UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 LAW LIBRARY
 
 i
 
 6
 
 <v 
 
 THE 
 
 LAW RELATING TO 
 
 MERCANTILE AGENCIES, 
 
 BEING THE JOHNSON PRIZE ESSAY OF THE UNION 
 COLLEGE OF LAW FOR THE YEAR 1886. 
 
 BY 
 
 JOSEPH ^Y. ERRANT, 
 
 OF THE CHICAGO BAE. 
 
 PHILADELPHIA: 
 T. & J. AV. JOHNSON & CO 
 
 1889.
 
 CoPTRIGnX BY 
 
 T. & J. W. JOHNSON & CO 
 
 18S9. 
 
 COLLINS PniXTIXG HOUSE, 
 705 Jayue Street. 

 
 i PREFACE. 
 
 CI 
 
 X 
 
 Mercantile or commercial agencies are establishments 
 which make a business of collecting information relating 
 to the credit, character, responsibility, and reputation of 
 merchants, for the purpose of furnishing the information 
 to subscribers. These agencies have become recognized 
 and permanent adjuncts to the world of trade and com- 
 merce. The community cannot do without them. 
 
 The responsibilities of these agencies are very great. 
 Upon them the merchant relies for information. Char- 
 acter and credit depend upon the care with which they 
 perform their duties. In many ways they are influences 
 for weal or woe. 
 
 E-ecognizing the importance of their position in the 
 commercial world, the author has thought that it would 
 be a valuable contribution to the field of law literature to 
 present in an accessible form the law relating to them. 
 The aim of the author has been to prepare a treatise which 
 should be of practical value alike to the lawyer and the 
 student, to the merchant and the mercantile agency. 
 He has constantly endeavored to bear in mind the needs 
 of these parties and the points in which they are specially 
 interested. 
 
 The principles supporting the decisions of the courts 
 have been developed. Special attention has been given 
 
 3
 
 PREFACE. IV 
 
 to the statement of the facts in each particular case, in 
 order to satisfy the practitioner who is always desirous 
 of knowing upon what facts a decision is based. The 
 principal points in the opinions of the courts have been 
 presented, and it has seemed desirable to present them 
 in the language of the judges. In short, the aim 
 throughout has been to produce something which would 
 be really useful to all parties in interest. 
 
 Much time and labor have been spent in collecting 
 the materials for this work, and it is believed that all 
 the cases on the subject, scattered as they are through 
 many volumes of reports, are embodied in this treatise. 
 
 The task of preparing this little work has been to the 
 author an interesting and instructive one. It has shown 
 to him anew the elasticity of the principles of the com- 
 mon law and their po'.ver of adapting themselves to the 
 varyhig demands of civilized life.
 
 MERCANTILE AGENCIES. 
 
 niSTOKY OF THE AGENCIES. 
 
 That there was a need for institutions of the nature 
 of those under discussion is shown by reports of several 
 cases in the English Reports prior to the estabhshment 
 of Mercantile Agencies. In the years 1826 and 1827 
 we read of two cases reported in Carrington & Payne's 
 lleports in which the defendant was a Mr. Foss, the 
 secretary of " The Society for the Protection of Trade 
 against Swindlers and Sharpers." It was the duty of 
 the secretary to send to members printed reports for the 
 purpose of denoting and signifying to the members of 
 the society the names of such persons as were deemed 
 and considered swindlers and sharpers, and improper 
 persons to be balloted for as members of the society. 
 
 From the report of a case which came before the 
 House of Lords in 1848 we gain some information in 
 regard to the " Scottish Mercantile Society." The society 
 had been formed of merchants and bankers, and its 
 object was declared to be " To concentrate and bring 
 together from time to time a body of information for the 
 exclusive use of the members relating to the mercantile 
 credit of the trading community, with the view of dimin- 
 ishing the hazards to which mercantile men were ex- 
 posed." 
 
 The American system of mercantile agencies owes its 
 origin to the work done by one Church, who was at first
 
 2 MERCANTILE AGENCIES. 
 
 a commercial traveller. On his business tours he was in 
 the habit of making notes as to different persons. He 
 had his notes for his own use. Other people knew of 
 his notes, and would come and ask him for information. 
 At last he was employed by about thirty New York 
 houses to travel in the South and West to collect infor- 
 mation for them. His labors suggested to Lewis Tappan 
 the idea of establishing an institution which should make 
 a business of collecting information concerning the re- 
 sponsibility, character, reputation, and credit of mer- 
 chants, and which should furnish this information to 
 interested persons who became its patrons. In an able 
 article, written in defence of the system, published in 
 Hunt's " Merchants' Magazine" for January, 1851, Free- 
 man Hunt, speaking of Tappan's Agency, says : " Im- 
 mediately after the terrible mercantile revolution in 
 1837, when our whole system of internal commerce was 
 prostrated and nearly all its operations bankrupt, this 
 agency was planned and put into operation, as a remedy 
 for some of the difficulties which had just been so heavily 
 experienced. Its design was to uphold, extend, and 
 render safe and profitable to all concerned the great credit 
 system on which our country had thriven, doing business 
 to an immense amount with all the world, and using the 
 capital of the world to do it with." 
 
 Before proceeding with our sketch of the growth of 
 the American system of mercantile agencies, let us briefly 
 consider the methods employed by business houses for 
 ascertaining the standing of merchants prior to the estab- 
 lishment of these institutions. We are told that " they 
 would get information as they could by correspondence 
 or otherwise. Some of the larger houses employed trav- 
 elling agents to look after and report debtors, and collect 
 debts. Smaller houses were deficient in the information 
 6
 
 MERCANTILE AGENCIES. 3 
 
 SO necessary to their success ; the larger houses got it at 
 too high a cost." A writer in the "Cyclopaedia of Com- 
 merce," edited by J. Smith Ilomans and J. Smith llo- 
 mans, Jr., and published in 1860, says: "A comparison 
 of the system of ' The Mercantile Agency' with that of 
 the ' Commercial Traveller,' which it superseded, is 
 much to the advantage of the former, as regards the 
 item of cost, as well as information. From a large dry- 
 goods house we learn that in old times its expenses for 
 travellers counted by thousands, and that it was, to a 
 vexatious extent, in the power of clerks, who were anx- 
 ious to make sales, and whose good opinion was too 
 often won by civilities rather than by responsibility. Now 
 it holds an efficient check upon its salesmen, who travel 
 not to choose customers, but to make collections, and 
 obtain orders." 
 
 It was to displace this system that Lewis Tappan, in 
 1841, established in the city of New York " The Mer- 
 cantile Agency." Owing to the strong anti-slavery ten- 
 dencies of Tappan, his house could not send men to the 
 South, and was therefore compelled to limit its opera- 
 tions to the country north of Mason and Dixon's line. 
 In 1842, six months after the establishment of " The 
 Mercantile Agency," Messrs. Woodward & Dusenberry 
 established " The Commercial Agency." They reported 
 the entire country. In the year 1846 Benjamin Doug- 
 lass became Tappan's coadjutor, and assumed the chief 
 management. From this time the business grew rapidly, 
 and assumed a permanent and recognized position among 
 the mercantile institutions of the country. Subsequently 
 Tappan retired from business, and the firm became Ben- 
 jamin Douglass & Co. This firm was succeeded by R. 
 G. Dun & Co. The Woodward & Dusenberry Agcuicy 
 subsequently became " The McKillop & Sprague Co.,'' 
 
 7
 
 MERCANTILE AGENCIES. 
 
 and " Tlic Tappan, McKillop & Co. Agency," being the 
 two names by which the house was known in the East 
 and West. This Tappan was some relative of Lewis 
 Tapj)an. In 1878 tliis agency fiiiled, and retired from 
 business. 
 
 A few years after the establishment of " The Mercan- 
 tile Agency" and " The (Commercial Agency," J. M. 
 Bradstreet established "The Improved Mercantile 
 Agency," which was some years afterwards incorpo- 
 rated, and is known as " The Bradstreet Company." 
 
 The mercantile and commercial agencies were origi- 
 nally estabhshed for the purpose of reporting the credit 
 of buyers throughout the country. It was Mr. Brad- 
 street who first published a book giving the ratings. The 
 other agencies followx^d his example. 
 
 Among the recent features of the business may be 
 mentioned the " Special Agencies" established during 
 the past ten or twelve years, wliich confine themselves 
 to reporting a particular line of business. Prominent 
 among these are the agencies devoted to the furniture, 
 stationery, jewelry, and hardware industries. 
 
 In England mercantile agencies are also known under 
 the name of " Trade Protection Societies," and appear 
 to liave been established and developed independently of 
 the American agencies. 
 
 Tlie American establishments have branch offices in 
 all the prominent cities of the United States and Canada, 
 and have extended their operations to Great Britain, 
 France, and Germany. 
 
 Without going into details as to the methods employed 
 by these agencies, it may be said that the country is di- 
 vided into districts ; each district reports its own territory, 
 and there is a daily interchange of information between
 
 MERCANTILE AGENCIES. 5 
 
 the districts. Correspondents are selected with the ut- 
 most care ; in fact, everything is pkmned with the idea 
 of securing the best resuUs- 
 
 Thus tliese agencies, which were at first regarded as 
 " partaking of the nature of a system of espionage seem- 
 ingly at variance with that candor and love of open deal- 
 ing so characteristic of our commercial usages," have 
 gained the confidence of the mercantile world, and have 
 demonstrated, by their careful and successful manage- 
 ment, that they are necessary parts of the machinery of 
 trade and commerce. 
 
 THE QUESTION OF AGENCY. 
 
 It is said that, in the early days of mercantile agencies, 
 Charles O'Connor laid down for them tlie principles of 
 the law under which they should act, and within which 
 they would find protection. We do not know what 
 those principles were, but we do know that experience 
 in the courts has taught the community and the agencies 
 what principles can be applied. 
 
 The mercantile agency is the agent of him who en- 
 gages it to serve him. The contract signed by a sub- 
 scriber to " The Bradstreet Company" agency reads as 
 follows : " The undersigned hereby employs the Brad- 
 street Company to investigate and report," etc. 
 
 When the mercantile agencies first came into the 
 courts, the judges recognized the fact that these estab- 
 lishments were new forces in the community, and they 
 felt themselves called upon to assign to them their proper 
 sphere. In Ormsby vs. Douglas,^ Woodruff", J., in giv- 
 ing the opinion of the Court, discusses the question of 
 
 1 37 N. Y. 484.
 
 G MERCANTILE AGENCIES. 
 
 agency as follows ; " Laying out of view for the moment 
 the circumstance that the defendant in this case made 
 it his business to seek information in order to furnish it 
 to tliose whose occasions and interest require knowledge 
 of the standing and cliaracter of others wlio dealt or pro- 
 posed to deal with them, it is clear that if the witness 
 Benton, having procured a note to be discounted on the 
 faith, in part, of the plaintiff's responsibility, or being 
 about to do so, called on the defendant for information 
 respecting his standing and responsibility, it was entirely 
 lawful for the defendant to give him all the information 
 which he had on the subject. It was in a just sense a 
 duty which one member of the community owes to an- 
 other for mutual protection and benefit, and the law will 
 recognize it as such by holding it privileged. 
 
 "• Information of the description referred to being im- 
 portant, there is no legal objection to the employment of 
 an agent to seek and communicate it. And the agent 
 may properly be paid for his time, labor, and expense in 
 the pursuit of such information. 
 
 " If one merchant may employ his own private agent 
 to seek and communicate such information,^ there is no 
 legal objection to the combination or union of two or 
 more in the employment of the same agent. And as a 
 consequence, if an agent may act for several, he may 
 make the pursuit of such information his occupation, and 
 receive from those who desire to avail themselves of his 
 services and his knowledge acquired in such occupation 
 a compensation therefor." 
 
 It was upon su(;h reasoning that the courts recognized 
 the mercantile agencies as new and necessary servants of 
 the commercial world. 
 
 ^ 3 Deiiio, 110. 
 10
 
 MERCANTILE AGENCIES. 7 
 
 THE QUESTION OF PRIVILEGE. 
 
 " Good name in man or woman 
 Is the immediate jewel of their souls." 
 
 This is the sentiment which Shakespeare makes lago 
 express, and this is the feeling of the law. Recognizing 
 the priceless value of character, the law throws about it 
 the mantle of protection, and holds to the strictest ac- 
 countability him who unwarrantably assails it. 
 
 The merchant also is protected, not only in his capa- 
 city as a member of society, but also in his character of 
 merchant, and for any reflection upon his business, even 
 though it does not affect his reputation as an individual, 
 he is held liable who makes the same. " The law," says 
 Odgers, in his treatise on the " Law of Libel and Slander,"^ 
 " guards most carefully the credit of all merchants and 
 traders ; any imputation on their solvency, any sugges- 
 tion that they are in pecuniary difficulties, or are attempt- 
 ing to evade the operation of any Bankruptcy Act, is 
 therefore actionable per se." 
 
 In Harman vs. Delany^ the Court says : " The law has 
 always been very tender of the reputation of tradesmen, 
 and therefore words spoken of them in the way of their 
 trade will bear an action that will not be actionable in 
 the case of another person, and if bare words are so, it 
 will be stronger in the case of a libel in a public news- 
 paper which is so diffusive," Evidently the law is strict 
 in guarding the reputation of merchants. But there are 
 exceptions to the general rule. " Circumstances," says 
 Odgers, on page 182 of the work above mentioned, " will 
 afford an excuse for writing or speaking defamatory 
 words whenever the occasion is such as to cast upon the 
 
 ' P. 77. « 2 Str. 898. 
 
