Cullinan v. Burkhard

This action was brought by plaintiff to recover the sum of $500 upon and by virtue of a bond executed by the defendants under the provisions of the liquor tax law upon the application by the defendant Burkhard for the issuance of a liquor tax certificate to him

We think that the learned justice erred in the views and principles which he applied to the solution of the questions presented in the case', and that the judgment must be reversed. The facts presented to us are practically without dispute. If any divergent inferences, even, were to be drawn from them, it would be our duty to adopt those most favoring the defendants, because at the close of the evidence each side moved for a disposition of the case as upon questions of law only, thereby conferring upon the justice presiding the power and duty to draw any legitimate deductions from the facts which rtfight be necessary to or involved in his decision, and which, as already stated, was in favor of the defendants. The individual defendant was a pharmacist doing business in the city of Rochester. He made application for a certificate for the business of trafficking in liquor by him as a duly licensed pharmacist, and upon such application he, with the other defendant as surety, executed the requisite and usual bond. Said bond was conditioned in the sum of $500 that, amongst other things, the holder of the certificate would not “suffer or permit any gambling to be done in the place designated by the liquor tax certificate in which the traffic in liquors was (is) to be carried on, or in any yard, booth, garden or any other place appertaining thereto or connected therewith, or suffer or permit such premises to become disorderly, and would not violate any of the provisions of the liquor tax law.” Burkhard was compelled to be absent from his store, and while he was so absent a clerk in his regular employment sold liquor without requesting the physician’s prescription. Such sale was in direct violation of the employer’s instructions, but there was no evidence that the clerk did it wantonly, willfully, or maliciously in pursuit of any object or purpose of his own, as distinguished from the business of his employer in which he was engaged. The simple and narrow question presented to us is whether the principal and surety are liable upon a bond such as was given in this case, where the violation complained of consists of an unlawful sale of liquor by an employé acting in the regular line of his employment, but against the commands of his employer, in respect to that particular detail. We think they are. It is so well settled by controlling authority that the learned counsel for the. respondents concedes it, and we. without" elaboration and discussion may assume the proposition that this action is upon a contract obligation, and not one to recover a penalty or forfeiture imposed by statute; that the bond upon which defendants are sought to be held in effect amounted to a contract or agreement for the observance by the person licensed of the provisions of the liquor tax-law, and that the sum named in the bond

At the outset defendant’s counsel calls our attention to the language used in the bond prohibiting certain things as indicating that the violation here complained of could not be charged to the employer because of the disobedient act of his servant. He calls attention to the fact that whereas the bond provides that the person to whom the certificate is issued will not “suffer or permit” certain things to be done, the provision in this action relied upon is that “he will not violate” certain provisions; that the fair implication from a comparison of these clauses is that in the first case a proprietor might be held responsible for violations committed by others without his authority or assent, but that in the last case he could not be so held. We think that undue import.ance in behalf of defendants’ argument is attached to the language used. The condition against “suffering or permitting” relates to various illegal acts and conditions which could scarcely become offensive without the conduct of others than thé person licensed. The bond would not be efficient if it simply prohibited gambling or disorderly conduct alone by the person licensed, and therefore he is, in effect, required not to suffer or permit it "to be done by others than himself; and we do not think that any argument flows therefrom that the clause that he will not violate the provisions of the liquor tax law is simply

Counsel for respondents also urges that the principles by which proceedings for the revocation and cancellation of liquor tax certificates have been sustained are not applicable, because the statute authorizing such proceedings expressly refers to violations committed not only by the holder of said certificate, but “by his agent, servant, bartender, or any person whomsoever in charge of said premises.” While it may be that such provision specifically making a holder of a certificate liable for the misconduct of his servants and agents does little more than to expressly embody in words what the general principles of law applicable -to principal and agent would necessarily imply,' we still have so far acquiesced in his views as not to assume for the purposes of this discussion that the decisions based upon such provisions of the statute áre controlling authorities for the proposition that the holder of a certificate is responsible for the unauthorized act of his employe under the provision of the statute here up for review. As we regard it, plaintiff, in seeking a recovery upon the facts appearing in this case, does no more than to invoke the general principles applicable to the relation of employer and servant so far as third parties are concerned. .It is so well settled as to be elementary that the principal is liable to third persons for the misfeasance, negligence, and omissions of his agent in the business of his agency. A principal is confessedly liable for the acts- of his agent within tire scope of his general authority. A master is responsible for the fraudulent misrepresentations or deceit as well as for the negligence or other wrongful act of a servant, if committed in the business of his master, and within the scope of his employment, although in doing it he departed from or violated the instructions of the-master. A principal cannot exonerate himself from liability for the acts of his agent by showing that they were committed in violation of his instructions. Smith v. Reynolds, 8 Hun, 128 , 130; Verona Central Cheese Co. v. Murtaugh, 50 N. Y. 314 . The test of a master’s responsibility for the act of his agent is whether the act was done in the prosecution of the master’s business, not whether it was done in accordance with the instructions of the master to the servant. When, therefore, the servant, while engaged in the prosecution of the master’s business, deviates from his instructions as to the manner of doing it, this does not relieve the master from liability for his acts. Cosgrove v. Ogden et al., 49 N. Y. 255 , 10 Am. Rep. 361 . The liability of the employer for the acts of his servant is not limited to those which have been committed carelessly or negligently, but extends to and covers those which have been committed intentionally and wrongfully. A familiar class of cases illustrating this are those where an employe of a railroad company has designedly and wrongfully thrown or ejected a person from a car. In such cases it has never been held that the-employer would be relieved of liability because he had given instructions forbidding such act, provided only the act was performed by the servant within the general line of his duty, and having in view the business of his employer. Reasoning by analogy from such principles and decisions, we see no good reason why the holder of a liquor tax certificate should not be held responsible for the

