DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY, LUCKNOW.

2016-2017

LAW OF TORTS: FINAL DRAFT

VICARIOUS LIABILITY

SUBMITTED TO: SUBMITTED BY:

MS. ANKITA YADAV, AKANKSHA SACHAN,

ASSISTANT PROFESSOR, ROLL NO.14,
DR. RMLNLU, LUCKNOW. SECTION A,
SEMESTER II.
 ACKNOWLEDGEMENT

I would like to extend my sincere thanks to my teacher and mentor, Ms. Ankita Yadav for her
able guidance and help; Vice Chancellor, Prof. (Dr.) Gurdip Singh and Dean (Academics),
Prof. C.M. Jariwala for their encouragement and Enthusiasm. My seniors for sharing their
valuable tips and my classmates for their constant support.
 DECLARATION
I, hereby, declare that the project work entitled Vicarious Liability submitted to Dr. Ram
Manohar Lohiya National Law University, Lucknow, is a record of an original work done by
me under the tutelage of Ms. Ankita Yadav, Assistant Professor of Law. The Detailed study on
the topic embodied in the project has not been submitted to any other University or Institute.
 TABLE OF CONTENTS

INTRODUCTION
LIABILITY BY RATIFICATION
LIABILTIY BY RELATIONSHIP
MASTER SERVANT RELATIONSHIP
o COURSE OF MASTERS EMPLOYMENT
o EXCEPTIONS TO MASTERS LIABILITY
PRINCIPAL AGENT RELATIONSHIP
LIABILITY BY ABETMENT
CONCLUSION
BIBLIOGRAPHY
 INTRODUCTION

Vicarious liability is, as the expression signifies, a liability incurred by A to C for Bs conducts
or acts. When the law holds one person responsible for the misconduct of another, although
he is himself free from personal blameworthiness or fault we speak of vicarious liability. A
vicar is one who performs the functions of another, he is a substitute1.
The English doctrine of employers liability is of comparatively recent growth. It has its origin
in the legal presumption which gradually became conclusive that all acts done by a servant in
and about his masters business are done by his masters expressed or implied authority and are
therefore in truth the acts of his master for which he may be justly held responsible2.
Two Latin maxims closely related to the principle of vicarious liability are respondeat superior
and qui facit per se. The first means that a principle must answer for the acts of his
subordinates and the second one explains he who employs another person to do something,
does it himself3.
These two maxims taken together place the master in the same position as if he had committed
the wrong himself and make him answerable for the servants wrong.
The liability of tort committed by another person arises in three ways
1. Liability by ratification.
2. Liability arising out of special relationships.
3. Liability by abetment.

1
Jowitt, Dictionary of English Law (1977)
2
Salmond, Jurisprudence (12th Edn. 1966)
3
Baxi Amrik Singh v. Union of India, (1973)
 LIABILITY BY RATIFICATION

Ratification is the act of adoption a transaction, by a person who was not bound by it originally
because it was entered into by an unauthorized agent. It is an act of confirmation.
If one acts as an agent and yet without authority, the party for whom he purported to act may
hold the third person, and is himself liable to such third person, by an election to stand by and
affirm what the agent has done in his behalf.
One cannot be held by the act of another unless he has really or apparently authorized that other
to represent him in the matter in question. One who acts as an agent may have no authority, or,
having some authority, may not have the particular authority requisite to the case at hand. In
such a case the principal is not bound unless he cares to ratify what has been done in his behalf.
If he does ratify, he becomes bound as though the agent had had previous authority, and the
third person becomes bound to him. The lack of authority has been supplied. This is no injustice
upon the third person as it merely brings matters of the state in which he supposed they were
or wanted them to be when he assented to the supposed agreement. But in almost every case in
which ratification is claimed, it is claimed by the third person against an alleged principal who
pleads lack of authority.

Ratification rests upon the broad general principle that as a matter of practical justice, one who
has assented to the act of his supposed agent will not be allowed to afterwards disclaim it upon
the technicality that at the time the agent acted there was lack of authority which would have
justified repudiation by the principal had he chosen to disclaim.

Ratification is an act of adoption, confirmation or authorization by the principle, of his

employees act. Some of its essential features are as follows.

1. The principle must have full knowledge of the facts and nature of the act which has
been done in his name and on his behalf.4 If one wants to ratify he must ratify the act
fully , one cannot choose between benefits and losses arising from the act. Mistake or
ignorance of the principle is no defence for him.
2. Illegal or void acts cannot be ratified.5
3. Ratification does not relieve an agent from liability to third parties.
4. Mere passive acquiescence is no authority.

