Chapter 22

Having taken him on board and seated him, what degree of care must the company use in carrying the passenger? It may seem strange to say that the company is not obliged to use as much care as in carrying a barrel of apples or an animal. Goods must be moved, kept dry, perhaps, and cared for in other ways. An animal must be fed. In carrying cattle stops must be made for rest. But the passenger takes care of himself. He gets in and out and provides his own rations. Therefore the law puts on the carrier the duty of using only a reasonable degree of care in taking him from place to place. In other words, the railway is not an insurer of life, as it is of goods or other merchandise. As passengers are of themselves able to get around and use some care with respect to their own movements, the law lessens the responsibility.

Perhaps the reader would like to know _what the company must do in carrying a passenger's baggage_. This is a very practical question. If he takes his grip in the seat with him, he alone is responsible for its safety. If some one should get in the seat beside him and in going out should take the grip along with him, the owner could not ask the company to make good his loss. On the other hand, if he delivers his grip to the company, then the company is bound by the same rule as when carrying other goods and merchandise. The price paid for his ticket is also enough to pay the cost of carrying his trunk or other baggage, therefore the carrier cannot escape paying for its loss when having possession of it on the ground that the service is purely voluntary and without compensation. As the company gets compensation it must pay for any loss while taking baggage from one place to another unless the loss or damage should be due to no fault or negligence of the company.

Every now and then we receive a cheque for a trunk or other piece of baggage stating that in the event of loss the company will not be responsible beyond a certain amount--$50, or $100, or other sum. Is that statement on the cheque worth anything? The courts have held that if one of these cheques is taken by a passenger and he reads it he is bound thereby. This is a contract between carrier and passenger, consequently he is bound by the figures mentioned under ordinary circumstances. This rule is just and is based on a good reason. As every one knows, whenever a trunk is lost it is very difficult for the carrier to get any proof of the real value of its contents. All the evidence is in the hands of the passenger. If he is without a conscience and apparently proves that the things in it were worth $200 or $300, he may succeed in getting this much, although it might have been full of shavings. It is because of much experience of this kind that carriers have tried to limit the amount for which they will be responsible, and so long as they do this in a fair, open way the law regards their conduct with favour. If, however, a passenger receives such a cheque and at once puts it in his pocket and does not know its true nature, then the courts have held that he was not bound by any limit of this kind.

Again, a person has no business to put diamonds and rubies and jewellery and the like in his trunk. If he does and they are lost, he cannot compel the carrier to pay for them. The courts have said that passengers have no right to put such things in their trunks expecting to make carriers pay for them when they are lost. If there are things of unusual value in a trunk, the carrier should be informed or else the owner should assume the risk.

One word more. An express company is a common carrier and is bound by the same rules as other carriers except so far as such rules may be changed by definite contract. When a definite contract is made, then the rules of ordinary carriers do not apply.

XII. ON THE KEEPING OF THINGS

There are some principles of every-day importance relating to the keeping of things.

In our last lecture was mentioned the carriage of merchandise by common carriers. They not only carry merchandise--they also keep it. When merchandise reaches its destination and shippers have had a reasonable time to take it away, but neglect to do so, a common carrier is no longer liable for its safe keeping as a common carrier but only as a warehouseman. What do we mean by this? As we have seen, a common carrier, unless he makes a special contract for carrying the merchandise, is liable for everything lost or injured except "by the act of God or the public enemy"; or, as we have already said, he is an insurer for safely taking and keeping the merchandise while it is in his charge. When the merchandise has reached the final station, and the person to whom it is shipped or sent has had ample time to take it away and does not do so, the carrier still keeps the merchandise in his warehouse or depot, but he is no longer liable as a carrier for keeping it but simply as a warehouseman. In other words, if goods are kept by him for this longer period, he is liable for their loss only in the event of gross negligence on his part. If a fire should break out and the goods be burned, unless it happened by his own gross negligence, he would not be liable for the loss. So, too, if a thief should break into his warehouse and steal the goods, he would not be liable for the theft unless it was shown that he was grossly negligent in not providing a safer building. If the rats and mice should destroy the goods while they were in the common carrier's building, the same rule would apply; or if they were injured or destroyed in any other manner, he would not be responsible for the loss unless gross negligence was shown.

