Commonwealth ex rel. Lawson v. Ohio & Pennsylvania Railroad

1 Grant 329 | Pa. | 1857

Lead Opinion

The opinion of the court was delivered

by Black, J.

— This was an action against the defendants, (a corporation,) to recover the penalty imposed by statute for paying out bank notes of a less denomination than five dollars. The record raises certain questions, which have been fully discussed by counsel on two occasions, and very carefully considered by all the members of this court. The conclusions to which we have severally arrived are so various, that I must be understood as expressing no more than my own opinion, though I think it probable that a majority of my brethren will concur in the judgment which I would give. I shall take the points in order.

Absalom Morris was offered as a witness by the plaintiff,' and, at first, the court held him to be incompetent, on the ground of infamy, he having been convicted of a conspiracy. But he was afterwards offered again, with a pardon from the governer, and he was then adjudged to be competent. The plaintiff took an exception to the decision excluding the witness, and, on the ruling which admitted Mm, the court sealed a bill for the defendants. In this court, the plaintiff insists, that the witness ought to have been admitted without the pardon, because his crime was not of the class which, by law, disqualifies him. The defendants not only deny this, but assert that it was erroneous to admit him even after the production of the pardon, inasmuch as it does not so recite the record as to show that he was pardoned .of the same offence he was convicted of. All this has, from the beginning, seemed to me beside any purpose for which the case can be here. If the court did err in rejecting the witness when first offered, the error was cured by admitting him afterwards. The plaintiff had precisely the same advantage from his witness that he would have had if no error had been committed. To compel him to produce the pardon, was not even a hardship ; it was revealing but the simple truth of the case. 'The fact of the pardon did not go to the jury, but only to the court, and we are asked to reverse the judgment, not because a competent witness was excluded, but because the court insisted upon stronger and fuller proof of his competency than what the law made necessary. ' I think there never has been, and never ought to be, a reversal for such a reason. If the court supposes a witness to be interested, and rejects him, and the same witness being afterwards offered, with a release, is admitted and gives his testimony, could the party who introduced him assign his first rejection for error ? Certainly not. If we should reverse on this ground, what reason would we give ? not the exclusion of the witness, for he was not excluded; not the reading of the pardon, for that was the act of the plaintiff in error himself; not the admission of the witness, for that was_surely no fault of the defendant.

I have said that the question of the witness’s competency, on the score of infamy, is not raised on this record; and it is certainly not our duty to say anything on the subject. But as other members of the court probably think differently, and as, on anew trial, it may become very important, I will take leave to express the opinion, that the offence of the witness did disqualify him. As to the pardon, it does not recite the date of the conviction correctly, but that does not render it impossible to show that it was intended to cover, and does cover, the offence of which the record shows the witness to be guilty. If he was convicted but once in his life of any similar offence — if the pardon recites that he was in prison at its date, under the conviction to which it applies* and it can be shown what conviction that was — then it will be mere hypereriticism to pick out a discrepancy in the recital, for the purpose of defeating it. Why should a judge be required to say that it is not a pardon of a particular offence, when he knows in his conscience that it is ? It is a question for the court below to determine, upon all the facts before them, whether the pardon is a remission of this offence or some other: and it is not, in my opinion, subject to review here. At least, there ought to be no reversal on that ground, unless the record shows a palpable mistake. When the court settled the general competency of the witness, an objection was made by the defendants, grounded on the matter of his deposition, which, it is asserted, disclosed an interest in the case. It appears that the plaintiff and the witness had a contract between them, by which they agreed to get as many small notes as possible, from the defendants and other corporations, and from brokers, and sue for the penalties, sharing the profits between them. If this agreement had continued in full force, and the plaintiff had recovered the penalties, it would, perhaps, give Morris a right to demand from Lawson his stipulated share, and that would be such a direct interest in the event of the suit, as would disqualify him from being a witness. But the same deposition in which we find this fact stated, informs us further, that the contract was rescinded by mutual consent; that the witness’s right to any share in the penalties, was abandoned before suit brought, and that the agreement was burnt previous to the time when he delivered his testimony. This drives the defendants to the necessity of setting up the rule in Post v. Avery. They allege that the witness could not make himself competent by any release of his interest.

