Bankers' Mutual Casualty Co. v. Minneapolis, St. P. & S. S. M. RY. Co.

CARLAND, District Judge, after stating the case as above, delivered the opinion of the court. This case presents but one question for our consideration, and that is whether or not the defendant in error is liable to the plaintiff in error upon the facts stated. No federal decision is called to our attention, and we are unable to find any, parallel to the case at bar. There are, however, well-settled principles of law which we believe must determine the case. It is claimed by plaintiff in error that it is alleged in the complaint, and admitted by the demurrer, that defendant in error had no contract relation with the United States in pursuance of which it carried the mail between Minneapolis, Minn., and Harvey, N. D.; that the duty to carry the mail safely was imposed upon defendant in error by the constitution and laws of the United States; and that, this duty being imposed by law, any person injured by a violation thereof would have his remedy. If we correctly understand counsel, it is argued that there was no contract relation between the defendant in error and the United States, in order to avoid the objection that plaintiff in error stands in no such relation to that contract as would enable it to maintain an action for a breach thereof. In the view we take of the case, however, we do not see how it makes any difference whether defendant in error was carrying the mail under and by virtue of a contract with the United States, or whether that duty was imposed by the constitution and laws thereof; in either event it was a public agent of the United States, and its liability must be determined accord [439] ingly. The defendant in error, in regard to its liability for the loss of the money, was in no sense a common carrier. As was said in the case of Banking Co. v. Lampley, 76 Ala. 357, 52 Am. Rep. 334: “Between a contractor for carrying the public mails and the sender of letters, there is no privity of contract, and the contractor has no right to and receives no remuneration from the sender. The government undertakes the transmission of the mails, and receives pay therefor by the postage charged. The contractor's contract is with the government, and by it his compensation is paid. He owes a duty, not to the sender of the letters as an individual, but to the integral public, springing from his agreement to carry the mails. The public mail is not the proper subject of a common carrier’s charge, and the extraordinary responsibility attached by law to such employment does not attach to a mail contractor. He does not become an insurer of the safé transportation of mail matter; the extent of his liability is the same as that of a bailee for hire. The railroad company was not transformed into a common carrier as to the mails because, being engaged in the regular business of transporting goods for the public, it was, at the same time, carrying the mails by direction and employment of the proper department of the government. The occupation of the company was of a dual character. It was acting in two capacities, created and regulated by separate and distinct contracts and employments. The liability of the defendant cannot, therefore, be determined by the rules governing the responsibility of a common carrier.” It seems clear to us that defendant in error was a public agent of the United States in relation to carrying the mail, for the reason that the constitution of the United States conferred upon it the power to establish post offices and post roads, and this power was granted by the people as one of the sovereign powers, to be exercised by the general government exclusively. By virtue of this grant of power, the United States has always, through its post-office department, assumed the exclusive charge of the carriage and delivery of the mail for the benefit of all the people. In doing so, the United States is beyond question engaged in the discharge of a governmental function. All persons or corporations who are engaged in the carriage or delivery of the mail by the authority of the United States, conferred by contract or general laws, are but the instruments used by it to discharge this function. As a practical illustration as to whether the defendant in error was engaged in the discharge of a governmental function, let us suppose that some person had attempted to obstruct the carriage and delivery of this mail sack, which contained the money in controversy, at the post office at Harvey, N. D., while it was in possession of defendant in error. Would not the person be liable to punishment under the penal laws of the United States ? Beyond question he would. From whence springs the power of the United States to punish such an act? It springs from the authority that all governments possess of punishing the person who obstructs that government in the lawful discharge of its duty. It now becomes necessary to ascertain what the liabilities of public agents are, and upon this question there seems to be little, if any, conflict of authority. A public officer or agent, provided he has exercised ordinary care to select competent subordinates, is not responsible for the misfeasances or positive wrongs, or for the nonfeasances, or negligences or omissions of duty, of the subagents or servants, or other persons properly employed by or under him in the discharge of his official duties. Rob [440] ertson v. Sichel, 127 U. S. 507, 8 Sup. Ct. 1286, 32 L. Ed. 203; Story, Ag. § 319. In reference to the post-office department, it has been uniformly held that the postmaster general, the deputy postmasters, and their assistants and clerks appointed and sworn as required by law, are public officers, each of whom is responsible for his own negligence only, and not for that of any of the others, although selected by him and subject to his orders. Lane v. Cotton, 1 Ld. Raym. 646; Whitfield v. Le Despencer, 2 Cowp. 754; Dunlop v. Monroe, 7 Cranch, 242, 3 L. Ed. 329; Schroyer v. Lynch, 8 Watts, 453; Bishop v. Williamson, 11 Me. 495; Hutchins v. Brackett, 22 N. H. 252, 53 Am. Dec. 248; Conwell v. Voorhees, 13 Ohio, 523, 42 Am. Dec. 206; Story, Bailm. §§ 462, 463; Robertson v. Sichel, 127 U. S. 507. The same doctrine has been extended or applied to mail contractors by the cases of Conwell v. Voorhees, 13 Ohio, 523, 42 Am. Dec. 206; Hutchins v. Brackett, 22 N. H. 252, 53 Am. Dec. 248; Foster v. MettS, 55 Miss. 77, 30 Am. Rep. 504. The court, however, refused to extend the rule to mail contractors in the cases of Banking Co. v. Lampley, 76 Ala. 357, 52 Am. Rep. 334; Sawyer v. Corse, 17 Grat. 230, 99 Am. Dec. 445. The Alabama court adopted and followed the reasoning of the Virginia court. The reasoning of the cases cited is illustrated by the following language taken from the opinion in Banking Co. v. Lampley: “The contractor, being the person who contracts with and is paid by the government, and who gives a guaranty for the faithful discharge of the service, is the public agent if such contract constitutes an agency. He is the one directly responsible to, and with whom, the government deals. He employs his own carriers, who are paid by him, and who are not known to the government other than as his employes. As to civil responsibility, the contractor stands between the carrier and the