*1 ery. second, suggest As to the I would really

that like that de- issues Congress

termine whether will remain a day-to-

viable institution. For if in the government

day business of the Execu- permitted

tive his ideas substitute expedience policy determinations

unambiguously expressed by Congress,

larger routinely issues will be decided regard without to our basic constitution-

al scheme.26 require obey Secretary I would Congress. respectful-

the command of I

ly dissent.

Seitz, part Judge, concurred in opinion. and dissented in and filed Guy DUBERN, Appellant, Comte GIRARD TRUST BANK.

No. 19515. Appeals,

United States Court Third Circuit.

Argued Nov. 1971.

Decided Jan.

As Amended Feb. remains, “But the essence tinue, example, scheme to see the President by dividing governmental that wage Congressional war without declara- among tion, three brandies there was to be not to see executive orders substitute only separation powers system legislation, but a to see secret executive Here, too, agreements cheeks and balances. we are treaties, substitute for danger losing pro- carry the constitutional see Presidential decisions sought tection Congressional programs be afforded. Since government the executive ‘impoundment sug- branch of the label of gested I of funds.’ years has secured and ago exercised more and more several the failure power, part by it, part by seizing Congress proves or will the fail- legislative democracy. the failure of the branch to as- ure of I And still think sert itself. danger nothing less than that.” Kurland, Separation A Comment on Pentagon pa- Power, “After tiie paper ‘crisis’ of the based a statement pers past, expect recedes into the before the House Committee on Govern- Congress published Operations, continue to condone Presi- June University Chicago dential actions find no warrant Law School Congressional legislation. Paper.” IVe will con- “Occasional

OPINION OF THE COURT Judge. GIBBONS, Circuit Appellant, Guy Dubern, Comte citizen and resident is the legatee universal under the last will and Marc, testament of Ellen Wain de St. Marquise Meyronnet de In St. Marc. de diversity in this case sues the Girard Trust Bank over handling of certain securities trans- marquise shortly actions on behalf of the February 26, before her death on legatee Under French law a universal approximate combination sole beneficiary personal representative and of a decedent’s estate under relationship between and Girard marquise decedent was set forth in a agreement May letter dated (Exhibit P-1) establishing what Girard interchangeably Super- refers to vised Advisory Account or an Investment agreement Account. decedent, owner, referred to as the open directs such an account “ Agent . . . and to hold therein as stocks, bonds, all Owner securi- property, ties, and other from time to deposited time . . .

