§ 1018. Limits of servants' duty of obedience.

In order that disobedience shall create either liability on the part of the servant or a right of the master to discharge him the master's direction must have been reasonable.41 This is merely stating in another way that the implied promise of the employee is not one of universal obedience, but merely of such obedience as is usual and proper for the performance of the duties of the employment.

"As long as the servant is permitted to perform the services he contracts for, he cannot treat a mere request or direction to perform additional services as a discharge. Neither would a master be justified in discharging a servant for a refusal to perform services outside the scope of his employment." 42

"But when there is a refusal to permit the servant to perform the substantial or principal service he agreed to perform and a direction to substitute a different service . . . then the servant may treat such refusal and direction as a discharge." 43 On the other hand, "a master has the right to give reasonable orders to a servant, even though the master knows that the work required is distasteful to the servant, and even though the master gives the order with the expectation that the servant will leave the employment rather than obey, as the motive of the master is unimportant, and the servant is bound to obey all reasonable orders, even if given part. Nevertheless the court held his discharge proper as his absence was a material injury to his employer. See also infra, § 1940.

41 Rex v. Polesworth, 2 B. & Ald. 483; Marx v. Miller, 134 Ala. 347, 32 So. 765; McIntosh v. Abbot, 231 Mass. 180, 120 N. E. 383; Lehigh Valley R. Co. v. Snyder, 56 N. J. L. 326, 28 Atl. 376; Walker v. John Hancock Mut. L. Ins. Co., 80 N. J. L. 342, 79 Atl. 354; International, etc., R. Co. v. Greenwood, 2 Tex. Civ. App. 76, 21 S. W. 559 (order not to patronize a certain hotel held unreasonable); Lone Star Salt Co. v. Wilderspin (Tex. Civ. App.), 81 S. W. 327; Wright v. C. S. Graves Land Co., 100 Wis. 269, 75 N. W. 1000.

42 Loos v. Geo. Walter Brewing Co., 145 Wis. 1, 129 N. W. 645; Koplitz v. Powell, 56 Wis. 671, 14 N. W. 831.

43 Loos v. Geo. Walter Brewing Co., 145 Wis. 1, 129 N. W. 645, citing Cooper v. Stronge & Warner Co., 111 Minn. 177, 126 N. W. 541, 27 L. R. A. (N. S.) 1011; Marx v. Miller, 134 Ala. 347, 32 So. 765; Roserie v. Kiralfy Bros., 12 Phila. 209; Warner v. Rector, etc., 1 City Ct. R. 419; Pepper v. Kisch, 2 City Ct. R. 131. See also Colloraff v. Hickson, 159 N. Y. S. 177. This rests upon the principle that both parties are entitled to a substantial compliance with the contract, and that he who refuses to permit it is guilty of a breach of his obligation.

in bad faith, while he is not bound to obey unreasonable orders, even when given in good faith." 44 The importance and responsibility of the employee's position, and the degree to which his work requires the exercise of his personal judgment are also circumstances to be considered. 45 And an employee whose contract is expressly or impliedly conditional on his work being directed by a certain person, cannot be required to obey another.45a

§ 1019. Liability of a principal for default of a sub-agent.

Unless the principal has authorized expressly or impliedly the employment of a sub-agent, the agent will be liable, if he delegates his authority, for any damages which may happen because of this breach of duty. Frequently, however, by usage, by necessary implication from the character of the act to be performed, or by the express terms of the authority given, the agent is justified in employing a sub-agent. How far the agent becomes personally liable for the acts of the sub-agent then becomes important. Several situations may be distinguished. The duty of the agent may be merely to employ an agent for his principal. The sub-agent in such a case can hardly be called with propriety a sub-agent. He is the agent of the principal; all duties are owing to the latter and all rights are against him. Even where the agent's authority is not to employ an agent on behalf of the principal but to employ personally a sub-agent, if he so desires, to perform part of his own duties, it does not necessarily follow, as is sometimes supposed, that the agent is liable for the default of the sub-agent. It is argued that as a principal is bound by the default of his agent, when the latter is acting within the scope of his authority, so, therefore, the original

44 Smith v. Herring-Hall-Marvin Safe Co., 115 N. Y. S. 204, 207, citing Development Co. v. King, 161 Fed. 93, 88 C. C. A. 255, 24 L. R. A. (N. S.) 612. Cf. Shaver v. Ingham, 58 Mich. 649, 26 N. W. 162, 55 Am. Rep. 712. And see supra, § 839.

