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-what is the same thing, in holding him out as agent. It is submitted that he does no such thing without giving the agent express authority to make the representation complained of; except, perhaps, in those cases where he derives a benefit from the agent's act. A principal holds out his agent as authorized to transact his (the principal's), business, and not that of third persons, in which the principal has no concern. It is hardly conceivable that he should have any other purpose in the appointment of an agent; and everybody knows it. Consequently, when the plaintiff goes to the defendant's agent for information in a matter which has no relation to the defendant's business, he knows, if he is a man of common sense, that that is outside of the legitimate purpose of the agency, and that he must rely, if at all, upon the responsibility of the agent in case false information be given.
If the principal expresslj- authorize the agent to make the statement, the case is more difficult; but we conceive that the same principles should apply as if the principal had himself made it. If he is aware of its falsity, or, perhaps, if it is a matter peculiarly within his own means of knowledge, he will be liable for permitting his agent to commit the fraud on the plaintiff. But on what principle he could be held for a misrepresentation made as to a matter indifferent to him, where he is innocent of any improper motive in allowing the agent to speak for him, is not easily understood. If he were himself to make the statement, he would not be liable; why, then, should he be liable for allowing another to do so for him? The plaintiff is no worse off by inquiring of the agent than if he had inquired of the principal.
It is said that the principal is liable, under the rule that of two innocent persons he who enables a third person to commit a fraud upon the other must suffer the loss.1 But is it true that the principal has enabled his agent to commit a fraud on the plaintiff? In most cases it is not. The plaintiff has made inquiry of the agent, not because of his authority to give the desired information, but because he possessed that information. He treats him for such purpose not as an agent, but as one acting on his own responsibility. If it be replied that he acquired his information by reason of his situation in the defendant's employment, the answer to this is, that such a connection between the defendant
'Nelson, J., in Sandford v. Handy, 23 Wend. 260.
and the plaintiff is too remote. The rule of liability between innocent persons is subject to the rule of proximate and remote cause.
Now, in all probability the plaintiff knew nothing of the fact that the agent had authority to make the representation. The presumption is, as we have seen, that it was outside of his ordinary powers, to the plaintiff s knowledge; and he would seldom stop to inquire into the matter. At all events, the burden of proof should be upon him to show that, in acting upon the representation, he relied upon the defendant's grant of authority.
The rule, if there is such a one, that a principal is supposed to know what his agent knows, is, we conceive, confined to the case of contracts and sales. It probably means no more than this: that, mutual assent being essential to binding transactions in contract, that is wanting where a material misrepresentation has been made by one having a right to make the contract. The injured party has not agreed to do or accept the thing for which the principal seeks to bind him; and thus the principal is bound by the fraud of his agent. It is not because of the fraud of the agent; since the same result would follow in many cases where the agent himself were innocent, as in cases of mistake.
In the early law, under the old writ of deceit, where we are to look for the true significance of the action of deceit, we find that it was necessary to prove fraud directly upon the defendant. And there is a case in the Year Books1 involving the very question now under consideration. If we translate it correctly, it was, in substance, as follows: —
Writ of deceit by A. against B. and C., in the sale of Rummney wine, said C. knowing it to be sour and unfit for use. Rolf, for the defence, having taken certain objections to the writ (one of which was that no warranty was alleged), which were overruled, pleaded for B. that the wine was not sour, upon which issue was joined. For C., he pleaded that he sold the wine hy B., Ma servant. To which Martin, J., replied: But" of your own knowledge you deceived " the plaintiff. — Rolf. "If I have a servant, who is my salesman, and goes to a fair with an unsound horse, or other merchandise, and sells it, will the party [pty] have an action of deceit on the case against me? Clearly not."— Martin, J. "You say true; for you did not command him to sell the thing to him, nor to any person in particular. But if your servant, by your 1 9 Henry 6, 53, pi. 37; 8. c. Brooke's Abr. Accion sur la Case, pi. 8.
covin and command, sell one bad wine, he shall have an action against you; for it is your own sale. And if the case should be that you did not bid your servant sell to that very person, then you can say that you did not sell to the plaintiff."
Rolf did not appear to take much comfort from this last morsel, replying that it would be a risky thing to put that into the mouth of the common people. This was A.d. 1430.
Mr. Justice Nelson, indeed, says that this case was overruled by Lord Holt in Hern v. Nichols. Sandford v. Handy, supra. But the report of that case does not show any thing of the kind, except in the ground of the decision, which has itself been overruled, as we have seen. The point decided in Hern v. Nichols is distinguishable from the case in the Year-Book, on the ground that the defendant had there obtained a benefit from the agent's act. And though this was also the fact apparently, in the other case, that was decided at a time when the form of action precluded any notice of such fact. This old case, therefore, also supports the position that the action of deceit is not the proper proceeding, even where the defendant has derived a benefit from his agent's misrepresentation.
