COOK, Justice, dissenting.

With this decision, the court creates strict liability where it is not warranted. I must respectfully dissent.

If the plaintiff in this case goes back to trial and proves that the repossessor committed a breach of the peace, then the bank which hired the contractor is liable. Liability is absolute and extreme. The bank has no defenses, outside of proving that no breach of the peace occurred. Even if the bank had no knowledge of the contractor's actions, the bank cannot defend. Even if the bank expressly ordered the contractor to proceed cautiously, the bank cannot protest. Even if the bank did not knowingly or recklessly violate the statute, the bank will be exposed to punitive damages.

Why has the court created such unyielding liability? The facts in this case certainly invite such a response. They are egregious. No repossessor has the right to breach the peace, and certainly not so blatantly as the facts here indicate. It does not matter that the plaintiff had twice before had the car repossessed. And it does not matter that she jumped into the car when the wrecker was attached and refused to leave. If the public peace is threatened, then the repossessor violates the statute.

But as disturbing as the facts are, I cannot join in this decision. It has no support in either Texas law or the Restatement. And the decision has unjustifiably severe consequences for creditors who hire independent contractors to enforce their rights. Accordingly, I dissent.

I. LIABILITY AND DAMAGES

The claims in this case, as in most other wrongful repossession cases, include tort claims. The plaintiff sued for false imprisonment as well the section 9.503 claim. If we construe her pleadings liberally, we conclude she brought negligence claims. Damages sought are $250,000 compensatory and $1,000,000 punitive.

Under the decision delivered today, the bank is potentially liable for all claims and all resulting damages, as though the bank itself had executed the repossession. This is so because one who performs a nondelegable duty for the principal is a vice-principal. See Fort Worth Elevators Co. v. Russell, 123 Tex. 128, 70 S.W.2d 397, 406 (1934); Southwestern Bell Telephone Co. v. Reeves, 578 S.W.2d 795, 800 (Tex.Civ.App. — Houston [1st Dist.] 1979, writ ref'd n.r.e.). A vice principal's acts are the acts of the principal, and the principal is liable as though he himself performed them. Fort Worth, 70 S.W.2d at 406. Liability extends to all damages, whether compensatory or punitive. Id.; Southwestern Bell, 578 S.W.2d at 800.

This extreme liability takes the bank beyond the law of the Uniform Commercial Code. Under the Code, damages are expressly limited and defined. See TEX.BUS. COM.CODE ANN. § 9.507 (Vernon 1991) [hereinafter UCC]. Punitive damages are not available. Id.; see also § 1.106 (Vernon 1991).

Those who read today's decision may argue that damages are limited by the UCC. After all, the break in the independent contractor relationship was made through a UCC provision. But I find no authority to support the proposition that, once the independent contractor relationship is destroyed by a nondelegable duty, it is destroyed in some limited way, so that the bank may be liable for statutory damages but insulated from the full range of tort damages. It is more consistent with the law to recognize that the independent contractor relationship is destroyed for all claims arising out of facts such as those presented in this case, and to accept that the bank may now be held liable for all resulting damages.

II. NEED FOR A NEW EXCEPTION

Before destroying the employer-independent contractor relationship under the repossession statute or any other, we should consider whether Texas law requires such a change. A valid reason for change is lack of a remedy for injured parties. Stated in the context of this case: Do plaintiffs injured by wrongful repossessions already have a means of reaching the employers of independent contractors? They do.

Plaintiffs in wrongful repossession cases may reach beyond the independent contractor to the employer through one of many previously-recognized exceptions to the rule of employer non-liability. The exception which first comes to mind in these cases is the negligent hiring exception. See, e.g., Smith v. Baptist Memorial Hosp. System, 720 S.W.2d 618 (Tex.App. 1986). Under this exception, the plaintiff has a cause of action for negligence in hiring the repossessor. Id. The exception has long provided plaintiffs like Mrs. Sanchez the means to reach employers who have carelessly hired their contractors. See generally Restatement (Second) Torts § 411 (1965) [hereinafter Restatement].

III. THE RESTATEMENT

The words of the statute under discussion do not expressly impose a nondelegable duty upon the bank. To support an interpretation that imposes such a duty, the majority must go to other sources. Chief among them is the Restatement.

