The most distinct suggestion of the doctrine of exemplary or
punitive damages in England before the American Revolution is to be
found in the remarks of Chief Justice Pratt (afterwards Lord
Camden) in one of the actions against the King's messengers for
trespass and imprisonment, under general warrants of the Secretary
of State, in which, the plaintiff's counsel having asserted, and
the defendant's counsel having denied, the right to recover
"exemplary damages," the Chief Justice instructed the jury as
follows:
"I have formerly delivered it as my opinion on another occasion,
and I still continue
Page 147 U. S. 107
of the same mind, that a jury have it in their power to give
damages for more than the injury received. Damages are designed,
not only as a satisfaction to the injured person, but likewise as a
punishment to the guilty, to deter from any such proceeding for the
future, and as a proof of the detestation of the jury to the action
itself."
Wilkes v. Wood, Lofft, 1, 18-19, 19 Howell's State
Trials 1153, 1167.
See also Huckle v. Money, 2 Wilson 205,
207; Sayer on Damages 218, 221. The recovery of damages, beyond
compensation for the injury received, by way of punishing the
guilty, and as an example to deter others from offending in like
manner, is here clearly recognized.
In this Court the doctrine is well settled that in actions of
tort the jury, in addition to the sum awarded by way of
compensation for the plaintiff's injury, may award exemplary,
punitive, or vindictive damages, sometimes called "smart money," if
the defendant has acted wantonly, or oppressively, or with such
malice as implies a spirit of mischief or criminal indifference to
civil obligations; but such guilty intention on the part of the
defendant is required in order to charge him with exemplary or
punitive damages.
The Amiable
Nancy, 3 Wheat. 546,
16 U. S.
558-559;
Day v.
Woodworth, 13 How. 363, 371;
Philadelphia &c. Railroad
Co. v. Quigley, 21 How. 202,
62 U. S.
213-214;
Milwaukee & St. Paul Railway v.
Arms, 91 U. S. 489,
91 U. S.
493-495;
Missouri Pacific Railway v. Humes,
115 U. S. 512,
115 U. S. 521;
Barry v. Edmunds, 116 U. S. 550,
116 U. S.
562-563;
Rio Grande Railway v. Harris,
122 U. S. 597,
122 U. S.
609-610;
Minneapolis & St. Louis Railway v.
Beckwith, 129 U. S. 26,
129 U. S. 36.
Exemplary or punitive damages, being awarded not by way of
compensation to the sufferer, but by way of punishment of the
offender and as a warning to others, can only be awarded against
one who has participated in the offense. A principal, therefore,
though of course liable to make compensation for injuries done by
his agent within the scope of his employment, cannot be held liable
for exemplary or punitive damages merely by reason of wanton,
oppressive, or malicious intent on the part of the agent. This is
clearly shown by the
Page 147 U. S. 108
judgment of this Court in the case of
The
Amiable Nancy, 3 Wheat. 546.
In that case, upon a libel in admiralty by the owner, master,
supercargo, and crew of a neutral vessel against the owners of an
American privateer for illegally and wantonly seizing and
plundering the neutral vessel and maltreating her officers and
crew, Mr. Justice Story, speaking for the Court in 1818, laid down
the general rule as to the liability for exemplary or vindictive
damages by way of punishment, as follows:
"Upon the facts disclosed in the evidence, this must be
pronounced a case of gross and wanton outrage, without any just
provocation or excuse. Under such circumstances, the honor of the
country and the duty of the Court equally require that a just
compensation should be made to the unoffending neutrals for all the
injuries and losses actually sustained by them and if this were a
suit against the original wrongdoers, it might be proper to go yet
further and visit upon them, in the shape of exemplary damages, the
proper punishment which belongs to such lawless misconduct. But it
is to be considered that this is a suit against the owners of the
privateer, upon whom the law has, from motives of policy, devolved
a responsibility for the conduct of the officers and crew employed
by them, and yet, from the nature of the service, they can scarcely
ever be able to secure to themselves an adequate indemnity in cases
of loss. They are innocent of the demerit of this transaction,
having neither directed it nor countenanced it nor participated in
it in the slightest degree. Under such circumstances, we are of the
opinion that they are bound to repair all the real injuries and
personal wrongs sustained by the libellants, but they are not bound
to the extent of vindictive damages."
3 Wheat.
16 U. S.
558-559.
The rule thus laid down is not peculiar to courts of admiralty,
for as stated by the same eminent judge two years later, those
courts proceed, in cases of tort, upon the same principles as
courts of common law in allowing exemplary damages as well as
damages by way of compensation or remuneration for expenses
incurred or injuries or losses sustained by the misconduct of the
other party.