4
Shama Sundari Devi v. Dukhtu Mandal, (1869); Girish Chandra Das v. Gillanders Arbutnot & Co., (1869)
5
Lewis v. Read, (1845)
 LIABILITY BY RELATIONSHIP
MASTER-SERVANT RELATIONSHIP

A servant is any person employed by another to do work for him on the terms that he, the
servant, is to be subject to control and directions of his employer in respect of the manner in
which his work is to be done. In other words, an employee is a servant if his superior is in a
position to tell him not only what to do but how to do it.

This relationship involves, as could be observed, a power of control and directions by one
called the master, over the other, called his servant. Consequently, a master has also been
defined as a person who is legally entitled to give such orders and have them obeyed.6

(A) TWO TESTS

The two main tests to find out master-servant relationship are 1) right to control test, and 2)
organisation test. The first significant test which the courts developed was the control test.
According to the test, a person is said to be a servant if his employer retains a right of control
not only the work he does, but also the way in which he does it. In sense, the employer is the
party that state the work policy of the employee and in charge of the employee when he is
carrying out his duties as an employee.

It was first established in the authority of an English Tax law case7. In this case, the defendant
was a hops merchant and possessed certain houses for the purposes of his business. The
claimant was the clerk of the defendant with a set annual salary. Meanwhile, he was required
to take care of the houses. Thus, he lived in the houses with his with his family. The core issue
of the case was regarding the payment of inhabited house duty. Therefore, the key question
was whether the claimant a servant of the defendant? It was held that in this instance, the
claimant did not fall under the definition of a servant. On appeal, the court held that the
premises were purely for trading purposes. Thus, the claimant was only a caretaker. It was
stated that a servant is a person who subject to the command of his master as to the manner in
which he shall do his work.

The organization test observes that save in respect of administrative matters hospital authorities
were not responsible for the professional negligence of the staff.8

6
Goolbai v. Pestonji, (1935)
7
Yewens v. Noakes, (1881)
8
Hillyer v. St, Bartholomews Hospital, (1909)
But this observation, in the course of time became unacceptable due to considerations of policy
and social justice. Moreover, the uncontrollability of such professionals cannot prelude
recovery as they are part and parcel of the organization.

In India, the position is quite settled that the health authorities or the municipal corporations
are liable for the torts committed by their employees during the course of employment.9

(B) LENDING OF A SERVANT

A master may lend his servant to a third party for a short span of time, temporarily. Here, there
are two masters, one the lender and other the borrower. The lender is the general employer
while the borrower is the hirer or the particular employer. In carrying out the work of the hirer,
the servant injuries someone, in that case the general employer would be liable. A general
servant remains the servant of the master and this liability can only be avoided by proving that
in transferring a servant to the hirer the result was to make his employee the servant of the hirer
pro hac vice.

When A lends his servant X to B, and X commits a tort against C, the question is who is to be
considered the master, A or B and whom can C sue for the tort committed by X. The answer to
this question depends on various considerations, the main being who among the two masters
have the authority to tell the servant, not only what is to be done by him, but the way in which
he is to work.

In Mersey Docks10 case, the House of Lords held that the harbour board, who was the general
and permanent employer of the driver, was liable to X. It was also observed that the power of
control is presumed to be in the general employer and the burden of proving the existence of
that power of control in the hirer rests on the general employer.

(C) THE COURSE OF EMPLOYMENT

A master, like a principle, is liable for every tort which he actually authorises. The liability of
master is not only limited to the act which he expressly authorises to be done but he is liable
for such torts which are done by his servant in the course of his employment. An act is deemed
to be done in the course of employment if it is either: (1) a wrongful act authorised by the
master or (2) a wrongful and unauthorised mode of doing some act authorised by the master

9
Union of India v. Abdul Raheem, AIR 1981
10
Mersey Docks & Harbour Board v. Coggins & Grifflths (Liverpool) Ltd, (1947)
COURSE OF MASTERS EMPLOYMENT

FRAUD: When a servant, while in the course of performance of his duties as such, commits
a fraud, the master would be liable for the same. In State Bank of India v. Shyama Devi11
It was held that if a customer of the bank gives some amount or cheque to the bank
employee (in his capacity as a friend) for being deposited in the account, without obtaining
any receipt for the same the bank employee is not deemed to be acting in the course of his
employment. If such an employee misappropriates the amount or proceeds of the cheque
for his personal gain, the bank cannot be made liable for the same, because the act of the
servant in this case has been done outside the course of employment.

