Madron v. Thomson

• Decision Date: 26 October 1966
• Citation: 245 Or. 513,419 P.2d 611
• Parties: , 27 A.L.R.3d 953 Louis C. MADRON and Louis E. Madron, doing business as Madron & Son, American Home Assurance Company of New York, a corporation, and Reserve Insurance Company, a corporation, Appellants, v. Wayne THOMSON, individually, and doing business as Hilltop Sav-More Service Station, and T. James Riley, Respondents.
• Court: Oregon Supreme Court

Page 611

419 P.2d 611

245 Or. 513, 27 A.L.R.3d 953

Louis C. MADRON and Louis E. Madron, doing business as Madron & Son, American Home Assurance Company of New York, a corporation, and Reserve Insurance Company, a corporation, Appellants, v. Wayne THOMSON, individually, and doing business as Hilltop Sav-More Service Station, and T. James Riley, Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted March 3, 1966.

Reargued Sept. 8, 1966.

Decided Oct. 26, 1966.

John S. Martel, San Francisco, Cal., argued and reargued the cause for appellants. With him on the briefs were H. F. Smith, Klamath Falls, and Elke, Farella, Braun & Martel, San Francisco, Cal.

Glenn D. Ramirez, Klamath Falls, argued the cause for respondent Riley. With him on the briefs was D. L. Hoots, Klamath Falls. D. L. Hoots argued the cause on reargument.

Stanley C. Jones, Medford, argued the cause for respondent Thomson. On the brief were J. Anthony Giacomini, Klamath Falls, and Jones & Reeder, Medford. J. Anthony Giacomini, argued the cause on reargument.

Ridgway K. Foley, Jr., Portland, filed a brief as amicus curiae. With him on the brief were Mautz, Souther, Spaulding, Kinsey & Williamson, Portland.

Before McALLISTER, C.J., and PERRY, SLOAN, O'CONNELL, GOODWIN, DENECKE and HOLMAN, JJ.

DENECKE, Justice.

A truck and trailer, together with the cargo thereon, belonging to the plaintiffs Madron were damaed by fire. The plaintiff insurance companies paid the Madrons a part of the loss pursuant to fire insurance policies issued to the Madrons. The defendants are a service station opertor, Thomson, and his employee, Riley. Plaintiffs contend the fire ewas caused by defendants' negligence. The trial court directed the jury to return a verdict in favor of both defendants. Plaintiffs appeal.

The plaintiffs charged that the defendants were negligent in two particulars:

'(1) In endeavoring to fill and in filling the gas tank of a gasoline motor connected to the refrigeration unit upon the above-described motor truck while the motor on said refrigeration unit was left running by the defendants.

'(2) In filling the gas tank on the gasoline motor connected to the refrigeration unit upon the above-described motor truck and permitting said gasoline to overflow and to become ignited by the motor which said defendants negligently and carelessly permitted to remain running.'

The plaintiffs put on their case in chief; defendant Thomson rested and moved for a directed verdict; this motion was denied and defendant Riley took the stand in his own behalf. On cross-examination Riley denied that he had given any statement about the fire while he was in the hospital. After Riley completed testifying, he rested. Plaintiffs then put on as a rebuttal witness an insurance investigator, Rider. He testified that he had interviewed Riley in the hospital and Riley told him he had attempted to fill an operating gasoline motor on the truck which drove a fan, and that the gasoline overflowed and ignited. The plaintiffs rested and Riley put on surrebuttal evidence and rested. The defendants again moved for directed verdicts and their motions were granted.

The trial court was of the opinion that Rider's testimony of Riley's statement could only be considered as impeachment and not as substantive evidence of negligence and causation. The trial court was of the opinion that without such testimony there was no evidence of liability.

The rule is that prior statements of a witness, not a party, made out of the courtroom, are only admissible for the purpose of impeachment and have no other probative value. ¹ This rule has been criticized, but we have followed it. E.g., State v. Watts, 208 Or. 407, 411, 301 P.2d 1035 (1956); for criticism see cases collected at 133 A.L.R. 1454, 1462 (1941). The rule is a part of of the hearsay rule. The statements are hearsay because they are not made under oath and are not subject to cross-examination at the time made.

The rule, however, is different if the prior statements are those of a party. Out-of-court admissions of a party are admissible as probative testimony despite their hearsay quality. ORS 41.900(2); Bingham v. Lipman, 40 Or. 363, 369, 67 P. 98 (1901); Franklin v. Webber, 93 Or. 151, 156, 182 P. 819 (1919); other cases from other jurisdictions collected in McCormick, Evidence (1954), 74, n. 4.