 11
 
 8 mercantii.h: agencies. 
 
 defendant a duty, Avli(>thor legal or moral, of stating what 
 he honestly believes to be the plaintili's character, and 
 of speaking his mind fully and freely concerning him. 
 In such a case the occasion is said to be privileged, and 
 the employment of defamatory words on such privileged 
 occasions is, in the interest of the public, excused." 
 
 According to Odgers, privileged occasions are of two 
 kinds: — 
 
 1. Those absolutely privileged. 
 
 2. Those in which the privilege is but qualified.- 
 
 '• In the first class of cases," he says, " it is so much 
 to the public interest that the defendant should speak 
 out his mind fully and freely, that all actions in respect 
 of words spoken thereon are absolutely forbidden, even 
 though it be alleged that the words were spoken falsely, 
 knowingly, and with malice." The testimony of wit- 
 nesses, the utterances of legislators, governors, and the 
 executive of the nation come under this head. 
 
 The second class of cases may be defined in the words 
 of Selden, J., in giving the opinion of the Court in the 
 case of Lewis vs. Chapman.^ " The term privileged^'' 
 says the Court, " as applied to a communication alleged 
 to be libellous, means simply that the circumstances 
 under whicli it was made were such as to repel the legal 
 inference of malice, and to throw upon the plaintiff" the 
 burden of offering some evidence of its existence beyond 
 the mere falsity of the charge." This definition is 
 adopted by Cooley in his work on " Constitutional Limi- 
 tations."- " The cases falling within this classification," 
 says Cooley, " are those in which a party has a duty to 
 discharii^e which requires that he should be allowed to 
 speak freely and fully that which he believes, where 
 
 ' 16 N. Y. 373. ' Pp. 532 et seg. 
 
 12
 
 MERCANTILE AGENCIES. 9 
 
 he is himself directly interested in the subject-matter of 
 the communication, and makes it with a view to the pro- 
 tection or advancement of his own interest, or where he 
 is communicating confidentially with the person inte- 
 rested in the communication, and by Avay of advice or 
 admonition." 
 
 In his treatise on the " Law of Torts," Cooley, in defin- 
 ing the second class of privileged communications, says : 
 " These are cases privileged, but only to tliis extent ; 
 that the circumstances are held to preclude any pre- 
 sumption of malice, but still leave the party responsible 
 if both falsehood and malice are affirmatively shown." 
 Under this head, according to Cooley, confidential com- 
 munications between one and his professional adviser, 
 whether legal, medical, or spiritual, are privileged. So 
 are confidential communications between a principal and 
 his agent in any matter pertaining to the business. In 
 his work on " The Law of Torts,"^ he says : " And where 
 confidential inquiries are made concerning the character 
 and conduct of servants, or the responsibility of trades- 
 men, and the like, by one having an interest in knowing, 
 and of one who may be supposed to have had special 
 opportunity in his own dealings or affairs to acquire the 
 information, the answers are in like manner privileged. 
 But if one makes it his business to furnish to others in- 
 formation concerning tlie character, habits, standing, and 
 responsibility of tradesmen, his business is not privileged, 
 and he must justify liis reports by the truth." In liis 
 treatise on " Constitutional Limitations,'*^ he mentions 
 answers to inquiries by one tradesman of another as to 
 the solvency of a person whom the inquirer has been 
 desired to trust as coming under the class of " privileged 
 
 -r ST-^ 
 
 p. 217. 2 p,^^53r 
 
 13
 
 10 MERCANTILE AGENCIES. 
 
 communications," but in a foot-note he says, " but the 
 reports of a mercantile agency to its customers are not 
 privileged." 
 
 Dr. Francis Wharton, in a note to the case of Trussel 
 vs. Scarlett,^ says : " If the limitations of confidence are 
 thrown off by the agency, in other words, if it publislies 
 to the world the information it collects, then it is liable 
 in damages to parties whose character it disparages, or 
 whose standing it impugns. On the other hand, if it 
 confines itself to the confidential communication of such 
 information to its customers, then, if it acts houajide, and 
 without malice or recklessness, these communications are 
 privileged, and the defendant, if sued for a libel in 
 making such communications, would be entitled to a 
 verdict." If we understand Ur. Wharton correctly, he 
 holds that communications made to subscribers are privi- 
 leged, regardless of whether they are interested in the 
 communication or not. 
 
 Is it not surprising to find that two eminent jurists 
 have come to such opposite conclusions ? 
 
 In the light of these opinions it seems necessary to 
 examine the subject as thoroughly and as critically as 
 possible in order that we may know how the law stands. 
 Let us in the first place examine some important opin- 
 ions of the courts which have a bearing upon this ques- 
 tion. 
 
 In Toogood vs. Spyring," Parke, Baron, says : " In 
 general, an action lies for tlie malicious publication of 
 statements wliicli are false in fact and injurious to the 
 character of another (within the well-known limits as to 
 verbal slander), and the law considers such publication 
 as malicious, unless it is fairly made by a person in the 
 
 > 18 Fed. Rep. 214. » 1 Cr. M. & R. 180. 
 
 14
 
 MERCANTILE AGENCIES. 11 
 
 discharge of some public or private duty, wlicthcr legal 
 or moral, or in the conduct of his own affairs, in matters 
 where his interest is concerned. In such cases the occa- 
 sion prevents the inference of malice, which the law 
 draws from unauthorized communications, and affords a 
 qualified defence depending upon the absence of actual 
 malice. If fairly warranted by any reasonable occasion 
 or exigency, and honestly made, such communications 
 are protected for the common convenience and welfare 
 of society ; and the law has not restricted the right to 
 make them within narrow limits." 
 
 In Harrison -ys. Bush,^ Lord Campbell, C. J., said: "A 
 communication made hona fide upon any subject-matter 
 in which the party communicating has an interest, or in 
 reference to which he has a duty, is privileged, if made 
 to a person having a corresponding interest or duty, 
 although it contains criminatory matter which, without 
 this privilege, would be slanderous and actionable. 
 Duty, in the proposed canon, cannot be confined to legal 
 duties which may be inforced by indictment, action, or 
 mandamus, but must include moral and social duties of 
 imperfect obligation." 
 
 In Gassett vs. Gilbert," Bigelow, J., said: "A party 
 cannot be held responsible for a statement or publication 
 tending to disparage private character if it is called for by 
 the ordinary exigencies of social duty, or is necessary and 
 proper to enable him to protect his own interest, or that 
 of another, provided it is made in good faith and without 
 a wilful design to defame." 
 
 In Wright vs. Woodgate,^ Parke, Baron, says : " The 
 proper meaning of a privileged communication is only 
 
 1 85 Eng. Com. Law, 5 E. & B. oU. ' 6 Gray, 97. 
 
 » 2 Cr. M. & R. 573- 
 
 15
 
 12 MERCANTILE AGENCIES. 
 
 this ; that the occasion on which the communication 
 was made rebuts the inference 2:>rima facie arising from 
 a statement prejudicial to the character of the phiintiff, 
 and puts it upon him to prove that there was mahce in 
 fact — that the defendant was actuated by motives of 
 personal spite or ill-will, ind(^pendent of the occasion on 
 which the communication was made." 
 
 In Cockayne vs. Hodgkisson,^ Parke, Earon, says : " I 
 have already said, that every wilful and authorized pub" 
 lication to the injury of the character of another is a 
 libel ; but where the writer is acting on any duty, legal 
 or moral, towards the person to whom he writes, or 
 where he has, by his situation, to protect the interests of 
 another, that whicli he writes under such circumstances 
 is a privileged communication." 
 
 In Coxhead vs. llichards,^ Tindal, C. J., said: "I 
 do not find the rule of law so narrowed and restricted by 
 any authority that a person having information materially 
 affecting the interests of another, and honestly communi- 
 cating it, in the full belief and with reasonable grounds 
 for the belief that it is true, will not be excused, though 
 he has no personal interest in the subject-matter." 
 
 In Washburn vs. Cooke,^ Bronson, C. J., says : " Bu 
 in actions for defamation, if it appear that the defendant 
 had some just occasion for speaking of the plaintiff, malice 
 is not a necessary inference from what, under other cir- 
 cumstances, would be a slanderous charge." 
 
 It is from such words as these that we gain light in 
 our investis^ations. It is from such statements of the 
 law that the courts luive been able to give a place and 
 privilege to mercantile agencies. But to what extent 
 
 ' 21 En?. Com. Law, 5 C. «fe P. 543. 
 
 ^ 10 Jurist, 984. ' 3 Denio, 110. 
 
 16
 
 MERCANTILE AGENCIES. 13 
 
 thoy have gone in holdinj; communications made by 
 these agencies privileged, is another question. The 
 cases upon this question are not numerous, and we have 
 therefore deemed it best to present as fully as possible 
 the facts in each particular case, and extracts from the 
 opinions of the courts. 
 
 The case of Goldstein vs. Foss, et al.^ is the earliest 
 case on this question. It was the duty of Foss, who was 
 the Secretary of "The Society for the Protection of 
 Trade against Swindlers and Sharpers," to send to mem- 
 bers printed reports for the purpose of denoting and 
 signifying to the members the names of such persons as 
 were deemed and considered swindlers and sharpers, 
 and improper persons to be balloted for as members of 
 the society. Goldstein's name appeared on one of the 
 circulars which was sent to members. This was held 
 to be libellous, and was not protected as a privileged com- 
 munication. 
 
 Fleming vs. Newton^ came before the House of Lords 
 in 1848. The appellants were the directors of the Scot- 
 tish Mercantile Society and the printers to that body. 
 The society had been formed of merchants and traders, 
 and its object was declared to be " to concentrate and 
 bring together, from time to time, a body of information 
 for the exclusive use of the members, relating to the 
 mercantile credit of the trading community, with a view 
 of diminishing the hazards to which mercantile men 
 were exposed." The third rule of the society was to the 
 following effect : " The secretary shall collect from the 
 general records of protests, hornings, and other records 
 of diligences kept for Scotland at Edinburgh, the names 
 
 ' 12 En;i. Com. Law, 2 C. & P. 252 (1826). 
 » 1 H. L. C. 3G2. 
 
 17
 
 14 MERCANTILE AGENCIES. 
 
 and designations of debtors in trade, and otherwise, ap- 
 pearing in these records. . . . The whole information so 
 collected shall be printed and forwarded monthly, or 
 oftener, as the general committee of directors shall think 
 proper, to each member respectively." The fifth rule 
 declared that " the information contained in the printed 
 record, so forwarded to members, shall be confined to 
 themselves for business purposes, and no member shall 
 communicate or use such information for other purposes, 
 under penalty of deprivation of membership." The so- 
 ciety printed the information thus obtained in a book 
 called "The Scottish Mercantile Society's Record." This 
 book was known among the trading community as the 
 "Black List." Newton had dishonored two promissory 
 notes, and Miller, the payee, had them duly protested, 
 and the protests registered according to the laws of 
 Scotland. The society had taken a copy of the register, 
 and Newton's name was about to be published in the 
 society's book, which was a mere copy of the register. 
 Newton applied for an interdict to prevent the publi- 
 cation, and it was decreed. On appeal the case came 
 before the House of Lords. A number of points were 
 discussed. On the question of publication and libel 
 the Lord Chancellor said : " Tlie appellants are en- 
 gaged in mercantile affairs, in which their security and 
 success must greatly depend upon a knowledge of the 
 pecuniary transactions and credit of others. That each 
 of them mii^ht cfo or send to the office and search the re- 
 gister is not disputed, and that they might communicate 
 to each otlu^r what they had found there is equally 
 certain. What they have done is only doing this by a 
 common agent and giving the information by means of 
 printing. No doubt, if the matter be a libel, this is a 
 publication of it, but the transaction disproves any 
 lb
 
 MERCANTILE AGENCIES. 15 
 
 malice, and shows a legitimate object for the act donr." 
 Directions were given to the lower court to recall the 
 interdict, with costs to the appelhuit. The decision in 
 this case, allowing the society to publish Newton's name 
 in its book, was based upon the fact that the society was 
 merely copying from the public record. 
 
 A writer in the " Albany Law Journal"^ says that, so 
 far as he has been able to ascertain, the earliest case in 
 this country is that of Billings vs. Russell,- tried before 
 Dewey, J., at nisi prius. He is probably correct in this 
 statement. In that case "the plaintiff was a merchant 
 and the defendant the proprietor of the Boston ' Mer- 
 cantile Agency.' The defendant had received from his 
 agent, on what was supposed to be reliable authority, a re- 
 port injurious to the credit of the plaintiff. This report 
 had been read by defendant's clerks to regular subscrib- 
 ers to defendant's agency, who were interested in know- 
 ing the standing of the plaintiff. The report was in- 
 correct and unjust. The court charged that if the 
 defendant, as the constituted agent of a commercial 
 house, upon the application of his principal, made in- 
 quiries at the proper places and under proper and rea- 
 sonable guards, to insure accuracy and privacy as to 
 the information thus obtained, and the information 
 which he thus obtained was repeated hona fide to his 
 employer, and to him alone, as tlie result of such in- 
 quiries, and for the purpose of governing his conduct in 
 his business transactions with the party as to whom the 
 inquiry was made, such communication may be justifia- 
 ble as a confidential communication and the defendant 
 would not be responsible, although the information was 
 incorrect and unfounded in fact, the defendant acting in 
 
 • Vol. 8, p. Q>o. » 8 Boston Law Reporter, 699. 
 
