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not in use, and, in mere caprice, placing them on the track for the purpose of frightening the ladies, he was not, it is true, within his employment as to the use of them; but, in so doing, he violated the duties connected with his employment as the custodian of them, and thereby made his master liable for the consequences of his neglect, in the same manner and to the same extent as if it had been done by the company itself.

It is necessary in this and in all similar cases to distinguish between the departure of a servant from the employment of the master, and his departure from or neglect of a duty connected with that employment. A servant may depart from his employment without making his master liable for his negligence when outside the employment of the master; and he so departs whenever he goes beyond the scope of his employment and engages in affairs of his own. cannot depart from the duty intrusted to him, when that duty regards the rights of others in respect to the employment of dangerous instruments by the master in the prosecution of his business without making the master liable for the consequences; for the first step in that direction is a breach of the duty intrusted to him by the master, and his negligence in this regard becomes at once the negligence of the master; otherwise the duty required of the master, in respect to the custody of such instruments employed in his business, may be shifted from the master to the servant, which cannot be done so as to exonerate the master from the consequences of a neglect of the duty.

To better illustrate the ground of this distinction, we may, for example, suppose a servant, with others under his control, employed with a construction train repairing the track of his master. He may, for a time, quit his employment, and, with his men, go off on affairs of his own. Whilst thus out of the master's employment, he may build a fire, which, through his negligence, may consume the property of another; and, in the mean time, loss of life and property may result from a collision with the train negligently left standing on the track. Now, whilst, as has been held, the master would not be liable for the loss resulting from the fire, because the act was done outside the servant's employment (Morier v. St. Paul etc. R'y Co., 31 Minn. 351; 47 Am. Rep. 793), yet it is equally certain that for the loss occasioned by the servant's negligence in leaving the train on the track the master would be

liable in damages, for the plain reason that in abandoning the custody of the train he was guilty of negligence in the employment of the master, whilst in building the fire he

was not.

That what was done by the conductor contravened the purpose and instructions of the company in regard to the use of these torpedoes does not vary its liability for the negligence of the conductor in the custody of them. In discussing the master's liability for his servant, it is said by Professor Wharton: "It is not necessary, in order to make the master liable, that there should be specific directions as to the particular act. It is enough if the general relation of master and servant, within the range of such act, exists. The question is, simply, whether the wrong inflicted was incidental to the discharge of the servant's functions. It may have been capricious. It may have contravened the master's purposes or directions. But a master who puts in action a train of servants, subject to all the ordinary defects of human nature, can no more escape liability for injury caused by such defects than can a master who puts machinery in motion escape liability, on the ground of good intentions, for injury accruing from defects of machinery. Out of the servant's orbit, when he ceases to be a servant, his negligences are not imputable to the master. But within that orbit, they are so imputable, whatever the master may have meant": Wharton on Negligence, sec. 160; see also Wood on Master and Servant, sec. 283, and Cooley on Torts, 632 (*539).

The custody of these torpedoes was within the servant's orbit. Negligently leaving them on the track was a negligence within that orbit, and therefore imputable to the master. If a master has a duty to perform, and intrusts it to a servant, who disregards it to the injury of another, it is immaterial, so far as the liability of the master is concerned, with what motive or for what purpose the servant neglects the duty. This is illustrated by the case of Weed v. Panama R. R. Co., 17 N. Y. 362, which was an action against the company for failure to carry the plaintiff to her destination with reasonable dispatch. The delay was caused by the willful act of the conductor in wrongfully detaining the train at a station, and which the defendant claimed exonerated it from liability. But the court held otherwise; it being observed, among other things, in the opinion, that "the obligation to be performed was that of the master, and delay in performance, from in

tentional violation of duty by an agent, is the negligence of the master."

We do not see that this in any way conflicts with the decision in Little Miami R. R. Co. v. Wetmore, 19 Ohio St. 110; 2 Am. Rep. 373. There the plaintiff got into a quarrel with the baggage-master of the company about checking his baggage; and under the influence of anger, the latter struck the plaintiff with a hatchet, and it was held that the company was not liable for the injury. A hatchet is not an instrument of danger, within the rule above stated; it includes only such instruments as are such within themselves. The danger of a hatchet is in the hand and spirit of the man who may use it. If, in this case, the instrument left on the track had been a hatchet, the company would not have been liable to a child who might afterwards have picked it up and been injured by it; for the company would have been under no such duty as to its custody, as it was under in regard to this dangerous explosive.

Judginent affirmed.

MASTER AND SERVANT-LIABILITY OF MASTER FOR ACTS OF SERVANT.The master is responsible for the negligent or wrongful acts of his servant resulting in injury to others, when such acts are done in the general line of his apparent authority: Cook v. Houston D. N. Co., 76 Tex. 353; 18 Am. St. Rep. 53; Dillingham v. Russell, 73 Tex. 47; 15 Am. St. Rep. 753, and note. So held where the servants of a railway company negligently placed a torpedo at a point on the track, which the public, including children, had long been in the habit of crossing: Harriman v. Pittsburgh etc. R'y Co., 45 Ohio St. 11; 4 Am. St. Rep. 507. But a company is not liable for the death of one who, while walking upon its track without permission, intermeddles with a torpedo placed there by servants of the company as a danger signal: Carter v. Columbia etc. R. R. Co., 19 S. C. 20; 45 Am. Rep. 754.