Boston Mfg. Co. v. Fiske, 2
Page 147 U. S. 109
Mason 119, 121. In
Keene v. Lizardi, 8 La. 26, 33,
Judge Martin said:
"It is true, juries sometimes very properly give what is called
'smart money.' They are often warranted in giving vindictive
damages as a punishment inflicted for outrageous conduct; but this
is only justifiable in an action against the wrongdoer, and not
against persons who, on account of their relation to the offender,
are only consequentially liable for his acts, as the principal is
responsible for the acts of his factor or agent."
To the same effect are
The State Rights, Crabbe 42,
47-48;
The Golden Gate, McAllister 104;
Wardrobe v.
California Stage Co., 7 Cal. 118;
Boulard v. Calhoun,
13 La.Ann. 445;
Detroit Post Co. v. McArthur, 16 Mich.
447;
Grund v. Van Vleek, 69 Ill. 478, 481;
Becker v.
Dupree, 75 Ill. 167;
Rosenkrans v. Barker, 115 Ill.
331;
Kirksey v. Jones, 7 Ala. 622, 629;
Pollock v.
Gantt, 69 Ala. 373, 379;
Eviston v. Cramer, 57 Wis.
570;
Haines v. Schultz, 50 N.J.Law 481;
McCarthy v. De
Armit, 99 Penn.St. 63, 72;
Clark v. Newsam, 1 Exch.
131, 140;
Clissold v. Machell, 26 Upper Canada Q.B.
422.
The rule has the same application to corporations as to
individuals. This Court has often, in cases of this class as well
as in other cases, affirmed the doctrine that for acts done by the
agents of a corporation in the course of its business and of their
employment, the corporation is responsible in the same manner and
to the same extent as an individual is responsible under similar
circumstances.
Philadelphia &c. Railroad
Co. v. Quigley, 21 How. 202,
62 U. S. 210;
National Bank v. Graham, 100 U. S. 699,
100 U. S. 702;
Salt Lake City v. Hollister, 118 U.
S. 256,
118 U. S. 261;
Denver & Rio Grande Railway v. Harris, 122 U.
S. 597,
122 U. S.
608.
A corporation is doubtless liable, like an individual, to make
compensation for any tort committed by an agent in the course of
his employment, although the act is done wantonly and recklessly,
or against the express orders of the principal.
Philadelphia & Reading
Railroad v. Derby, 14 How. 468;
New Jersey
Steamboat Co. v. Brockett, 121 U. S. 637;
Howe v. Newmarch, 12 Allen, 49;
Ramsden v. Boston
& Albany Railroad, 104 Mass. 117. A corporation may even
be held liable
Page 147 U. S. 110
for a libel or a malicious prosecution by its agent within the
scope of his employment, and the malice necessary to support either
action, if proved in the agent, may be imputed to the corporation.
Philadelphia &c. Railroad
v. Quigley, 21 How. 202,
62 U. S. 211;
Salt Lake City v. Hollister, 118 U.
S. 256,
118 U. S. 262;
Reed v. Bank, 130 Mass. 443, 445, and cases cited;
Krulevitz v. Eastern Railroad, 140 Mass. 573;
McDermott v. Evening Journal, 43 N.J.Law 488 and 44
N.J.Law 430;
Bank of New South Wales v. Owston, 4 App.Cas.
270. But, as well observed by Mr. Justice Field, now Chief Justice
of Massachusetts:
"The logical difficulty of imputing the actual malice or fraud
of an agent to his principal is perhaps less when the principal is
a person than when it is a corporation; still, the foundation of
the imputation is not that it is inferred that the principal
actually participated in the malice or fraud, but, the act having
been done for his benefit by his agent acting within the scope of
his employment in his business, it is just that he should be held
responsible for it in damages."
Lothrop v. Adams, 133 Mass. 471, 480-481.
Though the principal is liable to make compensation for a libel
published or a malicious prosecution instituted by his agent, he is
not liable to be punished by exemplary damages for an intent in
which he did not participate. In
Detroit Daily Post Co. v.
McArthur, in
Eviston v. Cramer, and in
Haines v.
