I'm just editing the section of my forthcoming agency and partnership treatise in which I discuss Gorton v. Doty, 69 P.2d 136 (Idaho 1937), which is one of my favorite cases on the definition of an agency relationship. On September 21, 1934, the Soda Springs (Idaho) High School football team was to travel to Paris (Idaho, not France) to play its arch-rival. The team planned to travel in private cars rather than by bus. School teacher Doty subsequently related a conversation she had with team Coach Garst, as follows: ?I asked him if he had all the cars necessary for his trip to Paris the next day. He said he needed one more. I said that he might use mine if he drove it. That was the extent of it.? Garst thereafter in fact borrowed and drove Doty?s car. On the way home from the game, Garst caused an accident in which Richard Gorton, one of his passengers/players, was injured. Gorton sued.
Gorton did not sue the coach, who had died in the accident. Gorton did not sue the school, presumably because the school at that time (1937) could have invoked some form of sovereign immunity defense. Instead, Gorton sued Doty, who must have been very surprised indeed. Doty must have been even more surprised, however, when a trial court held (and the Idaho supreme court affirmed) that Garst was her agent and that she was liable for his negligence.
As for the somewhat surprising result, the following is an excerpt from the aforementioned forthcoming treatise. It's got some crossreferences to material elsewhere in the text, which I didn't bother to edit out. After all, maybe they'll tease you to buy the book when it comes out!
The court inferred that Doty manifested her consent that Garst act on her behalf from the fact that, instead of driving the car herself, she volunteered the use of her car subject to the requirement that Garst be the driver. This is a puzzling holding. What benefit did Doty anticipate from allowing Garst to use her car? The record discloses none. Doty was not compensated for the use of her car nor was there any evidence of any other benefit. Indeed, if anybody benefited, it was the school, which avoided having to pay for a bus.
As the dissenting judge complained, moreover, the most plausible reading of the facts is that Doty simply made ?a kindly gesture.? In the dissenter?s view, you do not become an agent simply by offering to help out a friend or doing them a favor. As we saw above, however, the agency relationship in fact can be purely gratuitous. The Restatement (Second) offers the following example: ?when one ... asks a friend to do a slight service for him, such as to return for credit goods recently purchased from a store,? an agency relationship exists even though no compensation or other consideration was contemplated. Did Doty?s conduct rise to the relatively low level contemplated by the Restatement? It seems doubtful, as it hard to see what service the coach rendered Doty. In the event, however, none of these difficulties prevented the majority from finding an agency relationship.
The majority next concluded that Coach Garst was to be subject to Doty?s control from the mere fact that she set a condition precedent on the use of the car; namely, that he be the driver of the car. In my experience, students often find this holding to be the most outrageous aspect of the case. In fact, however, the court was on reasonably solid ground here. As we have seen, it doesn?t take much control to satisfy the Restatement (Second) standard. Indeed, it suffices that the principal have the power to control the end result of the agent?s actions, which power ?may be exercised by prescribing the agent?s obligations before or after the agent acts, or both."
Finally, the court assumed that the coach agreed to act on her behalf and subject to her control based on the simple fact that he indeed used the car and was driving it at the time of the accident. Here, again, the court was on reasonably solid ground. Remember that the agent need not communicate the agent?s consent to the principal.
Despite the plausible basis for the court?s holding on the latter issues, many students are outraged by this result (or, at least, as outraged as one gets in business classes). Granted, the court?s analysis is awfully thin. Granted also, the result seems counter- intuitive. Should I be exposed to potentially significant liability just for doing a favor for a friend? The decision becomes easier to understand (and maybe accept), however, when one realizes that the opinion was a results-driven one intended to effect public policy.
Consider the ex post planning implications of the result in Gorton v. Doty: Suppose that you are Ms. Doty?s attorney. A few months after the decision was handed down, she stops by your office. She tells you that the new football coach wants to use her car to take some players to another game. She asks for your advice as to how she could avoid liability in the event of an accident. What do you tell her?
First, it won?t help to expressly state that the coach is not her agent, or even to put that in writing. The issue is not how the parties describe their relationship, but rather whether the Restatement (Second) standard is satisfied under all of the circumstances. Second, while it would help to avoid requiring the coach to drive her car, she may not want to let some teenage football player drive her car. Third, and perhaps the best advice you can give, you might tell Doty to make sure that her auto insurance policy covers accidents caused by people who use her car with her permission.
This analysis should tip you off as to the policy goal the court was trying to effect. But here?s another clue: During his closing argument, counsel for plaintiff Gorton stated to the jury that ?you have a right to draw on your experience as business men in determining the facts in this case, and that you know from your experience as business men that prudent automobile owners usually protect themselves against just such contingencies as are involved in this case.? Counsel for defendant Doty objected, and moved for a mistrial, on grounds that it was improperly prejudicial to encourage the jury to assume that the defendant had an insurance policy that would cover any damages. Both the trial court and the supreme court majority rejected that objection.
So what was going on here? The court used (and arguably bent) agency law principles to effect what it regarded as sound public policy. The owner of a car is clearly the person best able to insure against these sort of losses. By using agency law to impose liability on car owners, the courts thus create an incentive for owners to insure. This explanation of the Gorton v. Doty majority?s motivation is supported by the fact that state motor vehicle statutes now uniformly create a presumption that the driver of a vehicle is the agent of the vehicle?s owner.