When the interest of the witness-is collateral, his competency may be restored by a release or transfer of it. The rule in Post v. Avery, applies only to persons who have assigned dioses in action, on which the recovery would have been for their own use, if no assignment had been made. Its object is to prevent a party from transforming himself into a witness, by the magic of a bit of paper. It 'forbids one who assigns a claim to sell his oath along with it. But a person who has a merely incidental interest in the result, an interest which arises entirely out of the fact, that the record may be evidence for or against him in some other action, may divest himself of such interest, and if he does so at any time before he is offered as a witness, his testimony must be received. Eor instance, a stockholder in a corporation may transfer his stock, and become a witness for the company : a legatee may dispose of his interest in the estate and testify, for the executors : an attorney who has a contract for a contingent fee may release it, and give evidence in favor of his client. The rule in question is not levelled against interested witnesses, but is founded in the policy of stopping a disinterested party from testifying in favor of one who sues in his right. This question was considered and decided in the case of Hartman v. The Insurance Co., (9 Harris, 466;) and we then refused to carry the doctrine beyond the limits which I have here assigned to it.

It becomes necessary therefore to consider whether the interest ■which Morris would have had in the event of this suit was collateral and incidental, or whether he owned and transferred to the plaintiff the claim on which suit is brought. He certainly never had any right of action against the defendants, more than what any other person had. He had no vested interest in the penalties which they incurred by passing small notes. Neither had Lawson until he brought suit. Lawson got his interest by becoming the informer, not by viitue of any assignment from Morris. Lawson does not sue in Morris’s right, but’ as purely in his own right, as if Morris had never lived. The contract of Lawson, to share the penalties with Morris, in consideration of Morris’s services, in getting up the evidence, if it be a contract enforceable at law, (a point on whiph we give no opinion,) would give the latter a claim upon the former for the amount agreed upon, but it was collateral, like the claim of an attorney, whose client agrees to pay him a compensation proportioned to the afnount recovered. It did not make him a party to the suit, nor vest in him the right of action, but it gave him an interest in the record, because he might use it in an action against Lawson, to recover the share he bargained for.

On the whole, I cannot see that the plaintiff can legally be deprived of the testimony of this witness, on the ground that he was a party, and transferred his right of action to the plaintiff; for he never had any right to the penalty sued for, and of course could not transfer it; Lawson got his claim to it as any body else might have got a similar claim, by the act of bringing the suit and becoming the informer. Neither can the witness be excluded on the score of a present interest in the money to be recovered, for he has wholly divested himself of all interest that he ever had.

What I have said about Morris’s interest refers to his interest in the penalty. If that was divested before he was called to the book, it would not exclude him. But his liability for-costs stands upon different grounds. If he had a right to part of the penalty, even collaterally, by way of contract with the plaintiff for his services, he is liable for costs, unless the contract was rescinded before the suit was brought. This was decided in Gallaher v. Milligan, (3 Penn. Rep. 177.) The witness says in effect that the 'contract was in writing, and he and the plaintiff each had a copy. But it was agreed that the witness should have no further interest in it, and Lawson brought the suit for his own benefit, and on his own responsibility. Lawson gave up his copy of the contract, and the witness destroyed it. All this was before suit brought. But the witness kept the other copy and did not destroy it until after suit brought. If this statement be true the witness’s interest was in fact gone before the suit commenced. The court must take it for true in determining the competency of the witness, but the jury may believe it to be false, and if they do they must reject all the evidence he gives, not only on the ground that he is interested, but upon the maxim falsum in uno falsum in omnibus.