following instructions . ”. The instructions analysis refer to a semi-annual

of the account after review agreement provides, Girard. The how- ever, that reviews made “[t]he Company supervisory only, no action is to be taken with the Account the direction responsibility and sole It Owner.” provides Company, also “[t]he Hodgson, Jr., Ronon, C. Clark Stradley, Agent, buy stocks, bonds, sell Young, Philadelphia, Pa., & Stevens comprising other investments or to com- appellant. prise Account, upon the written Owner, person direction of or such Voorhees, Dechert, Theodore Price & persons as the Owner from time to Rhoads, (R. Philadelphia, Pa. Neal designate by proper time written au- Risley, Philadelphia, Pa., brief), on thority.” Although management appellee. supervised agency accounts was housed SEITZ, Judge, department, Before it is clear Girard’s GIBBONS, relationship KALODNER and between dece- Circuit Judges. dent and was that of Barclay’s Bank, compensated Cannes. agent, not that of settlor inquire, whether, under and trustee.1 We would then trustee or cestui your Attorney, you could not Power the decedent March any required handle distribution attorney power of a written executed Barclay’s account. among extremely broad whatever to make *3 powers funds from authorized Dubern purchases of other securities. kind any bank, and wherever sell securities of to withdraw located and though remittance before We will await ^[*] if for ^[*] ^[*] your year reason ^[*] instructions, end, you might you ^[*] .desire a ^[*] al- wire us instructions.” advised of the execution attorney power of on March this P-29). (Exhibit acknowledge It declined Girard, December Thus authority in the funds its Dubern’s over acknowledging authenticity of while however, time, ap- custody for some attorney power Dubern, de- parently over the au- out of concern to the full clined to follow instructions attorney thenticity power of the specified agency agreement, in the extent principal’s capacity. Decem- over the On Exhibit P-1. agree finally to ac- ber it did Dubern, February 1, a knowledge ex- to this Dubern’s at on letter which was received tent: February on 5th and translated Febru- question “It was not intention to our ary 7th, instructed Girard to sell securi- authenticity instrument for- $115,000 ties in order raise and appears, warded to us Mr. It Prat. account transfer this sum to decedent’s however, the effect of such a Power Barclays at Bank. The translation Attorney your country in from differs letter, P-31, discloses that Exhibit here, practice our and some difficulties dissatisfied about Gir- Dubern was still way thinking. remain to our are We delay arriving long in at a ard’s decision you cooperate most anxious to with in his in- to its act on with handling affairs, Marquise’s and (as translat- structions. He also wrote press legal question rather than ed) : sug- further, we would like to offer present, give my “For the immediate gestion may, present which at ordering your pay- proposal accord to least, in a resolve our difficulties signa- only my of funds satisfactory manner of us. both solely the benefit of ture and remitting hesitancy We in Marc, account of Ellen de St. Wain Advisory Marc, Barclays funds from the Investment Marquise de St. deposit Marquise’s Account for Bank, Cannes. personal agencies depend only upon “These various are trustee terms upon different princi- from trusts. The trust insti of the trust but also I)les tution as does not have title and of the common law and rules property it, applicable entrusted to the title re of statutes which maining customer; whereas in the in- trust relation. The liabilities of the legal depend upon case of a trust vests title stitution as whether the„institution. agency may per- be ter it has failed to use due care in the by; party any time, minated formance of the it under- duties which automatically takes; depend and terminates on the trustee its liabilities as death of customer. the case of whether it has committed agency customer; Ordinarily responsibilities the control is in the of trust. whereas the case of a settlor the institution are more extensive such control as he than where it has reserved where acts as trustee agent, the terms of the no lia- trust. The duties acts as and it incur powers of the institution as bilities as for conduct which would are determined the terms of the con render liable if it were trustee.” 1956) customer; Scott, (2d tract made with the ed. the du I. A. Trusts 8.1§ powers (footnotes omitted). ties and the institution as Your the income indicated money is isfactory of effective ital into large Paris (Exhibit P~31) n X indexed present market. On short customer ^[*] manner.” thus covered devaluation her on the ^[*] stocks may, age, obtaining future tax. The ^[*] price in a having above, exempt of french term the risk rather sat- gold double X [sic] very was take cap- Dubern power peal followed. October Girard’s answer admitted February 1, of no making findings case was It denied attorney under in favor legal standing to pleaded tried effect the district without letter affirmatively Girard. sue February fact, (Exhibit court, receipt of jury. On This entered with- acted ap- P- single ground decision *4 quoted paragraph may The second have con- court, it district which made without something lost translation. In case, sidering any issues event, what had in mind was the plaintiff had failed to was that the purchase of a known as a Rente bond damages. conclud- The court Pinay, government the issued of only permissible of ed that measure the gold, indexed to traded on the damages comply to for an Bourse, having unique Paris the decline, stock the with an order to sell is characteristic was free of all This, any, in the stock. if value of the taxation, including payment the of oversimplification think, we Anticipating French succession taxes. respect problem, the both with to factual Barclays Bank, the transfer in- to govern- context and with structed to make bank the invest- ing Pennsylvania law. Pinay $115,- ment in Rente as soon as the upon three court relied district (Exhibit 000 was from Girard. received Refining cases, Cot- Landa Co. P-33). Globe v. 545, Co., 540, ton 23 S.Ct. Oil 190 U.S. years age. The decedent 83 was then Keystone (1903), L.Ed. 1171 47 February Late her health deteriorated. Irwin, Co., Engine Pa. Diesel Inc. v. 411 February sepa- 21 Dubern sent two (1963), 191 A.2d 376 requesting rate cables trans- immediate Connelly, 501 Twachtman 106 F.2d v. fer of request, funds. At his on that (6th Barclays Bank, York, same date in- New Keystone Refining quired by telephone Globe when the funds applications familiar Diesel the February would be available. On the 26 Hadley Baxendale, rule of 9 Exch. 341 decedent died before the funds (1854), obliged in an action for breach transferred. Dubern was to only govern- contract are recoverable succession to duties the French injuries had per for those the at defendant the of 60 cent the rate probable to result net reason foresee as assessable Had estate. value made. accomplished his breach when the contract was the transfer in time been (1964). Corbin, purchase A. Pinay Contracts for of the Rente bonds § application to a case That rule has the no before decedent’s death succession agen liability involving $69,000 for breach of duties would been less. He have cy duty, con arises out of both addition, sues for this amount. since (Second) $115,000 tract and Restatement status. the was still United Moreover, Agency (1958). at States the time death §§ decedent’s Hadley into Baxendale rule comes funds transmit could contracting. operation Id. time until an tax return had filed estate supervised agency application here, Its with the Internal Revenue Service required recovery notice about Dubern seeks of interest on the consequences French tax succession funds withheld while tax clearance March of failure to follow instructions obtained. on purchase quoted language Rente when that case with the Pinay (Second) in the contem- Restatement bonds even 401: § plation principal. The contract agent subject “An relied on district court are cases principal by any loss caused the measure of an duty.” agent’s liability principal. to his Comment a. states: § supra, Connelly, tends Twachtman v. “The relation between decision, support court the district agent always consensual but not al- principal-agent rela- since involves ways contractual. 16. A See fail- tionship in which the to act failed gratuitous perform promise ure to upon instructions to sell certain shares there has been because of re- when loss of bank stock. The court limited lower principal may liance cause charge decline only to be liable action of market value the shares. Because hand, tort. See 378. On the other governing under the law stockholders if the sole basis an action is a statutory as- a bank were to a promise by act, as when failed, the sessment in the the bank event agrees represent prin- sought and was denied leave cipal year so, for a and fails to do complaint amend the to include dam- being there no element of reliance ages statutory the amount of the assess- principal, the latter has an ac- *5 appeal ment. Circuit said: Sixth tion for breach of contract. But if a by special pled “No circumstances are paid agent wrongful, something does appellant proved or to have been knowing wrong, either be or act- to parties known to either of the at the ing negligently, principal may time the contract was entered into an an action of tort or ac- from which it reason- could have been tion of contract. This is true when ably anticipated would agent negligently an chattel harms a flow from than those the breach other by negligence principal, or, ordinary from an contract to shares sell principal fraud, a causes to be to liable corporation. by ap- in a Mere notice person, a third his exceeds pellant appellee to to wished she selling goods, duty or violates a statutory lia- sell the shares to avoid remedy may loyalty. This choice of enough support bility to an reasons, procedural important for be implied understanding appellee that if of a difference between contract, he would not breached his of limitations for and for statute torts become liable for the decline (Emphasis supplied.) contracts.” addition value shares but accept Twachtman case as We cannot liability. statutory for Globe Re- Pennsylvania a of the law of statement fining Company Landa Cotton Oil liability agent’s on the limits of an 547, Company, 190 U.S. 23 S.Ct. to follow instructions. The court com- 47 L.Ed. rejecting amend- par mitted error But neither research of the petition.” F.2d at ed nor our own has discovered ties dealing Here, Pennsylvania opinion with the be- case2 the district court’s as low, special proper misapplication where a bank measure of agent holding acting damage an in a bailee rule contracts is evidenced by failing advisory Refining. account, to vestment the citation of Globe subjected prin follow instructions has to Twachtman case would seem be cipal other attempt by prin- a tax which would classic instance of an must, there cipal agent a wise have been avoided. We who recover from analogies fore, and the principal nearest duty find the has caused Pennsylvania signposts cases. party. best a third Contrast liable to be ease. indeed Or in proval statement ing tive Assur. Co. v. National Pa.Super. 399.3 in Restatement dies available cause of but forwarded writer was clearly, See was instructed derwriter, company. ed the full edy may remedy A “§ The full In Kraber v. Union trespass. 18 A. 491 that a suit ^[*] premium (b) an e. (3d principal unsatisfactory. remedies would will That this full this g., required to of Sims v. amount from the lie not The loss to cancel be liable his be: Remedies panoply of alternative reme- required *6 language action breach example Agency: such (1889) whose is made clear 30 A.2d 333 duties has an by a the net -X- (Second) of opinion cites with only in violations. Such of tort Greene, his occurring, panoply an insurance from He did # policy principal, the un- Ins. Ins. pay, the rule premium the Principal. to a third sums which assumpsit recognized in premium rate 160 F.2d the agent. (1943), his Agency, 151 has Co., 129 Pa. but X appropriate against not do in Pearl first Re- set principal violated recover- alterna- under- return party. -X- Here, forth hold- rem- but ap- be- so, vania courts would 435.4 of the Restatement ages most In instances where courts would vania district court tract lationship. third agent. restrict a most ments Pa.1967). duty See which the under an amount is render it on ty pal, gether McLean, 402(1) (b) (c) unreasonably which would which the jurisdictions measure of nearly applicable to the also Phoenix agent: parties Skoda and to to his It seems uses with interest principal’s -X- principal for Where an adverse An damage agent make apply liquidated, or principal the v. is not it for his own the immediate demand.” appropriate the agent not have been principal -X- West F.Supp. damages, clear, then, in the measure follow holds for the Mutual claim; (Second) of law relied the law negligence measure is recovery principal-agent re the -X- Penn Power refuses principal thereon circumstances Pennsylvania Life Ins. Co. has breached damages, if -X- entitled, possession principles to liabili- . Pennsyl purposes made to Pennsyl does of Torts princi- whole. money if the a con # (E.D. inas dam pay sur- Co., to- § against principal; person