Different rules apply, depending on whether the keeper, or bailee, gets any compensation for storage. In our lecture relating to sales we stated that the seller would not be liable for the loss of anything intrusted to his keeping after it had been bought of him unless he was grossly negligent, for the reason that no reward or compensation is paid to him for storage. There are, therefore, two rules which govern many cases. If a person keeps a thing for a reward or compensation, then he is bound by a stricter rule of diligence than in those cases in which he receives nothing for his service. This accords with the common reason of mankind. Evidently if a person keeps a thing simply as an act of kindness, he ought not to be responsible in the same sense that one is held responsible who is paid a fixed price for such service.

Another good illustration is that of a bank which keeps the bonds of a depositor in its safe for his accommodation. The bank does not pretend to be a safe-deposit company or anything of the kind, but it has a large vault and wishes to accommodate its customers by keeping their stocks and bonds and other articles for them while they are off on vacations or for other reasons. It is a common thing for a customer to go to his bank, especially in the country, and ask the cashier to keep his valuables during his absence. The cashier is willing to comply, and the things are intrusted to him; but as the bank receives no compensation for this service it is not responsible for their loss unless it is grossly negligent in the matter. Suppose they are put in the safe among other valuables belonging to the bank and a robber breaks in and takes them away--is the bank responsible? Certainly not. On the other hand, if the customer should leave his valuables at a safe-deposit company, a different rule would apply, because that company charges him for keeping the articles. It is therefore bound by a stricter rule than the bank. It must use the greatest care, and if neglectful in any respect it is responsible for the consequences.

Suppose a person should say to me: "Will you be good enough to leave this package with a jeweller on your way down street?" I say to my friend: "Certainly, with the greatest pleasure." What degree of care must I use in carrying that package? Only ordinary care. Suppose in going along the street a thief, without my knowledge, should walk beside me and slip his hand into my pocket and take the package, and on my arrival at the jewellery store I should find that it was gone. Should I be responsible for the loss? Certainly not, because I had neither received nor expected to receive any reward for taking the package to the store. Of course, if it could be shown that I was unnecessarily negligent in carrying the parcel, the owner might be justified in claiming damages.

One thing more may be added. If a bailee should be a scoundrel and sell the thing left with him for safe-keeping and receive the money, the true owner could, nevertheless, claim the thing wherever he could find it. The owner would not get a good title. This rule of law applies to everything except negotiable paper. A person who buys that in good faith, honestly, not knowing that it was stolen, and pays money, gets a good title. _This is the only exception to the above rule in the law._

XIII. CONCERNING AGENTS

Very many persons act as agents for others. Much of the business of modern times is carried on by persons of this class. All the managers of corporations are agents of the railways, banks, manufacturing companies, and the like. They are to be seen everywhere. Every salesman is an agent. In short, _the larger part of the modern commerce of the world is done by agents_.

AGENTS ARE OF TWO KINDS, SPECIAL AND GENERAL; and there are important differences between the two. A GENERAL AGENT is a person who transacts all the business of the person hiring or appointing him, called a principal, or all his business of a particular kind. A principal might have several general agents for the different kinds of business in which he was engaged. Suppose he has a cotton-factory and a store and a farm; he might have three general agents, each managing one of these enterprises.

A general agent may be appointed in different ways. This may be done by a written contract. Very often, however, no such contract is made, and the person comes to act in a different way. A cashier of a bank, for example, is a general agent to transact its business, but the mode of appointing him rarely consists of anything more than a resolution of the board of directors. More often than otherwise his appointment is purely verbal, by word of mouth. And, again, the authority of an agent thus to act is often found out by his acts, known and approved by his principal, or in other ways. Suppose that A should manage B's store for him, buying and selling merchandise with A's knowledge; by thus putting him before the world as B's agent the law would say that he really was so, and B would be bound by his acts within a limit soon to be explained. This, perhaps, is the more common way in which the world learns of the authority of an agent's act. He does a great variety of things which it is well known must be within the knowledge of his principal or employer and, as they are known by the employer and the employer says nothing in the way of disowning or repudiating these acts, he is bound by them.

Sometimes, indeed, persons pretend to be agents for others when really they have no authority to act. When this is done, and the person for whom they are pretending to act finds out what they are doing, then it is his immediate duty to take such action as the circumstances require to disown the acts of such pretenders. If this is not done he may be bound by them. His action in adopting or approving is called the RATIFYING of an agent's act; and when this is done the agent's action is just as valid as though authority had been given to him to act in the beginning. The principal's conduct in thus ratifying an agent's acts relates back to the time when the agent first began to act.

