B. & O. Employees' Rel. Ass'n v. Post , 122 Pa. 579 ( 1888 )

Opinion,

Mu. Justice Paxson;

The plaintiff below was in the employ of the Baltimore & Ohio Railroad Company, and whilst so employed received a personal injury by which he lost his left arm and thereby was prevented from performing any manual labor for a number of weeks. The defendant is a corporation chartered by the state of Maryland. In its act of incorporation its objects are stated to be “ to extend relief in case of sickness, injury, old age, and death, to the employees of the Baltimore & Ohio Railroad Company, and their families, and also to the employees of such other railroad companies as this association may permit to participate in its benefits, and to the families of such employees; to receive deposits on interest from said employees and their wives, and to loan them money at lawful rates of interest, in order to provide them with, or to improve homesteads, and generally to promote their welfare.” The members of the association are divided into several classes and graded as respects their benefits. The details are not important.

The plaintiff claimed that he was a member of the defendant company at the time he was injured, and entitled to the benefits provided by its charter and by-laws. The defendant denies that he was a member, and that he had ever paid anything in the way of dues or assessments. The plaintiff then brought this action of assumpsit to recover “the amount of the benefits to which he became entitled upon the payment of the assessment as aforesaid.” It will thus be seen that the matter of his membership was a vital question in the plaintiff’s case. The by-laws provide that “ Employees are entitled to the benefits of the association only from the date of perfecting their applications for membership.”

Upon the trial below, the plaintiff produced no certificate of membership, nor any written evidence of any kind showing that he was a member of the association. He testified that he had signed an application to be admitted as a member, but he had never been notified of his admission ; nor had he ever been examined by the company’s physician, or taken any of the steps required by the rules regarding admission. He further testified, under objection, that when he came to receive his monthly pay for January, 1883, the paymaster of the railroad company informed him that his dues to the defendant company had been deducted. Samuel Mackey, a witness for plaintiff, also testified that he was present and heard the above statement by the paymaster. This was all the evidence in the case to show that plaintiff was a member of the company, and upon this he was allowed to recover and hold a verdict for $3,541.

The admission of the declarations of the paymaster forms the subject of the first assignment of error. I quote the language of the assignment:

The court erred in overruling the defendant’s objection to and admitting the following offer of evidence made by the plaintiff below.

(William B. Post, the plaintiff, on the stand; witness had just stated that when he was paid his wages for January, 1883, by the paymaster of the Baltimore & Ohio Railroad Company, there was a shortage in the amount received by him.)

Q. Did you ask for an explanation at the time that this payment was made to you?

The purpose is to show that at the time the plaintiff was paid his wages for the month of January, 1883, there was deducted from those wages an amount of money Avhich the paymaster said was deducted by reason of the plaintiff’s membership in the defendant association.

This was objected to, the objection was overruled, and a bill sealed. The witness then proceeded.

Q. What explanation Avas given if any? A. The paymaster told me that the reason my pay was short was because the insurance money Avas deducted from it.

This declaration Avas received and allowed to go to the jury as proof of the fact of plaintiff’s membership. Moreover, it was the only proof in the case.

I may observe just here, in passing, that in point of fact there was no deduction from his Avages on account of dues to the association. If the fact depended on oral testimony I would not state it in this positive manner. The pay-roll itself was produced upon the trial in the court below, and shoAved upon its face that no such deduction had been made, but that on the contrary it arose from a discrepancy in regard to time, the plaintiff claiming he had made more time than the company’» time-book showed. There was also proof uueontradicted, that plaintiff’s application liad never been acted upon, and that he had never been admitted to membership. The admission of the paymaster’s declarations, however, must be considered in view of the case as it stood at the time they were offered.

There was no proof produced by the plaintiff at any stage of the cause that the paymaster had any authority to make such a declaration, or that he was authorized to make any deduction from plaintiff’s wages on' account of dues to the defendant company, or that he was an agent, officer, or even a servant of the company. He was merely the servant of the Baltimore & Ohio Railroad Company, another and distinct corporation. The latter company had no power to admit a man to membership in the defendant corporation, yet what the railroad company could not do, one of its employees has practically done, and that by a mere loose declaration which, if made by him, he had no authority to make, and which hound no one hut himself. Such a result can only come from an error somewhere. That it has its source in the erroneous admission of the, paymaster's declarations, is very plain to our view.