3. “A has violated whose (i) self-help; or has threatens violate his duties discharge; (j) appropriate remedy violation. for such compensation (k) refusal remedy may Such be: employ- contract (a) rescission the contract of an action on ment.” service; (5) an action for and for losses “Foreseeability or Manner of I-Iarm property; misuse of (c) equity Occurrence Its an action in to enforce (l) a sub- provisions express If the actor’s conduct un- of an bringing harm about in stantial factor agent; dertaken another, the actor fact (d) restitution, action fore- should equity.; foresaw nor neither in at law or harm or the accounting; (e) extent of the seen the an action for an not does injunction; in it occurred (f) manner which an action for an being prevent counterclaim; him liable. (g) set-off or may held (2) (h) causing The actor’s conduct to be made legal harm to party brought by cause not to be a third an action (1963); loss Pa. 191 A.2d since French law succes- Markowitz, 108 A. sion not from the de- Vereb 379 Pa. duties collected legatee. (1954). 2d Restate See also cedent’s estate but from the (Second) dichotomy heads-I-win-tails-you-lose Assum of Torts This ing duty principles simply comport a breach not we these does with what recovery here, permit for certain think court’s would be ly appear highly justice. does not extraordi If sense because of nary consequences might paid which tax breach of adverse taxes need flow from a an instruc not have follow for that paid tion then in one or the funds. to sell securities transmit standing to Which the several theories set forth or both Dubern has (Second) recovery. Restatement seek appropriate de this case will will be reversed and pend findings made fact case remanded to the court district the district court. findings fact conclu- shall make suggests light opinion. if the sions of this even dis- law applicable trict court misconceived the judgment dismissing rule of its SEITZ, Judge (concurring complaint should nevertheless be af- dissenting part). (1) firmed was court dismissed com- district (2) established was because Dubern plaint single ground plain- on the that the guilty contributory negligence. damages. tiff failed to grounds We cannot consider these ruling par- basis its findings depend upon