45 Park v. Bushnell, 60 Fed. 583, 9 C. C. A. 138, 20 U. S. App. 425; Carpenter Steel Co. v. Norcross, 204 Fed.

537, 123 C. C. A. 63, Ann. Cas. 1916 A. 1035; Crabtree v. Bay State Felt Co., 227 Mass. 68, 116 N. E. 535; Schaub v. Arc Welding Co., 123 Mich. 487, 82 N. W. 235.

45 Triangle Film Corp. v. Artcraft Pictures Corp., 250 Fed. 981, 163 C. C. A. 231; Styblo v. Sokol, 207 I11. App. 340.

agent must on the same principle be liable for the defaults of the sub-agent. But this principle must be qualified by the observation that such liability will not arise in favor of one whose contract fixes a different standard of liability. The terms of the contract, implied as well as express, between the principal and his agent must, therefore, be considered. The question has generally become important with reference to banks in their collection of negotiable paper. A bank with which such paper has been deposited for collection may forward it to a bank in the place where it is payable. the latter bank is negligent, some courts hold the bank of deposit liable though it used due diligence in selecting the channel for collection.46 The contrary view, however, is preferable and is supported by much authority. If it were

46 Van Wart v. Woolley, 3 B. & C. 439; Exchange Bank v. Third Bank, 112 U. S. 276, 28 L. Ed. 722, 5 Sup. Rep. 141; Bailie v. Augusta Savings Bank, 95 Ga. 277, 21 S. E. 717, 51 Am. St. Rep. 74; Tyson v. State Bank, 6 Blackf. 225, 38 Am. Dec. 139 (subagent was a branch of agent bank); Simpson v. Waldby, 63 Mich. 439, 30 N. W. 199; Fort Dearborn Nat. Bank v. Security Bank, 87 Minn. 81, 84, 91 N. W. 257; Davey v. Jones, 42 N. J. L. 28, 36 Am. Rep. 505; Saint Nicholas Bank v. State Nat. Bank, 128 N. Y. 26, 27 N. E. 849, 13 L. R. A. 241; McBride v. Illinois Nat. Bank, 138 N. Y. App. Div. 339; Commercial Bank v. Red River Valley Nat. Bank, 8 N. D. 382, 387, 79 N. W. 859; Reeves v. State Bank, 8 Ohio St. 465. See also Eufaula Grocery Co. v. Missouri Nat. Bank, 118 Ala. 408, 24 So. 389; Sherman v. Port Huron, etc., Co., 8 So. Dak. 343, 66 N. W. 1077. A case like Mackersy v. Ramsays, 9 C. & F. 818, must be distinguished. There after the collection of the bill in question by the collecting bank, the bank of deposit allowed the collection to stand to its own credit for some months after notice of the collection. It was

If

rightly held liable for the amount. See also Hazlett v. Commercial Nat. Bank, 132 Pa. 118, 19 Atl. 55.

567;

