1.
Since ancient times, it is the rule that a person should be held liable for his own mistake. In the words of Plato - "a person should be held for his own sins". But, in thirteenth century, in England, it was for the first time, established that the master would be liable for his servant's or slave's torts only when there is an express command of the master to the servant's wrong.
By the end of 17th century, this concept of liability was found inadequate due to rise in commercial transactions. New development took place when Sir John Holt in the case of Tuberville v. Stamp, (1697) 1 Ld Raym 267, held that "the master would be liable for his servant's tort if he had given his implied command". This 'implied command' can only be inferred from the general scope of the servant's employment. Accordingly, if the servant commits any wrong during the course of his employment with the master, then the master will be held liable for the torts of his servant. It can be said without any exaggeration that Justice Holt was the proponent of the modern law of vicarious liability.
It depends on circumstances, whether liability attaches to a person for the wrongs committed by others. It arises in three ways: (i) Liability by ratification, (ii) Liability arising out of special relationships & (iii) Liability by abetment.
When a person commits a tort while acting on behalf of another but without his authority and that the other subsequently ratifies that act, he thereby becomes responsible for it. Such act is based on the maxim 'omnis ratihabitio retrorahituret mandato priori acquiparatur means every ratification of an act relates back and thereupon becomes equivalent to a previous request. It has been explained by Tindal C.J., in the case of Wilson v. Tumman, (1843) 6 M&G 236 (242), as - "an act done, for another, by a person not assuming to act for himself, but for some other person; though without any precedent authority whatever, becomes the act of the principal if subsequently ratified by him, is the known and well established rule of law".
Three conditions are to be satisfied before one person can be held liable for another's tort on the ground of ratification. These are:
(a) only such acts bind a principal by subsequent ratification as were done at the time on his behalf. This necessarily implies that what is done by a person on his account cannot be effectually adopted or ratified by another;
(b) the person ratifying the act must have full knowledge of its tortious character; and
(c) an act which is illegal and void cannot be ratified.
3.
Master-Servant and Principal-Agent are the relationships which has a place in the partnership.
It can be understood under following headings:
(i) Principal and Agent, (ii) Partners (iii) Master and (iv) Independent Contractor.
There is a maxim 'qui facit per alium facit per se' which means 'he who does an act though another is deemed in law to do it himself' on which the vicarious liability of principal for the tort of his agent is based. A principal is vicariously liable for the tort of his agent committed within the course of his authority. Thus, a contract concluded by an agent on behalf of his principal with third party/parties within the course of his authority would bind the principal to the third party. Other than where a principal has made himself personally liable i.e., by way of guarantee, indemnity etc. liabilities of him, under common law, are confined to cases where they have been guilty of tort towards those to whom they discharge fiduciary obligations. Additionally, qua third parties, where he has committed tort. To the third party, he may be personally liable. However, such liability would not flow from a contract but would flow in an action at tort.
Agent - A person who, otherwise than as servant and otherwise than as an independent contractor, whether by way of contract, or only by way of request, conducts some business or performs some act or series of acts on behalf of another i.e., principal.
Example-If A authorises B to drive his car and if B somehow meets with an accident and injures someone, then A will be held vicariously liable. Here, authorization is an important ingredient to hold the master liable.
A director, by making false representations about his company, induces a third party to advance a loan to the company. Whether he is liable for such misrepresentation? If he is liable at what law?
Where a person makes false representation to third party about something, he may be personally liable to him on prove of such false representation. However, his liability would not flow from a contract but would flow in an action at tort. The director induces the third party to advance a loan to his company. The tort being of misrepresentation of inducement and causing injury to the third party having induced the third party to part with money. Thus, on prove of his false representation, he is personally liable to the third party.
Ormord v. Crosville Motor Services Ltd., (1953) 2 All ER 753.
Q.