 19
 
 16 MERCANTILE AGENCIES. 
 
 good faith, and believing it to be true at the time he 
 communicated it ; but that the privilege of a confiden- 
 tial communication would be confined to the agent, and 
 if the principal repeated it to others he would be re- 
 sponsible." 
 
 The case of Taylor vs. Church^ came before the 
 General Term of the Court of Common Pleas of New 
 York in 1851. The jury had rendered a verdict for 
 the plaintiffs of ^6000 damages. An appeal was taken 
 from the judgment to the General Term of this Court. 
 The fbllowini^ is a statement of the facts in the case : 
 Information respecting a firm doing business in a South- 
 ern State was communicated by the defendant to a per- 
 son by whom he was employed for the purpose, and 
 who was directly interested in ascertaining their credit. 
 The information was then printed by the defendant and 
 furnished in the course of his business to merchants hav- 
 ing no immediate interest in learning the standing of the 
 said firm, but who were in the habit of selling goods to 
 persons in the Southern States, and wished the record for 
 future reference. The defendant in this suit was the 
 proprietor of what is now known as a commercial agency, 
 and as such conducted a business which is described in 
 the opinion of the court. He was sued by the plaintiffs 
 for injuries to the credit and standing of their firm from 
 a libel contained in the following words : — 
 
 "Taylor, Hale, and Murdock, Columbus, Miss. 
 
 " This concern does not seem to thrive here. M. is 
 capable in some respects, but is not a successful mana- 
 ger. He is remarkably systematic and particular in 
 details, and a superior office clerk, but lacks the other 
 and more essential requisites of a good merchant. H. is 
 
 » 1 E. D. Smith's Rep. 279. 
 20
 
 MERCANTILE AGENCIES. 17 
 
 rather a nesrativc character. Taylor resides in New 
 York, and sends out undesirable, ill-assorted odds and 
 ends and unsalable stock. He was formerly with Beri 
 Kini,^ and I am told is an unprincipled character." The 
 complaint alleges that the plaintiffs were merchants, and 
 co-partners in trade at Columbus, Miss., at the time of 
 the publication of the alleged libel ; that the same was 
 printed by the defendant of and concerning their firm, 
 and circulated by him to and among divers merchants of 
 and from whom the plaintiffs were in the habit of pur- 
 chasing goods. The answer sets up that the defendant 
 was eniraored in ascertainins: the credit and standing of 
 merchants residing and doing business in the Southern 
 and Southwestern States ; that the publication was 
 written by him at Columbus while in the discharge of 
 his said duties, and forwarded to a mercantile firm at 
 New York for the use of that firm and thirty-six other 
 subscribers; that the plaintiffs were unknown to him at 
 the time, and it was information he received which he 
 deemed reliable ; that it was printed for the more con- 
 venient distribution among said subscribers, and was a 
 privileged communication. The proof was that the 
 defendant sold and distributed it among others besides 
 those subscribers. This was one of the early cases. 
 Mercantile agencies were yet new to the community. 
 The Court feels the importance of the occasion, and 
 gives an elaborate opinion covering the whole question. 
 We quote liberally from the opinion of Ingraham, First 
 Justice, because his language is both interesting and 
 instructive. He says: "This action is brought to re- 
 cover damages for an alleged libel contained in a printed 
 paper which was circulated by the defendant. The 
 defendant was employed by certain merchants and mer- 
 cantile firms to obtain and communicate intelligence in 
 
 21
 
 18 MERCANTILE ANENCIES. 
 
 regard to tlie standing and responsibility of merchants 
 and others doing business at the South and West, and 
 after obtaining such infornuition he caused the same to 
 be printed and distributed in loose sheets, and subse- 
 quently in a book, to such persons as became, or were at 
 the time, subscribers to his agency. He was in fact the 
 proprietor of an agency for giving information to such as 
 were willing to pay for it in regard to the character and 
 standing of Southern and Western merchants. In the 
 course of such publication the article which is com- 
 plained of as libellous was published concerning the 
 plaintiffs. The business is one of recent date, novel in 
 its character, and the questions which have been pre- 
 sented to us in this argument are important, not only to 
 the parties immediately concerned, but to the mercantile 
 community. That such establishments, properly con- 
 ducted, and giving only correct information, are of the 
 highest importance to those who require such communi- 
 cations, no one can deny ; but it is also evident that if 
 carelessly conducted, or if untrue reports are furnished, 
 even through error or mistake, the consequence to those 
 who are thus misrepresented may be very injurious, and 
 sometimes destructive to their reputation, character, and 
 credit. We have felt the importance of these considera- 
 tions, both in regard to those who need the information, 
 and also in reference to a continuance of such agencies, 
 in the investigation of the questions before us." 
 
 Again : " The next inquiry is, was this libel a privileged 
 communication'? If it was, then it must be conceded that 
 there is no ground upon which the verdict can be upheld. 
 No special damage is shown, nor is any express malice 
 proven. The subsequent report in 1847 could not be 
 considered as furnishing such evidence. That publica- 
 tion would be equally privileged with the first, and 
 22
 
 MERCANTILE AGENCIES. 19 
 
 express malice is not to be inferred from a second publi- 
 cation of privileged matters, without some stronger evi- 
 dence than the mere republication. If this publication 
 had been in answer to an inquiry from a merchant having 
 an interest in knowing the condition of this firm, and had 
 extended no further than the form or answer to the appli- 
 cation, it might be included within the protection of 
 privileged communications.^ It is not, however, neces- 
 sary to the decision of this case that we should now 
 decide whether, if the communication had been confined 
 to tlie person making the inquiry, it would have been 
 privileged. The publication was far more extended in 
 this case." 
 
 Again : " The question then on this part of the case 
 is, whether a communication made for the purpose which 
 brings it within the class of those which are privileged, 
 may be subsequently printed and circulated to other per- 
 sons, who, at the time of the publication, have no interest 
 in knowing the facts stated, and who purchase tlie work 
 for the purpose of reference at a future period, if they 
 should thereafter have occasion so to do. The benefit of 
 this exception on account of privilege from the ordinary 
 rule has never been extended so far, nor do I know of 
 any case that warrants such a doctrine." 
 
 Again : " No case that has been cited protects a com- 
 munication made for the mere purpose of profit, and to 
 persons at the time having no interest in knowing, nor 
 can such a rule be maintained upon principle. The only 
 ground of privileged communication is interest, eith(>r in 
 the party giving or receiving the information, but it is 
 not to be found in a case where no such interest exists 
 at the time the communication was made. Any ex- 
 
 ' 3 How. 2G6, and 31 Eng. Com. Law, 5 A. & E. 53o. 
 
 23
 
 20 MERCANTILE ANENCIES. 
 
 tension of the rule would be frauijjht with danger to 
 that class of busmess men to whom credit is of any 
 value." 
 
 Again : " As no one can guard against the effect of 
 such secret publications, the least that can be required 
 in regard to them is, to hold the party who, as a matter 
 ' of profit, prints and publishes them, to the obligation of 
 seeing that what he thus privately circulates is founded 
 in truth. The convenience and protection of those who 
 give credit is not to be considered as paramount to the 
 credit and solvency of those who are the subjects of these 
 reports. The rule which we would adopt in these cases 
 is tliis, while any one who has an interest in giving or 
 receiving the information has a right to claim that the 
 same is a privileged communication, if made without 
 maUce, yet, when the publication is extended beyond 
 the parties directly interested, its privileged character is 
 at an end, and the man or firm whose credit is injured 
 by such publication lias a right to ask from the publisher 
 full indemnity for the injuries sustained." 
 
 Again : " There can be no difterencc, as suggested on 
 the argument, between making the communication in 
 writing or printing. It may well be doubted whether 
 either mode is justifiable if a third person is employed 
 to do the work. If such a communication can be privi- 
 leged, it must be made in a private manner ; and if the 
 defendant was justified in making it, he should have 
 furnished the information himself, and not have com- 
 mitted the duty to others. It is not necessary, however, 
 to decide this point. The view I have taken of the 
 question whether tlie communication was privileged, 
 renders it immaterial whether the copies were written 
 or printed. The judgment must be affirmed." 
 
 24
 
 MERCANTILE AGENCIES. 
 
 21 
 
 This case came before the Court of Appeals in 1853.^ 
 The judgment was reversed on one point. As to the 
 matter of privilege, Jewett, J., says : " I think the Court 
 below was right in holding that the publication could 
 not be included within the protection of privileged com- 
 munications. In this case the communications were not 
 even confined to the persons making the inquiries of the 
 defendant. The libel complained of was printed by his 
 procurement, and distributed by him to persons who had 
 no special interest in being informed of the condition of 
 the plaintiff's firm." When the formal question was 
 put to the judges : " Was the alleged libel a privileged 
 communication r' All the judges who heard the argu- 
 ment were of the opinion that it was not. 
 
 We Avish to call special attention to the last paragraph 
 quoted by us from the opinion of Justice Ingraham. He 
 doubts whether third persons can be employed to do the 
 work. He thinks " the defendant should have furnished 
 the information himself, and not have committed the 
 duty to others." This objection will again appear. In 
 fact, the next case we shall mention was decided on that 
 very point. We refer to the case of John B. and Horace 
 Beardsley vs. Tappan.^ This suit was tried before Judge 
 Betts of the United States District Court in the city of 
 New York. W^e have not been able to find any report 
 of the proceedings in the District Court. It has, how- 
 ever, been our pleasure to see Mr. Douglass, who was at 
 that time in Tappan's employ, and who was a witness in 
 the case. We have not endeavored to obtain tlie details, 
 but we are informed by him that the question involved 
 in that case was as to whether those wlio establislicd 
 mercantile agencies could have clerks and correspondents 
 
 1 8 N. Y. 452. * 5 Blatch. 497. 
 
 25
 
 22 MERCANTILE AGENCIES. 
 
 to aid them or not, and bis statement is supported by 
 tbe opinion of Judge Nelson, wbich we sball take tbe 
 liberty of presenting verbatim. During the cross-exami- 
 nation of Mr. Douglass, he was asked whether Tappan 
 had at the time of the alleged libel an agent or a cor- 
 respondent in Norwalk, Ohio (the town in whicli the 
 13eardsleys were established in business), and if so, who 
 he was. Objection was made by Tappan's counsel, but 
 was overruled. The question was then put. The wit- 
 ness declined to answer. Persisting in his refusal he 
 was sent to Ludlow Street Jail for being guilty of con- 
 tempt of court, and remained there for twenty days. The 
 jury returned a verdict for $10,000. Mr. Douglass in- 
 forms us that his determined refusal to answer the ques- 
 tion put to him aided greatly in establishing the agencies 
 in the confidence of the public, because men saw that 
 they could give information to the agencies, and that 
 these would not betray the confidence reposed in them. 
 The judgment for the plaintiff in this case is, of course, 
 an exception, and must be attributed to the fact that the 
 courts and the public were not yet educated up to the 
 needs and objects of the mercantile agencies. The case 
 was taken to the United States Circuit Court, and Judge 
 Nelson affirmed the jiulgracnt. His opinion shows the 
 feeling at that time. He says : " The defendant resided 
 in New York, and had established in that city a mercan- 
 tile agency. . . . Defendant had some twenty clerks who 
 participated in the business of the establishment, and 
 who were, of course, privy to the information obtained, 
 whether favorable or unfavorable to tlie character and 
 credit of the country merchant, and who participated in 
 the communication of the information to their customers 
 or their customers' clerks. The defendant communicated 
 through his clerks to several customers and to their 
 26
 
 MERCANTILE AGENCIES. 23 
 
 clerks facts seriously affecting the credit of the plaintiff's 
 house ; and the main question in the case on the merits 
 is, whether or not he is exempt from the consequences 
 of the publication on the ground of its privileged cliar- 
 acter. The Court charged the jury that if the defendant 
 himself communicated the information to a person ap- 
 plying to him for the purpose in good faith, the commu- 
 nication might have been a privileged one, but that the 
 publicity given to it by recording the libellous words in 
 a book to which others had access, and to whom they 
 were communicated, though standing in the relation of 
 clerks, deprived the communication of its otherwise 
 privih^ged character. This is no doubt a very important 
 question, and one involving in its practical operation, 
 whichever way it may be decided, interests of very great 
 magnitude. On the one hand, to legalize these estab- 
 lishments 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 espionage and in- 
 quisition 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 re- 
 stricting injuriously the right of inquiring into the cliar- 
 acter and standing of the customer asking for credit in 
 his business transactions. I am strongly inclined to 
 think that if the establishments are to be upheld at all, 
 the limitation attached to them by the court below is 
 not unreasonable, to wit, that it must be an individual 
 transaction, and not an establishment conducted by an 
 unlimited number of partners and clerks. The prin- 
 ciple upon which prvileged communications rest, whicli 
 of tluMuselves would otherwise be libellous, imports con- 
 fidence and secrecy between individuals, and is incon- 
 sistent with the idea of a communication made by a 
 
 •27
 
 24 MERCANTILE AGENCIES. 
 
 society or a congro<^atioii of persons, or by a private 
 company, or a corporate body." On appeal the case was 
 taken to the Supreme Court of the United States, and 
 the judgment was reversed. The Court does not seem 
 to have thouglit it necessary to touch on the cpiestion 
 of privileged communications, but reversed the judgment 
 on other grounds.' 
 