The Restatement sets out a number of exceptions to the rule that employers are not liable for the acts of independent contractors. Among these is an exception based on the precautions required by certain statutes:

§ 424. Precautions Required by Statute or Regulation

One who by statute or administrative regulation is under a duty to provide specified safeguards or precautions for the safety of others is subject to liability to the others for whose protection the duty is imposed for harm caused by the failure of a contractor employed by him to provide such safeguards or precautions.

Restatement § 424 (emphasis added).

The critical term in this section is "specified." The only statutes imposing a nondelegable duty are those which require specificity. Under our repossession statute, the duty to avoid breach of the peace is general. No specific safeguards or precautions are set out, either in the language of the statute or in the comments to it. See TEX.BUS. COM.CODE ANN. § 9.503 (Vernon Supp. 1992). Our repossession statute, therefore, does not fall under the exception described in the Restatement.

That exception is rare in Texas law, but it does arise out of one group of statutes. Certain statutes governing common carriers give rise to nondelegable duties. See, e.g., Berry v. Golden Light Coffee Co., 160 Tex. 128, 327 S.W.2d 436 (1959); Wardlow v. Newberry, 319 S.W.2d 437 (Tex.Civ.App. — Eastland 1958, no writ); Emerson v. Park, 84 S.W.2d 1100 (Tex.Civ.App. — Galveston 1935, writ dism'd). An examination of these cases reveals the distinction between a statute which falls under the Restatement section and a statute which does not.

Wardlow was a wrongful death suit which arose out of an automobile-truck collision. Weathersby owned the truck. It was leased to Wardlow, who held the Railroad Commission permit to operate the truck. The plaintiff sued Weathersby, Wardlow, and the truck driver. Wardlow claimed that Weathersby was an independent contractor and that Wardlow was not liable for Weathersby's actions. This was so because the only purpose of the lease agreement between Wardlow and Weathersby was to allow Weathersby to operate the truck under Wardlow's Railroad Commission permit. Wardlow argued that his office was simply a clearing house for purchase orders and receipts and that he had no control over the drivers. According to Wardlow, the mere use of his permit by Weathersby was not enough to place liability upon Wardlow.

Based on the statutes governing motor vehicles for hire, the court rejected Wardlow's argument. Id. at 442. The court stated that the right to operate a motor vehicle for hire is a non-delegable right. Id.

The statutes upon which the court based its decision state that their purpose is to insure safer highways. Id. at 440; see also Berry, 327 S.W.2d at 438. The statutes authorize the award of permits to carry commodities by a particular state agency to particular persons after specific application procedures. Wardlow, 319 S.W.2d at 440. They limit and name the entities which can operate a vehicle for hire. Id. Furthermore, the statutes provide that anyone who operates under a valid permit is an agent of and under the control of the permit holder. Id. at 440; see also Emerson, 84 S.W.2d at 1103.

Our repossession statute, in contrast to the common carrier statutes, does not limit and name those who may carry out a self-help repossession. Nor does the statute require anything like a license or a permit to repossess. The repossession statute does state that the secured party retains control over anyone who carries out the repossession. In sum, the repossession statute is not specific enough, under the Restatement, to justify an exception to the independent contractor rule and imposition of strict liability upon an employer.

IV. OUT-OF-STATE LAW

Out-of-state cases often assist us in decisions, and we should take advantage of what we can learn from the analysis of other courts. Reliance upon these decisions, however, should be tempered by the understanding that they grow out of generations of the law of another state. There may be underpinnings which support the decision that do not support the same decision here. To illustrate, I suggest we look closely at the decision of the Alabama Supreme Court in General Fin. Corp. v. Smith, 505 So.2d 1045 (Ala. 1987). This court is the only supreme court which has written on the issue we face today. The Alabama Supreme Court interpreted a repossession statute identical to our own to decide that the statute imposed a nondelegable duty. In reaching its decision, the Alabama Supreme Court conceded that the Alabama legislature had not specified the safeguards or precautions which a secured party may take to effect a peaceful repossession. Nevertheless, the court concluded that "by implication, a secured party is under a duty to take those precautions which are necessary at the time to avoid a breach of the peace." Id. at 1048.