In this case, the defendant was about to compete in the car rally asked his friend to drive his car from Birkenhead to Monte Carlo so as to meet the defendant at the end of rally there. The friend had to carry a bag in the car for defendant as both of them had to go on a holiday after completion of programme. When the friend departed from Birkenhead for Monte Carlo met with an accident and collided with an omnibus. The Court held the defendant liable for his friend who was using his car. Lord Denning said-
"The law puts a special responsibility on the owner of a vehicle who allows it to go on road in charge of someone else, no matter whether it is his servant, his friend or any one else. It is being used wholly or partly on the owner's business or for the owner's purpose, the owner is liable for any negligence on the part of the driver. The owner only escapes liability when he lends it or hires it to a third person to be used for purposes in which the owner has no interest or concern."
Q.
(a)
Partners are vicariously liable for torts committed by their co-partners acting in the ordinary course of the firm's business.
The liability of partners is governed by section 26 of the Partnership Act, 1932-
"Where, for any wrongful act or omission of any partner acting in the course of the business of the firm, or with the authority of his co-partners, loss or injury is caused to any person not being a partner in the firm..... the firm is liable therefore to the same extent as the partner so acting or omitting to act."
Hamlyn v. Houston and Co., (1903) 1 KB 81.-
In this case the defendant company's partner bribed a clerk of the competition firm to know the details of the contract. The Court held the firm liable as the partner was acting in the course of the firm's business.
The liability of the master for the tort which has been committed by his servant is based on the maxim - 'respondent superior' i.e., superior is responsible. In the law, it is established that he who employees another to do something does it himself or he who does an act through another is deemed in law to do it himself.
We will study the relationship of master and servant under the following heads:
(i) Who is a servant
(ii) Lending a servant
(iii) The scope of employment
(iv) Carelessness of servant
(v) Mistake of servant
(vi) Fraud of servant
(vii) Theft by servant
(viii) Outside the course of employment
(ix) Lift to an unauthorized person
(x) Delegation of duty by servant
(xi) Express prohibition by master
(xii) Servant and independent contractor.
Servants can be distinguished from other kinds of agents by reference to the degree of control exercised, or exercisable, over him by his master. Depending upon the control of master on the person he is said to be as the 'servant'. Under the 'contract of service' a master has the control over the servant by ordering or requiring him "what is to be done" and "how it shall be done". If a master controls a man by ordering him 'what is to be done' and 'the manner in which the work has to be done', then the man is a servant, otherwise he is not.
But today, vicarious liability has been extended. Earlier, hospital authorities were not held to be vicariously liable for the activities of their professional staff because they lacked the power of control over the manner in which the work was to be done.
But, now the hospital authorities are held liable not only for the negligence of nursing staff, but also for that of radiographers in whole-time service, resident house surgeon, and whole time medical officer or surgeon as it was held in Gold v. Essex, (1942) KB 203; Collins v. H.C. Council and Cassidy v. Ministry of Health, (1951) 2 KB 343.
In Mooren v. Swinton & Pendlebury Council, (1965) 2 All ER 351. Lord Parker C.J., held-"the cases have over and over again stressed the importance of the factor of superintendence and control, but that is not the determining test is quite clear. Clearly superintendence of control cannot be the decisive test when one is dealing with a professional man, or a man of some particular skill and experience."
According to Lord Thankerton, there are four essential elements of a 'contract of service'-
(i) the master's power of selection of his servant;
(ii) the payment of wages or other remuneration;
(iii) master's right to control the method of doing the work; and
(iv) the master's right of suspension or dismissal.
Sometimes an employer lends his servant to some other employer for a particular purpose or for a period of time. If, in such a case, if the servant injures a third party then the question arises who will be vicariously liable - First employer or the second employer?
This question can be answered on the basis of an important case of Mersey Docks and Harbour Board v. Coggins and Griffiths (Liver Pool) Ltd., (1847) 1 AC 1, which was decided in the year 1947 by the House of Lords:
In this case, the appellants hired out a crane to the respondents for the purpose of unloading a ship. A driver was also provided to the hirer on the condition that he will be the servant of the hirers for the contract period. The hirer didn't have any control over the driver vis-a-vis his actual management of crane. During the unloading of ship, the driver injured a person by negligent working of the crane. It was the observation of the house of Lords that the appellants as the general employer of the driver were liable to injured person.