NATURAL CONSEQUENCES: Since the master has asked the servant to do a particular
task, he is naturally liable for the natural consequences. In Gregory v. Piper 12, a master
ordered his servant to clean the ground of the rubbish and heap it near the wall of his
neighbour in such a way that it did not touch the wall. In execution of this order with
ordinary care and precaution the servant heaped the rubbish there but on account of its
viscous nature, it spilled down and touched the wall and spoiled it. The master was made
liable for the trespass as the running of the rubbish against the wall was a necessary and a
natural consequence of the act which he had ordered to be done.

NEGLIGENCE: Where the servant is careless in carrying out the order of his master, the
principle is if the servants tortious act is within the class of acts which is employed to do
the master will be liable, but the act constitutes a departure from the servants duty, the
master will not be liable.13In K. Mammi v. Barium Chemicals Limited14, the driver of a
vehicle parked in a public place left the ignition key in the vehicle and same was driven by
another employee who later in turn caused an accident. It was held that the driver was
negligent under Section 84 of the Motor Vehicles Act,1939 and made his master liable for
the act of his servant.

EXCESSIVE OR MISTAKEN EXECUTION: The act of the servant may consist in

excessive or mistaken execution of the masters lawful authority. In Poland v. John Parr

11
A.I.R 1978 S.C. 1263
12
(1829) 9 B&C 591
13
James, Tort (1964); Dalip Singh v. Mukhand Kaur, (1978)
14
A.I.R. 1979 AP 75.
 and Sons15 a servant of the defendants honestly but mistakenly believed that a boy, the
plaintiff, was tampering with a bag of sugar on a wagon owned by the defendants. With the
view to protecting the sugar and the masters interests, the servant struck the plaintiff with
his open hand. The plaintiff fell under the wagon and received injuries which led to
amputation of his leg, it was held that the defendants were liable as their servant had acted
within the implied authority to take reasonable steps to protect their property. Such persons
can well be termed as misguided enthusiasts.

WILFUL WRONG: As expressed in Limpus v. London General Omnibus Co.16, a master

is responsible for the improper acts of his servant even if they are wilful, reckless or
improper, but there is one most important qualification to it that the act must be within the
scope his employment and in execution of his work he is employed to carry out. In this
class of acts are included assault cases.

Giving a lift to an unauthorised person was not merely a wrongful mode of performing the
act of the class the driver was employed to perform but was the performance of an act of a
class which he was not employed to perform at all.17 The above principle can be seen
working in a series of Indian Cases decide by various High Courts. In Premawati Case18,
the driver took the vehicle from the workshop and went on a spree and had a joyride with
an unauthorised person. In this case the master was not liable.

CRIME AND ILLEGAL ACTS: The act of the servant may constitute a crime (theft) or an
illegal act and may be in excess of his actual or ostensible authority. In Rooplal Case19,
certain military jawans took away some firewood for a campfire. It was lying unmarked by
the riverside. They thought it probably belonged to the government. On the plaintiff suing
the Government of India it was held that this conversion and the government was liable.

15
(1927) 1LJKB 236 (CA)
16
(1862) 1 H&C 526
17
Conway v. George Wimpey & Co. Ltd., (1951)
18
Premawati v. State of Rajasthan, A.I.R. 1977 Raj 116
19
Rooplal v. Union of India, A.I.R. 1972 J&K 27
 EXCEPTIONS TO MASTERS LIABILITY

A master is responsible for his servants acts and wrongs done by him in the course of his
employment but there is an important exception to this rule and that is in case of compulsory
pilot. But one has to note that the master is not absolved by the liability to third persons
merely because a statute has limited and controlled or regulated the masters choice in
selecting his servants. The master may have select them from a particular class of skilled
persons who are supposed to carry out their duty properly. For acts of such persons the
master is liable but where the duty is to be performed by these persons are imposed upon
them by the law and not by the employer, the employer is absolved from the liability of
wrongs committed by such persons. The basic reason for this that the servant or agent here
is obeying the law and not the master. This principle which was laid down in Tobin v.
Queen20.
In Shivabhajan case21, a police constable caused damage by an act done not in obedience
to an order of the executive government but in performance of a power statutorily vested
in him by the legislature. His act was not in any way profitable to the government and it
did not also ratify the same or adopted it. It was held that this did not make the government
liable.
Similarly, the head of a government department is not liable for the negligence of a
telegraph servant. A telegraph servant is not an agent of the PMG and in such cases the
doctrine of respondeat superior does not apply.

