Pacific Telephone & Telegraph Co. v. White

• Decision Date: 15 June 1939
• Docket Number: No. 9044.,9044.
• Parties: PACIFIC TELEPHONE & TELEGRAPH CO. v. WHITE.
• Court: U.S. Court of Appeals — Ninth Circuit

104 F.2d 923 (1939)

PACIFIC TELEPHONE & TELEGRAPH CO. v. WHITE.

No. 9044.

Circuit Court of Appeals, Ninth Circuit.

June 15, 1939.

Omar C. Spencer and Howard T. McCulloch, both of Portland, Or. (Carey, Hart, Spencer & McCulloch, of Portland, Or., of counsel), for appellant.

Eugene C. Libby and Barge E. Leonard, both of Portland, Or., for appellee.

Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.

GARRECHT, Circuit Judge.

Coe C. White filed a complaint in the Circuit Court of the State of Oregon for the county of Multnomah against appellant and one H. A. Hansley, its agent, servant and employee. The cause was removed to the District Court of the United States upon the ground of diversity of citizenship.

An amended complaint was filed, which alleged that H. A. Hansley, an agent of appellant, while acting within the scope of his employment, committed an assault and battery upon the appellee, Coe C. White, in the police station in the City of Portland, Oregon, about three o'clock in the morning of January 17, 1937. It further alleged that this assault was the culmination of fruitless efforts on the part of H. A. Hansley to secure information from the appellee as to the perpetrators of the crime of assault and robbery, while armed with a dangerous weapon, which had been committed in a holdup of appellant's cashier in Portland, Oregon, on January 9, 1937. In its answer to the amended complaint the appellant admitted the allegations respecting its corporate capacity and that H. A. Hansley was its servant and agent. All other allegations of the amended complaint were denied.

There was evidence that at the city jail, after hours of questioning of White by Hansley, during all of which time White continued to reiterate his innocence of the said crime and his ignorance of the names of the persons who had committed it, Hansley, the Chief Special Agent for appellant, apparently became enraged and without aggravation or provocation struck and beat White about the head and neck with such force and violence as to render him unconscious in which state he was removed from the jail to the hospital where he remained in that condition for a long time.

The case proceeded to trial and the jury returned a verdict for the plaintiff, finding in his favor for the sum of $2,625, compensatory or actual damages, and $9,750 punitive damages and judgment was entered for said amounts. The defendant moved for arrest of judgment and for a new trial which the court denied, filing an opinion. D.C., 24 F.Supp. 871.

It is conceded that, "so far as this appeal is concerned, the jury's verdict must be considered as a conclusive finding that the appellee was, in fact, assaulted by H. A. Hansley."

The appellant claims that the trial court erred in its instructions to the jury and in refusing to give two instructions requested by it. The defendant-appellant's requested instructions refused are as follows:

"III. There is no evidence in this case that the defendant The Pacific Telephone Company either authorized or ratified any alleged assault and battery committed by H. A. Hansley. Consequently, I instruct you that you cannot make any award of punitive damages in this case."

"VI. It is the law in the state of Oregon that an employer is not responsible for punitive damages for the malicious, willful or wanton acts of his employee, unless such acts were authorized or ratified by the employer. In this case, therefore, unless you find, first, that H. A. Hansley maliciously assaulted and battered the plaintiff, and, secondly, that The Pacific Telephone and Telegraph Company either authorized or ratified such assault and battery, if any, then there can be no recovery of punitive damages in this case."

The portions of the instructions given by the court to the jury which are complained of on this appeal are as follows:

"The main fact in this case is whether you believe the plaintiff's story, that he was struck by the defendant's agent Hansley. If you don't believe his claim in that respect, if you are not satisfied of it by a preponderance of the evidence, then you must find for the defendant. But you must further find, before you can fix liability on the defendant, that Hansley was acting within the scope of his employment. That means that you must find that he reasonably felt that what he was doing was in the interest of his employer and was not a wilful act on his part, or not in disregard of any express instructions he might have been given on the subject. That does not mean, however, that he must have been expressly authorized by his superiors to take any action of this sort, if he did take such action. And so, if you find from a preponderance of the evidence, that he struck White, and that he was acting within the scope of his employment, then your verdict must be for the plaintiff and it will be your duty to assess his damages."

