2. Owing to the negligence of S in operating a machine T is injured. M is not liable to T. In operating the machine S is a fellow-servant of T.

3. Owing to the negligence of a railway engineer a train is derailed and a brakeman injured. The railway company is not liable to the brakeman. An engineer is a fellow-servant of a brakeman; so also is a conductor; so also is a switchman. But a train dispatcher is a vice principal.

In Ohio and some other states a superior officer, like a conductor or a manager or a foreman, is always a vice principal even if he performs operative acts; but the general rule is that it is the nature of the act and not the rank of the actor that is decisive. Employers' Liability Acts exist in several states, enlarging the liability of the master to one servant for the negligence of a co-servant.

136. The master's nonassignable duties. The duty to use care to furnish safe machinery, safe tools, proper inspection, and the like, as specified in sec. 135, is called a nonassignable duty, because no matter who is delegated to perform it the master remains liable to his servants for any negligence in that regard.

This rule is qualified by the further rule that if a servant with full knowledge of some defect remains in the employment he "assumes the risk" as to the defect and cannot recover from the master if he is injured in consequence of it.

Example 1. S is told to operate a machine. He knows it is defective. He operates it and is injured because of this defect. He cannot recover.

But if the master promises to repair the defect, the servant may remain a reasonable time without assuming the risk.

Example 2. As above. S objects to the machine because it is defective. The master promises to repair it. The next day S is injured. The master is liable to S.

In any case a servant cannot recover if his injury is due to his own contributory negligence.

Example 3. S, after the master's promise to repair, operates the machine. He is injured by his own negligence in the manner of operating it. He can

not recover.

REVIEW QUESTIONS AND PROBLEMS

SECTION 133. When is a master liable for negligent injuries by his servant to a third person? What will bar the action?

134. When is a master liable for willful injuries inflicted by his servant upon a third person? What is the rule as to public carriers?

Problem 1. B, a boy of twelve, steals a ride on a freight train. The brakeman discovers him and pushes him off while the train is in motion, and the boy is injured. Is the railway company liable?

Problem 2. B is employed to repair electric lights in X's building. While he is on a stepladder X's janitor, who is sweeping the room, pushes the ladder intentionally and B falls and is injured. Is X liable?

135. Who is a vice principal? Who is a fellow-servant? Is a superior officer a vice principal? What is the usual test as to the master's liability to one employee for a negligent injury by another employee? What is the purpose of Employers' Liability Acts?

Problem 3. Owing to the negligence of a switchman a train is derailed and the engineer injured. Is the railway company liable to its engineer for the negligence of its switchman?

Problem 4. B was a laborer in X's factory. C was superintendent of the factory. B was lifting a fly wheel of an engine off from its center, when C negligently turned on the steam and started the wheel, injuring B. Is X liable to B?

Problem 5. A workman in the X. Ry. Co.'s repair shops negligently repairs a locomotive boiler. When it is used it explodes and injures an engineer. Is the railway company liable?

136. What are the master's nonassignable duties? How may the risk as to these be shifted to the employee? What is the effect of a promise to repair a defect? What is the effect of contributory negligence?

Problem 6. B was X's domestic servant, and X agreed to furnish board and lodging. B's room leaked. X promised to repair the roof. B stayed, and owing to the leak took cold and was ill. Is X liable to B?

PART V

BUSINESS ASSOCIATIONS

CHAPTER XII

PARTNERSHIPS AND JOINT-STOCK COMPANIES

137. Forms of conducting business. Business may be conducted by a sole trader, or by a partnership, or by a joint-stock company, or by a corporation.

A sole proprietor or trader is one who conducts his business in person or through agents without admitting any one else to share in the profits. He alone owns the property embarked in the business; he alone has a decisive voice in the management of the business; and he alone is liable for debts and entitled to credits. He may, of course, have agents to whom he intrusts many important matters, but they are his employees and are responsible to him alone.

It is the combination of persons in business that calls for special consideration.

1. Partnerships. In order to increase capital and make it possible to do a larger business, two or more persons may combine and do business together as one firm. A partnership involves a high degree of confidence in the ability, fidelity, and integrity of one's partners, without relieving one of personal liability to third persons for contract obligations and torts. The partnership has three important characteristics: (1) the death or retirement of one partner dissolves the firm; (2) each partner is an agent for the firm; (3) each partner is individually liable for the debts of the firm.

2. Joint-stock companies. The joint-stock company is a large partnership in which the interests are represented by shares of stock, as in a corporation. It differs from a partnership in that the death or retirement of a shareholder does not dissolve the company and in that a shareholder is not an agent of the company unless duly elected or appointed as such. It is like a partnership in that each member is individually liable for the debts of the company.

3. Corporations. A corporation is a distinct legal entity independent of its stockholders. Partnerships and joint-stock companies are formed by the agreement of the members and require no statutory authorization. A corporation is the creature of statute, and is by statute given a legal being and invested. with legal powers as a separate entity. Title to property vests in it, not in its members; it acts through its agents as a legal person; it is liable for its debts and torts, and no liability (unless expressly fixed by statute) rests upon its members. The last feature is highly important. Persons may invest money in a corporation without becoming individually liable for the debts of the corporation, while in a partnership or joint-stock company each partner or shareholder is individually liable.

Statutes, of course, may and often do modify these results. Thus we have full-liability corporations authorized in some states, while we also have limited partnerships in some. In the full-liability corporation each shareholder is individually liable, while in the limited partnership a limited partner is not individually liable beyond a specified amount. In some corporations the statutes make shareholders individually liable to a limited amount. But the type is as stated above.

I. PARTNERSHIPS

138. What constitutes a partnership. A partnership may be general or limited, and partners may be real or ostensible, active or dormant.

1. General partnerships. A general partnership is a voluntary association of two or more persons under an agreement to carry on in common, as if one person or entity, a business or occupation, and to share as common owners the profits of the enterprise.