The relation between a principal and agent gives rise to three kinds of liabilities:
The law upon this subject is founded upon the same analogies as exist in the case of masters and servants. In order that responsibility may attach to the principal, in respect of a tortious or fraudulent act; whether criminal or not.1); it is necessary:
That this last is sufficient is obvious from those cases in which masters have been held liable for the negligence of their servants; litigants, for irregularities committed by their solicitors in the course of litigation to conduct which they are retained; merchants, for frauds committed by their factors and brokers whilst acting on their behalf; and shopkeepers, for the wrongful acts of their shop men whilst in the shop and attending to its business.
The principal is not liable for the torts of his agent, except upon one or other of the three above-mentioned grounds. Thus, a principal is not liable for the wilful acts of his agent, if not done in the course of his employment and as part of his business2); and this is true not only of assaults, batteries, libels, and the like, but also of frauds. The maxim respondeat superior does not render a principal liable for the frauds of his agent, if the agent has been dealt with as a principal; nor unless the frauds have been committed by the agent for the benefit of his principal, and in the course, and as part of his own employment.
Criminal acts of agents: The fact that the wrongful act is a felony does not constitute any defence. Thus, if an agent, in the ordinary course of his employment on the principal's behalf commits a trespass, or infringes a patent or trade-mark, or wrongfully converts the goods or chattels of a third person, by refusing to deliver them up to him on demand, or by selling or otherwise disposing of them without his authority, the principal is civilly liable for the trespass, infringement, or conversion, even if he did not authorise it, to the same extent as he would have been if he had committed the wrong himself.
Liability: The liability of a principal for the wrongs of his agent is a joint and several liability with the agent. The injured party may sue either or both of them, but if he chooses to sue the agent alone, and recovers judgment against him, such judgment, though unsatisfied, is a bar to any proceedings against the principal.
The agent is personally liable to third persons for his own misfeasance and positive wrong, whether he did the wrong intentionally or ignorantly the authority of his principal and for his benefit; or for his own benefit. But he is not, in general (for there are exceptions), liable to third persons for his own non-feasances, or omissions of duty, in the course of his employment. His liability, in these latter cases, is solely to his principal; there being no privity between him and such third persons, but the privity exists only between him and his principal. And, hence, the general maxim as to all such negligence and omissions of duty, is, in cases of private agency, respondeat superior.
If goods are delivered by the owner to A to keep, but if he delivers them to B to keep for the use of A, and B wastes or destroys them, the owner may have an action for the tort against B, although the bailment was not made to him by the owner; for B is a wrong-doer. If A delivers his horse to a black-smith, and he delivers him to another black-smith, who wantonly lames him, A may have an action against the latter notwithstanding A did not authorize the bailment, for he is a wrong-doer.
If the servant of a common carrier negligently loses a parcel of goods, intrusted to him, the principal, and not the servant, is responsible to the bailor or the owner.3) If the servant of a blacksmith so negligently conducts himself in shoeing a horse that the horse is consequently injured, or afterwards becomes lame, the master and not the servant, will be liable for the negligent injury. But, if the servant, in shoeing a horse, has pricked him, or has maliciously and wantonly lamed him, an action will lie personally against the servant himself.
If the principal is a wrong-doer, the agent, however innocent in intention, who participates in his acts, is a wrong-doer also. Thus, if the agent of a merchant who has received goods from a bankrupt after a secret act of bankruptcy, should, pursuant to orders from his principal, sell the goods, an action of trover would lie in favour of the assignees against the agent, however ignorant he might be of the defect of title; for a person is guilty of a conversion who intermeddles with the property of another without due authority from the true owner; and it is no answer that he acted as an agent, under the authority of a person supposed at the time to be entitled as the owner.
There is one important exception to the rule already stated as to non-liability of agents to third persons for the negligence and omissions of duty of themselves and of their sub-agents, founded upon the principles of maritime law. It is the case of masters of ships who, although they are the agents or servants of the owners, are also, in many respects, deemed to be responsible, as principals, to third persons, not only for their own negligence and misfeasance, but also for the negligence, non-feasances and misfeasance of the subordinate officers and others employed by and under them.
It is plain, that the Government itself is not responsible for the misfeasance or wrongs, or negligence or omissions of duty, of the subordinate officers or agents employed in the public service; for it does not undertake to guarantee to any persons the fidelity of any of the officers or agents whom it employs; since that would involve it, in all its operations, in endless embarrassments, difficulties and losses, which would be subversive of the public interests; and, indeed, laches are never imputable to the Government. And the public officers and agents are not responsible for the misfeasance, or positive wrongs, or for the non-feasances, or negligence or omissions of duty, of the sub-agents, or servants, or other persons properly employed by or under them, in the discharge of their official duties, such as the Postmaster-General, the Lords Commissioners of the Treasury, the Commissioners of Customs and Excise, the Auditors of the Exchequer, etc. But such subordinates shall be held personally responsible to third persons.
Again, a public officer will not be exempted from responsibility for the act of one who is his own servant.
The remedy of agents against third persons in tort, as a general rule, are confined to cases where the right of possession is injuriously invaded, or where they incur a personal responsibility, or loss, or damage in consequence of the tort. Thus, where an agent has actual possession of property belonging to his principal, he may maintain an action for any tort, committed by a third party, whereby such possession is affected.4) Where goods have been bailed, and a third person wrongfully deprives the bailee of the use or possession of them, or does them any injury, the bailee is entitled to bring a suit for such deprivation or injury.