Delaware State journal and statesman., 1867-11-01
Journal AND NWffTNGT6N FRIDAY NOVEMBER h. 1857
MERCANTILE AGENCIES. 80 IMPOR-
TANT DECISION.

The following decision, rendered by Judge
Nelson, in the United States District Court
OF New York, strikes at the root of mercan-
tile agencies, and will be likely to reyolu-
tionize the business. Under this decision,
every man, whose credit injured by reports
given out by mercantile agencies, may sue
ior and recover damages.
John Beardsley and Horace Bedrdsley as.
Le'0fs Idppan. was motion for a new
trial on bill of exceptions. The case was
commenced in 1s49, and was for libel and
slander, as appears in the opinion. 1t was
tried in November, 1861, before Judge Belts
and Messrs. Cutting g. Owen and Ogden
Hoffman being counsel for the plaintiffs, and
d. F. Butler for the defendant. The trial
lasted over a fortnight. 1t may be remem-
bered that during it Benjamin Douglas, the
managing agent of the defendant, refused to
divulge the name of the correspondent who
had given the information, and was com
mlted to prison for contempt of court and
the trial went on without his testimony. 1t
resulted in a verdict for the plaintiff of
$4,000. The defendant moyed for a new
trial, which motion was heard by Judge
Nelson, in November, 1864,
The following is his opinion denying the
motion:
This was a suit against Tappan for libel
and slander of the defendants in respect 10
their credit as a mercantile firm, carrying on
business in Norwalk, Huron County, Ohio.
The defendant resided in New York, and
had established in that city mercantile
agency, the object of which was 10 procure
information of the pecuniary ability and
standing of merchants in the country for
merchants in the city, to be communicated
to the latter in confidential manner. The
defendant had some twenty clerks who pal
ticipated in the business of the establish
ment and were, of course, priyy TO the in
formation obtained, whether favorable or
unlavorable, to the character and credit OF
the country merchant; and who participated
in the communications of the information to
their customers or customers clerks.
The defendant communicated through his
clerks TO several customers and 10 their clerks
facts seriously affecting the credit of the
plaintiffs house; and the main question in
the case, on the merits, is whether or not he
is exemp. from the consequences of the pub
licatIon, on the ground of its privileged
character. The court charged the jury that
if the defendant himself had communicated
the information to person applying TO HIM
fnp tt,rr c,i
tion might have been a privileged one; but
that the publicity given 10 il by recording
the libellious words IN book, TO which
others had access, and 10 whom they were
communicated, though standing in relation
of clerks, deprived the communication OF
its otherwise privileged character. This is
no doubt very important question, and i'm
wolves in its practical operation, whichever
way it may be decided, interests of very
great magnitude. On the one hand, to
legalize these establishments in the manner
and TO the extent used by the defendant, is
placing one portion of the mercantile com.
munity under an organized system of espion-
age and inquisition for the benefit OF the
other, exposed, from the very nature of the
organization, to perversion and abuse; and
on the other, to refuse TO legalize them, may
be restricting injuriously the right of inquir
ing into the character and standing of the
customer asking for credit in his business
transactions. We are strongly inclined 10
think, if the establishments are to be upheld
at all, the Limitation attached to them by the
court below ID not unreasonable, to wit, that
1t must be an individual transaction, and
not an establishment conducted by an un-
limited number of partners and clerks
The principle upon which privileged com
mumcations rest, which, of themselves, would
otherwise be llbelous, imports confidence and
secresy between individuals, and is inconsls-
tent with the idea of communication made
by a society or congregation of persons, OF
by private company or corporate body,
The other objections in the case are tecl,-
meal in their character, not involving the
merits. We have looked into them, and are
OF opinion that they are not available to the
defendant. New trial denied,