 Ormsby vs. Douglass- is the title of a case which was 
 first tried in 1858 in the Supreme Court of New York 
 City. It was a case to recover damages for slander. At 
 the close of the plaintiff's evidence, the defendant moved 
 for a nonsuit and a dismissal of the complaint, on the 
 ground that the words spoken by the defendant concern- 
 ing the plaintiff appeared to have been spoken confiden- 
 tially, in the course of the defendant's employment, to 
 one of his employers on the application of the latter, 
 who had need of the information, for the purpose of gov- 
 erning his discretion in his business, and that under the 
 circumstances the communication was not unlawful, there 
 being no evidence of malice or bad fiiith. The Court 
 granted the motion. A new trial was denied at the 
 General Term, and the case was carried to the Court of 
 Appeals. 
 
 Douglass kept a mercantile agency in New York City. 
 By the terms of subscription, which constituted the con- 
 tract between the defendant and the person to whom the 
 alleged slanderous words were uttered, all information 
 was considered strictly confidential, and furnished only 
 for the use of subscribers, and was not to be communi- 
 cated to any other person. In July or August, 1854, 
 one Benton, a subscriber, who held a note endorsed by 
 the plaintiff, presented a written call for information as 
 
 » 10 Wallace, 427. » 37 N. Y. 484. 
 
 28
 
 MERCANTILE AGENCIES. 25 
 
 to the credit, responsibility, etc., of the plaintiff. The 
 book was examined by the clerks, and after consultinjjf 
 defendant, and some objection by defendant to reporting 
 in writing, becanse the report was bad, and a further 
 conversation with Benton, the defendant stated that 
 Ormsby was a man of no responsibility ; he was a bad 
 man, and worked for counterfeiters, and was a counter- 
 feiter. Afterwards, in another conversation, after plain- 
 tiff's attorney had written a letter to the defendant, 
 Benton asked defendant if he had made further inqui- 
 ries, and the result, and he said he had, and that the 
 report was not so much out of the way after all. He 
 also stated that he had given the report to some four or 
 five other persons. Miller, J., said : " It is said that the 
 defendant falsely charged the plaintiff with a crime, and 
 that the answer of the defendant to the inquiry made was 
 not responsive to the question put. It is true that the 
 report made embraced a charge of a criminal offence ; but 
 it was, I think, directly responsive to the question asked. 
 It related to the standing of the party. It affected his 
 responsibility as a business man and his financial credit 
 and character. It had much to do with tlie question 
 whether, as a business man, he was entitled to credit and 
 confidence, and to what extent. It was in fact what the 
 witness inquired for. ... It was not an allegation or 
 charge made by the defendant, but a report of informa- 
 tion he had obtained in the due course of his business, 
 and which had been entered upon his books. He merely 
 communicated to a person, who had a right to demand it, 
 such information as he had, including a fact within the 
 range of inquiry made. Surely, if any communication 
 of this kind made in good faith is privileged, then the 
 whole is protected as much as any part of it, and it 
 
 29
 
 26 MERCANTILE AGENCIES. 
 
 cannot well be urged that there is malice because the 
 whole truth is stated and a portion of it is criminatory," 
 
 Asrain : " If the allci2:ed slanderous words were com- 
 municated to other persons besides the witness, the 
 surrounding circumstances evince that it was in good 
 faith and confidentially, to those who had a right to 
 require it, and where it would be protected as a privi- 
 lejjed communication." 
 
 Asrain : " The business in which the defendant is 
 engaged is sanctioned by the usages of commercial com- 
 munities, and the proof in this case fails to establish that 
 he transgressed any rule of law in its transaction." 
 WoodruflF, J., from whose opinion in this case we quoted 
 when treating of " The Question of Agency," after review- 
 ing a line of authorities, says : " Upon the same general 
 principle, merchants have an interest in knowing, and 
 have a right to know, the character of their dealers and 
 of those who propose to deal with them, and of those 
 upon whose standing and responsibility, in the course of 
 their business, they have occasion to rely. As a neces- 
 sary consequence they may make inquiries of other 
 merchants, or of any person who may have information; 
 and if such merchant, or other person, in good faith com- 
 municates the information which he has, or thinks he 
 has, the communication is privileged." 
 
 Again : " In my opinion the right of the plaintiff to 
 recover does not at all depend on the question whether 
 the defendant was pursuing this business for gain, but 
 on the same principle as if he had been in the same 
 business with the subscriber who applied to him and 
 had made the same communication." The judgment 
 was affirmed. 
 
 In the first volume of the "Albany Law Journal"^ we 
 
 30 ^ P. 323.
 
 MERCANTILK AGENCIES. 27 
 
 find an acconnt of a case wliich was tried in September, 
 1870, before the Chenango Circuit Court. It appears 
 that one Gilbert received a letter with printed questions 
 from J. M. Bradstreet & Sons' Mercantile Agency, 
 inquiring as to the standing, character, and financial 
 ability of a party by the name of Sherwood; and this 
 letter he ansAvered. Sherwood sued him for libel for 
 matter contained in that answer. The Judsre charjjed 
 the jury that the communication was not privileged. It 
 was ruled that the protection which is given to the pro- 
 prietors of a mercantile agency in reporting the standing 
 of a party to one of its customers (as laid down in Ormsby 
 vs. Douglass) is not given to the country correspondent 
 of tlie agency. It is strange that this case was not 
 appealed by the defendant. If it was, we have not met 
 it in our investigations. 
 
 The Commonwealth I's. Stacey^ was a criminal action 
 for libel, brought in 1871 against one Stacey, who was 
 probably the Philadelphia representative of R. G. Dun 
 & Co. The publication which was made the foundation 
 of this indictment was as follows : 
 
 " Mercantile Agency ; notification sheet, R. G. Dun & 
 Co., proprietors. Thursday, ]March 3d, 1870. No. 9. 
 Strictly confidential. Subscriber to reference book. 
 We have information which changes the ratings of the 
 undermentioned names. An indication that a change 
 has occurred should be made in your book in all cases 
 by making a dash ( — ) against your name. If specially 
 interested in any of the parties, particulars may be 
 obtained at our office. These notifications are confined 
 strictly to changes materially affecting the ratings in our 
 reference book. The insertion of a name herein does 
 
 1 8 Phila. G17. 
 
 31
 
 28 MERCANTILE AGENCIES. 
 
 not always imply a failure, but simply that circumstances 
 have occurred, the particulars ot" which should be olv 
 tained by parties interested. Pennsylvania, 103, O'Brien 
 & Cahill, shoes, Philadelphia." 
 
 This notification sheet had been sent to all the agen- 
 cy's subscribers. The indictment was demurred to, and 
 the report details the opinion of the Court on the de- 
 murrer. The Court, Allison, P. J., says : " It is further 
 assigned for demurrer against the bill that the matter set 
 forth is on its face a privileged communication, made in 
 the performance of an obligation and duty, being a confi- 
 dential communication made by a mercantile agency to 
 subscribers who employed the agency for the purpose of 
 supplying them with information for their use in the 
 management of their business. A communication is 
 privileged, even though it be defamatory, where there is 
 an interest or duty to make the matter complained of 
 known, if it is done hona fide and without malice : 
 Moore vs. Farrall,^ Shipley vs. Todhunter. "^ 
 
 Again : " The indictment before us is founded on a 
 communication made to only one member of the associa- 
 tion, so far as we have information from the libel itself, 
 and it would be a good defence to the charge of publish- 
 ing a malicious libel, to show that the paper was sent to 
 but one person, who was interested in knowing all that 
 is stated, or referred to in the communication, as to the 
 ratings of 0'P>ricn & Cahill, and that the publication 
 was without malice, the defendant having knowledge of 
 such facts as warranted him in making the statement 
 contained in the communication, or having reason to 
 believe them to be true, made them to persons who were 
 interested in obtaining the information. But we cannot 
 
 ' 21 Eng. Com. Law, 4 B. & Ad. 871. 
 * 32 Eng. Com. Law, 7 C. & P. 680. 
 32
 
 MERCANTILE AGENCIES. 29 
 
 agree with the position taken by the defendant, tliat he- 
 cause he is connected witii a mercantile agency h(; may 
 communicate to every person who becomes a subscriber 
 to his agency statements prejudicial to the business or 
 moral standing of the merchants of the land, whether 
 the persons to whom the information is sent have an in- 
 terest in receiving it or not. In any case in which they 
 have such an interest, and the agency have come under 
 obligations to perform a duty of tliis kind, it would 
 doubtless be regarded as a privileged communication if, 
 without malice, facts are communicated which are neces- 
 sary for the protection or proper for the information of 
 the persons to whom they are sent. And this was the 
 ruling of the court in the case of Lawless vs. Anglo- 
 Egyptian Cotton & Oil Co. ;^ there every person to whom 
 the circular was sent, having an interest in the business 
 of the association, of which he was a member, was en- 
 titled to be informed of the transactions of the body, the 
 publication of which was charged to be libellous. But 
 can anything like this with fairness be claimed of an 
 association whose members are scattered over all the 
 land, but a small portion of whom can have any interest 
 in knowing the ratings, as they are called, of the par- 
 ticular names which are periodically sent out with such 
 remarks as are calculated to injure their reputation and 
 business credit V 
 
 Again : " There is no great hardship imposed upon 
 an agency of this kind if they are required to know be- 
 forehand that their statements are true, and that the 
 person to whom they are sent has an interest in receiv- 
 ing the information ; and this could be accomplished by 
 requiring every subscriber to furnish to the agency from 
 
 ' L. R. 4 Q. B. 262. 
 
 33
 
 30 MERCANTILE AGENCIES. 
 
 time to tim(^ the names of the firms with whom tliey 
 have established business relations, or who may have 
 applied to tliein for credit." This ground of demurrer 
 was overruled. 
 
 In 18T1 the case of Sunderliu et al. vs. Bradstreet^ 
 came before the Court of Appeals. Sunderlin et al. 
 were merchants doing business in the City of Rochester. 
 Bradstreet et al. were the proprietors of the well-known 
 " ^Mcu'cantile Agency." One of their publications was a 
 weekly sheet of corrections which was sent to their sub- 
 scribers in the city of New York by private messenger, 
 and in tlie country by mail. Between three and four 
 thousand copies of their weekly sheet were so distri- 
 buted. In this weekly sheet under the date of January 
 31st, 1868, they published that the plaintiffs had failed. 
 This was confessedly false. The plaintiffs called upon 
 the defendants for the names of the parties furnishing 
 the information, which they refused to give, but pub- 
 lished the next week a retraction of the report com- 
 plained of. The jury had returned a verdict for the 
 plaintiffs for $400. A new trial was denied at the 
 General Term and judgment directed on the verdict in 
 favor of the plaintiffs. It was then appealed to the 
 Court of Appeals. The only question presented to the 
 court by the appeal was : whether the communication 
 came within the protection of privileged communica- 
 tions. Allen, J., declared that the case might be de- 
 cided upon the authority of Taylor vs. Church, and spoke 
 of the unanimous decision of the court in that case, 
 seven judges taking part in the decision, the other judge 
 not expressing an opinion because he was not present at 
 the argument. He says : " The circumstances under 
 
 » 46 N. Y. 188. 
 34
 
 MERCANTILE AGENCIES. ' 31 
 
 which this judgment was given, as well as the method 
 adopted by the judges iu d(!termining this precise ques- 
 tion by a forniul declaration, entitles the decision to 
 peculiar weight as an autliority. That case cannot be 
 distinguished from this in any circumstance favorable to 
 the defendant." In this case the court again defines 
 the limits of the doctrine of privileged communications. 
 Says Allen, J., " A communication is privileged within 
 the rule when made in good faith in answer to one hav- 
 ing an interest in the information, and it will be pri- 
 vileged if volunteered when the party to whom the 
 communication is made has an interest in it, and the 
 party by whom it is made stands in such relation to him 
 as to make it a reasonable duty, or at least proper that 
 he should give the information." 
 
 In regard to the question of communications in cipher 
 the Court say : " The fact that the libellous statement 
 was in cipher is not material. It was in language under- 
 stood by the numerous patrons of the defendant, and all 
 the subscribers to the publication had the key to the 
 cipher, and the publication was equally significant and 
 injurious as if made in the distinct terms, in the very 
 words, indicated by the numerical figures." The judg- 
 ment was affirmed. 
 
 The State ex rel. Lanning et al. vs. Lonsdale^ came 
 before the Supreme Court of Wisconsin in 1880. This 
 was a proceeding against the appellant Lonsdale, as for 
 a contempt, to enforce a civil remedy. Lonsdale was 
 the managing agent of the mercantile agency of II. G. 
 Dun & Co. at Milwaukee. He had refused to answer 
 certain interrogatories propounded to him when giving 
 his deposition as a witness before a court commissioner 
 
 '■ 48 ^Yiscon. 3-18. 
 
 35
 
 32 MERCANTILE AGENCIES. 
 
 of Milwaukee County, in an action pending in the Circuit 
 Court of Fond du Lac County, in which relators were plain- 
 tift's, and one Lewis E. Reed defendant. That action was 
 an action to recover damages for an alleged libel contained 
 in a letter which it was charged Heed wrote and sent to 
 some commercial agency in Milwaukee, giving an unfavor- 
 able report of the financial standing and responsibility of 
 the relators. In obedience to a suhpcena duces tecum 
 Lonsdale appeared before the commissioner. Lonsdale, 
 on bein<' uiterrogated, refused to disclose whether the 
 a^j-ency had received any such communication from Reed, 
 or whether Reed was one of the correspondents of the 
 ao-ency, and also refused when requested to do so to 
 produce any correspondence or documents called for by 
 the subpoena. The ground of his refusal was that his 
 answers to the questions propounded would have a ten- 
 dency to accuse himself of libel, which is a misde- 
 meanor, or to expose him to a penalty. As a result of 
 his continued refusal, Lonsdale was adjudged guilty of 
 contempt of court, and ordered to pay expenses and 
 costs to the plaintiffs in the libel suit, and was commit- 
 ted to jail. From this order Lonsdale appealed. 
 