There is one more difficulty worthy of notice, presented by the class of cases in which it is held that the principal is liable in tort for the acts of misconduct of his agent in the course of his employment; though he be acting without authority, or contrary to the express instructions of his principal.1 But these cases are not easily understood except upon the principle of a special public policy, which finds it important to hold the master responsible for the extraordinary conduct of his agent within the line of the agency. In Limpus v. London Omnibus Co., supra, which was a case of misconduct by an omnibus-driver, Mr Justice Willes refers the right of action against the principal in part to the impecuniosity of that class of servants. "There ought to be a remedy," he says, "against some person capable of paying damages to those injured by improper driving." This is doubtless the real ground of the master's liability in such cases. But, we submit, that a public policy which points to a state of facts which varies with almost every case, and often fixes a liability
'See Willes, J., in Barwick T. English Joint-Stock Bank, Law E. 2 Ex. 259, 265; Whatman y. Pearson, Law B. 8 C. P. 422; Burns T. Poulsom, Law B. 8 C. P. 568; Limpus T. London Omnibus Co., 1 Hurl. & C. 526; s. c. 82 Law J. Ex. 84. Vol. mi. 42
where there is no need of it (for agents are often responsible), should not be extended to a new and different class of cases.
But there is a better reason for limiting this rule of public policy. The negligence or misconduct of an agent for which the cases hold the principal liable, probably never involves any deep moral turpitude. If the conduct of the agent were of such character, the principal would not be held liable. For instance, — to take a case often put, — if a servant shoeing a horse should maliciously prick him, he, and not the master, would be Hable; though it would be otherwise if it were not intentionally done. And it is immaterial that the act, in cases of this kind, may have been intended for the benefit of the principal.1
The action for deceit more nearly resembles this class of cases. The allegation always is that the representation was made "falsely and fraudulently.'' A lie is charged, and charged to have been told with the base motive of injuring another. The proof need not be so strong in all cases; but fraud, actual or constructive, must be made out. Now it can no more properly be held that such a misrepresentation binds the principal, than that the other-mentioned malicious misconduct of the agent does; and as the rule of public policy does not extend to the latter class of cases, it should not to the former.
It is to be observed that it is no answer to the action that the defendant is a corporation. It is settled that a corporation, though having no soul, is liable for the authorized deceit of its agents.2 But this would probably be otherwise where the misrepresentation was made before the incorporation of the body. In such case, the action should be against the individuals personally.8
1 See the language of Blackburn, J., in Limpus v. London Omnibus Co., supra, quoted with approval by Brett, J., in Burns v. Poulsom, supra.
2 See Brokaw v. New Jersey Ry. Co., 3 Vroom, 328;. Vance v. Erie Ry. Co., ib 334, 335; Foga v. Griffin, 2 Allen, 1; Ranger v. Great Western Ry. Co., 5 H. L. Cas. 72; Addie v. Western Bank, Law R. 1 H. L. Scotch, 145; Mackay v. Commercial Bank, 80 Law Times, N. S. 130.
3 See Addie v. Western Bank, supra.
THE THREE DEGREES OF NEGLIGENCE.
The doctrine of three degrees of negligence — slight, ordinary, and gross — is generally supposed to be a principle taken from the Roman law. Its title to regard as furnishing rules for practical application in the English law has lately been much questioned. If negligence is a matter of fact, it is hard to see how the degree of negligence can be a matter of law, or how the doctrine of three degrees can exist except as a theory, — a mere inapplicable formula. It is a rule when there is nothing to measure. There seems now to be a growing tendency to repudiate the entire doctrine,1 and to cut loose from the huge mass of dicta upon the subject which encumbers both text-books and cases.
The learned editor of the last edition of Story on Bailments says:2 "The existence of a practicable difference between the degrees of negligence lies at the foundation of the law of bailments." But it may well be doubted whether it is a necessary part of that law. In Steamboat New World v. King? Mr. Justice Curtis says: "The theory that there are three degrees of negligence, described by the terms slight, ordinary, and gross, has been introduced into the common law from some of the commentators on the Roman law. It may be doubted if these terms can be usefully applied in practice. Their meaning is not fixed, or capable of being so. One degree, thus described, not only may be confounded with another, but it is quite impracticable exactly to distinguish them. Their signification necessarily varies according to circumstances, to whose influence the courts have been forced to yield, until there are so many real exceptions that the rules themselves can scarcely be said to have a general operation. ... If the law furnishes no definition of the terms 'gross negligence ' or 'ordinary negligence' which can be applied
l Grill v. General Iron Screw Collier Co., L R. 1 C. P. 600, 612; Briggs v. Taylor, 28 Vt. 180, 185; The New World, 16 How. 469, 474; Perkins y. New York C. R.R., 24 N. Y. 196, 207; Wells Y. N. Y. C. R.R., ib. 131, 187; Coggs v. Bernard, 1 Smith's Leading Cases, Am. note; Jenkins v. Motlow, 1 Sneed, 248, 252.
'§ 17, note. » 16 Howard, 474.