I initially note that the words "by implication" indicate that the Alabama Supreme Court has greater liberty than we in statutory interpretation. Texas law does not give us the power to insert words which the legislature has omitted in drafting statutes. See Seay v. Hall, 677 S.W.2d 19, 25 (Tex. 1984).

A deeper analysis leads to questions about what the opinion does to the Alabama law governing independent contractors and their employers. Does the decision represent a logical next step or was it a departure from Alabama's law?

When we take a step back into Alabama law, we find that Alabama law regarding independent contractors has developed somewhat differently from our own. In Alabama, the non-delegable duty exception is well-recognized and broad. In State Farm Mutual Automobile Ins. Co. v. Dodd, 276 Ala. 410, 162 So.2d 621 (1964), the court discussed the history of the nondelegable duty exception, citing a line of cases which run back to 1889. Id. 162 So.2d at 626-27. Many of these cases expressly use the term "nondelegable duty" and develop the rule that an employer may not escape tort liability for negligence in performing such a duty by hiring an independent contractor. Id. The nondelegable duty may arise out of a contract or law. Id. In State Farm, it arose out of contract. The court held that an insurance company was liable, under contract, for harm resulting from automobile repairs done by a garage which the company had hired. Id., 162 So.2d at 628. In Robertson v. City of Tuscaloosa, 413 So.2d 1064 (Ala. 1982), the Alabama Supreme Court made clear that the nondelegable duty exception could arise from a statute. Id. at 1066.

The line of cases preceding the decision explains why the Alabama Supreme Court was able to deliver a unanimous, per curiam opinion in General Finance. The precedent supporting the court was overwhelming, the exception developed, the rule familiar. In our own case, creation of strict liability by application of the exception is a major decision, one which constitutes a break with our usual approach to the law governing employers and their independent contractors. It is a mistake to base our decision upon out-of-state law without being certain that our own law supports the step we take.

V. CONCLUSION

I cannot join in the court's decision, for it imposes strict liability and severe damages exposure upon employers who may be acting honestly and carefully. Liability is automatic, attaching as it does upon proof of the repossessor's conduct and in spite of the employer's conduct. Damages are uncertain at this point, but potentially great.

To join in the court's decision, I would have to see much more convincing authority than currently exists. The Restatement does not support this decision. Texas law does not support the decision, and, in light of that law, it does not make sense to adopt the interpretation of other states.

Accordingly, I dissent.

HECHT, Justice, joined by GONZALEZ and CORNYN, Justices, dissenting.

I respectfully dissent. Section 9.503 of the Uniform Commercial Code authorizes a secured creditor to take possession of collateral without judicial process "if this can be done without breach of the peace". TEX.BUS. COM.CODE § 9.503. The statute does not state that this duty to conduct nonjudicial repossessions peaceably is nondelegable. It could; it could add something like: "This duty cannot be delegated to any person acting on behalf of the creditor." And it might be good policy if it did; the Legislature is certainly empowered to determine that secured creditors should be liable for breaches of the peace caused by independent contractors hired to repossess collateral. But the Legislature has not done so; this Court has.

As justification for its decision, the Court relies upon section 424 of the Restatement (Second) of Torts (1965), which states that a statutory duty "to provide specified safeguards or precautions for the safety of others" is nondelegable. To bring section 9.503 within this rule, the Court must hold that the specified safeguard or precaution is not to breach the peace. This is at best an odd fit. Not to breach the peace may be a general guideline, but it is hardly a specified precaution. I find it very implausible that the Legislature ever had any notion, let alone intent, that by allowing secured creditors the remedy of peaceable nonjudicial repossession it was imposing upon them a nondelegable duty. This view is bolstered by the fact that the cases from other states upon which the Court relies were all decided within the past five years. The Uniform Commercial Code was adopted in each of those states at least 25 years ago; yet more than two decades passed before any court in the nation was asked to hold that section 9.503 imposed a nondelegable duty on secured creditors. This is a new judicial idea; it is not simply enforcement of legislative policy.

