a corporation, like a natural person, may be held liable in exemplary or punitive damages for the act of an agent within the scope of his employment, provided the criminal intent, necessary to warrant the imposition of such damages, is brought home to the corporation. Philadelphia &c. Railroad v. Quigley, Milwaukee & St. Paul Railway v. Arms, and Denver & Rio Grande Railway v. Harris, above cited; Caldwell v. New Jersey Steamboat Co., 47 N.Y. 282; Bell v. Midland Railway, 10 C.B. (N.S.) 287, 4 Law Times (N.S.) 293.
Independently of this, in the case of a corporation, as of an individual, if any wantonness or mischief on the part of the agent, acting within the scope of his employment, causes additional injury to the plaintiff in body or mind, the principal is, of course, liable to make compensation for the whole injury suffered. Kennon v. Gilmer, 131 U. S. 22; Meagher v. Driscoll, 99 Mass. 281, 285; Smith v. Holcomb, 99 Mass, 552; Hawes v. Knowles, 114 Mass. 518; Campbell v. Pullman Car Co., 42 F. 484.
In the case at bar, the defendant's counsel having admitted in open court "that the arrest of the plaintiff was wrongful, and that he was entitled to recover actual damages therefor," the jury were rightly instructed that he was entitled to a verdict which wound fully compensate him for the injuries sustained, and that, in compensating him, the jury were authorized to go beyond his outlay in and about this suit, and to consider the humiliation and outrage to which he had been subjected by arresting him publicly without warrant and without cause, and by the conduct of the conductor, such as his remark to the plaintiff's wife.
jury that, "after agreeing upon the amount which will fully compensate the plaintiff for his outlay and injured feelings," they might "add something by way of punitive damages against the defendant, which is sometimes called smart money,'" if they were "satisfied that the conductor's conduct was illegal, wanton, and oppressive."
The jury were thus told in the plainest terms that the corporation was responsible in punitive damages for wantonness and oppression on the part of the conductor, although not actually participated in by the corporation. This ruling appears to us to be inconsistent with the principles above stated, unsupported by any decision of this Court, and opposed to the preponderance of well considered precedents.
In Philadelphia & Reading Railroad v. Derby, which was an action by a passenger against a railroad corporation for a personal injury suffered through the negligence of its servants, the jury were instructed that "the damages, if any were recoverable, are to be confined to the direct and immediate consequences of the injury sustained," and no exception was taken to this instruction. 14 How. 55 U. S. 470-471.
"they are not restricted in giving damages to the actual positive injury sustained by the plaintiff, but may give such exemplary damages, if any, as in their opinion are called for and justified in view of all the circumstances in this case, to render reparation to the plaintiff, and act as an adequate punishment to the defendant."
"For acts done by the agents of the 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 under similar circumstances."
contumely or indignity, the jury are not limited to the ascertainment of a simple compensation for the wrong committed against the aggrieved person. But the malice spoken of in this rule is not merely the doing of an unlawful or injurious act. The word implies that the act complained of was conceived in the spirit of mischief, or criminal indifference to civil obligations. Nothing of this kind can be imputed to these defendants.
21 How. 53 U. S. 210, 62 U. S. 213, 214.
"If you find that the accident was caused by the gross negligence of the defendant's servants controlling the train, you may give the plaintiff punitive or exemplary damages."
"whether called 'gross' or 'ordinary' negligence, did not authorize the jury to visit the company with damages beyond the limit of compensation for the injury actually inflicted. To do this, there must have been some willful misconduct or that entire want of care which would raise the presumption of a conscious indifference to consequences. Nothing of this kind can be imputed to the persons in charge of the train, and the court therefore misdirected the jury."
91 U.S. 91 U. S. 495.
was found that the defendant acted with bad intent and in pursuance of an unlawful purpose to forcibly take possession of the railway occupied by the other company, and in so doing shot the plaintiff."
This Court, speaking by MR. JUSTICE HARLAN, quoted and approved the rules laid down in Quigley's Case and affirmed the judgment not because any evil intent on the part of the agents of the defendant corporation could of itself make the corporation responsible for exemplary or punitive damages, but upon the single ground that the evidence clearly showed that the corporation, by its governing officers, participated in and directed all that was planned and done. 122 U.S. 122 U. S. 610.