because both reasonably ticular risk of not loss was fact which the district did court principal’s when instruc- foreseeable judg make. We cannot our substitute given. com- tions were as the Insofar ment on matters for factual plaint agree contract, sounds in trier of fact who heard witnesses. disposition mat- district court’s 52(a); Fed.R.Civ.P. Plack Baum cf. ter of fact and of er, (3d 121 F.2d 676 However, matter this does not end the negli- plaintiff also asserted a appeal not on gence against claim defendant. briefed, though separate argue, it did standing defense that tort A sue *7 bring Restatement, this suit. We considered as well Sec- as contract. contention ond, Topic because the Agency Chapter same issue 1. Duties. standing presented When he does so appeal. points inapplica- reasonably As the Girard brief test foreseeable (brief appellee 2), adopted n. a universal ble state legatee approxi law French is an Factor” rule the Restate- “Substantial beneficiary ment, Second, 435, quoted mate combination of the sole Torts § personal representative opinion and the of de therefore of the court. cedent’s estate under the con- affirm insofar as beneficiary argu In the tract but claim concerned reverse goes, standing he issue remand a determination of the agent’s principal. found, and, ca of tort if whether pacity personal representative Re- he lacks under the established standing because the estate suffered statement Rule. highly extraordinary another where after event the court looking brought back from the harm should have about the harm.” negligent conduct, appears actor’s