47 East Haddam Bank v. Scovil, 12 Conn. 303; Etna Ins. Co. v. Alton City Bank, 25 Ill. 243, 79 Am. Dec. 328; First Nat. Bank v. Bank of Whittier, 221 Ill. 319, 77 N. E. 563, Irwin v. Reeves Pulley Co., 20 Ind. App. 101, 48 N. E. 601; Guelich v. National Bank, 56 Iowa, 434, 9 N. W. 328, 41 Am. Rep. 110; Bank of Lindsborg v. Ober, 31 Kan. 599, 3 Pac. 324; Beach v. Moser, 4 Kan. App. 66, 46 Pac. 202; Second Nat. Bank v. Merchants' Nat. Bank, 111 Ky. 930, 65 S. W. 4, 55 L. R. A. 273, 98 Am. St. Rep. 439; Hyde v. Planters' Bank, 17 La. 560, 36 Am. Dec. 621; Jackson v. Union Bank, 6 Har. & J. 146; Lord v. Hingham Nat. Bank, 186 Mass. 161, 71 N. E. 312; Dorchester &c. Bank v. New England Bank, 1 Cush. 177 (cf. Barnard v. Coffin, 141 Mass. 37, 6 N. E. 364, 55 Am. Rep. 443); Finch v. Karste, 97 Mich. 20, 56 N. W. 123; Third Nat. Bank v. Vicksburg Bank, 61 Miss. 112; Daly v. Butchers' &c. Bank, 56 Mo. 94, 17 Am. Rep. 663; Bedell v. Harbine Bank, 62 Neb. 339, 86 N. W. 1060; Planters' &c. Bank v.

true, as said in a leading case by the Supreme Court of the United States, 48 that the agreement of the bank of deposit is to collect the paper intrusted to it, the consequence would follow that this bank would be liable for failure to fulfil its contract; but this does not seem a correct statement of the bank's obligation. Except as special instructions control the agreement between the depositor and the bank, the latter's undertaking is to exercise a reasonable degree of skill and judgment in endeavoring to collect.49 Even with its obligation thus limited, however, if the bank's duty were to collect by its own officers or servants, loss resulting by the negligence of one of them would render it liable. The complete power of choice and the full control of the bank in regard to its officers and servants identifies them, so far as the depositor is concerned with the bank. But the situation is different when the instrument must be forwarded to a collecting bank. It may well happen where a check or note to be collected is payable at a small place that the bank of deposit, in view of business customs, has neither freedom of choice nor power of control in regard to the collecting bank. There may be but one bank to which the paper can be sent, and the case is then one where in effect the depositor has dictated the method of collection. Even where the bank of deposit has a choice, it has no control. It is in effect selecting an agency at the request of the depositor, and though the collecting bank looks to the bank of deposit, not to the original depositor as its employer, the only function that the bank of deposit exercises or is expected to exercise, is to select a

First Nat. Bank, 75 N. C. 534; Bank v. Floyd, 142 N. C. 187, 55 S. E. 95; Mechanics' Bank v. Earp, 4 Rawle, 384; Morgan v. Tener, 83 Pa. 305, 307; Bank of Louisville v. First Nat. Bank, 8 Baxt. 101, 35 Am. Rep. 691; Second Bank v. Cummings, 89 Tenn. 609, 18 S. W. 115; Stacy v. Dane County Bank, 12 Wis. 629. See also Dun v. City Nat. Bank, 58 Fed. 174, 7 C. C. A. 152.

48 Exchange Nat. Bank v. Third

Nat. Bank, 112 U. S. 276, 287, 28 L.
Ed. 722, 5 Sup. Ct. Rep. 141.

49 See Bank v. Monongahela Nat. Bank, 126 Fed. 436; First Nat. Bank v. First Nat. Bank, 116 Ala. 520, 22 So. 976; Manhattan Life Ins. Co. v. First Nat. Bank, 20 Colo. App. 529, 80 Pac. 467; Capitol State Bank v. Lane, 52 Miss. 677, 679; Taylor v. Sipp, 30 N. J. L. 284; Omaha Nat. Bank v. Kiper, 60 Neb. 33, 82 N. W. 102; Sahlien v. Bank, 90 Tenn. 221, 16 S. W. 373.

channel of collection. For the same reason a collecting bank should not be, and generally is not held liable for the negligence of a notary to whom negotiable paper is intrusted for protest. 50

§ 1020. Duty in regard to proper behavior.

The relation of employer and employee requires on the part of each an observance of the elementary principles of good behavior. The extent of the duty and the consequences of a breach of it must vary necessarily with the character of the employment. Insolent or disrespectful language or conduct on the part of a servant will justify dismissal.51 Similarly the employer is under a duty to refrain from language or conduct of so severe or offensive nature as to be improper in view of the relation between the parties.52 And though