Freund, Donges and Proctor. The opinion of the court was delivered by Freund, J.s.c.
The plaintiff, owner of a Chevrolet sedan automobile, on August 29, 1949, by written instrument leased it to Veeder-Root, Inc., for one year. The car was in the possession of William T. Heydt, Sr., an employee of the lessee, and on April 28, 1950, was being driven by him on an errand unrelated to his employment, when it came into collision with an automobile owned and operated by the defendant. Charging the defendant with negligence, the plaintiff brought this suit in the Passaic County District Court to recover for the damage caused to its automobile, but the court determined that the plaintiff had failed to establish the negligence of the defendant and accordingly rendered judgment for the defendant. The plaintiff appeals, urging that the judgment is contrary to the evidence.
At the opening of the trial, pursuant to notice, the defendant moved for the dismissal of the action on the ground that the defendant here, Ann B. Mulroony, had previously brought suit against William T. Heydt, Sr., the operator of plaintiff's car, in the Essex County District Court to recover for personal injuries and damage to her car arising out of the collision, and that the trial thereof resulted in a judgment in favor of Heydt and against her because the court found that he was negligent and she was contributorily negligent. The defendant argued that the judgment was res judicata; that the negligence of Heydt constitutes contributory negligence
chargeable to the plaintiff in this action perforce of R.S. 46:36-1. The court reserved decision on this motion until the close of the case and then denied it, ruling that the statute was inapplicable. The first question for consideration is whether this ruling was correct.
Prior to the enactment of chapter 53 of the Laws of 1939, R.S. 46:36-1, the law was that the bailor's right of action for damages to the property bailed was not defeated by the negligence of the bailee in the management or operation of the property. In a suit by the bailor against a third-party tortfeasor to recover damages to the vehicle, the contributory negligence of the bailee was not imputable to the bailor. Commercial Credit Corp. v. Satterthwaite , 107 N.J.L. 17 (Sup. Ct. 1930), affirmed 108 N.J.L. 188 (E. & A. 1931); First National Acceptance Corp. v. Annett , 121 N.J.L. 356 (Sup. Ct. 1938), affirmed 124 N.J.L. 78 (E. & A. 1940).
To remedy this situation, the Legislature enacted chapter 53 of the Laws of 1939, R.S. 46:36-1, N.J.S.A. , which provides that in a suit by the bailor against a third party based on the negligence of the third party to recover damages to the goods or chattels in the custody, control or possession of the bailee, his agents, servants or employees, the contributory negligence of the bailee, his agents, servants or employees, shall constitute a proper and valid defense and be a complete bar to the recovery in the same manner as though the suit were brought by the bailee. See Flagg v. Johansen , 124 N.J.L. 456 (Sup. Ct. 1940), which quotes the act in its entirety. In interpreting and construing this statute, the court must consider: first, the old law; second, the mischief; and, lastly, the remedy. Stephenson v. Stephenson , 102 N.J. Eq. 50 (E. & A. 1927). The mischief which the statute was intended to remedy was the injustice of a situation in which the bailor could recover, although the bailee could not.
The automobile leased by the plaintiff to Veeder-Root, Inc., the lessee, was in the possession and control of Heydt, an employee of the lessee, but at the time was being used on a personal errand and not in the business of the employer-bailee.
The court assumed that the relationship of employer and employee between the bailee and Heydt did not exist when he was using the automobile on a personal errand, and accordingly considered the statute inapplicable. This construction of the statute by the court imposed a condition which is not to be found in the act, namely, that the vehicle be used by the agent, servant or employee of the bailee in the scope of his employment in order that the contributory negligence of the operator be imputable to the bailor. The relationship of principal and agent, employer and employee, or master and servant is not terminated when the latter is not acting within the scope of his employment, or when he deviates from the line of duty. Such an act may be cause for termination, but does not, ipso facto , terminate the relationship. The car was in Heydt's possession as an employee of the bailee, although he was not driving it on his employer's business. The use to which an employee may be putting property entrusted to him by the employer may be personal, but the custody or possession is nevertheless as employee. The statute does not require operation of the vehicle or use of the bailed property to be in the course and scope of the service.
It is to be observed that the statute does not impose liability upon the bailor for the negligence of the bailee or his agent. It applies only to the limited instance of a suit brought by the bailor to recover damages to the goods or chattels against a third-party tortfeasor; then, the contributory negligence of the bailee or his agent, servant or employee shall constitute a valid defense. Therefore, as we construe the statute in a suit by the bailor against a third-party tortfeasor, the defense of contributory negligence is available if the agent, servant or employee of the bailee is in lawful custody, control or possession of the vehicle. It is then immaterial that at the moment of collision, the car was not being used in the scope of the bailee's business, for the statute does not so limit the defense.
Now, was the judgment entered in the Essex County District Court against Ann B. Mulroony in ...