PRINCIPAL-AGENT RELATIONSHIP

(A) PRINCIPALS LIABILITY

Agency is the legal relationship between one person, the agent having the authority to act, and
having consented to act, on behalf of another, the principal, particularly to place the principal
in contractual relations with a third party the term is also sometimes used more widely of one
acting in the interest of another.

20
(1864) 16 CBNS 310
21
Shivabhajan Durgaprasad v Secy. of State of India, (1904)
The agent is not, as such, an employee, but an employee may be an agent. In general, whatever
a person could do to himself he does so by means of an agent.

Agency of necessity arises where a person acts in the interest of another to preserve his
property, or carries out his duties in his necessary absence. Agency of estoppel arises where
one person has acted in such a way so as to lead the master to believe that a third party was his
agent and other has transacted with the third party subject to that belief.

The principle is entitled to expect that his agent will carry out personally the business he has
undertaken, use ordinary care and skill in doing so, use his judgment and discretion honestly
and in the interest of the principle, keep account of money received and paid on the principles
behalf, maintain confidence as to all that comes to his notice in the course of the agency, and
not permit his own interest to conflict with his duty to the principal. The agent may not accept
a bribe, secret commission or benefit not known to the principle.

Dinbai R. Wadia v. Farukh Mobedjina22, is an important case which lays down that as is the
case with a servant so as with an agent. If A requests B to drive his car and B complies with
the request, B is As agent. If B complies with As request gratuitously or in order to oblige A
either socially or morally B is As agent. A is interested in compliance with his request, Bs
interest in driving the car may be anything. It is therefore not the actual physical control by A
over B that is important but it is As right to control B that is an important element to constitute
the relation of principal and agent. Bs purpose may coincide with As; but that also does not
alter their relation. The journey is As journey and not journey of B, the agent.

(B) KINDS OF AGENTS AND THEIR LIABILITIES AND RIGHTS

Agents are there of two types, private and public. The first type includes a general agent and a
special agent. A general agent is one who has been appointed to do a certain class of acts, while
a special agent is appointed for a particular work or act only. A private agent is liable to third
persons for acts of misfeasance or positive wrongs. But insofar as the act of non-misfeasance
or mere omission are he is not liable to third parties, he is liable to his principal only in this
regard. An agent committing a fraud is liable personally to third persons. He cannot defend
himself by saying that he acted as agent, because the contract of agency does not in any way
impose any obligation on the agent to commit fraud or to assist therein.

22
(1957)
Insofar as the rights of the agent against third parties are concerned, the agent has a right to
remedy against those who invade or injure his right of possession or against those who impose
loss or damage upon him by committing a tort.

LIABILITY BY ABETMENT

Abetment is the act of stirring up or exciting, maintaining, patronising, encouraging or setting

on. An abettor is an instigator or setter who promotes or procure a tort or a wrongful act to be
committed. For example, a person who knowing that a motorist is going to drive, surreptitiously
adds alcohol to his drink so as to bring his blood alcohol concentration above the statutory limit
is guilty of procuring the subsequent offence.23 As in crime so in tort abettors are equally liable
with those who commit the wrong. In Allen v. Flood24 it was found that the threat by the
delegate of the iron workers to dismiss particular employees was a malicious inducement to
the employer to discharge the respondents. Thus when the abettor procures a breach of contract
for his own end, wrongfully, which is detrimental to a third party, and in doing so if he uses
illegal means, he is liable to the abettor.

23
Attorney Generals Reference (No.1 of 1975)
24
(1898)
 CONCLUSION

Vicarious liability is a form of a strict, secondary liability that arises under the common
law doctrine of agency, respondeat superior, the responsibility of the superior for the acts of
their subordinate or, in a broader sense, the responsibility of any third party that had the right,
ability or duty to control the activities of a violator. It can be distinguished from contributory
liability, another form of secondary liability, which is rooted in the tort theory of enterprise
liability because, unlike contributory infringement, knowledge is not an element of vicarious
liability. The law has developed the view that some relationships by their nature require the
person who engages others to accept responsibility for the wrongdoing of those others. The
most important such relationship for practical purposes is that of employer and employee.
 BIBLIOGRAPHY

RATANLAL AND DHIRAJLALS LAW OF TORTS

LAW OF TORTS: B. M. GANDHI
LAW OF TORTS: R. K. BANGIA