Tt is true the plaintiff put in evidence, subsequent to the ruling of the court upon this question, the constitution and bylaws of the, defendant company. It is there provided that “All the contributions due by the, members of this society shall be paid in advance, by being deducted from the monthly wage> due them by either of the companies aforesaid, and every person signing these rules hereby assents to such reduction.” From this it was argued that the railroad company had the right to deduct the dues from the plaintiff’s wages; that the paymaster was the company’s agent for that purpose, and that his declarations while in the performance of that duty were competent evidence of the fact of such deduction. The whole of this proposition is unsound. In the first place the railroad company could only deduct dues from members. This could only be done after being officially notified by defendant company that the employee had been admitted to membership. Without such notice a deduction of dues from one of its employees would have been merely an unlawful act, which would bind no one but itself. In the second place, the fact, if it be so, that the railroad company was the agent of the defendant company to collect the dues from the employees of the former, does not constitute the paymaster its agent for any purpose, much less to bind it by his declarations. Considering for the sake of the argument that he was an agent of the railroad company, and that his declarations might bind his employer, it by no means follows that they would bind another corporation which had never employed him, and probably did not know of his existence. But the declarations in question would not have bound the railroad company, for the reason that he had no authority to make them, nor were they properly in the course of his employment. No more dangerous kind of evidence exists than this, and no case could more fully illustrate its danger than the one in hand.

The uncontradicted evidence showed that the paymaster had nothing to do with deductions for dues; that he did not handle the amount of such deductions; the money, therefore, did not pass through his hands: that whatever deductions were made from the pay-rolls were made by other officers; that he had nothing to do with the data from which the payroll was made up or the method of reaching that result; that when the pay-rolls were made up by the proper officers and sent to him, his duty, and his only duty, was to pay the men the balance due thereon; so that the declaration of this paymaster was as to what some one else had done at some other time and some other place.

As the railroad company was only an agent for a specific purpose, it could only bind its principal, the defendant company, by an act done within the scope of its authority. Its authority only extended to the single act of collecting dues from the members of the association. If it collected dues from a stranger without any notification from the association that he was a member, it might bind itself, but it could not therebv bind the association, force upon it a member which it had not accepted, and render it liable to him for benefits. Authority must be shown to make the collection, or a subsequent ratification of the unauthorized act: Twelfth Street Market Company v. Jackson, 102 Pa. 269; Kerns v. Piper, 4 W. 222; Hackney v. The Insurance Co., 4 Pa. 185; Reaney v. Culbertson, 21 Pa. 507 ; Greene v. Insurance Co., 91 Pa. 387. Neither authority nor ratification is to be found within the four corners of this record. An agent’s authority cannot be shown by his own declarations: Grim v. Bonnell, 78 Pa. 152; Whiting v. Lake, 91 Pa. 349. A party who avails himself of the act of an agent must, in order to give in evidence his declarations to charge his principal, prove the authority under which the agent acted. The burden of proof lies on him to establish the agency and the extent of it: Hays v. Lynn, 7 W. 525; American Life Insurance and Trust Co. v. Shultz, 82 Pa. 46.

But the paymaster was not even the agent of the railroad company; he was a mere servant. The distinction between these classes of employees is sometimes lost sight of, and when it is, injustice is likely to follow. The distinction is well stated by Doctor Wharton in his book on Evidence: “ We must remember that a servant moves within a limited orbit, one far more limited than that of an agent; and that consequently the admissions of a servant- are more jealously guarded than are those of an agent. An agent is authorized to exercise discretion, when a servant is authorized to exercise discretion then he ceases to be a servant and becomes an agent. Those dealing with a mere servant, knowing him to be such, know that, except in the immediate discharge of a mechanical duty, he is not authorized to hind his master by his admissions. Hence, ordinarily, a master, except within such range, is not so bound:” 2 Wharton on Evidence, § 1182. The paymaster in this case was clothed with no discretion. He was a mere servant to perform a purely ministerial duty, viz.: to pay the men the amount respectively appearing to be due them from the railroad company by the monthly pay-rolls sent to him for that purpose. He had no authority to withhold any portion, for any purpose, of the amount designated in the pay-roll. Having no discretion, no duties to perform that were not ministerial, he cannot he said to be the agent of the company in any proper sense. He was an employee with certain'defined duties, just as are the brakemen, switch-tenders, engineers, firemen, and the thousands of other employees who are always to be found in the service of a great railroad company. To dignify such employments by the name of agent:; would not only be grotesque, but a serious innovation in the law as it has always been understood. And if we go further and hold the employer responsible for all the loose declarations of this army of servants, it is not difficult to see endless confusion and injustice as the result. In Fairlie v. Hastings, 10 Ves. 126, it was said by Sir William Grant in discussing this subject: “ An agent may undoubtedly within the scope of his authority bind his principal by his agreement, and in many cases by his acts. What the agent has said may be what constitutes the agreement of the principal; or the representations or statements may be the foundation of or the inducement to the agreement. Therefore, if writing is not necessary by law, evidence must be admitted to prove the agent did make the statement or representation. So with regard to acts done, the words with which these acts are accompanied frequently tend to determine their quality. The party, therefore, to be bound by the act must be affected by the words. But, except in the one or the other of those ways, I do not know how what is said by an agent can be evidence against his principal. The mere assertion of a fact cannot amount to proof of it, though it may have some relation to the business in which the person making that assertion was employed as agent.....If any fact material to the interests of either party rests in the knowledge of an agent it is to be proved by his testimony, not by his mere assertion.”