 The Court had to dispose of a number of questions 
 presented by the appeal. On the question of privilege 
 the Court, Lyon, J., says : " We do not think it proper 
 to pass definitely upon the character of the communica- 
 tion which is charged to be libellous, or to say whether 
 or how far it is privileged as respects Mr. Reed. These 
 are questions which should regularly be determined in 
 the libel suit. For the purposes of this appeal we are 
 inclined to think that it was conditionally privileged in 
 the hands of the appellant or his principals, and that 
 they might lawfully make known its contents confiden- 
 tially to their subscribers, seeking information of the 
 3G
 
 MERCANTILE AGENCIES. 33 
 
 financial standing of tlio relators, provided they did so 
 in good faith — that is, without malice, and in the helief 
 that the statements therein contained were true. There 
 is nothing in the record before ns tending to show that 
 the appellant has made known the contents of this com- 
 munication to any person otlier than the subscribers of 
 the agency, and the fidelity with which he has guarded 
 and kept the secrets of the agency in this proceeding is 
 strong evidence that he has not." The order was re- 
 versed. 
 
 Erber & Stickler rs. R. G. Dun & Co.^ was tried in 
 April, 1882, before Judge Caldwell in the Circuit Court 
 of the United States for the Eastern District of Arkansas. 
 It appeared in evidence that in the year 1880, and for 
 some years prior thereto, Erber & Stickler were partners 
 engaged in the mercantile business at Texarkana, in the 
 State of Texas. It was and is the business of R. G. Dun 
 & Co. to impart information to their subscribers orally 
 on application therefor, and by means of a " daily noti- 
 fication sheet" printed and sent to their subscribers at 
 the agency issuing such sheet. In the fall of 1880 re- 
 ports injurious to the credit and standing of the plaintiffs 
 were in circulation in Texarkana. One of the plaintiffs 
 testified that these reports originated with one Kozmin- 
 sky, another mercliant and citizen of Texarkana. In 
 time some statement of these reports reached the mer- 
 cantile agency of R. G. Dun at St. Louis. In what 
 terms these reports reached the agency at St. Louis was 
 not very clear. Erber & Stickler contended that the 
 reports made by Porter or some one else at Texarkana, 
 and given out by the agency to its subscribers calling 
 for the same were to this effect, viz : " Erber & Stickler 
 
 > 4 McCrary, 160. 
 
 87
 
 34 MERCANTILE AGENCIES. 
 
 are selling their goods below cost. They are about to 
 fail. They have a bad business record. Their creditors 
 had better be on their guard, and look after their claims." 
 On the 13th day of December, 1880, the agency pub- 
 lished the "daily notification sheet," on which appeared 
 the names Erber & Stickler and residence, with the 
 words " call at office" opposite thereto. This sheet was 
 distributed to 600 subscribers, irrespective of their in- 
 terest in the question of the plaintiffs' credit and stand- 
 ing. Dun & Co. denied tliat the words, " call at office," 
 had any damaging meaning. Caldwell, District Judge, 
 charging the jury, said: "It is indisputable under the 
 evidence that whatever was said orally by the defendants 
 about the plaintiffs and their business was said in good 
 faith and in confidence to their subscribers, who were, 
 by reason of their business relations with the plaintiffs, 
 interested in knowing tlieir financial and business stand- 
 ing, and in answer to requests made by subscribers in 
 relation thereto, and without malice in fact. . . . These 
 statements thus made by the defendants to their sub- 
 scribers, in answer to inquiries in relation to the plain- 
 tiffs, are what the law terms 'privileged communica- 
 tions.' "... 
 
 As to the publication in the notification sheets the 
 Court says : " These daily notification sheets were sent 
 out by the defendants to all their subscribers in the city 
 of St. Louis, numbering 600, irrespective of their interest 
 in the question of the plaintiffs' credit and standing. 
 This sheet was distributed to persons having no interest 
 in being informed of the condition of plaintiffs' firm. 
 This fact robs it of the protection of a privileged com- 
 munication, and if it contains libel on the plaintiffs, the 
 defendants cannot escape responsibility for such libel on 
 the plea that it was a privileged communication." The 
 38
 
 MERCANTILE AGENCIES. 35 
 
 Court then tells the jury that at the present day it is his 
 duty to define what in law constitutes a libel, and that it 
 is tlie duty of the jury to determine whether the publi- 
 cation falls within the definition, or whether it is 
 calculated to injure the reputation of the plaintiffs. 
 Accordingly, he defines libel and says : " It is your duty 
 to determine whether the publication of the ' daily notifi- 
 cation sheet' containing the names of the plaintiffs, and 
 opposite thereto the words ' call at office,' is a libel on the 
 plaintiflfs within this definition." He then discusses the 
 evidence on that point. The Court was asked to instruct 
 the jury that "no person other than the merchant himself 
 asking for information, has in law a right to read, hear, 
 or receive said words, and to him they can be communi- 
 cated only by the defendants, R. G. Dun & Co., personally ; 
 and the reading of said words by any person in their employ 
 by their permission, or the delivery of a written or printed 
 statement containing said words by their employes, with 
 their permission, to the clerks of a merchant subscriber 
 requesting information concerning the plaintiffs, or to 
 such subscribers, was an nnl awful publication, not at all 
 within or protected by the rule of law as to privileged 
 communications." The Court discussed the instruction 
 and its bearing upon the questions at issue at some 
 length. " The merchants and other business men of the 
 country," said the Court, " conducted their business to a 
 very large extent through agents. A large proportion, if 
 not all of the principal commercial houses of the countrv, 
 employ commercial travellers, through whom sales are 
 effected, credit extended, and collections made. In 
 many of the houses there is what is usually termed the 
 credit man of the house, whose special business it is to 
 inquire in reference to the merit of all persons applyin<>- 
 to purchase on credit, and who determines to whom 
 
 39
 
 36 MERCANTILE AGENCIES. 
 
 credit shall be given and the amount. The credit man 
 of tlie house may or may not be a principal. It fre- 
 quently occurs that he is a mere clerk or agent. Can it 
 be sound law that a communication made to a principal 
 m a house, to be by him immediately communicated to 
 an agent of the house who conducts and controls the 
 business to wliich such communication relates, is privi- 
 leged, and that the same communication made directly 
 to such agent is not privileged ] It is also said that 
 while such information is privileged if imparted by some 
 member of the firm of li. G. Dun & Co., it is not so if 
 imparted by a clerk or agent of theirs. If the? business 
 of the defendant is lawful, then it may be conducted by 
 the same agencies that are lawful in the conduct of any 
 other business." 
 
 " The distinction attempted to be drawn between the 
 right to resort to the services of an agent in this business 
 and other legitimate business pursuits, is not well 
 founded. It is not in harmony with the known and uni- 
 versal methods of conducting business. Commercial and 
 other business pursuits are conducted chiefly by partner- 
 ships and corporations, and the former often, and the 
 latter always, can act only by agents ; and any rule of 
 law that would deny to them the right to avail them- 
 selves of the services of an agent in every department of 
 tlieir business, and for every legitimate purpose connected 
 with it, is unsound. What a man may lawfully do by 
 himself he may do by an agent. The distinction taken 
 between a communication to a principal and liis agent in 
 the case of Beardsley vs. Tappan,^ is too refined. It is 
 not supported by reason or authority." 
 
 After disposing of this matter, the Court declares that 
 
 ' o Blatcliford, -197. 
 40
 
 MERCANTILE AGENCIES. 37 
 
 the real question is whether such communications made 
 by a commercial agency like that conducted by tlie 
 defendants are privileged in any case. " It is question- 
 able," says the Court, " whether it is not pushing the 
 doctrine of privileged communications beyond its legiti- 
 mate scope to hold that a corporation or partnership 
 whose business it is to collect information in regard to 
 the standing and financial condition of business men 
 which is imparted to subscribers for a money considera- 
 tion, can invoke the doctrine of privileged communication 
 for its protection 
 
 " The only case on the point decided by a court of 
 last resort brought to our attention, is Ormsby vs. Doug- 
 lass.^ That case is on all fours with the case at bar, 
 and in the absence of opposing authority on the question, 
 we incline to assent to its reasoning and to follow it." 
 The Court then quotes from the opinion of Justice 
 Woodruff, and says that " it is wortliy of remark that 
 the author of this opinion was afterwards United States 
 circuit judge for the second circuit, and Justice Hunt 
 of the Supreme Court of the United States was also a 
 member of the Court of Appeals at the time the case 
 was decided and seems to have concurred in the opin- 
 ion." 
 
 Trussell vs. Scarlett,- trading as R. G. Dun &Co., was 
 tried in December, 1882, before Morris, district judge, 
 and a jury in the Circuit Court of the United States for 
 the district of Maryland. Trussell was a general mer- 
 chant in business in Charlestown, West Virginia. In 
 July, 1881, in Baltimore, Scarlett sent to William D,>v- 
 ries a paper containing the following words: "Trussell, 
 C. W., Charlestown, Jefferson County, W. Va., D. G., 
 
 ^ 37 New York, 477. - 18 Feb. Rep. 214. 
 
 41
 
 38 MERCANTILE AGENCIES. 
 
 etc., July 11, 1881, has made an assignment for the 
 benefit of his creditors. No particulars known as yet." 
 Tlie plaintiff wished to present the communication in 
 evidence. Objection was made on the ground tliat it 
 was a privileged communication. Evidence was then 
 had as to its privileged character. Devries testified that 
 the firm of William Devries & Co., of which he was a 
 partner, was a subscriber to the mercantile agency of 
 R. G. Dun & Co. ; that when they first credited Trussell 
 they made an inquiry of 11. G. Dun & Co.; that they 
 were apt to make one twice a year — every six months — 
 may have made half a dozen during the year; that this 
 paper, or a similar one, came to their office giving this 
 information. Witness, upon being shown a ticket ad- 
 dressed to II. G. Dun & Co., asking information in regard 
 to plaintiff and dated June 16, 1881, identified it as hav- 
 ing come from his office, and upon being asked whether 
 the paper received by him was not in answer to the in- 
 quiry contained in said ticket, replied: " I don't know. 
 I should infer it was. We make inquiries every day in 
 the week. We have an understanding with R. G. Dun 
 & Co. that if anything occurs to any of our customers 
 they are to immediately inform us." The communica- 
 tion was held to be a privileged communication and the 
 evidence was excluded. 
 
 The Cincinnati " Commercial Gazette" not long ago 
 published the charge of Judge Harmon in a libel suit 
 against a mercantile agency which was tried in the 
 Superior Court of Cincinnati and decided Februuvy 
 24th, 1886. The trial was quite lengthy, occupying 
 two weeks. The jury returned a verdict for the defen- 
 dant. The charge is an admirable statement of the law 
 governing the question. The "Gazette" says: "Thirty- 
 five years ago no judge would have given such a charge, 
 42
 
 MERCANTILE AGENCIES. 39 
 
 and no jury would have given siu-h a verdict. The 
 efforts to secure trade by sending out travellers, who fre- 
 quently solicit patronage without re^gard to the fitness 
 of the subject for credit, have made mercantile agencies 
 a necessity, and tlie charge of the judge and the verdict 
 of the jury are in keeping with the advanced ideas of 
 the business community, which demands telegraphs, 
 telephones, lightning express trains — in fact everything 
 that will enable them to transact business securely and 
 rapidly." 
 
 We have now presented all the cases which, so far as 
 we have been able to discover, relate to the question of 
 commnnications on the part of mercantile agencies. 
 There has certainly been a development in the views 
 of the courts. At first they seemed inclined to restrict 
 the protection given to privileged communications to 
 such as passed between principal and principal. Gradu- 
 ally they recognized the fact that through the needs of 
 trade and commerce, and the rapid growth of the busi- 
 ness of the mercantile agencies, new conditions had 
 arisen which demanded recognition. The agencies were 
 allowed the means of carrying on their work. They 
 were permitted to have clerks and agents. Communi- 
 cations made by principals or agents of mercantile agen- 
 cies to the merchant or his agents are now held to be 
 privileged. The same principle would also protect the 
 correspondent who has furnished information to a mer- 
 cantile agency. Nor would it make any diffennice 
 whether the communication which was privileged was 
 made orally, in writing, or in print. The printer wonld 
 be regarded as a necessary agent. In this respect there 
 has been an advance since the dictum of the judge in 
 Taylor vs. Church. 
 
 43
 
 40 MERCANTILE AGENCIES. 
 
 In Lawless vs, Anglo-Egyptian Cotton & Oil Co.,^ 
 Mellor, J., says : " I think that we should be going 
 against the progress of the age if we were to hold that 
 the necessary publication of the manuscript to the 
 printer, from the fact that the directors, in making this 
 communication to the great body of the shareholders, 
 adopted printing instead of employing confidential 
 clerks to write a letter to each shareholder, rendered the 
 communication unprivileged." 
 