The president and general manager, or, in his absence, the vice-president in his place, actually wielding the whole executive power of the corporation, may well be treated as so far representing the corporation and identified with it that any wanton, malicious, or oppressive intent of his, in doing wrongful acts in behalf of the corporation to the injury of others, may be treated as the intent of the corporation itself; but the conductor of a train, or other subordinate agent or servant of a railroad corporation, occupies a very different position, and is no more identified with his principal, so as to affect the latter with his own unlawful and criminal intent, than any agent or servant standing in a corresponding relation to natural persons carrying on a manufactory, a mine, or a house of trade or commerce.
"punitive or vindictive damages, or smart money, were not to be allowed as against the principal unless the principal participated in the wrongful act of the agent, expressly or impliedly, by his conduct authorizing it or approving it, either before or after it was committed."
punitive or exemplary damages have been assessed, it has been done upon evidence of such willfulness, recklessness, or wickedness on the part of the party at fault as amounted to criminality, which for the good of society and warning to the individual ought to be punished. If in such cases, or in any case of a civil nature, it is the policy of the law to visit upon the offender such exemplary damages as will operate as punishment and teach the lesson of caution to prevent a repetition of criminality, yet we do not see how such damages can be allowed where the principal is prosecuted for the tortious act of his servant, unless there is proof in the cause to implicate the principal and make him particeps criminis of his agent's act. No man should be punished for that of which he is not guilty. . . . Where the proof does not implicate the principal, and, however wicked the servant may have been, the principal neither expressly nor impliedly authorizes or ratifies the act and the criminality of it is as much against him as against any other member of society, we think it is quite enough that he shall be liable in compensatory damages for the injury sustained in consequence of the wrongful act of a person acting as his servant."
Hagan v. Providence & Worcester Railroad, 3 R.I. 88. 91.
master, within the scope of his employment, the latter is liable for compensatory damages; but for such negligence, however gross or culpable, he is not liable to be punished in punitive damages unless he is also chargeable with gross misconduct. Such misconduct may be established by showing that the act of the servant was authorized or ratified, or that the master employed or retained the servant, knowing that he was incompetent, or, from bad habits, unfit for the position he occupied. Something more than ordinary negligence is requisite; it must be reckless, and of a criminal nature, and clearly established. Corporations may incur this liability as well as private persons. If a railroad company, for instance, knowingly and wantonly employs a drunken engineer or switchman, or retains one after knowledge of his habits is clearly brought home to the company, or to a superintending agent authorized to employ and discharge him, and injury occurs by reason of such habits, the company may and ought to be amendable to the severest rule of damages; but I am not aware of any principle which permits a jury to award exemplary damages in a case which does not come up to this standard, or to graduate the amount of such damages by their views of the propriety of the conduct of the defendant unless such conduct is of the character before specified."
Cleghorn v. New York Central Railroad, 56 N.Y. 44, 47-48.
Similar decisions, denying upon like grounds the liability of railroad companies and other corporations sought to be charged with punitive damages for the wanton or oppressive acts of their agents or servants, not participated in or ratified by the corporation, have been made by the courts of New Jersey, Pennsylvania, Delaware, Michigan, Wisconsin, California, Louisiana, Alabama, Texas, and West Virginia.
with the later decisions in Fay v. Parker, 53 N.H. 342, and Bixby v. Dunlap, 56 N.H. 456, and in Goddard v. Grand Trunk Railway, 57 Maine, 202, 228, and Atlantic & Great Western Railway v. Dunn, 19 Ohio St. 162, 590, there were strong dissenting opinions. In many, if not most, of the other cases, either corporations were put upon different grounds in this respect from other principals or else the distinction between imputing to the corporation such wrongful act and intent as would render it liable to make compensation to the person injured and imputing to the corporation the intent necessary to be established in order to subject it to exemplary damages by way of punishment was overlooked or disregarded.
Most of the cases on both sides of the question, not specifically cited above, are collected in 1 Sedgwick on Damages, 8th ed.,§ 380.
Judgment must be reversed and the case remanded to the circuit court with directions to set aside the verdict, and to order a new trial.
MR. JUSTICE FIELD, MR. JUSTICE HARLAN, and MR. JUSTICE LAMAR took no part in this decision.

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