Lord Porter in Mersey Dock's case pointed out-
"Many factors have bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. But the ultimate question is not what specific orders, or whether any specific orders, were given but who is entitled to give the orders as to how the work should be done."
The power of control in such cases is presumed to be in the general employer and the burden of proving the existence of that power in the hirer rests on the general employer.
In Rajasthan State Road Transport Corp. v. Kailash Nath Kothari, MANU/SC/0849/1997 : AIR 1997 SC 3444: 1997 ACJ 1148: JT 1997 (7) SC 673: RLW 1997 (3) SC 421: 1997 (5) SCALE 680: MANU/SC/0849/1997 : (1997) 7 SCC 481: (1997) Supp 3 SCR 724: 1997 (2) UJ 669 (SC), that the State Road Transport Corporation hired a bus alongwith a driver to ply it on its route from a private bus owner. The driver continued to be on payroll of the bus owner. The bus met with an accident. Justice Anand observed-
"The general proposition of law that an employer, i.e., the person who has the right to hire and fire the employee is generally responsible vicariously for the tort committed during the course of employment, is a rebuttable presumption. If the original employer is able to establish that when the servant was lent, the effective control over him was also transferred to the hirer, the original owner can avoid his liability. In such a case hirer will be held vicariously liable for the tort committed by the concerned employee."
Q.
It is a fact that one man in legal sense the 'servant' of another does not in itself render the 'master' liable for any or every tort which the servant may commit.
Master can only be held liable vicariously for such torts which are committed by the servant in the course of employment. An act is said to be done in the course of employment when the servant executes the order of the master: (a) The master has ordered the servant to commit a wrongful act, or (b) wrong may be committed due to the servant's negligence while carrying out the orders of the master.
In the first case, master's order is itself wrongful. For example, if master asks his servant to throw garbage on other's land, the master will be held liable. In the second case, if master asks driver to drive his car and the driver drives the vehicle negligently, or where a clerk who was permitted to use a lavatory and who left the tap open which flooded the lower premises. These acts are considered within the course of employment. Such cases comes within the purview of 'respondent superior' i.e., superior is responsible or let the principal be liable.
Sometimes, wrong may be committed due to negligence of servant.
In Century Insurance Co. v. Northern Ireland R.T. Board, 2942 AC 509, the respondents were insured by the appellants against damage arising from the use by the respondents of their petrol tankers. One driver working under respondent, lit a cigarette while delivering petrol at the garage and threw the match box upon garage floor. It caused explosion and the property was damaged. The appellant raised the plea that the driver was outside their employment hence they were not liable. But, the Law Lords held that though the driver lighted the cigarette for own purpose, it was a negligent method of conducting his work. The Law Lords also followed the dissenting opinion in Williams v. Jones, (1865) 3 H&C 602 and held the appellants liable as the driver's negligent act was within the course of his employment.
During the course of employment, if a servant commits any wrong then the master shall be held liable. In Bayley v. Manchester Sheffield and Lin Rly., 1882 LR 7 CP 415, it was the duty of porter of the Railways (defendant) to prevent passenger from getting into wrong train but a porter of defendant under erroneous belief that plaintiff was sitting in a wrong train pulled the plaintiff out of the train. The Court found the porter wrong and held the defendant liable for the servant's errors of judgment.
Q.
During the course of employment under a master, if the servant commits any fraud then the master would be liable.
In Lloyd v. Grace Smith & Co., 1912 AC 716, the plaintiff had a small cottage and some money which was due on a mortgage to the tune of œ 1,000 approached the manager of a solicitor's firm for advice on how to increase her money. The manager advised her to sell the cottage. The plaintiff authorized the manager to sell the cottage. The manager sold the cottage and absconded with money. The Court held that the firm would be held liable for all the frauds committed by its servants since the servant was acting within the course of employment.