 The early tendency of mercantile agencies seems to 
 have been to claim privilege for all communications to 
 its subscribers irrespective of whether they were in- 
 terested in the communication or not. The courts have 
 held that communications made by mercantile agencies 
 are privileged wlien made to subscribers who are inter- 
 ested in those particular communications. The fact that 
 a merchant is a subscriber and is connected with the 
 mercantile world, does not give the agency the right to 
 communicate to him matters in which he has no present 
 interest. This position the courts have steadfastly main- 
 tained. We therefore see no reason for saying with 
 Judge Cooley, " that reports of a mercantile agency 
 to its customers are not privileged ; " nor can we hold 
 with Doctor AVharton, who seems to draw the line of 
 distinction between communications which mercantile 
 agencies publish to the world and such as they publish 
 to their subscribers, holding that the latter are privi- 
 leged. 
 
 We do not know of any case which has been brought 
 into the courts in which mercantile agencies have volun- 
 teered information to parties who were not subscribers, 
 but such a case might easily arise. We believe that 
 
 » L. R.. 4 Q. B. 2G2. 
 44
 
 MERCANTILE AGENCIES. 41 
 
 such communications would also be privileged. Odgers, 
 in his " Treatise on the Law of Libel and Slander,"^ 
 says : " Where neither the defendant himself nor any 
 one with whom he has confidential relations, is inter- 
 ested in the subject-matter of the communication, it is 
 very difficult to define what circumstances will be suffi- 
 cient to impose on him the duty of volunteering informa- 
 tion to the prejudice of the plaintiff. There is no rule 
 of law on the point. It is a question rather of moral or 
 social ethics. . . . The jury must place themselves in 
 the position of the defendant at the time these suspicious 
 circumstances were brought to his knowledge, when first 
 the question arose in his mind: 'Ought I not to inform 
 A. of tliese matters which nearly concern him V It may 
 be that another man would have said : ' It is no concern 
 of mine,' and would do nothing (which is always the 
 safer course). But if the defendant honestly felt that 
 he could not conscientiously allow A. to continue in 
 secure ignorance, that he must communicate to him the 
 rumor he had heard, and if he had reasonable grounds 
 for so feeling, that is sufficient. It is not necessary that 
 the reports which reach the defendant should be true, or 
 that he should thoroughly investigate them. Hearsay is 
 sufficient, reasonable, and probable cause in the absence 
 of malice ; unless the defendant ought, for any reason, 
 to have known that his informant was unreliable and his 
 story undeserving of belief. . . ." The law on this point 
 cannot be better expressed than in the following passage 
 found in the opinion of the Court, per Blackburn in 
 Davies vs. Snead : - " AVhere a ])erson is so situated that 
 it becomes right, in the interests of society, that he 
 should tell to a third person certain facts, then if he 
 
 ^ Pp. 212 and 213. ^ L. R., 5 Q. B. 611. 
 
 4 45
 
 42 MERCANTILE AGENCIES. 
 
 honafide and witlioiit malice docs tell them, it is a privi- 
 leged commuincation. The only difficulty is in any 
 given case to determine whether it had or had not 
 become right in tlie interests of society that the de- 
 fendant should act as he did." 
 
 It has sometimes happened that subscribers, to whom 
 information has been communicated, have informed par- 
 ties concerning whom statements were made of the nature 
 of the statements, and an action against the agency has 
 been the result. In such a case it has been held that the 
 agency may have a bill of particulars which shall specify 
 to whom the statements complained of had been commu- 
 nicated. In this way the agency can discover the names 
 of subscribers who have furnished the information upon 
 which the suit is brought. 
 
 THE EFFECT OF EEPEESENTATIONS MADE TO 
 MERCANTILE AGENCIES. 
 
 It is the custom of mercantile agencies to send agents 
 to call upon persons engaged in business and obtain from 
 them a statement of their financial condition. Some- 
 times this is done because some subscriber is seeking 
 information in regard to the party ; sometimes because 
 the agency wishes to be prepared in case of inquiries. 
 The person does not know who it is that desires the 
 statement, but he is well aware of the fact that some 
 one is or may be interested in knowing about him, and 
 that any representation he may make as to his finan- 
 cial condition will, in all probability, be relied upon 
 by some one. The question which we now propose to 
 investigate is, whether one who makes false representa- 
 tions to a mercantile agency is liable to a person to 
 46
 
 MERCANTILE AGENCIES. 43 
 
 whom tlic representations are communicated, and wlio, 
 relying upon tiic same, suffers damage. 
 
 Tliere are some interesting cases in which may be 
 found the principles that can be applied here. The 
 law holds him responsible who does any wrongful act 
 which causes injury to another. The injury may be 
 inflicted directly by one upon another Avhom he selects, 
 or it may be set in motion by one and act upon a par- 
 ticular person not directly contemplated by the one doing 
 the injurious act. The law holds that a man must be held 
 to intend the consequences of his acts. This principle 
 lies at the basis of the decision in the well-known cases 
 of Thomas vs. Winchester,^ and Scott vs. Shepherd.^ 
 
 The legal maxim that " fraud is not purged by cir- 
 cuity" is also helpful to us in reaching and understanding 
 the principles involved in this question. 
 
 In Eaton vs. Avery,^ which is the leading case upon 
 this subject, Rapallo, J., said : " The counsel for the 
 defendant contends that the plaintiff cannot maintain an 
 action against the defendant for false representations 
 made by him to Dun, Barlow & Co., or its agent, and 
 that such representations, assuming them to have been 
 made, are not sufficiently connected with the dealing 
 between the defendant and the plaintiff to enable the 
 latter to recover by reason thereof. On this point we 
 are of opinion that the law was correctly stated by the 
 learned Judge before whom the trial was had, in his 
 charge to the jury, wherein he instructed them that, if 
 the defendant, when he was called upon by the agent of 
 Dun, Barlow & Co., made the statements alleged in the 
 complaint as to the capital of the firm of Avery & Rig- 
 
 » 6 N. Y. 397. » 1 Smith's Lead. Cas. 210. 
 
 " 83 N. Y. 3L 
 
 47
 
 44 MERCANTILE ANENCIES. 
 
 grins, and they were false, and so known to be by the 
 defendant, and were made with the intent that they 
 should be communicated to and believed by persons in- 
 terested in ascertaining the pecuniary responsibility of 
 the firm, and with intent to procure credit and defraud 
 such persons thereby, and such statements were commu- 
 nicated to the plaintiff and relied upon by him, and the 
 alleged sale was procured thereby, the plaintiff was en- 
 titled to recover. The rule thus laid down accords with 
 the principle of adjudications in analogous cases, in 
 which it has been held that it is not essential that a rep- 
 resentation should be addressed directly to the party who 
 seeks a remedy for having been deceived and defrauded 
 by means thereof." 
 
 Tlie Court then refers to a number of authorities, and 
 remarks that " the principle of these cases is peculiarly 
 applicable to the case of statements made to mercantile 
 agencies." 
 
 Let us examine some of these cases, and see upon what 
 principles the court bases its opinion. 
 
 In Morgan vs. Skiddy et al} the defendants were held 
 liable for publishing false and deceptive pamphlets and 
 prospectuses, which they caused to be exhibited to the 
 plaintiff", knowing them to be false, whereby the plaintiff, 
 relying thereon, was induced to purchase some of the stock 
 of the defendants' company. In this case the pamphlets 
 and prospectuses were exhibited to the plaintiff, not by 
 the defendants themselves, but by one Dalton, a trustee 
 of the defendants' company. 
 
 In Newbury vs. Garland- it appeared that the defend- 
 ant was connected with some company, and advertised 
 falsely in regard to the resources and prospects of the 
 
 » G2 N. Y. 319. ' 31 Barb. 121. 
 
 48
 
 MERCANTILE AGENCIES. 45 
 
 company. By means of those representations, and 
 through the agency of one Hamilton, he induced the 
 phiintiff to take shares of stock in exchange for certain 
 real estate belonging to the plaintiff. The shares turned 
 out to be worthless. The Court, Endicott, J., said: 
 " The doctrine of these cases, and of some others in the 
 English courts to which I shall presently advert, is that 
 a statement made to the public, and designed to influ- 
 ence the public, is designed to influence every individual 
 who is interested in its subject-matter. If any person 
 is induced to part with his property, or purchase that to 
 which the statement refers, by what it contains, and which 
 would naturally have that influence, the parties who have 
 put it forth arc responsible if it be false and fraudulent. 
 . . . Wherever there is deceit, designed to injure, and 
 consequent damage, the common law will give an action. 
 
 In Commonwealth vs. CaW the Court said: "A false 
 representation, made to the agent of Parker, and com- 
 municated by him to Parker, upon which he acted, was, 
 in legal contemplation, a false representation to Parker 
 himself. It was designed to influence him, and whether 
 communicated to him directly, or through the interven- 
 tion of an agent, can make no difference. It vvas in- 
 tended to reach and operate upon his mind. It did reach 
 and produced the desired effect upon it, viz : the pay- 
 ment of the money. And it is immaterial whether it 
 passed through a direct or circuitous channel." 
 
 In Commonwealth vs. Harley^ representations were 
 made to a clerk in the shop of the firm of G. B. Blake & 
 Co., and were conveyed to a member of the firm. Partly 
 upon these representations, and partly upon information 
 obtained from other persons, the goods were sold to the 
 
 * 21 Pick. 515. * 7 Mete. 4G2. 
 
 49
 
 46 MERCANTILE AGENCIES. 
 
 defendant. The Court instructed the jury on this point, 
 that '' it" these facts were proved, it was sufficient to sus- 
 tain the allegation in tlie indictment, that the said G. B. 
 Blake & Co. were induced by said false pretences to de- 
 liver the said goods to the defendant." 
 
 In view of such authorities we think that the Court 
 was riglit in concluding that " the case is a new one in 
 its facts, but the principles by which it should be governed 
 are well established." 
 
 In that case, the Eaton, Cole & Burnham Co. brought 
 suit against one Avery for loss suffered by them through 
 ^xlse representations as to his financial condition made to 
 a mercantile agency. According to the plaintiff's evi- 
 dence, it appeared that in August, 1875, a person em- 
 ployed by tlic mercantile agency of Dun, Barlow & Co. 
 applied to Avery for a statement of the means of the 
 firm to be reported to the agency, informing him of 
 the object of his visit ; that Avery stated the capital of 
 the firm to be $20,()()(), chiefly contributed by him, in 
 money, and gave further particulars. The employe re- 
 duced the statement to writing and afterward transcribed 
 it on the books of the agency. Avery subsequently ap- 
 plied to Eaton, president of the above company, to sell 
 his firm goods on credit. Eaton, before making the 
 sale, sent to the office of the agency for information as 
 to the responsibility of the firm and received an answer 
 in writing, which gave the substance of Avery's state- 
 ments These Eaton examined and he relied entirely 
 on the report in making the sale. After the failure of 
 Avery to pay, Eaton exhibited to him the statement, and 
 he admitted the making of the representations therein. 
 Iliggins, Avery's partner, testified that Avery did not 
 contribute any capital either in money or property ; he 
 (Kiggins) had contributed tools valued at Ij^-lOOO, of 
 60
 
 MERCANTILE AGENCIES. 47 
 
 wliicli Avery agreed to ])ay half, but did not. Avery, 
 about the time he made the statement, advised him tliat 
 he was going to the agency to put this property in the 
 name and to the credit of the firm, and afterwards stated 
 to him that he had rated the firm at $25,000. Judg- 
 ment had been entered on a verdict. At the General 
 Term it was affirmed and was then appealed to the 
 Court of Appeals. It was affirmed in that court in No- 
 vember, 1880. " Proof was given at the trial," said the 
 Court, " as to the business and office of these agencies, 
 but they are so well-known and have been so often the 
 subject of discussion in adjudicated cases that the courts 
 can take judicial notice of them. /A person furnishing 
 information to such an agency in relation to his own 
 circumstances, means, and pecuniary responsibility can 
 have no other motive in so doing than to enable the 
 agency to communicate such information to persons who 
 may be interested in obtaining it for their guidance in 
 giving credit to the party ; and if a merchant furnishes 
 to such an agency a wilfully false statement of his 
 circumstances or pecuniary ability, with intent to obtain 
 a standing and credit to whicli he knows that he is not 
 justly entitled, and thus to defraud whoever may resort 
 to the agency, and in reliance upon the false information 
 there lodged, extend a credit to him, there is no reason 
 why his liability to any party defrauded by those means 
 should not be the same as if he had made the false 
 representation directly to the party injured." / 
 
 The question was raised in this case as to >Aen a per- 
 son is responsible for false representations made to one 
 party which are relied upon and acted upon by a third 
 party. The Court held that "if A. casually or from 
 vanity makes a false or exaggerated statement of liis 
 pecuniary means to B., or even if he does so with intent 
 
 51
 
 48 MERCANTILE AGENCIES. 
 
 to deceive and defraud B., and B. communicates the state- 
 ment to C, wlio acts upon it, A. cannot be held as for a 
 false representation to C. But if A. makes the state- 
 ment to B. for the purpose of being communicated to C, 
 or intendin<^ that it shall reach and influence him, he 
 can be so held." 
 
 The same rules apply here as in the case of representa- 
 tions made to parties directly. In order to render the 
 fraud actionable it must appear that the representations 
 were made as alleged, that they were made in order to 
 influence the plaintiff's conduct, that the plaintiff relied 
 upon them and acted upon them, that the representations 
 were untrue, that the plaintiff suffered damage on ac- 
 count of the action he was induced to take, and that this 
 damage followed proximately the deception. 
 