Schultz, above cited, it was held that the publisher of a
newspaper, when sued for a libel published therein by one of his
reporters without his knowledge, was liable for compensatory
damages only, and not for punitive damages, unless he approved or
ratified the publication, and in
Haines v. Schultz, the
Supreme Court of New Jersey said of punitive damages:
"The right to award them rests primarily upon the single ground
-- wrongful motive. . . . It is the wrongful personal intention to
injure that calls forth the penalty. To this wrongful intent
knowledge is an essential prerequisite. . . . Absence of all proof
bearing on the essential question, to-wit, defendant's motive,
cannot be permitted to take the place of evidence without leading
to a most dangerous extension of the doctrine
Page 147 U. S. 111
respondeat superior."
21 Vroom (50 N.J.Law) 484-485. Whether a principal can be
criminally prosecuted for a libel published by his agent without
his participation is a question on which the authorities are not
agreed, and where it has been held that he can, it is admitted to
be an anomaly in the criminal law.
Commonwealth v. Morgan,
107 Mass. 199, 203;
Regina v. Holbrook, 3 Q.B.D. 60,
63-64, 70, 4 Q.B.D. 42, 51, 60.
No doubt, a corporation, like a natural person, may be held
liable in exemplary or punitive damages for the act of an agent
within the scope of his employment, provided the criminal intent,
necessary to warrant the imposition of such damages, is brought
home to the corporation.
Philadelphia &c. Railroad v.
Quigley, Milwaukee & St. Paul Railway v. Arms, and
Denver & Rio Grande Railway v. Harris, above cited;
Caldwell v. New Jersey Steamboat Co., 47 N.Y. 282;
Bell v. Midland Railway, 10 C.B. (N.S.) 287, 4 Law Times
(N.S.) 293.
Independently of this, in the case of a corporation, as of an
individual, if any wantonness or mischief on the part of the agent,
acting within the scope of his employment, causes additional injury
to the plaintiff in body or mind, the principal is, of course,
liable to make compensation for the whole injury suffered.
Kennon v. Gilmer, 131 U. S. 22;
Meagher v. Driscoll, 99 Mass. 281, 285;
Smith v.
Holcomb, 99 Mass, 552;
Hawes v. Knowles, 114 Mass.
518;
Campbell v. Pullman Car Co., 42 F. 484.
In the case at bar, the defendant's counsel having admitted in
open court "that the arrest of the plaintiff was wrongful, and that
he was entitled to recover actual damages therefor," the jury were
rightly instructed that he was entitled to a verdict which wound
fully compensate him for the injuries sustained, and that, in
compensating him, the jury were authorized to go beyond his outlay
in and about this suit, and to consider the humiliation and outrage
to which he had been subjected by arresting him publicly without
warrant and without cause, and by the conduct of the conductor,
such as his remark to the plaintiff's wife.
But the court, going beyond this, distinctly instructed the
Page 147 U. S. 112
jury that, "after agreeing upon the amount which will fully
compensate the plaintiff for his outlay and injured feelings," they
might "add something by way of punitive damages against the
defendant, which is sometimes called
smart money,'" if
they were "satisfied that the conductor's conduct was illegal,
wanton, and oppressive."
The jury were thus told in the plainest terms that the
corporation was responsible in punitive damages for wantonness and
oppression on the part of the conductor, although not actually
participated in by the corporation. This ruling appears to us to be
inconsistent with the principles above stated, unsupported by any
decision of this Court, and opposed to the preponderance of well
considered precedents.
In
Philadelphia & Reading Railroad v. Derby, which
was an action by a passenger against a railroad corporation for a
personal injury suffered through the negligence of its servants,
the jury were instructed that "the damages, if any were
recoverable, are to be confined to the direct and immediate
consequences of the injury sustained," and no exception was taken
to this instruction. 14 How.
55 U. S.
470-471.
In
Philadelphia &c. Railroad v. Quigley, which was
an action against a railroad corporation for a libel published by
its agents, the jury returned a verdict for the plaintiff under an
instruction that
"they are not restricted in giving damages to the actual
positive injury sustained by the plaintiff, but may give such
exemplary damages, if any, as in their opinion are called for and
justified in view of all the circumstances in this case, to render
reparation to the plaintiff, and act as an adequate punishment to
the defendant."
This Court set aside the verdict, because the instruction given
to the jury did not accurately define the measure of the
defendant's liability, and, speaking by Mr. Justice Campbell,
stated the rules applicable to the case in these words:
"For acts done by the agents of the corporation, either
in
contractu or
in delicto, in the course of its
business and of their employment, the corporation is responsible,
as an individual is responsible under similar circumstances."