State of Uttar Pradesh v. Hindustan Levers Ltd., MANU/UP/0138/1972 : AIR 1972 All 486. Here, Hindustan Levers Ltd. wanted to deposit Rs. 50,000 in Government sub-treasury at Ghaziabad as excise duty and for that purpose it instructed its Bankers, Punjab National Bank to do so. The Bank informed Hindustan Lever Ltd., regarding necessary payment and also intimated company by a letter with receipt (challan) enclosed. But, later on HLL found that necessary deposit has not been done with sub-treasury by the Bank and it had embezzled the said amount. The court found that Bank liable for the embezzlement committed by its staff.
Earlier, it was the rule that if a servant steals something belonging to other person, the master will not be held vicariously liable. In the case Morris v. C.W. Martin & Sons Ltd., (1966) 1 QB 716, the plaintiff had sent her fur coat to X to be cleaned and-
with plaintiff's permission gave it to
X-----------------> Z (defendant)
handed it over to servant
Z -------------------->M (Servant)
M (Servant) stole the coat.
The Court of Appeal held that the defendants were liable as their servants performing the duty of cleaning and taking care of coat instead converted the coat i.e., committed the tort. According to Winfield, unless there are specific terms in the contract of bailment which displace the general rules of vicarious liability, it has to be inquired first whether the goods were stolen which had been entrusted to his care. If, it was not then until the primary liability of the defendant can somehow be made out, the defendant cannot be held liable but if it is, then the theft was committed by the servant during the course of his employment and the master will be held liable.
There are so many factors to be considered first before deciding that a particular act is or not within the course of employment.
In committing a tort, the servant acts for his own benefit and not for his master's, the latter should not be held liable as it was held in Barwick v. English Joint Stock Bank, 1867 LR 2 Exh 259. In Lloyd case (case 9 of this chapter), it was observed that master holds servant out as his representative and if in this capacity, the servant opted to enrich himself at the expenses of others, it is correct to hold the person liable is who placed him in a position to do so.
In K.B. Co. v. Saad Bin Ahmad, it was observed that even though an act be done in the general course of employment still it may not render the employer vicariously liable if it is uncalled for or is excessive.
In Pushpabai Purshottam Uderhi v. Ranjit Ginning & Pressing Co. Pvt. Ltd., MANU/SC/0249/1977 : AIR 1977 SC 1735: (1977) 2 SCC 475: (1977) 3 SCR 372, the Manager of the Company was going to Pandhorna from Nagpur on a business trip. He also took another employee of company, Purshottam with him. The car met with an accident and Purshottam died. The manager was driving the car at the time of accident.
It was the view of the High Court that the manager in taking the deceased as a passenger was not acting in the course of employment. But Hon'ble Supreme Court reversed this decision with remarks that in present case a responsible officer of the company, the manager, had permitted Purshottam to have a ride in the car. Taking into account the high position of the driver who was the manager of the company, it is reasonable to presume, in the absence of any evidence to the contrary, that the manager had authority to carry Purshottam and was acting in the course of employment.
Q.
A servant may delegate his duty in certain circumstances. If a servant has got the authority from his master to delegate his duty in real emergency at the time when his master is not available to give permission, the person to whom he delegates the duty then the master will be liable for his negligence also.
Even, if a servant has delegated his duty to another and that person commits negligence then the master will be held liable not because that the person who was appointed/delegated has committed the negligence but his servant has delegated his duty to another person during the course of employment.
In Ricketts v. Thomas Tilling Ltd., (1915) 1 KB 644, the driver of the bus permitted the conductor to drive the bus and turn the bus in right direction for next journey. The driver was sitting by the side of conductor. The conductor drove the bus negligently and knocked down the plaintiff. The Court held that the defendant was not liable for conductor's negligence but was liable for the act of driver who wrongly delegated his duty to conductor in course of employment. In words of Pickford LJ.-
"The fact that he allowed somebody else to drive does not divest him of the responsibility and duty he has towards his master to see that the bus is carefully, and not negligently, driven."
