
    Harry H. Kutner, Plaintiff, v. James C. Fargo, as President, Defendant.
    (Supreme Court, New York Trial Term,
    April, 1897.)
    1. Malicious prosecution — Corporation not liable for malicious testimony of clerk.
    A corporation is not chargeable with malice of its clerks in testifying in a criminal proceeding, such testimony not being within the scope of their employment.
    2. Same — Exemplary damages.
    A corporation is not liable in exemplary damages for the willful or malicious acts- of its agents unless such acts were previously authorized or subsequently ratified by it.
    3. Same — Ratification.
    To warrant an inference of ratification there must be proof that the principal or his proper representative had knowledge of the agent’s malice, or that circumstances existed which warranted an inference that he believed the agent to have been guilty of a malicious act.
    
      4. Trial — Charge — Exemplary damages'.
    In instructing á jury the rule of exemplary damages should be stated with its restrictions and limitations,. and the question should not be left' wholly to the discretion of the jury.
    Motion for new trial..
    Action for malicious prosecution. •
    M. S. & I. S. Isaacs, for plaintiff.
    Carter & Ledyard, for defendant.
   Dugro, J.

There was substantial error at the trial. At most 5. was the person representing defendant in the prosecution; no others had been authorized to prosecute in its behalf. S., if authorized to prosecute, had a right to go before the magistrate with any witnesses he might have to substantiate his charge, and unless there was a conspiracy between him and the witnesses, their acts of malice should not be chargeable to him and so to def éndant. . In acting as witnesses, these clerks could not be said to be acting within the scope of their employment, for it is no part of the duties of a .clerk’s employment to testify as a witness in a criminal proceeding. It is a duty he owes the state and incidentally to the prosecutor, independent of employment. If this is wrong, and the malice of. a witness is constructively that of defendant, still there was error, and that in the main charge,, upon the subject of exemplary damages.

The- decisions in this country upon the question of the liability ■ of a corporation in exemplary damages for the willful or malicious acts of its agents are divided into three classes.. One holds the corporation never liable; another holds'the corporation liable if the wrongful act was done by" a servant acting within the scope of his authority; a third recognizes the liability if the wrongful act was within the scope of the employment and was previously authorized, or subsequently "ratified, by the corporation.

The Eew York decisions and those of the United States Supreme Court seem to incline to the third class. 147 U. S. 101; 56 N. Y. 41, 299; 41 id. 282; 3 Wheat. 546. A note upon these cases will be found in 62 Am. Dec. 379.

Samuels v. Evening Mail Assn., 15 N. Y. 604, an affirmance on the dissenting opinion in 9 Hun, 288, does not conflict with this • view, as in that case the management of the paper as to publication, etc., had been wholly committed to the discretion of the agents, and so actual malice was brought home to the defendant. -

Sedgwick on Damages, § 378, says: “ It is the better opinion that no recovery of exemplary damages can be had against a principal for the tort of an agent or servant, unless defendant expressly authorized the act as it was performed or approved it * * * .” See, also, Morawetz Corps., §§ 728-729.

56 N. Y. 299, explaining 47 id. 282, reads: “ FTor doeis it hold that a master is liable to punitory damages for the wrongful act of his servant if free from any wrong of his own. It does hold that a corporation is liable for punitory damages for its own torts and breaches.” Constructive malice in such a case will not suffice to warrant exemplary damages; for though constructively guilty )f malice one may, nevertheless, be free from personal wrong. For these damages the criminal intent must be brought home to the mncipal. 147 U. S. 101.

“ The act of a servant is not the act of the master, even in legal ntendment or effect, unless the master previously directs or sublequently adopts it. In other cases, he is liable for the acts of his ervant, when liable at all, not as if the acts were done by himself, rat because the law makes him answerable therefor.” Harris on Damages by Corporations, § 6.

In Hagan v. Prov. & Wor. R. R. Co., 3 R. I. 88-91; Shephard’s llustrative Cases, 159, it is laid down that: “Punitive damages dll not be allowed against a principal unless he participated in he wrongful act of his agent, expressly or impliedly authorized it, r approved it either before or after it was committed, so he beomes particeps criminis of his agent’s act. They will not be [lowed where the proof does not implicate the principal and, howver wicked the servant may have béen, the principal neither ex-ressly or impliedly authorized or ratified the act, and the riminality of it is as much against him as against any other memer of society. * *" "* It is quite enough that he shall be able in compensatory damages for the injury sustained in coniquence of the wrongful act. FTo man should be punished for that £ which he is not guilty.”

To warrant an inference of ratification there must be proof that íe principal or his proper representative had knowledge of the gent’s malice, or that circumstances existed which warranted an tference that he believed the agent to have been guilty of a alicious act. For there could be no ratification, such as would arrant exemplary damages, unless the malice of the subordinate as known to the one ratifying, or unless it can fairly be said that } had an intention to take upon himself without inquiry the risk of any improper acts as his own. The Laws of Principal and Agent Wright, 34. .

Actions for malicious prosecution" are not favored in the law "and more than usual care must be. exercised at a trial, "or injustici will be done a defendant. .

The point that "the exception .to that part of the charge whicl referred to exemplary damages was not sufficient, is not well taken ín instructing a jury the rule, of exemplary damages should b stated with its restrictions and limitations, and it should not be lef . wholly to the discretion of the jury. 56 N. Y. 49.

In the present case, as in the case cited, the jury were nowher .instructed what facts were requisite to be found to warrant ei : emplary damages. The jury were left at liberty to adopt any rul of liability and to punish for any conduct which they might coi denim They may have allowed exemplary damages without' fine ing the. necessary facts authorizing them to do it and so th defendant may have been injured.

The court, at the request of plaintiff,: Charged “ that if the jur find the prosecution of the plaintiff was instigated by defendant agents acting- in its interest, and within the- scope of their, generi authority, then the' defendant is chargeable with, etc.” ■ This w£ stated by plaintiff’s counsel to have reference to E. as well as to ‘ To this charge defendant excejited. As the jury may have bee misled into the view that from the evidence they might sáy thi it was within the general authority of E, to instigate the "prosee tion, this was error.

. Upon the whole case, the motion to set aside the verdict and f< a new trial should be granted. ■ .

Certain considerations unnecessary to specify compel me "to re. upon my memory of what took place at the close of the trial. 1 view "of the doubt that must exist as to the correctness of n recollection and the plaintiff’s circumstances, I trust the defen •ants will bear the expense of the printing the case upon the stipul tion referred to at the hearing.

It may be well to mention that the stenographer’s minutes < .not contain all that was said at the conclusion of the trial; so far they go, except in respect to the last page, they, are correct, A ■cording to my recollection I withdrew my denial -of the motion 'set- aside the verdict and for a néw trial and withheld my .decisi< .in respect to it, " -

' ' Motion granted.  