Court Opinion

ID: 6315116
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:25:53.516981+00
Date Added: 2024-06-11T08:59:13.776415
License: Public Domain

Knox, J.
— I concur in the opinion of my brother, Black, except so far as he admits that Morris was incompetent as a *352witness, by reason of his conviction for conspiracy. I am not prepared to say that this conviction disqualified him from testifying. I agree, however, that if it did, he was restored to competency by the pardon.
Lewis, C. J., and Woodward, J., dissented.
Woodward, J.
— Whilst I do not concur in the opinion of the majority in regard to the competency of Morris as a witness, I propose to confine my written dissent to the question which arises upon the rejection of the matters offered to be proved by Davis. If these matters, by whatever witness proved, do not entitle the plaintiff to recover, there is an end of his action, and he is out of court.
It was no part of the offer that the company expressly authorized, conductors and ticket agents to pay out the contraband currency, or that they knew it was done, except as knowledge might be infered from the circumstances that the notes were paid_out in the cars and ticket offices, and that such payments were the open and notorious custom of. the conductors and agents. The objection to this offer was specific — that there was no evidence of precedent authority, or of recognition and ratification on the part of the company, so that it is fair, perhaps necessary, to assume that the plaintiff had no such evidence to offer. The form of the objection would have brought it out, if such evidence existed. The question presented by the record is, then, whether the misdemeanor of the agents committed in the ordinary course of their employment, and for the benefit of the company, but without corporate sanction, is sufficient to charge the company with the statutory penalty ? “Every violation of the provisions of this section by any corporation,” is the language of the enactment which defines corporate liability. Under their charter, the president and managers are the governors of this corporation, and whatever is done by their authority or with their subsequent ratification, which is equivalent to precedent authority, binds the corporation. But in general, the only mode in which a corporation aggregate can act, is through the intervention of agents, and a corporation is liable for the wrongful acts and negligences of its servants and agents, done in the course of their regular employment, on the same ground, in the same manner, and to the same extent that natural persons are. Angelí & Ames on Corp. sec. 310; 7 Cranch, 305. A corporation, however, is not responsible for unauthorized acts even of its officers, though done colore officii, — nor does any presumption of the company’s guilt arise from the wrongful act of its officer, for while the presumption of law on the one hand is that the officer did no more than his duty, *353the presumption of innocence on the other is that the company did not instruct him to violate the law. Hazleton Goal Co. v. Megargle, 4 Barr, 329. To fix the liability, it must be shown affirmatively, either that the officers were expressly authorized to do the act — or that it was done bona fide in pursuance of a general authority in relation to the subject-matter, or that the act was adopted and ratified by the corporation. Angelí & Ames, s,ec. 309.
The relevancy of the evidence offered and rejected, depends on the application of these general principles to the very peculiar circumstances of the case.
A conspiracy is contrived in Ohio between four men, to betray Pennsylvania corporations into violations of the statute in question, whereby large penalties may accrue to the informer. Instead of attacking the governing officers of the corporation defendant, they tempt the conductors and ticket agents to pay out small notes, which was a public offence on the part of the employees that subjected them individually, for each note passed, to a penalty of $25, and to indictment and punishment as for a misdemeanor. The duties to which the conductors and ticket agents are appointed, are specific and lawful. No authority was ever given to them to receive or pay out small notes, and nothing but ground for an implication of the company’s knowledge that they dealt in them, was offered to be proved.
Have the conspirators caught the corporation ?
If the case be put on the ordinary ground of principal and agent, leaving out of view the distinctions already adverted to as peculiar to corporations, how will it stand?
If this suit be regarded as a criminal proceeding, the general doctrine is that a principal is not ordinarily liable in a criminal suit for the acts or misdeeds of his agent, unless, indeed, he has authorized or co-operated in them.