The Supreme Court followed the principle of Rickett's case in the case of Sita Ram v. Santanu Prasad, AIR 1966 SC 1967.
|
entrusted his car to |
employed |
|||
|
Sita Ram |
--------------> |
D |
-----------> |
C (cleaner) |
|
to ply it as a taxi |
||||
|
gave the car to |
while giving driving test |
|||
|
D |
----------------> |
C |
-----------------> |
Shantanu (injured by C) |
|
to obtain licence |
injured |
Now, the question was, whether Sita Ram, owner of the car was liable vicariously for the accident committed by C? Rickett's case was cited while arguing for this case. The Supreme Court distinguished this case with that of Rickett's case and stated that in Rickett's case-"turning the bus in the right direction for next journey" was itself in the course of employment i.e., the master's business and the driver was also sitting beside conductor but in the instant case, D gave the car to C to obtain his licence and C was doing it for himself and D was also not present when C negligently drove the car. In this case, the owner was not vicariously liable as he did not give the car to C for his driving test and C was not performing his master's duty at the time of accident and nor the driver at the time of lending the car was acting for the master's business.
Sometimes, a master prohibits his servant to do certain acts and if the servant does the acts in defiance of the order as given by his master then his act can be said to have been done outside the course of employment and the master may not be liable.
In Limpus v. London General Omnibus Co., (1862) 1 H&C 526, the driver of a bus was prohibited by his employers from obstructing buses of rival companies, and, in contravention of this order, driver obstructed one of the buses and overturned it. The master was held liable for the act of errant driver as at the time of accident, he was doing what he was employed to do.
In Premwati v. State of Rajasthan, MANU/RH/0019/1977 : AIR 1977 Raj 116, the driver of a vehicle took the jeep from a workshop and thereafter instead of keeping it in the garage, went on a spree, he allowed persons to sit in his jeep and during his joy ride met with an accident, injuring all the occupants of the vehicle and of them, two died. The Rajasthan High Court held that driver was in course of employment from workshop to garage but not further. He was not authorized to give lift to unauthorized persons in his jeep which was outside the course of employment and therefore the Government was not liable.
Q.
A servant is under the total control of his master. What he has to do and how it has to be done are decided by the master. Exceptions are where the work is technical or professional and the master is incompetent to supervise e.g., - surgery, pilot's job etc. Whereas an independent contractor is different from servant and agent. He is under a 'contract for service' i.e., 'what is to be done', 'how it is to be done' is in the hands of independent contractor completely. Since the independent contractor is free to choose his way to accomplish his job, his master is generally not liable for any tort committed by independent contractor.
In Ramu Tularam v. Amichand, 1968 ACJ 54, Bombay High Court explained the concept of principal-agent relationship in a far-fetched manner:
"When the car is given to the garage for repairs, the control of the car certainly stands transferred to the owner of the garage. But the point is that in such a case the owner of the garage is constituted by the owner of the car as his agent. Everything done or omitted to be done by the agent will be something for which the principal will be vicariously liable........ (if) the owner of the garage makes various purchases for the purposes of the repairs of the car, the owner of the car has to pay for those purchases. If the doctrine of agency extends to this situation, there is no reason why it should not extend to other situation where the car is allowed by the agent to go out of garage berserk. The liability of the agent will have to be vicariously fastened even upon the principal in such a case."
In the above case, the Bombay High Court extended the principle of agency by holding the repairer as agent of the owner of the car. But later on it was realized that to extend the rule so wide would not be justified.
4.
Q.
This doctrine is an exception to the rule of vicarious liability. In Priestly v. Fowler, (1837) 3 M&W 1, it was held that a master was not liable for the negligent act committed by one servant to another fellow-servant acting in the course of employment. So, the doctrine of common employment is a defence for that employer who is able to prove that-
(i) the wrongdoer and the injured person are fellow-servants under him, and
(ii) at the time of accident they are engaged in common employment.
This doctrine was abolished by the Law Reform (Personal Injuries) Act, 1948, in England. But this doctrine is still in vogue in India although its scope has been limited by the Employer's Liability Act, 1939; the Workmen's Compensation Act, 1923; the Employees State Insurance Act, 1948 and the Personal Injury (Compensation Insurance) Act, 1963. Although its scope has been limited by the above Acts but it needs to be abrogated.
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