 In regard to the purpose of the defendant the Court 
 said : " By making a statement of the financial condi- 
 tion of his firm to such an agency he virtually instructed 
 it what to say if inquired of. Can it make any dift'er- 
 ence whether he spontaneously went to the agency to 
 furnish the information, or whether he gave it on their 
 application 1 He must have known that the object of 
 the inquiry was not to satisfy mere curiosity, but to ena- 
 ble the agency to give information upon which persons 
 applying for it might act, in dealing with the defendant's 
 firm." ^ 
 
 In this case it appeared that the agency, in reporting 
 the statements of Avery to Eaton, added to its account 
 of what Avery had said, the following : " We do not 
 confirm his possession of so much means as he claims, 
 though he has had opportunities to earn it. Claims to 
 have contract for $25,000 worth of work at profitable 
 rates. Their claims for credit are not yet established, 
 and, for the present, small amounts should rule, though so 
 52
 
 MERCANTILE AGENCIES. 49 
 
 far have paid as agreed." This was followed hy the 
 usual statement that the information was communicated 
 in the strictest confidence, etc. The report concluded 
 with these words : " Tiie actual verity of this or any 
 other information obtained through -the mercantile 
 agency is in no manner guaranteed by the said agency 
 or the proprietors thereof, for, notwithstanding every 
 effort, mistakes and misapprehension may occasionally 
 occur." The Court held that these cautions " related 
 rather to the responsibility of Dun, Barlow & Co., for 
 the accuracy of the information which they communi- 
 cated, than to that of the defendant for the truthfulness 
 of that which he lodged with them for the purposes of 
 their agency ;" but thought that the defendant was en- 
 titled to have the jury instructed that they might take 
 into consideration whether the report made in the above 
 form was such a statement as a prudent man would 
 rely on. 
 
 A very interesting case on this subject, and one which 
 deserves careful study, is the case of Macullar et al. vs. 
 McKinley.^ It was tried in the Superior Court of the 
 city of New York. McKinley was a merchant tailor in 
 the city of New York. The plaintiffs were merchants 
 in Boston. On or about February 2oth, 1881, an em- 
 ploye of the Bradstreet Company called on McKinley 
 and told him that he came for the purpose of getting a 
 statement of his financial condition. McKinley said, 
 " Have a stock on hand of $2500, and no liabilities, as 
 I pay cash for all my purchases." In May, 1881, 
 Macullar, Parker & Co. began to sell goods to the 
 defendant, through their travelling agent. Before ex- 
 tending credit to McKudey they made inquiries as to 
 
 * 49 N. Y. (Superior Court) 5. 
 
 53
 
 50 MERCANTILE AGENCIES. 
 
 his financial standing of the Bradstreet Company, to 
 which they were subscribers. Tlie agency's report to 
 MacuUar, Parker & Co. contained McKinley's state- 
 ment of February, 1881. The defendant purcliased 
 several bills of goods in May and June from the plain- 
 tiff, for which he paid. In June, 1881, anotlier em[)loye 
 of the Bradstreets called upon McKinley, and as a re- 
 sult of the interview he made a report to the agency, in 
 which, referring to McKinley, he said: "He declines 
 giving any information ; he is believed to be working 
 with his wife's money ; is stated to have failed two or 
 three times ; regarded as of little responsibility, and 
 jobbing houses in the city say they would sell him only 
 for cash." The report was spread upon the books of 
 the Bradstreet Company June 20th, 1881. It was put 
 on file and distributed to those who inquired. It was 
 not brought to the knowledge of the plaintiffs. Mc- 
 Kinley bought goods in August, September, and October. 
 In November he made a general assignment, preferring 
 certain members of his own family, among others his 
 wife, to whom he recited an indebtedness of nearly 
 $1800, all borrowed before September, 1880, and $350 
 borrowed from other persons before February, 1881. 
 His inventory showed an indebtedness of $-1097.63, with 
 assets of the nominal value of $2526.80, and actual 
 value of $1553.80. An action was brought for damages 
 for false representations made by the defendant in pur- 
 chasing goods upon credit from the i)laintiffs. The 
 sales and credits on account of which this action was 
 brought were those made in August, September, and 
 October. The action was brtDught upon the representa- 
 tions made in February, 1881. The Court dismissed the 
 complaint on the ground " that Bradstreet & Com])any 
 were for the pur[)Oses of the trial the plaintiffs' agents.
 
 MERCANTILE AGENCIES. 51 
 
 The information whicli they communicated to the plain- 
 tiffs required the plaintiffs subsequently to ascertain 
 wlicther they had received further information wliich 
 qualified the former representations. The latter infor- 
 mation, spread upon the books of Bradstreet & Company 
 on June 20th, before any of these bills were contracted, 
 was that the defendant was doing business with his 
 wife's money and was of little or no responsibility. The 
 plaintiffs were bound to ascertain whether there had 
 been any change in the report to the agency or other- 
 wise. In law the plaintiffs are chargeable with the 
 knowledge of that further report made to their agents." 
 
 The case was appealed to the General Term of the 
 Superior Court, and was argued before the three judges 
 in December, 1882. Sedgwick, J., delivered the opinion 
 of the Court affirming the judgment, and Freedman, J., 
 concurred. Russell, J., dissented. The question raised 
 in this suit is one of great importance. We have shown 
 how Woodruff, J., in Ormsby vs. Doughxss, justified the 
 principles supporting the view that the mercantile agency 
 was the agent of the subscriber. In this case we find the 
 extent of the agency considered. In view of the impor- 
 tance of the subject we have deemed it best to present at 
 some length the points touched upon by the Court. 
 Sedgwick, J., refers to the opinion of the Court in the 
 case of Eaton vs. Avery, and then says : — 
 
 " I wish here specifically to notice that in this decla- 
 ration of what the law is, it is implied that the evidence 
 must show that the defendant was the responsible cause 
 of the plaintiffs relying on the statement. Of course 
 this would be shown, in most cases, by the mere fact of 
 the making of the reprcsentations when the defendant 
 was proceeding to buy the goods. There might, liow- 
 ever, be cases in which the representations were made
 
 52 MERCANTILE AGENCIES. 
 
 to induce one sale only, and yet the seller would be 
 induced by the statements to make another sale at a 
 future time, wlien the buyer would not be responsible 
 for the operation of tlie seller's mind." 
 
 A'^ain : " The plaintiffs were subscribers to the agency. 
 It was not shown how often, as a habit, the agency 
 applied to business men for information as to their 
 means. As a fact in this case, th(» agency applied to 
 the defendant for a statement of his financial condition 
 in February, 1881, and again in June, 1881. Both state- 
 ments were spread upon the books of the agency. What 
 was done in this case it may be assumed was done in 
 general as to all business men. Indeed, tlie methods of 
 business men require that applications be made from 
 season to season repeatedly. The profit or loss of each 
 business season must cause a change of the financial con- 
 dition at the beginning of the season, or the fiict, that 
 nothing has been made or nothing lost is an important 
 piece of information. A just conclusion in my judg- 
 ment is, that when the plaintiffs received the statement 
 of February, they could not be justified in assuming that 
 it was made by the defendant as something which he 
 meant they should sell goods upon for all future time, 
 but only for that space of time which, according to the 
 custom of the agency, would elapse before another appli- 
 cation be made and another statement procured. The 
 defendant could assume that after the application in 
 June the plaintiffs would act ui)on the custom of the 
 agency, and giving no further operation to the first state- 
 ment than it should properly have, would not act upon 
 it, except in connc^ction with the June statement. The 
 defendant would be bound to know that the statement 
 he made in February would be communicated to the 
 plaintiffs, and would also have the riglit to believe that 
 56
 
 MERCANTILE AGENCIES. 63 
 
 they would learn of the statement in June. It was 
 observed, in the course of the argument at the Bar, that 
 the agency did not furnish the information it received to 
 its subscribers always and uniformly, but gave it only to 
 such of them as inquired for information. Nevertheless, 
 it is true that the defendant would be liable for the Feb- 
 ruary statement, on the ground that when he proposed 
 to buy goods he would have convincing reason to 
 believe that the plaintiffs, if subscribers to the agency, 
 would apply to it. He must have the benefit of the 
 consideration that his mind would work in a like manner 
 upon proposing to buy goods after the second statement." 
 
 Again: " I therefore am of the opinion that it appeared, 
 by undisputed testimony, that the plaintiffs were not in- 
 duced by the defendant to rely upon the statement of 
 February by itself, but upon it in connection with such 
 further statement as in the usual course of the business 
 would be made before August. The plaintiffs wouM 
 learn, from the two coupled together, that the defendant 
 refused to reassert the facts stated by him in February, 
 and therefore did not claim any credit upon an implied 
 assertion by him that his first statement still held good. 
 The defendant had reason to believe that the plaintiffs 
 had learned of the second statement, and were not about 
 to rely upon the first statement. On either proposition 
 the defendant was not liable, and the court made a 
 correct disposition of the case." 
 
 llussell, J., acknowledges the general rule to be "that 
 a principal is chargeable in law with information com- 
 municated to his general agent, or to his special agent 
 in the course of negotiations relating to a particular 
 business ; but he cannot understand on what theory 
 Bradstreet & Company can be regarded either as the 
 general agents of the plaintiff, or as their special agents 
 
 57
 
 54 MERCANTILE AGENCIES. 
 
 with roforcncc to the business transactions between the 
 plaintiffs and their customers, so that information com- 
 municated to them can be held, in law, to have been 
 communicated to the plaintiffs themselves." 
 
 "True," he says, " Bradstreet & Company were in a 
 certain sense the agents of the plaintiffs," but he thinks 
 that the extent of their agency was, that they agreed to 
 furnish, upon iiiquiri/^ such information as they had in 
 regard to the financial condition of persons in relation 
 to whom their subscribers might desire to inquire." 
 
 This question will undoubtedly receive further con- 
 sideration. 
 
 The latest reported case in which this question has 
 appeared, so far as we know, is the case of the Genesee 
 County Savings Bank vs. The Michigan Barge Company, 
 T. W. Ferry and E. P. Ferry ,^ decided by the Supreme 
 Court of Michigan during the October Terra, 1883. 
 This was an attachment suit in which it was claimed 
 that tlie debt respecting wliich the suit was brought was 
 fraudulently contracted. T. W. Ferry was the president 
 and Andrew Thompson was the treasurer of the Barge 
 Company. At some time, through one or both of these 
 officers, the company procured a rating at Bradstrec^t's 
 Commercial Agency as owning property worth $20(),0()(), 
 while the plaintiff's testimony strongly tended to show 
 that the property was not worth more than $100,000, 
 several of the witnesses putting it below $70,000. Dur- 
 injr the trial of the case in the Circuit Court an attempt 
 was made to introduce in evidence the report made 
 by T. W. Ferry to Bradstreet's agency, and upon which 
 the plaintiff claimed to have relied and acted. Objection 
 was made and sustained. Speaking of the statement made 
 
 » 52 Mich. 164. 
 58
 
 MERCANTILE AGENCIES. 55 
 
 to the mercantile agency, the Court, Sherwood, J., held 
 that the circuit judge erred in rejecting the report. 
 Quoting api)rovingly from the opinion of the Court in 
 Eaton vs. Avery, the Court said : — 
 
 " We think a person furnishing information to a 
 commercial agency as to his means and pecuniary re- 
 sponsihility, is to be presumed to have done so to enable 
 the agency to communicate the same to persons interested 
 for their guidance in giving credit to him, and so long as 
 such intention exists, and the representations reach the 
 persons for whom they were intended, it is immaterial 
 whetlier they passed through a direct channel or other- 
 wise, provided they were reported by the agency as made 
 by the party. 
 
 " It is claimed the representations given by Ferry 
 were in writing, and the plaintiff did not offer the 
 original. The original was copied by the witness, and 
 then it was handed back to Ferry. Plaintiff gave de- 
 fendants' attorney notice to produce the original, which 
 was not done, and Ferry was in Europe. Under the cir- 
 cumstances we think the testimony offered was proper, 
 and should have been received." 
 
 LIABILITY OF MERCANTILE AGENCIES FOR FRAUD, 
 BREACH OF CONTRACT, AND NEGLIGENCE. 
 
 It seems hardly necessary to consider the question of 
 the liability of mercantile agencies in cases of fraud 
 practised by them. It is well settled in English and 
 American jurisprudence that fraud or deceit, accom- 
 panied with damage, is a good cause of action. When 
 a party asserts a falsehood with a. fraudulent design and 
 damage results, he will be held responsible. Mercantile 
 
 agencies are no exception to this rule. 
 
 59
 
 56 MERCANTILE AGENCIES. 
 
 Their liability under tlu'ir contracts doponds upon the 
 wordinir of the same. Thev are liable to subscribers if 
 they refuse to furnish information upon request. Then 
 there is generally a clause to the effect that they will 
 furnish information to the best of their ability. In case 
 an action should be brought against them for a breach 
 of this clause there would always be an interesting ques- 
 tion for the jury. 
 
 We come next to the subject of negligence. Negli- 
 gence is the absence of that deforce of care which the law 
 requires under certain circumstances. The law recog- 
 nizes the fact that " circumstances alter cases," and 
 therefore proportions the degree of care to be exercised 
 according to the circumstances of a particular case. 
 The general rule is, that when one is employed to do 
 certain services for another, and there is no special con- 
 tract on the subject, he assumes to exercise in the 
 employment ordinary care and skill. If it can be shown 
 that he has been negligent in the exercise of his employ- 
 ment, the law holds him responsible. This rule applies 
 to mercantile agencies, and for any negligence on their 
 part an action on the case can be brought. 
 