But the Act of 1850 calls these fdrfeitures civil penalties, and this suit is, undoubtedly, to be treated as a civil action. • What, then, is the law of principal and agent in respect to civil remedies for the torts of the agent ? It -will be found very fully stated by Judge Story, in his work on Agency, at sec. 452. The principal is liable to third persons for the frauds and torts of his agent in the course of his employment, although the principal did not authorize or justify, or know of such misconduct, nay, though he even forbade the acts or disapproved of them. The rule, in all such cases, is respondeat superior, and it is founded in public policy and convenience, for in no other way could there be any safety to third, persons in their dealings through the instrumentality of agents. Now be it observed, that this rule is both in reason and authority, a rule for the protection of third persons, such as deal with the agent in good faith, who are themselves in*354nocent of any fraud, and who must sustain loss and injury if the principal be not liable for the agent’s act. It has no application where the fraud is practised on the agent. The perpetrator of the fraud is not the third person whose safety and protection this rule contemplates. He is not the innocent and injured party, in behalf of whom the law will visit the agent’s act over on the superior. If loss results to him from the joint wrong of himself and the agent, the law will not repair it, for in general, where parties are in pari delieto, there is no relief for either. But if profit and advantage, instead of loss, are to result to the perpetrator of the fraud, surely, the law is not. to be an instrument in his hands to enable him to reap the fruits of his iniquity. This distinction wras taken, and stated better than I can state it, by Chief Justice ■Oakley, in the case Clark v. The Metropolitan Bank, 3 Duer, 241, a case which strongly resembled the present. That was an action to recover a statutory penalty for dealing in foreign bank notes. The Chief Justice said: “It is undoubtedly true that, in many cases, a principal is responsible for the act of his agent, which, although an abuse or excess of authority of the agent, was within the general scope of the business he was employed to transact; but this is only true between the principal and a third person, who, believing, and having a right to believe, that the agent,was acting within, and not exceeding or abusing his authority, would sustain a loss if the act were not considered as that of the principal. It is only true where the sole question is, by which of two innocent parties a loss, resulting from the fraud or misconduct of the agent, ought to be borne. It is plain, however, that no such question arises here. Here, the person who paid the bank bill in question, knew that the teller violated his duty in receiving it, for we are just as much bound to impute to him a knowledge of the provisions of the statute, as to the teller himself. And the person on whose behalf the bill was presented to the teller, so far from sustaining a loss, derived a benefit from its reception.” These observations are directly in point, and apply themselves to the case before us. In that case, the offence consisted in receiving, and in this in paying out forbidden bank notes; but in both, the agent of the corporation violated the statute, not to the prejudice of an innocent party dealing with him bona fide, but at the instance of a party who sought profit and advantage out of the violation to which he tempted the agent. The present informer is not entitled to the protection of the rule of law he invoked. It was made for honest men, dealing bona fide — not for conspirators against the rights of others. He knew right well that the agents were violating the statute, for the conspiracy which he had hatched had its foundation in a knowledge of the provisions of the statute. So far from sustaining any loss by the agent’s acts, he sought and created them — created the occasion and' in*355duced tbeir performance, as a source of profit to himself. He was, in a word, the author of the very wrong of which he now complains. Instead of suffering from a fraud, he practised the fraud, with circumstances of great aggravation, and to the insult of the dignity of Pennsylvania.
All this appears from the case as-offered in the testimony, and it is manifest that such a party is not in a condition to enforce the principle’ of respondeat superior, which belongs to the relation of principal and agent. And if that principle will not sustain his case and justify the evidence offered, there is no other ground for him to stand on. It is putting his case on its best footing to test it by the law of principal and agent, and if it cannot abide that test, it can endure no other.
To treat it upon the law of corporations, he is met by the rule that there is to be no presumption 'of corporate guiltiness, any more than an individual is to be presumed guilty, and as he offered no evidence that tended to establish the guilt of the corporation, what he did offer was properly rejected. At most, it could raise only a presumption that the agents acted with the knowledge and by the authority of the company, and. a complete counterpoise to that is the other presumption, that the corporation acted according to law.
On this main and fundamental point, I think the ruling below was right, and I would affirm the judgment; and I am permitted tij add, that the Chief Justice concurs with me.