. . . Whenever the injury complained of has been inflicted
maliciously or wantonly, and with circumstances of
Page 147 U. S. 113
contumely or indignity, the jury are not limited to the
ascertainment of a simple compensation for the wrong committed
against the aggrieved person. But the malice spoken of in this rule
is not merely the doing of an unlawful or injurious act. The word
implies that the act complained of was conceived in the spirit of
mischief, or criminal indifference to civil obligations. Nothing of
this kind can be imputed to these defendants.
21 How.
53 U. S. 210,
62 U. S. 213,
214.
In
Milwaukee & St. Paul Railway v. Arms, which was
an action against a railroad corporation by a passenger injured in
a collision caused by the negligence of the servants of the
corporation, the jury were instructed thus:
"If you find that the accident was caused by the gross
negligence of the defendant's servants controlling the train, you
may give the plaintiff punitive or exemplary damages."
This Court, speaking by Mr. Justice Davis and approving and
applying the rule of exemplary damages as stated in
Quigley's
Case, held that this was a misdirection, and that the failure
of the employees to use the care that was required to avoid the
accident,
"whether called 'gross' or 'ordinary' negligence, did not
authorize the jury to visit the company with damages beyond the
limit of compensation for the injury actually inflicted. To do
this, there must have been some willful misconduct or that entire
want of care which would raise the presumption of a conscious
indifference to consequences. Nothing of this kind can be imputed
to the persons in charge of the train, and the court therefore
misdirected the jury."
91 U.S.
91 U. S.
495.
In
Denver & Rio Grande Railway v. Harris, the
railroad company, as the record showed, by an armed force of
several hundred men, acting as its agents and employees, and
organized and commanded by its vice-president and assistant general
manager, attacked with deadly weapons the agents and employees of
another company in possession of a railroad, and forcibly drove
them out, and in so doing fired upon and injured one of them, who
thereupon brought an action against the corporation, and recovered
a verdict and judgment under an instruction that the jury
"were not limited to compensatory damages, but could give
punitive or exemplary damages if it
Page 147 U. S. 114
was found that the defendant acted with bad intent and in
pursuance of an unlawful purpose to forcibly take possession of the
railway occupied by the other company, and in so doing shot the
plaintiff."
This Court, speaking by MR. JUSTICE HARLAN, quoted and approved
the rules laid down in
Quigley's Case and affirmed the
judgment not because any evil intent on the part of the agents of
the defendant corporation could of itself make the corporation
responsible for exemplary or punitive damages, but upon the single
ground that the evidence clearly showed that the corporation, by
its governing officers, participated in and directed all that was
planned and done. 122 U.S.
122 U. S. 610.
The president and general manager, or, in his absence, the
vice-president in his place, actually wielding the whole executive
power of the corporation, may well be treated as so far
representing the corporation and identified with it that any
wanton, malicious, or oppressive intent of his, in doing wrongful
acts in behalf of the corporation to the injury of others, may be
treated as the intent of the corporation itself; but the conductor
of a train, or other subordinate agent or servant of a railroad
corporation, occupies a very different position, and is no more
identified with his principal, so as to affect the latter with his
own unlawful and criminal intent, than any agent or servant
standing in a corresponding relation to natural persons carrying on
a manufactory, a mine, or a house of trade or commerce.
The law applicable to this case has been found nowhere better
stated than by Mr. Justice Brayton, afterwards Chief Justice of
Rhode Island, in the earliest reported case of the kind, in which a
passenger sued a railroad corporation for his wrongful expulsion
from a train by the conductor, and recovered a verdict, but
excepted to an instruction to the jury that
"punitive or vindictive damages, or smart money, were not to be
allowed as against the principal unless the principal participated
in the wrongful act of the agent, expressly or impliedly, by his
conduct authorizing it or approving it, either before or after it
was committed."
This instruction was held to be right for the following
reasons:
"In cases where
Page 147 U. S. 115
punitive or exemplary damages have been assessed, it has been
done upon evidence of such willfulness, recklessness, or wickedness
on the part of the party at fault as amounted to criminality, which
for the good of society and warning to the individual ought to be
punished. If in such cases, or in any case of a civil nature, it is
the policy of the law to visit upon the offender such exemplary
damages as will operate as punishment and teach the lesson of
caution to prevent a repetition of criminality, yet we do not see
how such damages can be allowed where the principal is prosecuted
for the tortious act of his servant, unless there is proof in the
cause to implicate the principal and make him
particeps
criminis of his agent's act. No man should be punished for
that of which he is not guilty. . . . Where the proof does not
implicate the principal, and, however wicked the servant may have
been, the principal neither expressly nor impliedly authorizes or
ratifies the act and the criminality of it is as much against him
as against any other member of society, we think it is quite enough
that he shall be liable in compensatory damages for the injury
sustained in consequence of the wrongful act of a person acting as
his servant."
