CHAPTER XXX CONTRACTS OF EMPLOYMENT AND CONTRACTS TO MARRY Principal and agent, and master and servant. . . . Duties of the employer and employee to one another. Duty to employ... Agents' duty to obey instructions. Servants' duty of obedience.... Limits of servants' duty of obedience.. Liability of a principal for default of a sub-agent. Duty in regard to proper behavior. Employee's duty to account.. The employee's duty of fidelity to his employment. Employee is chargeable as trustee with anything fraudulently acquired... Effect of the Statute of Frauds on agent's duty in regard to real estate. Employee's duty in regard to information acquired by him. . Employee's right to indemnity. . . . . Notice of intent to terminate contract of employment. Compensation.... Attorney and client... Compensation by the piece or by commission. Contracts to marry. . . § 1012. Principal and agent, and master and servant. 1012 1013 1014 1015 1016 1017 1018 1019 1020 1021 1022 1023 1024 1025 1026 1027 1028 1029 1030 1031 The difference customarily stated to exist between the relation of principal and agent and that of master and servant is that where the employer has the right to direct the manner in which work shall be done, the relation is that of master and servant; but where the right is only to require that the act shall be done, the relation is that of principal and agent.1 The distinction, however, is not wholly satisfactory. One of the duties of an agent is obedience to his principal's directions so far as the contract between the two, or the customs of business give the principal the right to direct the agent's conduct. The extent to which the employer may dictate 1 Yewens v. Noakes, 6 Q. B. D. 530, 532; Singer Mfg. Co. v. Rahn, 132 U. S. 518, 10 Sup. Ct. 175, 33 L. Ed. 440; Butler v. Townsend, 126 N. Y. 105, 26 N. E. 1017; Bailey v. Troy, etc., R. Co., 57 Vt. 252, 52 Am. Rep. 129. the precise mode in which the employee shall achieve the result for which he is employed, varies according to the contract between the parties, and according to the nature of the business in hand. Probably the question is purely one of degree, and cases could be put in an unbroken series from one where the employer had no right of directing the manner of performance to one where he had the right to direct every detail. However necessary it may be to draw the dividing line in some connections between a servant and an agent, in considering the mutual obligations of employer and employee to one another, the distinction is generally immaterial.2 The duties of the employee, whether he is called an agent or a servant, are those imposed by the contract between the parties as construed in the light of existing usages. In considering the mutual obligations of the parties, gratuitous agencies, and agencies terminable by will, must be distinguished from other employments. In a purely gratuitous employment, there is no contract, and the obligations of the parties must be such as are imposed by law irrespective of contract. In employments terminable at will, though the rights of the parties arising from present or past performance are governed by their contract continuously as the employment proceeds,3 there is no obligation as to the future. These exceptional cases may be put aside for the moment and the typical case of an employment for reward and for a term considered. In defining the mutual obligations of the parties, two questions must be considered. First, what are the respective duties of the parties and, second, what effect will a particular breach of duty by one of the parties have on the obligations of the other party? § 1013. Duties of the employer and employee to one another. The duties of the employee whether he be an agent of the highest class, or a servant even of a menial class, are fundamentally alike. The employee is bound to render 2 Whether the principle that a disloyal agent forfeits a right to any compensation (infra, § 1477), would be applied with the same strictness to all classes of employees, is doubtful. See Rathenberger v. Jacob, 167 Wis. 273, 167 N. W. 271. See supra, § 49. reasonably diligent and skilful service. He must act in obedience to the authority given him, and in obedience to instructions, so long as these instructions are such as the employer by contract or usage is entitled to give. The employee is likewise bound to fidelity to his employment, and in case of pecuniary dealings on account of the employer is bound to render an account of expenditures. On the other hand, the employer is bound to compensate the employee in accordance with the terms of the agreement between them, and is bound to reimburse and indemnify the employee for all expense or loss incurred by the latter in the rightful exercise of his employment. Moreover, each must observe such rules of propriety in his personal conduct as are appropriate for the employment. A violation of his duty by either party will necessarily give rise to liability for any damage caused thereby, but whether it will justify a termination of the relationship will depend on the materiality of the breach of duty.5 If there is no damage, there is nevertheless a cause of action, and nominal damages should be given. Adams v. Robinson, 65 Ala. 586; Mills v. United States Slicing Mach. Co., 230 Mass. 95, 119 N. E. 690. In Potter v. Barton, 86 Minn. 288, 289, 90 N. W. 529, the court said: "Where a contract for work and labor has been substantially performed as to time and in its most material parts, an employer has no right to dismiss an employee and to refuse to carry out a contract previously made for a term not yet expired. Shaver v. Ingham, 58 Mich. 649, 26 N. W. 162, 55 Am. Rep. 712; Park v. Bushnell, 60 Fed. 583, 9 C. C. A. 138." In Loos v. Geo. Walter Brewing Co., 145 Wis. 1, 5, 129 N. W. 645, 140 Am. St. Rep. 1052, the court said: "It is not for every breach of duty that an employer is warranted in putting an end to a contract of employment