FARMERS' CO-OPERATIVE TRUST Co. v. FLOYD.

AGENCY

[47 OHIO STATE, 525.]

- PERSONAL LIABILITY OF AGENT ON UNAUTHORIZED CONTRACT MEASURE OF DAMAGES. A person who without having in fact authority to make a contract as agent, yet does so under the bona fide belief that such authority is vested in him, is nevertheless personally responsible to those who contract with him in ignorance of his want of authority, and the measure of damages is the loss sustained by reason of not having the valid contract which the agent undertook to execute. AGENCY - PERSONAL LIABILITY OF DIRECTORS OF CORPORATION FOR CONTRACT EXECUTED IN CORPORATE NAME. - Persons who, as directors of a corporation and in its name, contract with innocent third parties, be

fore the legal amount of corporate stock has been subscribed, do not create any corporate liability, but become personally liable, although they contracted under the bona file belief that corporate authority to do so was vested in them, and the measure of damages is the loss sustained by the innocent third party by reason of his not obtaining the valid contract which such directors assumed to execute.

John M. Cook, Estep and Estep, and A. H. Battin, for the plaintiff in error.

W. P. Hays and J. F. Daton, for the defendants in error.

WILLIAMS, J. The circuit court, it appears from the record, reversed the judgment of the court of common pleas, because of alleged errors in overruling the demurrers to the amended petition, and refusing the instructions which the defendants requested to be given to the jury. It sufficiently appears from the petition that in 1878 the defendants attempted to form, under the laws of this state, a corporation called "The Wool Growers' Exchange," for the purpose, as declared in the articles of incorporation, of dealing in "wool, merchandise, produce, and furnishing supplies to wool-growers and others, on commission, and purchase or sale, and to do a general commission business in the articles above enumerated; and also for the purpose of disseminating, through bureaus or journals, useful knowledge and information pertaining to the improvement and protection of wool-growing interests." The amount of the capital stock was fixed at fifty thousand dollars, in shares of ten dollars each. When less than three thousand dollars of stock had been subscribed, and less than two thousand dollars paid in, an election was held by the defendants and others, at which the defendants were chosen as directors of the concern. These directors organized, by selecting from their number the customary officers of a corporation. Thereafter, in 1882, while the defendants, against whom the judgment in the case was rendered, were acting as such directors, controlling and managing the business of "The Wool Growers' Exchange," wool was purchased in its name, from the plaintiff, to the amount averred in the petition; and the balance of $3,195 of the purchase price, for which, with interest, the plaintiff recovered judgment, remains unpaid. The defendants had knowledge that ten per cent of the stock of the corporation had not been, and never was, subscribed or paid in, but the plaintiff was ignorant of that fact. There is no allegation in the petition that the defendants were actuated by any fraudulent purpose, or had

any design to cheat or defraud the plaintiff. Without such purpose or design, it is claimed that the defendants could not be made liable, and therefore the lack of such averment is a fatal defect in the petition. Whether it be so, or not, is the question raised by the demurrers. The instructions refused present a question somewhat different in form, though much of the same nature, which is, whether a personal liability was incurred by the defendants, if, in the transaction with the plaintiff, they acted in good faith, believing that the requisite amount of stock to authorize the organization of the corporation had been subscribed.

Upon both questions, the circuit court held with the defendants; and if its holding upon either was correct, its judgment must be affirmed.

A somewhat extended examination has satisfied us, however, that upon neither is the decision in harmony with the great weight of authority. The courts of this country and of England, with few exceptions, adhere to the doctrine so clearly laid down by Mr. Justice Story in his commentaries on the law of agency, where it is said: "Wherever a party undertakes to do any act as the agent of another, if he does not possess any authority from the principal therefor, or if he exceeds the authority delegated to him, he will be personally responsible therefor to the person with whom he is dealing for or on account of his principal. There can be no doubt that this is, and ought to be, the rule of law in the case of a fraudulent representation made by the agent, that he has due authority to act for the principal; for it is an intentional deceit. The same rule may justly apply where the agent has no such authority, and he knows it, and he nevertheless undertakes to act for the principal, although he intends no fraud. But another case may be put, which may seem to admit of more doubt, and that is, where the party undertakes to act, as an agent, for the principal, bona fide, believing that he has due authority, but in point of fact he has no authority, and therefore he acts under an innocent mistake. In this last case, however, the agent is held by law to be equally as responsible as he is in the two former cases, although he is guilty of no intentional fraud or moral turpitude. This whole doctrine proceeds upon a plain principle of justice; for every person so acting for another, by a natural, if not by a necessary, implication, holds himself out as having competent authority to do the act, and he thereby

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