Hagan v. Providence & Worcester Railroad, 3 R.I.
88. 91.
The like view was expressed by the Court of Appeals of New York
in an action brought against a railroad corporation by a passenger
for injuries suffered by the neglect of a switchman who was
intoxicated at the time of the accident. It was held that evidence
that the switchman was a man of intemperate habits, which was known
to the agent of the company having the power to employ and
discharge him and other subordinates, was competent to support a
claim for exemplary damages, but that a direction to the jury in
general terms that in awarding damages they might add to full
compensation for the injury "such sum for exemplary damages as the
case calls for, depending in a great measure, of course, upon the
conduct of the defendant," entitled the defendant to a new trial,
and Chief Justice Church, delivering the unanimous judgment of the
court, stated the rule as follows:
"For injuries by the negligence of a servant while engaged in
the business of the
Page 147 U. S. 116
master, within the scope of his employment, the latter is liable
for compensatory damages; but for such negligence, however gross or
culpable, he is not liable to be punished in punitive damages
unless he is also chargeable with gross misconduct. Such misconduct
may be established by showing that the act of the servant was
authorized or ratified, or that the master employed or retained the
servant, knowing that he was incompetent, or, from bad habits,
unfit for the position he occupied. Something more than ordinary
negligence is requisite; it must be reckless, and of a criminal
nature, and clearly established. Corporations may incur this
liability as well as private persons. If a railroad company, for
instance, knowingly and wantonly employs a drunken engineer or
switchman, or retains one after knowledge of his habits is clearly
brought home to the company, or to a superintending agent
authorized to employ and discharge him, and injury occurs by reason
of such habits, the company may and ought to be amendable to the
severest rule of damages; but I am not aware of any principle which
permits a jury to award exemplary damages in a case which does not
come up to this standard, or to graduate the amount of such damages
by their views of the propriety of the conduct of the defendant
unless such conduct is of the character before specified."
Cleghorn v. New York Central Railroad, 56 N.Y. 44,
47-48.
Similar decisions, denying upon like grounds the liability of
railroad companies and other corporations sought to be charged with
punitive damages for the wanton or oppressive acts of their agents
or servants, not participated in or ratified by the corporation,
have been made by the courts of New Jersey, Pennsylvania, Delaware,
Michigan, Wisconsin, California, Louisiana, Alabama, Texas, and
West Virginia.
It must be admitted that there is a wide divergence in the
decisions of the state courts upon this question, and that
corporations have been held liable for such damages under similar
circumstances in New Hampshire, in Maine, and in many of the
western and southern states. But of the three leading cases on that
side of the question,
Hopkins v. Atlantic & St. Lawrence
Railroad, 36 N.H. 9, can hardly be reconciled
Page 147 U. S. 117
with the later decisions in
Fay v. Parker, 53 N.H. 342,
and
Bixby v. Dunlap, 56 N.H. 456, and in
Goddard v.
Grand Trunk Railway, 57 Maine, 202, 228, and
Atlantic
& Great Western Railway v. Dunn, 19 Ohio St. 162, 590,
there were strong dissenting opinions. In many, if not most, of the
other cases, either corporations were put upon different grounds in
this respect from other principals or else the distinction between
imputing to the corporation such wrongful act and intent as would
render it liable to make compensation to the person injured and
imputing to the corporation the intent necessary to be established
in order to subject it to exemplary damages by way of punishment
was overlooked or disregarded.
Most of the cases on both sides of the question, not
specifically cited above, are collected in 1 Sedgwick on Damages,
8th ed.,ยง 380.
In the case at bar, the plaintiff does not appear to have
contended at the trial, or to have introduced any evidence tending
to show, that the conductor was known to the defendant to be an
unsuitable person in any respect, or that the defendant in any way
participated in, approved, or ratified his treatment of the
plaintiff; nor did the instructions given to the jury require them
to be satisfied of any such fact before awarding punitive damages;
but the only fact which they were required to find in order to
support a claim for punitive damages against the corporation was
that the conductor's illegal conduct was wanton and oppressive. For
this error, as we cannot know how much of the verdict was intended
by the jury as a compensation for the plaintiff's injury and how
much by way of punishing the corporation for an intent in which it
had no part, the
Judgment must be reversed and the case remanded to the
circuit court with directions to set aside the verdict, and to
order a new trial.
MR. JUSTICE FIELD, MR. JUSTICE HARLAN, and MR. JUSTICE LAMAR
took no part in this decision.