A SPECIAL AGENT is appointed to do a particular thing and this is more often done in writing. Perhaps the most common illustration is the appointment of some one to act for another at the annual meeting of a corporation to vote on stock. Such a person is called a PROXY, and persons often act as through another in this manner. Sometimes one person serves as a proxy or agent for a very large number of shareholders.

The liability of a principal for the acts of a general agent are very different from his liability for the acts of a special agent. In the former case the principal is said to be responsible for all the acts of his agent that are within the general scope of his business. In other words, if it is generally known that A is acting as the general agent of B in conducting his business,--we will say managing his cotton-factory,--A will bind his principal B for everything done by him as general agent in conducting that business.

Suppose A was acting as a general agent of an insurance company and, among other things, was told by the president or board of directors of the company not to insure property in a given place below a stated rate. Suppose a person should go to this agent, desiring to have his property insured, but at a lower rate, and suppose that the agent should finally yield and make a lower rate as requested. Could his company repudiate the contract? Clearly not, for it was A's duty to make contracts for insuring properties. If the insured knew that the agent had been expressly limited in the rates for insuring and that he was going contrary to his instructions in making the lower rate, then, indeed, the company would not be bound by the contract. Otherwise it could not repudiate the act, for it would fall within the general principle that a principal is bound by the acts of his agent done within the general scope of his business or employment; and such a contract clearly would be within the limit. For, indeed, this is the very business of the agent--to effect insurance.

The only thing necessary, therefore, for a person doing business with a general agent is to find out whether he is such an agent; and when this is learned then a person can safely transact business with him, doing anything within the general scope of his powers, unless the person actually knows that some limit or restriction has been put upon the agent. It is not his duty to find out what the powers of a general agent are, but simply whether he is a general agent or not.

But the rule is very different that applies to the liability of a principal who employs a special agent. In such cases it is the duty of the person doing business with him to inquire what his powers are, for the principal will not be bound beyond these. Such an inquiry, therefore, must be made. He must ask the agent to show the authority under which he is appointed, or in some way clearly convince the other what his powers are before any business can be safely done.

The authority of a special agent is often stated in writing, and the paper is called A POWER OF ATTORNEY. _In selling land an agent should always have such a power_, because a good title to land can only be given in writing, and this power of attorney should be copied in the records kept for this purpose with the deed itself to show by what authority the agent acted in selling the land. Every now and then when a person buys a piece of land and examines the title to find out whether it is perfect or not, he discovers that somewhere in the chain of title a deed was made by the agent of the seller instead of the seller himself, and the buyer had forgotten to put the power of attorney on record with his deed. The omission to do this is often serious. It is in truth just as important for an agent to have a proper power of attorney in such a case as to give a proper deed for his principal, and the one paper should be recorded quite as much as the other, as both are parts of the same story.

_Sometimes an agent appoints a subagent._ This may be orally or in writing. A good illustration is that of the collection of a cheque deposited with a bank. Suppose a cheque is deposited in a bank in Chicago drawn on a bank in Newark, N. J. The Chicago bank is, in the first instance, the agent for collecting it. The bank would send the cheque to another in New York, which would be its subagent, and that bank in turn would send it to a third bank in Newark, which would be a subagent of the New York bank. Thus there would be two subagents, besides the agent, employed in collecting the cheque.

There is an important question relating to the liability of one of these agents or subagents in the event of the negligent performance of the duty; which is responsible? Generally, it is said, if the general agent appoints a subagent he is nevertheless responsible for his act. Suppose a street contractor employs a subagent to repair a street and he digs a hole and improperly guards it and some one falls into the place and is injured, can the person thus injured look to the contractor or to the subcontractor for compensation for his injury? The contractor is liable in such cases. It may be added, however, that although he is liable to the person injured, he may be able to recover of the subcontractor or subagent. But this rule does not apply to the banks in every State. In some of them the first bank in which the cheque was deposited is liable for the negligence of others that may be afterward employed in collecting it, and this rule prevails in the federal courts. In a larger number of States the first bank fully performs its duty in selecting a proper or reputable agent, and in sending the cheque to it for collection. Should the second or subagent be neglectful, the depositor of the cheque could compel that agent, and not the first, to make its loss good.