"Plaintiff has also claimed punitive damages and in the plaintiff's form of verdict that will be submitted to you will be one blank to fill in actual damages, if you find for the plaintiff and if you find he was damaged, and in the second line you will fill in punitive damages. If you find for the plaintiff, and if you find he was actually damaged, then you may proceed to assess punitive damages, if you think they are fairly allowable and correctly allowable in this case. You can't find punitive damages unless you find also actual damages.

"Now to allow plaintiff punitive damages you must find that the blow, if it was struck, was struck maliciously and wantonly, and with reckless disregard of plaintiff's situation and of his rights. And in fixing the amount, should you find punitive damages, you are entitled to consider the deterrent effect on actions of others that the allowance of such damages might have."

As we view the questions presented, we are to determine whether the instructions, those given and those requested and refused, set out above, properly state the law of the state of Oregon on the subject of scope of employment and liability of the master for punitive damages for the tort of its agent. This first involves the question whether appellant's agent Hansley was acting within the scope of his employment at the time he assaulted White. If so, then the question of liability for punitive damages becomes of importance.

H. A. Hansley was, at the time of the assault and of the trial, the Chief Special Agent for the Pacific Telephone and Telegraph Company for the entire territory served by the company — California, Oregon, Washington, Nevada, and part of Idaho — and maintained his headquarters at San Francisco. The duties of a special agent of the appellant company "are to investigate cases of damage to company property by outsiders, or damages to outsiders by company property or employees, the loss of funds or matters that may become controversial with regard to outsiders." E. D. Wise, vice president and general manager of appellant company for the state of Oregon stated Hansley's duties were of a staff nature — to advise the president and managers throughout the district, with general authority to make a complete and full investigation and to assist the law enforcing officers. Hansley had been assigned to the case from the head office of the company in San Francisco. He did not stop at Portland, but went directly to Seattle, Washington, where, on January 13, 1937, he met Lieutenant Schulpius of the Portland Police Force. They then went to Portland, in company with R. V. Jenkins, a special agent for the Oregon area, and one Morris Sam? Albohaire, an informant, who had been arrested in Seattle in connection with the robbery. Upon arrival in Portland Hansley reported his presence, and the reason therefor, to Wise. On January 17, 1937, Wise was advised by Jenkins of the interview had by Hansley and himself with White. Hansley had no further interview with White subsequent to January 17, 1937.

It appears from the foregoing recital of facts that Hansley was not a menial employee or servant of the appellant company, but was vested with a certain amount of discretion and, within bounds, the exercise of independent judgment. He had authority to make a complete and full investigation of cases to which he was assigned and this necessarily included the authority to question persons involved. If, in the course of questioning, he overstepped the rights of third persons, his acts must be chargeable to his company. When the headoffice of the company assigned Hansley, its chief special agent, having general authority to make full investigation of this case, it set in motion the events which culminated in the assault of White; it must be held responsible for the act which otherwise never would have occurred.

Were it not for its officers and agents a corporation could not act; they perform its functions and formulate its policies. It is not contended that the ranking officers specifically directed and commanded Hansley to set upon and beat White or that they commended Hansley for so doing, but the man who was assigned to investigate such cases did assault White while acting within the scope of his employment — so the jury found — and it is not within the province of this court to disregard this finding of fact and exonerate appellant from blame because the specific act may not have been authorized or directed by some officers superior to Hansley.

Under the holding of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, we must look to the law of the state of Oregon for the final answer to the questions presented. The views we have just expressed upon the question of scope of employment find ample support in the decisions of that state.

In Newkirk v. Oregon-Wash. R. R. & Nav. Co., 128 Or. 28, 38, 273 P. 707, 710, 72 A.L.R. 530, a brakeman ejected Newkirk from a moving freight train whereby Newkirk was severely injured. The court, in affirming a judgment for the plaintiff,...