Riley is a party and, therefore, Rider's testimony of Riley's purported admission is admissible and constitutes probative evidence of negligence sufficient to make a jury question on the issue of Riley's liability as a party defendant.

There still remains the question of whether Riley's admissions are sufficient to hold in Thomson.

The answer to this question involves an interplay of the rules of evidence and those of substantive law and the making of distinctions which we previously either were not required to make or did not make.

It is necessary to distinguish between (1) those actions in which the defendant employer is claimed to be liable, not because of any personal negligence or the negligence of some employees other than the employee making the admission, but solely because of the negligence of the admission-making employee; and (2) those actions in which the employer is sought to be held liable either because of his own personal negligence or the negligence of some employee other than the employee making the admission. In the first category there is no issue of the employer's negligence; it is not claimed that he is negligent. The sole claim is that his admission-making employee is negligent and the employer is therefore liable only by reason of the doctrine of respondeat superior.

The present action is in this first category. Plaintiffs do not claim that Thomson was negligent. Plaintiffs' claim is that Riley, the employee, while acting within the scope of his employment, was negligent and that by application of the doctrine of respondeat superior Thomson, as well as Riley, is liable to plaintiffs.

In the second category of cases the alleged personal negligence of the employer or his employee, other than the admittor, is in issue. If the employee making the statement that the employer or another employee conducted themselves in a manner which could be construed as negligent and the making of such statement is outside the scope of the narrator's employment, it is as if the narrating employee were a stranger. The narrating employee might have some peculiar knowledge of the alleged negligence because he is an employee, but he has no authority whatsoever to speak for his employer on the charge of negligence made against the employer, and his statement can in no respect be considered an admission of his employer.

An employee or agent may have the authority to make admissions and thus be in the scope of his employment when such admissions are made; in that case they would be admissible as proof of the employer's personal negligence or the negligence of another employee. Hansen v. Oregon-Wash. R. & N. Co., 97 Or. 190, 188 P. 963, 191 P. 665 (1920). We have held repeatedly, however, that an admission made by most employees at some time after the tort has occurred is nt within the scope of the narrator's employment and is, therefore, not evidence of the employer's negligence. ² This rule has been followed by a majority of the courts, but is also criticized and has been rejected by the draftsmen of the Uniform Rules of Evidence. Swearingen, How the Doption of the Uniform Rules of Evidence Would Affect the Law of Evidence in Oregon: Rules 62--66, 42 Or.L.Rev. 200, 219--221 (1963); McCormick, Evidence (1954), § 244. We need not determine in this case whether the criticism is valid.

Assuming the validity of the majority rule, the admission cannot be held to be an act of the employer just as any other act of the employee outside the scope of his employment cannot be held to be an act of the employer.

When, however, the issue is whether or not the employee who made the admission is negligent, not whether his employer was negligent, we have already stated when commenting upon the liability of Riley that such an admission is evidence of such employee's negligence, and the only issue of negligence is that of the employee. In this case Riley is a party and the testimony of the admission is admissible because it is an admission of a party and, as previously stated, it is evidence of Riley's negligence.

Our past decisions have not made this distinction between charges of personal negligence against the employer and charges of negligence only against the employee-admittor. The matter has never been discussed in our opinions. For example, in Alden v. Grande Ronde Lumber Co., supra, it is impossible to determine whether the plaintiff is relying only upon a claim of negligence against the employee who made the admissions or is asserting negligence against other employees which would hold the defendant corporation by the doctrine of respondeat superior. This court simply stated the usual rule of agency applicable to admissions as well as to other conduct:

'* * * 'The rule which admits admissions of an agent in an action against his principal applies only in two cases: (1) Where the scope of the agency is such that the agent is an agent for the purpose of making the particular admission--as, where an attroney, in the course of a trial, makes a solemn admission against the interest of his client. (2) Where the admission is in the from of a declaration made by an agent, while acting within the scope of his agency, and about the business of his principal, concerning such business. * * *. '"' 46 Or. at 595, 81 P. at 385.

The issue will usually arise when the admitting employee is a party defendant. If he is not, the admission is usually inadmissible because of the hearsay rule. Hazard v. Salles, supra, 222 Or. 559, 353 P.2d 548, appears to be the only Oregon case in which the employee was a party defendant. In that case,...