before the appointed time. In a controversy 4 over such a matter, especially where the employment is of a business nature, requiring the exercise of judgment and discretion, the breach of duty is not per se a legal justification for a discharge of the employee, unless such breach evidences moral turpitude, or the conduct is manifestly injurious to the employer's business. So, where the question of the breach itself is undisputed but the evidence leaves it in doubt as to whether there was any wrong intended, or any real injury inflicted upon the employer's business, whether it constituted reasonable ground to discharge the employee is always a fact to be found by the jury." Schumaker v. Heinemann, 99 Wis. 251, 255, 74 N. W. 785." See also Caşavant v. Sherman, 213 Mass. 23, 26, 99 N. E. 475; Gerber v. Kalmar, 104 N. Y. Misc. 85, 171 N. Y. S. 92; Bookhout v. Vuich, 101 Wash. 511, 172 Pac. 740. § 1014. Diligent and skilful service. The employee's promise of service, whether express or implied, includes an obligation to do the work for which he is employed diligently and in a reasonably skilful way. Just as in a contract to sell goods it is implied that the goods to be sold shall be merchantable, so in a contract of employment it is implied that the services shall be of the character which is customarily paid for in contracts of the kind in question. The standard of diligence may be much the same in every contract of employment, whatever its nature, but the standard of skill necessarily is subject to great variation. Unless the contract contains some definition, the question is one of fact for the jury to determine what degree of skill the employer was justified in expecting-in other words, what was reasonable taking into account the nature of the employment and the usages connected with it. The nature of the employment, and perhaps the amount of compensation may affect the degree of skill to which an employee is bound. One who holds himself out as exercising a profession or occupation in business, thereby represents that he is competent to perform services incident to that profession, or occupation; and is bound to exercise the skill which is reasonable in view of that representation." The employee is none the less liable though the principal was negligent, for the basis of liability Doorman v. Jenkins, 2 Adol. & El. 718; Leighton v. Sargent, 27 N. H. 256; Maratta v. Heer Dry Goods Co., 460, 59 Am. Dec. 388; Snow v. Wathen, 190 Mo. App. 420, 177 S. W. 718. 127 N. Y. App. D. 948; Weill v. Goodman, Shirt Waists, 102 N. Y. Misc. 524, 169 N. Y. S. 47; Eubanks #. Alspaugh, 139 N. Car. 520, 52 S. E. 207; Wenger v. Marty, 135 Wis. 408, 116 N. W. 7. See also Prindle v. Producers' Turpentine Co., 126 La. 1095, 53 So. 359. Even though the service undertaken is gratuitous, the employee is liable for the damage caused by lack of reasonable skill. Harlow v. Bartlett, 170 Mass. 584, 592, 49 N. E. 1014; Isham v. Post, 141 N. Y. 100, 35 N. E. 1084, 23 L. R. A. 90, 167 N. Y. 531, 60 N. E. 1113. 8 Becker v. Medd, 13 T. L. Rep. 313. 7 Beal v. South Devon Ry. Co., 3 H. & C. 337, 341; Jenkins v. Betham, 15 C. B. 168; Harmer v. Cornelius, 5 C. B. (N. S.) 236; Troy Fertilizer Co. v. Logan, 90 Ala. 325, 8 So. 46; Arkansas Machine &c. Works v. Moorhead (Ark.), 205 S. W. 980; Carroll v. Cohen, 5 Boyce (Del.), 233, 91 Atl. 1001; Hattaway v. Sanderlin, 145 Ga. 219, 88 S. E. 941; Parker v. Platt, 74 Ill. 430, 432; Lambert v. King, 12 La. Ann. 662; Baltimore Base Ball Club v. Pickett, 78 Md. 375, 385, 28 Atl. 279, 22 L. R. A. 690, 44 Am. St. Rep. 304; Maratta v. Heer Dry Goods Co., 190 Mo. App. 420, 177 S. W. 8 is not tort but contract, and the employer is under no duty to the employee to be careful about his own affairs. The negligence of the employer may, however, be important as tending to show in a particular case that the employee's conduct, under the circumstances, was reasonable, though it might not have been so had the employer not been negligent. Illustrations of the duty of the employee are very various. Each case must be judged by itself in the light of the broad general principles which have been suggested. Whether the default was wilful may have a bearing on the question of the sufficiency of the breach of duty to justify a discharge, 10 but not on the question whether it is a breach of duty, and if the damage or the likelihood of damage from a single act of mere forgetfulness is serious, it will warrant the employee's discharge.11 § 1015. Duty to employ. Whether the employer is bound to furnish the employee with work, or may completely fulfil his obligation by giving the employee the stipulated compensation, is a question which has been somewhat litigated. The answer, like that to most questions in the law of employer and employee which are not in terms controlled by the contract between them, must depend upon usage. If performance of work by the employee could be regarded as solely for the benefit of the employer he might decline to provide work and waive such advantage as the employee's work would give him. 12 On the other hand, if in view of custom and the natural understanding of the 'Thus, neglect to inform the employee of facts calling for special action or care on the part of the employee, will relieve the latter from liability. Freeholders v. State Bank, 32 N. J. Eq. 467; Chapman v. Union Bank, 32 How. Pr. 95. 10 In Casavant v. Sherman, 213 Mass. 23, 26, 99 N. E. 475, the court in speaking of an action by an employee for wrongful discharge said: "It is settled that while inadvertent or unimportant departures would not de feat the right of recovery, the plaintiff became bound to a substantial performance of the objects intended to be accomplished." 11 Baster v. London, etc., Works, [1899] 1 Q. B. 901. 12 Emmens v. Elderton, 4 H. L. Cas. 624; Turner v. Sawdon, [1901] 2 K. B. 653. The latter case was criticised with good reason in Rubel Bronze &c. Co. v. Vos, [1918] 1K. B. 315, 324. |