government, although, for the' purpose of public security, an oath may be required of the carrier, and penalties imposed for violations of the laws of the postal service. In a sense the carrier may be said to do work for the government, not as an agent, but as one employed by the contractor, in his own name, for his individual benefit, and on his personal responsibility, as necessary help to do the service which he has contracted to do. Laborers employed by a contractor for the construction of naval vessels, or for the erection of public buildings, may in the same sense be said to do work for the government, but they are not public laborers. We approve and adopt the legal propositions as to the liability of a contractor, maintained and asserted in Sawyer v. Corse, 17 Grat. 230, 99 Am. Dec. 445.” This reasoning would make the defendant in error a public agent, but would deny that position to the agent at Harvey; the subordinate agent of the defendant in error being what is called a carrier in the opinion under consideration. We do not think that the comparison between a laborer employed by a contractor for the construction of naval vessels or for the erection of public buildings an apt one. The United States in building a public building, or in constructing a naval vessel through a contractor, is not exercising sovereign power or ' engaged in a purely governmental function. It is acting in its purely private or business capacity. Any one possessed of sufficient means may construct a vessel or build a building. The United States only can carry the mail. Hence 'we believe that the character of the service in which the agent is engaged must determine in the case at bar as to whether the subordinate agents of the defendant in error, in [441] so far as they were engaged in carrying the mail, were or were not public .agents. Let us now apply the principles of law which, in our opinion are controlling, to the facts in this case. There is nothing alleged in the complaint that would connect the defendant in error personally with the wrong complained of; that is, there is no allegation that any officer of the defendant in error whose act or omission the court would be bound to hold was the act or omission of defendant in error did any act, or omitted to do any act, which caused the loss of the mail. There is no allegation that the defendant in error did not exercise ordinary care in the selection of competent persons to handle the mail after it reached Harvey. The allegation of the complaint in regard to the agent at Harvey is as follows: “That upon the arrival of defendant’s said train and postal car at said town of Harvey, North Dakota, said railway mail clerk or other postal official, between eleven and twelve o’clock of said night, delivered said mail sack, duly locked, together with said registered package of currency therein contained, to one James Magson, the night station agent dr night operator of defendant at said town of Harvey; that said night station agent or night operator was not sworn as an official or employé of the post-office department of the United States government as required by law, but was then and there employed and duly authorized by the defendant to receive and take charge of all mail matter received over defendant’s said" line of railway at said town of Harvey, including the mail sack or mail pouch containing said package of currency, and to deposit same in defendant’s depot at Harvey, North Dakota, and did so receive, take charge of, and deposit said mail sack or mail pouch.” The fact that Magson was not sworn fs not controlling, for if the defendant in error, in its business in carrying the mail, was a public agent, then it was responsible for its own negligence only, and not for the negligence of its servants engaged in the same business. If the defendant in error was a person, this case would be plain. The apparent difficulty arises from separating the negligence of defendant in error from the negligence of its subordinate agent arising from the fact that a corporation must perform all its acts through agents. We think, however, that there is a well-defined distinction with reference to its duties as a carrier of the mail. To illustrate: Supposing the agent Magson had left the mail sack on the depot platform, and by reason thereof the same had been stolen. This, in the absence of any showing that defendant in error had not used proper care in the selection of Magson as its agent, would have been the negligence of Mag-son, for which he would have been liable, but it would not have been the negligence of defendant in error. If, however, some officer of defendant in error who stood in such a relation to the company that his negligence would be its negligence should negligently do some act whereby a loss occurred from the mail, then defendant in error would be liable. Let us now examine the acts of negligence alleged. Section 713 of the postal regulations of 1893, set out in the complaint, determined the duty of defendant in error in relation to the mail sack after its receipt by Magson. The regulation is as follows: “Tbe railroad company will also be required to take the mails from and deliver them into all intermediate post offices and postal stations located not more than 80 rods from the nearest railroad station at which the company has an agent or other representative employed.” [442] Whatever duty this regulation imposed upon defendant in error must be determined irom the regulation itself. The demurrer admits the existence of the regulation, not the pleader’s opinion or legal conclusion of its effect. It simply made it the duty of defendant in error to deliver the mail sack at the post office. There is no allegation that the mail sack was not delivered at the post office, but that, after it was delivered to Magson, some person unknown to the pleader opened the mail sack, and abstracted the package of money in controversy. We know nothing about the facts connected with the loss of the money except what is alleged in the complaint, and in the discussion of the case we of course disclaim any intention of reflecting on the character of any one. The allegations of the complaint are entirely consistent with the theory that Magson stole the money. If so, in the absence of any allegation of negligence of defendant in error in employing him, there is no evidence of negligence that would charge the defendant in error, as all the precautions, that it is alleged would have prevented the theft would not have prevailed against Magson, for by the act of the postal clerk and defendant in error the custody of the mail sack was delivered to him. Mere proof that the package of money was stolen, no matter by whom, creates no liability against defendant in error, unless its own negligence was the direct cause of the larceny, as contradistinguished irom the negligence of its agent at Harvey. We are not informed by the record as to what was done with the mail sack after Magson deposited the same in defendant in error’s depot, or what became of it afterwards. We are satisfied, however, that, if the negligence of any one directly contributed to the larceny, it was the negligence of Magson, for whose negligence in the matter of carrying the mail the defendant in error is not liable. The judgment below must be affirmed, and it is so ordered.