When the plaintiff and his witnesses entered into the conspiracy, for which they were afterwards indicted and punished, they undoubtedly encountered about as much public hatred and contempt as a mortal man can live under. But, how far this should affect the credibility of the witnesses, is not for us, but for a jury of their country to judge.

The next question is, whether the railroad company is liable for the acts of the ticket agents and conductors. I concur fully in the opinion, that the defendants are not liable under the statute, unless the notes were paid out by the corporation. The corporation did not pay out the notes, unless the officers immediately chosen by the stockholders to manage the affairs of the company*, either passed them away with their own hands, or else authorized their subordinate agents to do so. A servant of the corporation who does an act forbidden by law, is responsible for it in his own person; and the corporation is not presumed to have given him any authority for such an act. It is very clear from this, that where a conductor pays out an illegal note in change to a passenger, the penalty cannot be recovered from the company, without proof that he had the authority of the president, directors and treasurer, or some of them. But, is it necessary that this proof should come in any particular form ? Will nothing do but a solemn resolution of the directors in full meeting assembled ? May it not be inferred from circumstances ? Surely, it may. In the present case, the offer was to prove, not only that a large number of small notes was passed upon two persons, in the course of a short time, but that it was the open and notorious custom of (as (we understand it) all the ticket agents and conductors employed by the defendants, to issue notes of a similar character. Now, what is the natural presumption from this ? May a jury infer that the superior officers of the company knew of the custom and approved it? or must the court, as a matter of law, determine without submitting it to a jury, that all the conductors and agents were habitually violating the orders of their masters, as well as an act of the legislature ? It is for the jury to say what is the natural presumption which arises out of such facts, and there is no rule of policy which requires us to make any legal or fictitious presumption on the subject. I will not say what verdict ought to be given on such evidence, but I am very clear, that no man who is not a juror in the case has a right to decide that the president and directors were ignorant, and therefore innocent of a custom which was open, public, and notorious. If a corporation cannot be held responsible for the acts of agents and servants, without proof of express authority beforehand, or distinct ratification afterwards, then the law upon which these defendants are sued, as well as a great many other laws, must remain a dead letter. The managers of a railroad company may cause any statute to be violated by their subordinates, without giving orders which are capable of direct proof. The treasurer takes from the ticket agent all the gold and silver he has collected, and leaves him small bills in place of it: the agent would understand the exact meaning of such a hint. The president passes along the road, and sees all his conductors paying out the forbidden paper, without censure or disapproval: the habit is as sure to be continued, as if he had told them to go on. If these bills had been passed in a few instances, by one or two of the company’s servants, it would not be enough. But .it seems to have been a general habit for a long time, until it became a notorious thing. The managers ought to be presumed to know at least as much about the conduct of their agents, as was known to everybody else. If they knew of this, and yet suffered it to go-on, the agents could not but know that they had the approbation of their superiors; and if they had, the corporation is responsible.

Morris, in his deposition, refers to a list or schedule of the small notes passed by the defendants’ agents to him, and in his presence, which list is appended to the deposition. This is objected to as secondary evidence; and so perhaps it might be called, if it were given alone. But the plaintiff’s offer is to produce with it the notes themselves, which, it cannot be denied, are the best evidence the nature of the case admits of. But the notes were not shown, when the witness’s deposition was taken. This makes no difference, if the jury be satisfied that the notes produced on the trial, and those from which the schedule was made out, are the same. The offer ought not to have been rejected. I am for reversing the judgment.

Judgment reversed, and venire de novo awarded.

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Concurrence Opinion

Knox, J.

— I concur in the opinion of my brother, Black, except so far as he admits that Morris was incompetent as a witness, 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, the 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 innocent 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' induced 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.

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Concurrence Opinion

Lowrie, J.

— I concur with my brother, Black, in the results to which he has arrived, on the points discussed by him in his opinion, yet I must confess that I have not felt convinced that there was any valid objection to the competency of Morris as a witness, and therefore do not adopt the process by which his competency is proved.