Cour de cassation

The court:

...

Given that according to the judgment under attack (Lyons, 24 March 1987), rendered on remand after cassation, that Héro, a departmental inspector of the insurer La Cité, which had instructed him to make house calls and try to obtain policy subscriptions from individuals, procured Mme Guyot to make several subscriptions and embezzled, partly for his own profit, the sums she paid him for the policies; that Héro has been prosecuted and found guilty;

Given that the insurance company criticises the judgment for having held it civilly responsible for its employee Héro whereas, first, in simply finding that La Cité had profited from the subscriptions the Court of Appeal had not indicated why the company should answer for the embezzlement of its employee and thus failed to give a statutory basis for its judgment, and secondly, that as Héro was not acting on behalf of the company or in its interests but was rather using his position for purposes alien to those of the tasks assigned to him, the Court of Appeal violated article 1384(5) Code civil and article 593 Code of Criminal Procedure;

But given that an employer is only exempted from liability if his employee was acting outside the functions for which he was employed, without authority and for purposes alien to his role; given that the decision states that in having Mme Guyot make the subscriptions H. was exercising his functions and acting with authority in what he was supposed to do; given that Mme Guyot was in no doubt that he was acting for La Cité, which had indeed registered the subscriptions and had some profit from them; given that it follows from these findings that Héro, who received these sums in the exercise of his functions, did not take himself outside those functions in embezzling them, and that the Court of Appeal was right to conclude that La Cité was not exonerated from civil liability

...

For these reasons, DISMISSES the application for review.

Full Court, 19 May 1988
Doctrine upheld: see Jurisclasseur “Civil Responsibility”, fasc. 143, no 53 and following: The abuse of office has given rise to several judgements by the Full Court of the Court of Cassation, originating in a divergence between the Criminal Chamber and the Second Civil Chamber which was eventually resolved by the judgement of 19 May 1988. Current doctrine bases itself on the conditions laid down by the judgement of 19 May 1988 in order to exonerate a principal when an employee has abused his office. The principal is freed of liability only if three cumulative conditions are met. The worker must have acted outside the scope of his functions, without permission, and for a goal unrelated to his powers. The second and third conditions are easy to apply. The absence of permission implies that, even if the worker’s actions go beyond his functions and have a goal unrelated to his powers, the principal’s liability continues if he has agreed to these actions. The fact that the goal is unrelated to the powers makes it possible to separate the worker’s action from his functions. However, it is more difficult to apply the first condition, as it is less precise. The Court of Cassation seems to appraise it objectively: to act beyond the scope of one’s functions is to act in a way which does not arise from the exercise of those functions. Hence (1) an almost systematic recognition that acts which have in fact been carried out by a worker without permission and with a goal unrelated to his powers are within the scope of his functions, and (2) the difficulty for principals to free themselves of liability in cases of abuse of office. Theft, for example, does not constitute an abuse of office if the perpetrator, employed by a cleaning company, perpetrated the act on the work premises entrusted to him by his employer, during the time of that job (Civ.2, 22 May 1995: Bull. II., no 154) The criminal nature of the worker’s fault is, in this case, irrelevant (iv.2, 29 May 1996 and 29 April 1997). The least objective link between the abuse of office and the function allows the former to be linked to the latter and involves the principal’s liability. This is particularly true if the act is carried out on the work premises or during working hours. Thus a bank is liable for the misappropriation of funds committed by one of its executives to the detriment of depositors (Civ.2, 8 June 1995, 4 January 1996, 28 February 1996: Bull. II, no. 53).

The rigour of this doctrine, entirely based on a restrictive conception of what is an act which is beyond the scope of functions, would make it impossible for a principal to be exonerated in cases of abuse of office if there were not two exceptions: (1) the knowledge of the victim of the personal nature of the worker’s act (Civ.2, 7 July 1993: Bull., no. 249; 2 April 1997: Bull. no. 111; 21 May, 1997: Bull., no. 154; 19 November 1997). Knowledge of the abuse of office shows that relations between the victim and the worker were outside the scope of the functions of the latter, so that the liability of the principal has no reason to come into play if an act is carried out without authorisation, for personal ends, and outside the scope of the worker’s functions. In many cases which hold a principal liable the courts take care to state that the victims could properly believe that the worker was acting within the scope of his functions. (2) The second situation in which courts allow an abuse of office to exonerate the principal concerns the breach by the worker of the obligation undertaken by the principal towards the victim. The Criminal Chamber arrived at this very position in cases of theft or arson committed by workers against property which the principal had given them to protect pursuant to the contract for security services entered into with the victims, on the grounds that a worker necessarily puts himself beyond the scope of his functions if he pursues aims which are not only foreign, but also contrary, to his powers. (Crim., 23 June 1988, judgements 7, 8 and 9: Bull., no. 289). A worker who carries out or facilitates an act which he had the duty to prevent objectively performs an action which is contrary to his powers. This contradiction between his act and his powers has as its result, according to the Court of Cassation, to put him necessarily outside the scope of his functions, so that his principal has no longer any liability for him. It is necessary to insist on the fact the principal is exonerated only to the extent that the worker has committed an act which it was his job to prevent. This would not be the case, for example, if theft were committed by a worker who had no security function (Crim., 19 March 1992, Civ.2, 22 January 1997).

Note: all the judgements handed down in this area by the Full Court of Cassation follow this doctrine, in which can be clearly seen the very restrictive conception of the possibility for a principal to be exonerated from liability for the acts of his worker, even where the wrong committed by the latter can be found to be criminal. Thus, a judgement will be quashed if it exonerates a principal – a bank in this case – for misappropriation of funds carried out by employees without stating in what way such employees had acted outside the scope of their functions – Com., 14 December 1999, Bull. no. 233. The cases also lay down that a principal cannot be exonerated from liability if the victim of a fraudulent employee could properly believe that the worker was in fact operating within the scope of his functions (see in particular Civ.2, 24 June and 19 November 1998, Bull. no 225 and 279).

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