Fort Worth Elevators Co. v. Russell, 5735.

CourtSupreme Court of Texas
Writing for the CourtCureton
Citation70 S.W.2d 397
Docket NumberNo. 5735.,5735.
Decision Date14 March 1934

Cantey, Hanger & McMahon, R. K. Hanger, and Warren Scarborough, all of Fort Worth, E. A. McCord, of Peoria, Ill., and Black & Graves, of Austin, for plaintiff in error.

Houtchens & Houtchens, Clark & Clark, and Chester F. Clark, all of Fort Worth, for defendants in error.

CURETON, Chief Justice.

This case is one of three heard by the Supreme Court and both sections of the Commission of Appeals, involving the liability of corporations for exemplary damages. The case of the Morton Salt Company v. Nora Wells, 70 S.W.(2d) 409, involves the liability of the company in punitive damages for death of a servant while operating a defective machine, and that of Southwestern Gas & Electric Company v. Stanley, 70 S.W.(2d) 413 for oppressive conduct in cutting off the current from a private residence. Separate opinions have been prepared, but since the cases were heard together the purpose of this opinion is to dispose of the basic question in each suit.

In the instant case the Fort Worth Elevators Company, a corporation, owned and operated two grain elevator plants in Fort Worth, at one of which, known as the "Katy Plant," occurred the accident which resulted in the death of John T. Russell, an employee. The company carried workmen's compensation insurance, and the insurance carrier is paying compensation as provided by law.

This suit was filed by the wife and children of the deceased for exemplary damages only, under the Constitution and statutes, who upon trial obtained judgment therefor, which on appeal was affirmed. 28 S.W.(2d) 320. The case is before us by writ of error.

The "Katy Plant" of the elevators company was a large one, consisting of some 215 storage bins, capable of storing 3,500,000 bushels of grain; a head house; offices, loading and unloading dock; railroad or switch tracks; and machinery necessary in the operation of the plant in loading and unloading grain on or from railway cars. A part of the machinery was an electric power machine or winch, used for placing or spotting cars for loading and unloading purposes. This machine was operated by a control switch, and at the time of the accident one F. D. Walker, in the employ of the company, was actually operating it. Russell, the deceased, had gone between the car to be spotted and another standing on the same track, to adjust the coupler of one of the cars. Walker threw the control switch and caused the cars to move together, with the result that Russell was caught and received injuries which resulted in his death.

The jury found, in answer to the special issues submitted in the court's main charge, that: (a) Walker was guilty of gross negligence in turning on the power that pulled the cars together and killed Russell; (b) that Walker had authority to control in his own discretion the matter of spotting the cars, and to control, within his own judgment, the work of the other men there engaged with him; (c) that prior and up to the time Russell was hurt, Walker was of a reckless and careless disposition in his work; (d) that Pettijohn, the superintendent of the plant, knew of such disposition of Walker prior to the time that Russell was hurt; and (e) was guilty of gross negligence in having Walker in defendant's employ.

The basic defense of the plaintiff in error is stated in its first proposition under the nineteenth assignment in the application, as follows:

"A verdict for the defendant should have been instructed because the evidence was insufficient as a matter of law to show that either Walker or Pettijohn, as employees of the defendant corporation, bore such relationship to said corporation as to render it responsible in exemplary or punitive damages for any act they may have committed. There is no evidence that any corporate officer or any person having authority to bind the defendant in its corporate capacity was guilty of any such conduct as would furnish a basis for an award of exemplary damages.

The elevators company was a corporation, with a board of directors and the usual corporate officers. C. H. Pettijohn, the superintendent of the plant where and when the accident occurred, was selected as such at a meeting of the company's officers and directors.

The opinion of the Court of Civil Appeals sets out the evidence quite fully as to the authority and powers of Mr. Pettijohn, and this, together with the record, which we have read, leaves no room for doubt that as general superintendent of the plaintiff in error, at its "Katy Plant," where the accident involved occurred, he was in truth and in fact a managing official and alter ego of the plaintiff in error. It is plain that the operation of the plant, a separate and distinct department or division of the company's business, was placed in his hands as a managing officer, with power to perform every corporate act, delegable and nondelegable, relevant thereto, which could have been performed by the board of directors or other officers if personally present. He not only was empowered to operate the plant in the usual sense, but he had authority to make every provision for its safe operation, comprehended by the general authority conferred upon him. He could employ and discharge servants; appoint and discharge foremen; could determine the fitness of all such servants and appointees; define their duties, fix their wages, and generally determine and manage the personnel of the elevator plant, as well as the actual operation of its machinery and storage facilities. The power conferred upon Pettijohn as superintendent was of such comprehensive and general character as to plainly make him its alter ego or vice principal, and all of his acts within the limits of his authority, including the employment and retention of Walker, were the acts of the corporation.