The consequences of the Court's decision are unclear. That is always the risk of judicial legislation. Courts cannot conduct hearings and investigate the need for new policies and their likely effects. Nevertheless, it appears that after today, secured creditors may use their own employees more to repossess collateral and attempt to exercise greater control over them. But when collateral has moved out of a creditor's vicinity, this alternative will not always be viable. Lenders may thus be expected to be more reluctant to make loans secured by distant or readily movable collateral. The Court itself recognizes that the burden of the liability it imposes may sometimes be heavy, and it proposes a solution: "the creditor may seek relief by turning to the courts." At 154. I would have thought that our courts had plenty to do without handling more repossession cases, and that the expense and delay of litigation was already a heavy enough burden without encouraging more. But I suspect the Court is right: creditors will be more inclined after today to choose the more expensive but less risky course of judicial foreclosure as the means of collecting their debts, rather than the much less expensive but much more dangerous course of nonjudicial foreclosure. Even still, there will be situations in which the creditor will quite innocently incur substantial liability for the actions of others over which it cannot exercise control. All these expenses must be added to the cost of credit, thereby charging all consumers more for loans just so debtors in default will have an additional cause of action against creditors who seek to be repaid. I doubt whether these costs — more cases for the courts, more litigation expense for creditors, and a dramatic increase in liability that is virtually unavoidable in at least some circumstances — are worth the change in policy the Court makes today.

I would hold that section 9.503 does not create a nondelegable duty for secured creditors. This does not leave a debtor without a remedy when a repossession of collateral has been accompanied by a breach of the peace. Such a debtor has a cause of action against the person causing the breach of the peace and any others who are vicariously liable for the offensive conduct. If those other persons are agents or independent contractors for whose conduct the creditor is not liable, a debtor may nevertheless have a cause of action against the creditor for negligent hiring. Debtors are thereby protected, and creditors' liability is commensurate with the level of their responsibility for any breaches of the peace.

The plaintiff in this case also argues that nonjudicial repossession of collateral is an inherently dangerous activity. Among the things which have been held not to be inherently dangerous activities are: construction work, Agricultural Warehouse, Inc. v. Uvalle, 759 S.W.2d 691, 695-96 (Tex.App. — Dallas 1988), writ denied, 779 S.W.2d 68 (Tex. 1989) (per curiam); protection of property, Gessell v. Traweek, 628 S.W.2d 479, 482 (Tex.App. — Texarkana 1982, writ ref'd n.r.e.); use of a forklift or winch line to load oil drilling equipment onto a truck, Gray v. Baker Taylor Drilling Co., 602 S.W.2d 64, 67 (Tex.Civ.App. — Amarillo 1980, writ ref'd n.r.e.); use of a plumber's torch, Goolsby v. Kenney, 545 S.W.2d 591, 595 (Tex.Civ.App. — Tyler 1976, writ ref'd n.r.e.); aerial spraying per se, Sun Pipe Line Co. v. Kirkpatrick, 514 S.W.2d 789, 792-93 (Tex.Civ.App. — Beaumont 1974, writ ref'd n.r.e.); use of inflammable paint remover, Olson v. B.W. Merchandise, Inc., 388 S.W.2d 737, 740 (Tex.Civ.App. — Austin 1965, no writ); use of a welding torch, Brownsville Nav. Dist. v. Valley Ice Fuel Co., 313 S.W.2d 104, 106 (Tex.Civ.App. — San Antonio 1958, no writ); electrical work, Texas Elec. Serv. Co. v. Holt, 249 S.W.2d 662, 667 (Tex.Civ.App. — Fort Worth 1952, writ ref'd n.r.e.); blasting per se, Seismic Explorations, Inc. v. Dobray, 169 S.W.2d 739, 742 (Tex.Civ.App. — Galveston 1943, writ ref'd w.o.m.); and operation of an oil refinery, Hall v. Amoco Oil Co., 617 F. Supp. 111, 112 (S.D.Tex. 1984). If these activities are not inherently dangerous, neither is nonjudicial repossession.

I join generally in the reasoning in Parts III and IV of Justice COOK's dissenting opinion. I would reverse the judgment of the court of appeals and affirm the trial court's summary judgment for the defendant.