XIV. THE LAW RELATING TO BANK CHEQUES

A CHEQUE has come to be one of the most common of all writings. Almost everybody receives more or less of them. There are some principles that ought to be understood by every holder or receiver of a cheque which, we fear, are not as well known as they should be.

_First of all, a person ought to present his cheque for payment soon after receiving it._ Some people are quite negligent in this matter and carry cheques around in their pocket-books for several days before presenting them for payment. It may not be convenient to take them to a bank, and so they are carried around; perhaps their owners forget they have them. They ought not to do so, for the reason that the maker of a cheque really says to the holder: "This is an order that I give to you on my bank for the money mentioned. If you go at once you can get payment, but I do not promise to keep it there always for you--only for a short time." Now if a person is willing to accept a cheque at all, he ought to present it within the time the holder intended, and if he does not and the bank fails, the loss falls on the holder and not on the maker.

_What time does the law fix for presenting cheques for payment?_ The rule everywhere is that the holder must present a cheque received by him, if drawn on a bank in the place where he lives, on the day of receiving it or on the next day. If the cheque is drawn on a bank at a distance, out of town, then he should send it to that bank, either directly or by leaving it with another bank for that purpose, on the same day as he received it or the next day. In other words, _he must take steps to collect the cheque either on the day of receiving it or the following one_.

A friend of mine gave a cheque to a merchant in payment of a small bill. Both lived in the same town, where the bank on which the cheque was drawn was also located. About a week afterward the bank failed and the merchant wrote to him, stating the unwelcome fact and that the cheque had not been collected and desired him to send another. I asked my friend if he complied with the request, and he said: "Certainly." I told him that he ought not to have done so, for he was under no obligation either in law or morals to do such a thing. Had he known the above rule he would not have sent the second cheque, for it was pure negligence on the part of the merchant in not presenting it--in fact, on the same day it was received.

A person may, of course, hold a cheque for a much longer period than the time above mentioned and present it and receive payment, but the point that we are trying to make clear is that _the risk of holding it_ during this period _is the holder's and not the risk of the maker of the cheque_. I suppose the merchant in the above case had, perhaps, lost the cheque. Every now and then one is mislaid and, consequently, is not presented for payment when it should be, but the maker ought not to suffer for the negligence of the receiver of his cheque. The rule of law that we have given is founded on justice, and if the receiver is negligent in not presenting it as he should, the holder ought not to suffer.

_It is the duty of a bank to pay a cheque just as it is drawn, and if it makes any mistakes it must suffer._ The reason for this rule is that the maker does not expect to see his cheque again after it leaves his hand, and when he puts his money in a bank for safe-keeping the bank virtually says to him that it will pay only on his order just as he has written. It will guard his interests carefully and pay no forged cheques or cheques that have been altered in dates or amounts, to his injury. Now, it is quite a common thing for cheques to be forged, and still more common for them to be raised. A scoundrel gets a cheque that is genuine, ordering a bank to pay $18, and changes it to $1800. He presents it for payment and it is paid. By and by the depositor finds out that he has not as much money in the bank as he supposed he had there. What has happened? Some one has altered one of his cheques and drawn out too much. He goes to the bank and makes inquiry, learns that this is so, and then demands that it shall make the amount good to him. Usually a bank is obliged to pay.

There is one limit to this rule. _A man making a cheque must be careful to write it in such a way that changes or alterations cannot easily be made._ If he is careless, leaving ample space so that changes can be made in the amount, then he will be considered negligent, and a bank would not be obliged to make good his loss. If, on the other hand, he is careful in drawing his cheques then a bank's duty to protect him is plain, and it is liable in the event of neglecting to do so.

A few years ago a man drew a cheque for $250, dated it three days ahead, and left it with his clerk, directing him to draw the money on the day written in the cheque and pay the men who worked for him, and went away. The clerk thought that he would like to keep that money himself and take a little journey also, so he changed the date to one day earlier, went into the bank on that day and drew the money, and started for the Klondike or some other place. The maker of the cheque soon found out what had happened and demanded of the bank to make the amount good. The bank said to him: "Suppose the clerk had waited one day longer and then drawn the money, you would have been the loser just the same." The man admitted all this, but replied, nevertheless, that he had not changed the date; that the bank ought to have seen the alteration before paying, and as it did not it was negligent in that regard, and the bank was obliged to lose.