As Pettijohn was a corporate officer selected by the company's board of directors, with power to manage a distinct department of its business in every essential respect, his acts in line of duty as stated above were plainly those of a vice principal, for the negligent performance of which the elevators company is liable. San Antonio & A. P. Ry. Co. v. Grier, 20 Tex. Civ. App. 138, 49 S. W. 148; St. Louis, S. W. Ry. Co. v. McArthur, 31 Tex. Civ. App. 205, 72 S. W. 76; 10 Texas Jurisprudence, § 356; Central R. R. Co. v. Cheatham, 85 Ala. 292, 4 So. 828, 7 Am. St. Rep. 48; Denver & R. G. R. Co. v. Harris, 122 U. S. 597, 610, 7 S. Ct. 1286, 30 L. Ed. 1146; Fletcher's Cyclopedia of Corporations, vol. 10, § 4907, and authorities post; 39 Corpus Juris, § 702, p. 587.

We are equally certain that, regardless of Pettijohn's status as a corporate officer, his position as a superintendent to whom had been confided the management of a department or division of the company's business, viz., the elevator properties known as the "Katy Plant," made him a "vice principal" in the sense that the company is liable for his negligence.

Authorities supra; Cooley on Torts (3d Ed.) vol. 2, pp. 1161 to 1163; 10 Texas Jurisprudence, p. 1022, § 356, and cases cited in the notes, p. 981, § 325; "Summary of (Texas) Decisions," Labatt on Master and Servant (2d Ed.) vol. 4, pp. 4402, 4403; 18 Ruling Case Law, pp. 748, 750, §§ 218, 219, and cases cited in the notes; 39 Corpus Juris, p. 585, §§ 702, 703, and cases cited in the notes; Commerce Cotton Oil Co. v. Camp, 105 Tex. 130, 145 S. W. 902; St. Louis, S. W. Ry. Co. v. McArthur, 31 Tex. Civ. App. 205, 72 S. W. 76 (writ refused); Roberts v. Fielder Salt Works (Tex. Civ. App.) 72 S. W. 618; Toledo, etc., R. R. Co. v. Rodrigues, 47 Ill. 188, 95 Am. Dec. 484; Graysonia-Nashville Lbr. Co. v. Saline Development Co., 118 Ark. 192, 176 S. W. 129; Mullan v. P., etc., S. S. Co., 78 Pa 25, 21 Am. Rep. 2; Minneapolis v. Lundin (C. C. A.) 58 F. 525, 527; Crane v. Bennett, 177 N. Y. 106, 69 N. E. 274, 101 Am. St. Rep. 722; Labatt on Master and Servant (2d Ed.) vol. 4, §§ 1453, 1455, 1456, 1458, 1460, 1461, 1462, 1463, and the many cases cited in the notes; Baltimore & O. R. Co. v. Baugh, 149 U. S. 368, 13 S. Ct. 914, 37 L. Ed. 772; Brickner v. N. Y. C. R. Co., 2 Lans. (N. Y.) 506 (affirmed 49 N. Y. 672); Corcoran v. Holbrook, 59 N. Y. 517, 17 Am. Rep. 369; Harrison v. Detroit, L. & N. R. Co., 79 Mich. 409, 44 N. W. 1034, 7 L. R. A. 623, 19 Am. St. Rep. 180; State, to Use of Hamelin, v. Malster, 57 Md. 287; Schroeder v. Flint & P. M. R. Co., 103 Mich. 213, 61 N. W. 663, 29 L. R. A. 321, 50 Am. St. Rep. 354; Brothers v. Cartter, 52 Mo. 372, 14 Am. Rep. 424; Mattise v. Consumers' Ice Mfg. Co., 46 La. Ann. 1535, 16 So. 400, 49 Am. St. Rep. 356; Mirick v. Morton, 62 Kan. 870, 64 P. 609; Colorado Mill. & Elev. Co. v. Mitchell, 26 Colo. 284, 58 P. 28; Washburn v. Nashville & C. R. Co., 3 Head (Tenn.) 638, 75 Am. Dec. 784; see, also, "Summary of Decisions," Labatt's Master and Servant (2d Ed.), vol. 4, pp. 4333 to 4410.

As said by Thompson on Corporations, vol. 7 (3d Ed.), § 5479:

"A corporation which has delegated to one of its agents the power and duty of appointing and removing employees makes such an agent a vice principal and is liable to one of its employees for an injury received by him through the negligence of another employee so appointed when the appointing agent has not used due care in selecting such employee, although the agent himself is possessed of competent skill and intelligence. In such a case an officer or agent of a corporation who has charge of its business or of a...

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