Case Name: James Talcott, Appellant, v. DeWitt C. Cowdry et al., Respondents
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1896-06
Citations: 17 Misc. 333
Docket Number: 
Parties: James Talcott, Appellant, v. DeWitt C. Cowdry et al., Respondents.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 17
Pages: 333–335

Head Matter:
James Talcott, Appellant, v. DeWitt C. Cowdry et al., Respondents.
(Supreme Court, Appellate Term,
June, 1896.)
1. Collecting agencies — Liability to principal for act of their attorney.
A collecting agency is liable to a customer for the act of an attorney employed by it in making an unauthorized compromise of a claim.
2. Same — Damage must be shown.
In such a case, however, the customer, in order to recover, must show that the entire sum was collectible.
. Talcott v. Cowdry, 16 Mise. Rep. 487, affirmed.
Appeal from the affirmance by the General Term of the City •Court of a judgment of the Trial Term entered upon the dismissal of the plaintiff’s complaint.
The action was brought to recover the sum of $1,026.98, being the amount of interest due upon a judgment, which the defendants were employed to collect, and which they compromised for the principal without the interest, contrary to the plaintiff’s instructions.
• E. B. Bunnell, for appellant. . .. ; ■
Blumenstiel & Hirsch, for respondents.

Opinion:
Daly, P. J.
The conceded facts of the case aré that the plain'tiff had a'judgment against the firm of. Evans, McDonald & Go., of Indiana, for $2,892.54, recovered "in .1883, which was uncollectible, owing to the insolvency of the judgment debtors. Mr. Erañklin, one of the defendants, who. were collecting agents, called upon the plaintiff in 1885, saying that he had information which'he thought would enable him to collect this judgment. Whereupon the plaintiff gave the defendants this claim to' collect, agreeing to give them fifteen per cent of . the amount of such collection, and the defendants were to employ their own attorneys, and plaintiff was to have no further expense.
The defendants sent the claim.to W- P. Breen, an'attorney in Indiana, who brought the creditor's' action against the father of one of the judgment debtors, which resulted successfully. This creditor's suit was brought in the'United States Circuit Court of , Indiana, and the defendants in thát case threatened to appeal to the United States Supreme" Court from the judgment, unless a settlement were made; whereupon Mr. Breen, in order to avoid the , appeal, arranged to accept, as a compromise, the full amount of the plaintiff's claim without interest, and sent the defendants a power of attorney for the plaintiff to execute. The plaintiff refused to sign it, insisting that no' settlement should be made without payment of interest on the judgment. ' This decision was communicated, by defendants, to Mr. Breen,' but he, nevertheless, carried Out his arrangement for the settlement, entered judgment in his action.for the amount of the plaintiff's judgment without interest, received, the amount and forwarded it, less agreed charges, to the defendants, . who sent the check for this amount to the plaintiff.' . The plaintiff received the check and retained it, but notified the defendants next day that he would'hold-them for the amount of the interest.
• It is. claimed that this was a ratification.of.the act of defendants' sub-agent in compromising for less than the whole amount due; and. that, if plaintiff repudiated the . transaction, he was bound to- return ' -the money to defendants. * It is unnecessary to determine that ques tiony because another and - controlling consideration disposes of the case. The defendants are liable for the acts of the attorney whom they employ (Weyerhauser v. Dun, 100 N. Y. 150, 157), and such an attorney, employed by a' collecting agency, is its agent, and not the agent of the creditor. Dale v.. Hepburn, 11 Mise. Rep. 386. But though the plaintiff had the right to recover what he had lost by the breach of duty of defendants' agent, no recovery could be had without proof of the damage sustained by. the unauthorized' act, and the case is barren of any such proof. While a recovery in the creditors' action in Indiana was had against the defendant Evans in that action, it does not appear what that recovery was, whether it was to set aside conveyances to him by the original judgment debtors, or to reach equitable assets, applicable to'the payment of the judgments against them. The records show only an order of judgment that the plaintiffs recover of Evans the face of their judgment, $2,892.14, which was evidently the compromise judgment agreed upon by his attorneys and the attorneys of the different creditors. It was not shown that Evans was liable in any way for the whele amount of the plaintiff's claim or had received property or assets- of the original judgment debtors sufficient to pay it.
While very slight evidence of the collectibility of the whole of • the plaintiff's demand would be sufficient to throw upon the collecting agents the burden of showing that the amount was not collectible, yet the case does not furnish even the slight evidence requisite for that purpose. It was conceded that the judgment debtors were insolvent. The judgment was, therefore, prima facie uncollectible as against them. All the plaintiff could offer was his own opinion and hearsay evidence that his judgment was collectible.
For want of legal evidence upon the subject of damages the complaint was properly dismissed.
. The judgment appealed from must be affirmed, with costs.
McAdam and Bischoff, JJ., concur.
Judgment affirmed, with costs;