Story Case

The Western Steamship Company instructed its ship master not to unload goods at the New York wharf until an order to that effect was delivered from the New York office. Captain Chase landed at the dock at four P. M., one day, and deemed that it would be well to unload his ship at once, without orders. This was done, and during the following night the wharf and contents were destroyed by fire. The company now tries to hold Chase accountable for the value of the goods. Can it do this?

Ruling Court Case. Whitney Vs. Merchant's Union Express Company, Volume 104, Massachusetts Reports, Page 152

Whitney, as drawer, held a draft upon which there was an amount with interest due from the drawee. He turned the draft over to the defendant express company, with instructions to present for payment, and to return at once if not paid.

When it was presented the drawee refused to pay the interest, but consented to pay the principal sum. The company communicated with the drawer, and allowed the drawee to keep the draft in the meantime. During this time the drawee was ready and willing to pay all except the interest thereon. The fourth day after presentment the drawee became insolvent. The plaintiff sues the company for the loss occasioned by their negligence.

Justice Colt delivered the opinion of the Court:

By failing to obey the instructions of their principal the defendants have become liable. The Court said in part: "It is the first duty of an agent, whose authority is limited, to adhere faithfully to his instructions in all cases to which they can be properly applied. If he exceeds or violates or neglects them, he is responsible for all losses which are the natural consequences of his act."

Ruling Law. Story Case Answer

When a principal gives to his agent, clear, concise, unambiguous instructions, it rests not with the agent to question the expediency or wisdom of the course as mapped out. He may not substitute plans of his own. His duty is to obey, and only by obeying does he relieve himself from liability. However, if it appears that the instructions, as given, are ambiguous, then the agent must adopt some reasonable construction and do the best he can. Not even in this case will he be permitted to utterly ignore the instructions, and substitute his own plans and procedure.

In the Story Case, Captain Chase would be liable to the company for failure to obey their instructions.