In the case in hand the fact to be proved was that the railroad company had deducted plaintiff’s dues from his January pay. No attempt to prove this in a legitimate way was made. The paymaster was a competent witness and if he had knowledge of the matter could have been called and sworn. Instead of doing so the plaintiff was allowed to prove his declarations, not as to anything he had done, but what some other persons had done some time before. The danger of admitting such loose declarations is shown by the fact found by the jury that the dues have been deducted, in the face of clear, uncontradicted evidence to the contrary.

What an agent says in the course of his employment, and within his authority, is evidence against his employer, because it thus becomes the act of the principal. Thus, if A. is the agent of B. to make a contract for the latter, what A. says in regard to the contract at the time it is being made is a part of the contract: it is the equivalent of the sayings or acknowledgments of the principal. They may be explanatory of the agreement, or determine the quality of the act which they accompany, and therefore must be binding on the principal as the act or agreement itself. The declarations of admissions of an agent in such cases are admissible, not for the purpose of establishing the truth of the facts stated, but as representations by which the principal is as much bound as if he made them himself, and which are equally binding whether the fact be true or false: Phillips on Evidence, 73; Hannay v. Stewart, 6 W. 487; and where a principal is bound for the acts or declarations of his agent, it is generally for the reason that said acts or declarations have led up, or been the inducement to, or explain, or qualify, or form part of some contract, or have caused some act to be done upon the faith thereof.

It has been seen that the declarations of the paymaster related to a past occurrence over which he had no control. In Fawcett v. Bigley, 59 Pa. 411, the defendant’s barges broke from their moorings, ran into the plaintiff’s barges and destroyed oxxe of them axxd its cargo. Declarations of the agent of the defendant who had charge of his bai'ges, made within aix hour after the accident, could ixot be given in evidence to charge the defendant. To the same point are Railroad Company v. Books, 57 Pa. 339; Patton v. Minesinger, 25 Pa. 393; Bigley v. Williams, 80 Pa. 107. Nor is the declaratioxx of arx existing fact by axx agexxt necessarily admissible. It depends upon its circumstances to make it so. It mxxst be strictly within the line of the authority of the agent: Hanover Water Company v. Ashland Iron Company, 84 Pa. 279; Fairlie v. Hastings, supra.

We need xxot pursue this branch of the case further. We are clearly of the opinion that it was error to admit the declarations of the paymaster. This disposes of the first assignment of error. The second axxd third are also srxstained. Aside from the declarations referred to, there was nothing to sustain these portions of the charge of the learned judge. We think the evidence of Doctor Doerner should have been received. (See fourth axxd fifth assignments.) He was the medical examiner of the defendant company and the evidexxce was offered by the latter as links in the chain, to show that plaintiff had never become a member of the association. When such loose ■ declarations had been admitted to prove his membership, surely the defendant company had the right to show that he had never been examined by the medical officer, as required by the rules, and that he had never been accepted as a member. It was also error to admit in evidence the “ Combined Experience Mortality Tables.” (Sixth assignment.) The plaintiff was suing for weekly benefits, and the mortality tables had nothing to do with the case. We also sustain the seventh assignment. The court was asked to instruct the jury that “ Under the pleadings in the case the plaintiff’s action does not cover any demand for any benefits accruing subsequent to the commencement of the suit.” This was refused. The narr was in assumpsit for the benefits, and only such could be recovered in this action as were due at the time the writ issued. In this connection we may refer to the question of the measure of damages. The learned judge charged the jury that “ There is no fixed rule by which damages can be ascertained in a case of this kind. You will carefully consider this question and do that which your consciences will approve of as an act of justice to both parties, and then neither will have a right to complain.” This was clearly error, as it left the jury no standard save their own consciences, which is too uncertain for practical purposes. As the plaintiff sued for his benefits, it is clear the measure of damages would be the stipulated sum he was entitled to under the charter and by-laws of the company, provided his membership was established.

The declaration was not for the refusal of the company to admit him to membership, but,- as before stated, to recover his benefits as a member, and the breach was a mere refusal to pay them. If this verdict is allowed to stand, I see nothing to prevent a-recovery for benefits accruing subsequent to the commencement of the action. We also think the court below erred in its construction of the words “ total inability to labor ” contained in the constitution and by-laws. This was a relief association, not an accident insurance company. Its object was to relieve its members during the time when they were unable to work by reason of injury or sickness. Hence, if a member was injured in such a way that he could no longer >aru a livelihood at the particular labor in which he was employed at the time of the accident, yet was capable of earning as much or more money in some other employment, it was certainly not the object of the association, as expressed by its ■charter and by-laws, that be should remain idle and draw benefits all his life. The evidence shows that the plaintiff was taken back into the employ of the railroad company about two months after bis injury, aud was so retained until after a second discharge — the first of which was, according to his own Testimony, for drunkenness, and the second for inattention to bis duties. The twelfth assignment is not sustained.

Judgment reversed.