The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1892-04-02
The Liability Of Mercantile Agencies
Doing a Collection Bust
ness Discussed.
Governed by the Contracts Be-
tween the Agency and Own
ers Of Claims.
Undertaking to Collect Does Not Insure
C~olieotion-The Position sf Attorney
~ Doing Like Work.

shall undertake to say q few words il
reference to the liability of mercantile
agencies doing u collection business. Al
most all agencies who do a reporting bust
ness also handle collections, it seeming tt
be almost n necessary part Of their bust
ness. and as almost every one, ut some
time in his business career, is tempted to
employ an agency in the collection OF his
claims, q statement with reference to tbs
liability Of an agency handling such bust
ness, will be Of general interest.
In the first place, it may be stated as a
general rule, that the liability OF an agency
is governed by the contract made betWeen
the agency and the owner of the CLAIM. In
most cases, however, the contract 10 merely
an implied contract, no express terms be-
ING agreed upon. unless it be as to the rate
per cent to be charged by the agency for
the work it does. Usually q bare receipt is
oiyeu for the collection and the liability Of
the agency in some cases, and in NIL cases
WHARF the terms are nos defined, is to be
determined from the general law Of con
tracts.
Bv undertaking to collect an agency does
not insure a collections; and early in the
history OF agencies. it was thought that the
taking Of a claim for collection was an I'M
Piled agreement on tho part of me agency
to TO ward to its local correspondent, and
10 act me ely as a forwnrder OF the claim
and al the sgeRt for the recslpt of the
money and the turning Of it over to the
client. That it's liability did net extend 70
the loss Of the money by failure OF the
correspondent to pay IL over, ana thas ~
was only bound TO use ordinary and
.a,e~rnHIN NJ1juauch III thH SELECTION
Of capable and honest Correspondents
and reasonable diligence in following
NJ the claim. lAele can bo no
doubt that il tbs terms Of the contract ex-
pteEsly states that such ia the position OF
the agency, that il that it shall be the
a % merely for tic purpose Of forwarding
q claim, the agency cannot ne hela fespon-
Hible after 1sillg o dlnary and reasonable
diligence in perfo ming its duties.
The law in later times, howeyet, 10 much
mora severe npon the agencies, where tnete
is no stated contract ab&olvlng 1T from la
bility. The position Of the agency ls now
said to be the same as that OF the attorney
doing like wo K, an the law with reference
to it liz the saIne. I.
In a leading case, Braastreat v. Eyerson,
~ Pa. ST., 12o4, mercantile agency under
took to collect certain claims belonging TO
their customer, giving the following re-
ceipt:
J. III. BRADsTREEr u son,
IMPROVED VI ERcANTILE AGENCY,
PlTEsBuRG, June ?, 1865.
Received Of Messra. Eyalson, Preston G
Co., four duplicate acca tances tor collec-
ton, W. Waite. Craifard, Memphis, Tenn,
amounting to Sl.726.3I.
(Siened) J.. NJ. f~RADsTREET q Son.
In delivering the opinion Of the court.
the Judge obssryed: 1T il argued, not
withdrawing the express receipt for col
lection, that tho defendants did not under
take for themselves to collect, but only to
submit to a proper and Responsible attof-
new, and made themselves liable only Tor
aiIiuence in corresponuenee and giving the
necessary information TO the plaintiffs; or,
in briefer terms, that the attorney in Mem
phis was not their agent for the collection,
but that of the plaintiff only. The cur
rent of decision, however. is otherwise as
to attornoys-at-lav sending claims TO cor
respondents for collection, and the reasons
for applying the same rules to col
lection agencies ara even stronger. They
have their selected agents In every
part of the country. from the nature OF
such rHmitsd institutions, we must con-
cluds that the public impression will be-
that the agency invites customers on the
very gtound of its facilities for making dis
tant collections. It must be presumed
from It's buainess connection at remote
points and It's knowledge of the agents
chosen, that the agency intends to under
take the performances of the service which
the individual customer il unable to per-
form for himself. There is good reason,
thereto G, to hold shat such an agency ID
liable for collections made by Its own
agents whrn it undertakes the collection
by the exp ess terms of the raceipt."
There was another case arising and de-
cided at Philadelphia in 1870, where the re-
ceipt given by tho agency read as follows:
For collection according to direction, and
proceeds when received by us to be paid
over to King & Baird.
Across the face of this was written this:
N. B.-The owner OF the, within mem
toned taking all the risks of the mail, tho
losses by failure of agents to remit and
also the losses by reason of instruction Of
war.
BIZ thus limiting their liability, the
agency was deoided to have been relieved
of responsibility sought to be cha ged
against it.
Other cases deciding that the attorney
undertaking the collection of claims. who
fails to limit his liability in tho receipt o
agreement to make the collection. is liable
for Losses occurring through tho negligence,
stc.. of his agents, may be found in Penn
sylvania, Alabama, Indiana, Arkansas, Mis-