When defendants complied with the provisions of the statute through which alone the issuance of a certificate could be obtained by giving a bond to the effect that the holder would not violate the provisions of such law, they justly may be held to have assumed the burdens and disadvantages which accompanied the privileges thereby secured. It is not violent to assume that at the time said certificate was issued and said bond executed the parties assumed that the holder would not limit himself to such business as he might personally do, but that, upon the other hand, he would employ clerks. Nobody would seriously claim that the certificate issued to him covered and protected only those sales of liquor which he might personally make, and that any clerk making a sale would be guilty of an illegal act. Likewise, upon the other hand, we think that the state had a right to expect, and that 'a fair construction of the language used sustains the expectation, that when, as a condition and price of securing the certificate sought, a bond was executed to the effect that the holder would not violate the provisions of law surrounding such certificate, such agreement assured not only against the personal acts of the holder, but also against those to be performed by others whom he employed to stand in his place and stead. Such a bond is an assurance that such authorized business will be conducted in the manner prescribed by the liquor tax law, and not otherwise; that the privilege of trafficking in liquor will not be abused; and that all of the requirements of the law will be observed in the conduct of the business. It is a contract with the state touching the conduct of the business. Lyman v. Schermerhorn, 53 App. Div. 32 , 34, 65 N. Y. Supp. 538 .

The surety upon such an undertaking can, of course, guard against liability by limiting his engagements to the guaranty of a proprietor who will be responsible and careful in the conduct of his business, and the proprietor in turn can. protect both himself and his surety from liability under the interpretation which we are giving to the clause before us for review either by personally conducting the business of selling liquor or else by selecting as agents and clerks to stand in his place only those who will be obedient and law-abiding. The proprietor has absolute control over these details, and the state necessarily has almost none. The law providing for the issuance of certificates, subject to only a few exceptions, gives an absolute right 1;o the applicant to take one out. Dependence is placed upon provisions requiring observance of the law and punishing violations thereof, rather than upon a selection of persons who are to conduct the business. In the administration of this business great reliance—and justly, as we believe—has come to be placed upon the execution of bonds like the one now before us as guarantying a responsible, careful, and law-abiding conduct of the traffic in liquors. The surety becomes interested in and watchful of the character of the vendor for whose fidelity he has engaged, and by the construction at which we have arrived the vendor in turn will become interested in and watchful of the character and conduct of

It is suggested by the learned trial justice in his opinion that a decision allowing a recovery in' such a case as this will work great injustice to the holder of the liquor tax certificate; that he can be subjected to loss of his license and the payment of penalties “simply because his servant for some petty grievance sold liquor contrary to law, and for the express purpose of injuring his master.” We see no such danger as that. The same law which holds an employer liable for an act committed by his servant within the general line and scope of his authority, even though at variance with special instructions, establishes, upon the other hand, that the same employer will cease to be liable the moment his servant steps outside of his employment and starts in pursuit of some personal end, or attempts to gratify some personal motive.

The learned counsel for the respondent in a vigorous and attractive manner urges that confusion and inconsistency will follow from a decision such as we are making. Certain provisions of the liquor tax law provide that the holder of a certificate guilty of violating the law shall be guilty of a misdemeanor, and lose his certificate. The counsel points to the fact that concededly the defendant Burkhard could not, under these provisions, upon the facts of this case, be convicted of a misdemeanor, and deprived of his certificate. Therefore he comjplains because the facts which would not secure such a conviction and loss under one part of the law are still “good enough,” as he phrases it, to secure a liability under other provisions of the law relating to the bond in question. We fail to see anything especially new, strange, or anomalous in these results. The Legislature had the perfect right to prescribe any number of different remedies and liabilities for violation of the law. The one imposing a responsibility under this bond is in addition to and outside of the other ones referred to by counsel. An employer may very well be liable civilly for thé acts of his servant, and still not be subject to conviction criminally. Referring again to

Entertaining these views, we think the judgment should be reversed, and a new trial granted.

Judgment and order reversed, and new trial granted, with costs to appellant to abide event. All concur.