Kerr v Employers' Liability Assurance Corporation, Ltd
| Jurisdiction | Scotland |
| Judgment Date | 20 October 1899 |
| Date | 20 October 1899 |
| Docket Number | No. 7. |
| Court | Court of Session |
Ld. Kyllachy, Lord President, Lord Adam, Lord M'Laren, Lord Kinnear.
Expenses—Dominus Litis—Agent and Principal—Election.—
A workman in a defended action obtained a decree against his employer for a sum of damages on account of personal injury, with expenses. He extracted the decree. The employer having become insolvent the workman then raised an action against an employers' liability assurance company for the expenses, on the ground that the company had been the true dominus litis. The company in defence maintained (1) that it was not in fact dominus litis and (2) that, even assuming that it was, the relation between a nominal party and the dominus litis was that of agent and principal, and that the pursuer having elected to take decree against the agent—his employer—was barred from afterwards suing the principal—the assurance company.
After a proof the Court held that the assurance company had been in fact the dominus litis in the original action, and that the pursuer was entitled to sue it by a separate action for the expenses therein awarded to him.
Observations on the applicability of the law of principal and agent to the relation between a nominal pursuer and the true dominus litis.
Fraser v. MallochSC, March 12, 1896, 23 R. 619, commented on.
In May 1894 John Kerr, a plater, raised an action in the Sheriff Court of Forfarshire at Forfar against his employers the Montrose Shipbuilding and Engineering Company, Limited, for damages on account of personal injury.
The Shipbuilding Company lodged defences, and after a proof the Sheriff-substitute granted decree against them for £150, in name of damages, and found the pursuer entitled to expenses.
The company appealed to the Sheriff and thereafter to the Court of Session, but in each appeal the judgment was affirmed and the pursuer found entitled to expenses.*
The pursuer extracted the decree for these expenses—the Court of Session expenses amounting to £32, 15s., and the Sheriff Court expenses to £55, 6s.
The pursuer having failed to recover payment of the sums decerned for against the Shipbuilding Company, then raised an action against the Employers' Liability Assurance Corporation, Limited, concluding for payment of the sums of expenses to which he had been found entitled in the action against the Shipbuilding Company.
The pursuer averred that the Shipbuilding Company were insured with the defenders against liability for accidents to their workmen, conform to a policy dated 30th January 1892, a copy of which was produced,† that the pursuer's claim and action against the Shipbuilding Company were duly notified to the Assurance Company, and that the latter thereupon undertook the whole conduct of the defence to the action. ‘The said defenders were the true domini litis in the said action … so far as regarded the defence thereto.’
The defenders denied that they were the domini litis.
The defenders pleaded;—(4) The pursuer having extracted decree against the Montrose Shipbuilding Company for the whole amount of the expenses incurred by him in the original action, the present action is incompetent. (7) The Montrose Shipbuilding Company having
retained control of the original action, they only are liable for the expenses of that action.
After a proof, the import of which sufficiently appears from the opinion of the Lord Ordinary, the Lord Ordinary (Kyllachy) decerned against the defenders in terms of the conclusions of the summons.*
The defenders reclaimed, and argued;—They were not the domini litis. The Shipbuilding Company were masters of the action, to go on with, or to settle it. Even if the defenders had had any control of the action they had lost it on the Shipbuilding Company going into liquidation. Besides, mere control of an action did not infer liability as dominus litis.1 It required an interest in or ownership of the subject in dispute sufficient to warrant the alleged dominus being sisted as a party.2 The Lord Ordinary was right in holding that the criterion was the existence of the relation of principal and agent. That relation had not been proved to exist, the true position of the defenders being that of an obligant in relief, which did not found an action like the present.3 But even assuming that the defenders were principals, the pursuer was barred from now suing them in a separate action, for he had elected to take judgment against the agent, the Shipbuilding Company.4 The principal and the agent could not be both liable to pay the same debt.
Argued for the pursuer;—It was part of the defenders' contract with the Shipbuilding Company that the defenders should be masters of any litigation the Shipbuilding Company might engage in, and they were proved to have had the absolute control of the action in question. They were therefore the veri domini litis, and it was well settled that a party was entitled to get decree against the dominns litis in a separate action even although he had already obtained a decree against the nominal litigant.1 The Shipbuilding Company had not been the agent of the defenders, and there was no room for election in the matter. In point of fact, the pursuer was ignorant at the time that the Shipbuilding Company were insured by the defenders.
Lord President.—I cannot but think this a very clear case, and I agree in the ground stated by what, for shortness, I shall call the first part of the Lord Ordinary's judgment. The action is brought on the theory that this assurance company was the true dominus litis in the previous action. Now, if anybody other than the person whose name is printed as party in the record can be the dominus litis, I think this assurance company was. To begin with, to the person whose name was used it was immaterial whether the result of the action was success or failure; he was completely covered by his policy of assurance, and accordingly the assurance company very naturally stipulated in their contract that they, and not he, should have the control of the action, and should, of course, incur all liabilities resulting from that position. There are valuable illustrations, in the cases, of the relations which
might constitute a man a dominus litis, but I do not cite any of them, for this reason, that I think that not one of them is clearer than, or, indeed, so clear as, the present case, of an assurance company who begin by stipulating that the insured shall give his name to them in order that they may conduct the action...
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