 An examination of the contracts entered into between 
 mercantile agencies and their subscribers will show that 
 the acrencies are well aware of the delicate nature of 
 their duties and the liability to commit errors to which 
 they are exposed. They endeavor to relieve themselves 
 of responsibility so far as the law permits. One thing 
 they cannot do. The law will not permit a person to 
 protect himself by contract against his own negligence. 
 Tiiis question arose in tlie case of Roesner, Adm'r, vs. 
 Herrmann.^ The case was tried in the United States 
 
 » 8 Fed. Rep. 782. 
 60
 
 MERCANTILE AGENCIES. 57 
 
 District Court for Indiana in 1881. An agreement had 
 been entered into between Herrmann and one Heed, an 
 employe, by which, in consideration of the employment, 
 Herrmann was released from all liability for damage in 
 case of death or accident to Heed through his (Herr- 
 mann's) own negligence or that of co-employes. Gres- 
 ham, D. J., held that such a contract was void as against 
 public policy. " If there was no negligence, the defen- 
 dant needs no contract to exempt him from liability. 
 If he was negligent, the contract set out in his answer 
 will be of no avail." 
 
 Tarling vs. Cooper, reported in the Law Times, is 
 an instructive case. It was argued before the High 
 Court of Justice, Queen's Bench Division. From the 
 statement of the case in the Law Times, we conclude 
 that a verdict for the plaintiff had been returned in the 
 lower court and that there had been an appeal. The 
 plaintiff was a wholesale clothier and ware-houseman, 
 and the defendants carried on a business known as the 
 " United Mercantile Agency." The defendants under- 
 took to make all proper and necessary inquiries as to the 
 mercantile status, respectability, and solvency of any per- 
 son concerning whom the plaintiff might wish to have 
 information, to report the result to the plaintiff, and in 
 making such report to exercise due reasonable care and 
 skill. The plaintiff was furnished with a status cheque- 
 book, with directions on tlie cover to fill in the cheques 
 with careful and accurate particulars of any person about 
 whom he wished inquiries to be made. In October, 
 1878, the plaintiff requested information about a firm 
 whose name he wrote as M. Lowe «& Son, tailors in 
 Swansea. The defendants searched their register, found 
 nothing against M. Lowe & Son, but communicated with 
 
 5 61
 
 58 MERCANTILE AGENCIES. 
 
 a correspondent at Swansea, who reported to them, and 
 they sent the following report to tlie plaintiff: 
 
 " Status report respecting M, Lowe & Son. 
 
 " Correspondent r(>ports that it should be B. Lowe & 
 Son ; having been established several years, B. Lowe has 
 only lately taken his son into partnership. Do not seem 
 to be doing much business, and they seem to have 
 ample stock. Considered safe for about oClOO. 
 
 " Signed Cooper & Craig, 
 
 " per II. M." 
 
 " This information is obtained from the best sources 
 available, and is given in confidence, but no responsi- 
 bility is undertaken on account hereof." 
 
 The information was correct as to B. Lowe & Son, the 
 firm about whom the plaintiff meant the inquiry to be. 
 He gave the firm credit, and they paid him bills for more 
 than £100. Eventually, when in plaintiff's debt to the 
 amount of £180, the firm failed, and it appeared that 
 there was a bill of sale over all B. Lowe's property. 
 This bill of sale was duly registered and was recorded in 
 the defendants' books at the date of the inquiry. The 
 plaintiff lost the value of the goods which he had sup- 
 plied. The Court said that the defendants claimed to 
 be protected from liability, even if they were negligent, 
 by reason of the directions on the cheque-book and by 
 using the words " no responsibility." They claimed 
 that, if the negligence did make them liable, the plain- 
 tiff's contributory negligence absolved them. AVith re- 
 gard to the point of no responsibility the Court held that 
 it had recently been decided that this did not entitle the 
 defendants to exemption or make it the less a contract 
 by them to exercise the greatest care, and as to the 
 question of contributory negligence it did not appear 
 that the mistake of the plaintiff in writing M. Lowe & 
 62
 
 MERCANTILE AGENCIES. 69 
 
 Son instead of B. Lowe & Son had misled the defen- 
 dants. There was evidence that the defendants had 
 been guilty of negligence in not exanuning their books 
 after the mistake as to the initial was corrected by their 
 correspondent. The Court sustained the verdict. 
 
 The law holds the principal responsible for the acts of 
 his agent done within the scope of his authority. This 
 rule would also apply to mercantile agencies, did they not 
 by their contracts relieve themselves from all responsi- 
 bility for loss or injury caused by the neglect or other 
 act of any officer, agent, or employe in procuring, collect- 
 ing, and communicating information. The law permits 
 persons to protect themselves by contract against the neg- 
 ligence of their agents. Common carriers, inn-keepers, 
 and other persons engaged in the exercise of a public 
 calling cannot do this. The exception in their case is 
 owing to the fact that it is held that it Avoidd be against 
 the public interests to permit it. But mercantile agen- 
 cies contract in this way, and the law protects them. So 
 it was held in the case of Duncan, Hale & Co. against 
 Dun, Barlow & Co,^ tried in 1879, in the United States 
 Circuit Court for the Eastern District of Pennsylvania, 
 before Judges McKennan and Butler. 
 
 Duncan, Hale & Co. had applied to the defendants at 
 their offices in Willi amsport and Philadelphia for infor- 
 mation as to the standing, responsibility, means, and so 
 forth, of one James Hill. The report communicated by 
 the defendants, by their agents in AVilliamsport and 
 Philadelphia, read as follows : " James Hill, commission 
 merchant, Pittston, Pa., July 20th, 1876. Character, 
 etc., good ; capital in business $4000 ; owns real estate 
 worth $10,000 and clear. Credit good." Relying upon 
 
 ^ 7 "Weekly Notes, 24G ; 9 Centnil L. J. 151. 
 
 63
 
 60 MERCANTILE AGENCIES. 
 
 this information, Duncan, Hale «& Co. sold and delivered 
 to Hill goods to the value of 1^5110.30. It appeared 
 that, on the day on which the defendants communicated 
 the information to the plaintiffs, Hill was not the owner 
 of real estate cl«ar of incumbrances, and worth $10,000, 
 but, on the contrary, was the owner of real estate all of 
 whicli had mortgages thereon which were duly recorded 
 in the county wlicrein the said real estate was situated, 
 and that the said Hill was at the date of the sale and 
 delivery of the goods insolvent. It also appeared that 
 Hill was still owing $3000 to the plaintiffs. The writ- 
 ten contract between Duncan, Hale & Co. and Dun, 
 Barlow & Co. contained, inter alia, the following 
 clauses : — 
 
 " The said proprietors are to communicate to us, on 
 request for our use in our business, as an aid to us in 
 determining the propriety of giving credit, such informa- 
 tion as they may possess concerning the mercantile 
 standing and credit of mercliants, traders, manufac- 
 turers, etc., throughout the United States and Canada. 
 It is agreed that such information has mainly been, and 
 shall mainly be obtained and communicated by servants, 
 clerks, attorneys, and employes, appointed as our sub- 
 agents, in our behalf, by the said 11. G. Dun Sc Co. The 
 said information to be communicated by the said R. G. 
 Dun & Co. in accordance with the following rules and 
 stipulations, Avith which we, subscribers to the agency as 
 afon^said, agree to comply faithfully, to wit: . . . The 
 said R. G. Dun & Co. shall not be responsible for any loss 
 caused by tlie neglect of any of the servants, attorneys, 
 clerks, and employes in procuring, collecting, and com- 
 municating the said information, and the actual verity 
 or correctness of the said information is in no manner 
 guaranteed by the said R. G. Dun &; Co." 
 G-l
 
 MERCANTILE AGENCIES. 61 
 
 The defendants claimed that by the terms of the con- 
 tract they were not responsible for the loss, since it was 
 caused by the neglect of their agents. They asked for 
 a nonsuit and obtained it. A motion was made to take 
 it off. Upon the hearing the question of liability for 
 gross negligence under tlie contract was ably argued on 
 both sides. The Court, Butler, J., declared that the 
 impression entertained at the trial had now deepened 
 into conviction ; that the lan<j:ua<^e of the contract was 
 broad enough to exempt the defendants from liability 
 for all negligence of such agents, and was not confined 
 merely to ordinary negligence. The Court also held 
 that it was undisputed and clear that the negligence 
 complained of, whether gross or otherwise, was the neg- 
 ligence of the agents and not of the defendants. The 
 motion was refused. 
 
 The subscriber comes in contact with the agency 
 when information is called for, and in response repre- 
 sentations are made in regard to some person or persons. 
 When, therefore, a subscriber complains of fraud, breach 
 of contract, or negligence on the part of the agency, it 
 itiust be in relation to such representations. AVe have 
 laid down the rule that mercantile agencies are liable for 
 any damage resulting from fraudulent representations, 
 breach of contract, or negligence on their part. Let us 
 now see whether this statement can pass without quidi- 
 fication. So far as fraud was concerned, there can be no 
 question. When the law declares that fraud or deceit, 
 accompanied with damage, is a good cause of action, it 
 is simply applying a principle of natural justice. No 
 statute adopted to protect people against fraud and per- 
 jury can be relied upon as a defence by him who has 
 been guilty of fraud. But when we come to the (pies- 
 tion of breach of contract, or negligence, we may have to 
 
 60
 
 62 MERCANTILE AGENCIES. 
 
 qualify our statement so far as some of our States are 
 concerned. We refer to those States in which statutes 
 simiUir to that known as Lord Tenterden's Act have 
 been adopted. It will be remembered that the fourth 
 section of the Statute of Frauds provided, inter alia, 
 *' that no action sliall be brought whereby to charge the 
 defendant, upon any special promise, to answer for the 
 debt, default, or miscarriage of another person unless the 
 agreement upon which such action shall be brought, or 
 some memorandum or note thereof, shall be in writing 
 and signed by the party to be charged therewith, or 
 some other person thereunto by him lawfully author- 
 ized." This clause was incorporated to do away with 
 verbal guaranties. In the well-known case of Pasley vs. 
 Freeman, in which Freeman was held liable for false 
 representations as to the credit of one Falch, the Court 
 held that the statute applied only to cases of contract, 
 and established the doctrine that an action for deceit 
 could be brought though the repr(\sentations were only 
 verbal. Pasley vs. Freeman was clearly within the mis- 
 chiefs intended to be remedied by the Statute of Frauds. 
 It was within the spirit, if not within the letter of the 
 law. Lord Eldon condemned strongly the doctrine es- 
 tablished in that case. He held that the statute would 
 have to be applied to such cases, or a new statute would 
 have to be passed. Twenty-seven years later. Parliament 
 enacted, in the 9 Geo. IV. c. 14, s. 6, known as Lord 
 Tenterden's Act, "That no action shall be brought 
 whereby to charge any person upon, or by reason of any 
 representation or assurance made or given concerning or 
 relating to the character, conduct, credit, ability, trade 
 or dealings of any other person, to the intent or purpose 
 that such otlu^r person may obtain credit, money or goods 
 upon [mistake for thereupon], unless such representation 
 GG
 
 MERCANTILE AGENCIES. 63 
 
 or assurance be made in writing, signed by the party to 
 be charged therewith." 
 
 Heed, in his treatise on the Law of the Statute of 
 Frauds, declares that " the object of this enactment 
 seems to have been to put misrepresentations in mercan- 
 tile cases upon the same footing with guaranties. It 
 has been so construed as to embrace every incorrect rep- 
 resentation untinged by fraudulent intent., and no others." 
 Statutes similar to Lord Tenterden's Act have been 
 adopted in Alabama, California, Indiana, Kentucky, 
 Maine, Massachusetts, Michigan, Missouri, Oregon, 
 South Carolina, Vermont, Virginia, and Wyoming Ter- 
 ritory. 
 
 Now, it is not difficult to see that this statute may 
 afiect the question which we have raised when we re- 
 member that the business of mercantile agencies con- 
 sists wholly in making representations as to the charac- 
 ter, conduct, credit, ability, and so forth, of persons. Let 
 us suppose, for example, that an action is brought for the 
 breach of a contract containing a clause to the effect 
 that the agency will furnish information to the best of 
 its ability, ^. e., make representations as to the credit, 
 character, standing, etc., of persons to the best of its 
 ability. Or let us suppose that an action on the case 
 is brought on account of negligence. On the trial it 
 appears that the representations are not in writing. 
 AVill the action faiU Is the statute applicable to this 
 case "? Let us examine the cases in which this question 
 has appeared. 
 
 The first case in which this question was presented to 
 the courts was the case of McLean vs. Dun, Winum & 
 Co.^ It was tried before Moss, J., and a jury at the 
 
 1 Upper Canada, 39 Q. B. 551. 
 
 67
 
 64 MERCANTILE AGENCIES. 
 
 Toronto Fall Assizes. Upper Canada lias adopted Lord 
 Tenterden's Act. 
 
 ]\[cLean was in June, 1875, a wholesale leather-dealer 
 in the city of Toronto. By the terms of a contract be- 
 tween him and Dun, AViman & Co., who were the pro- 
 prietors of a mercantile agency, they agreed to furnish 
 to the best of their ability information of the mercantile 
 standing and credit of business men concerning wliom 
 the subscriber should make inquiries. McLean desired 
 information in regard to one Ernest M. Wilson, who 
 had applied to him to purchase about |500 worth of 
 leather on credit. On the lOth of June he sent his 
 clerk to the office of the agency, and the clerk, witliout 
 giving any information as to the contemplated sale or its 
 amount, made application upon a printed form furnished 
 to him for the purpose by the defendants. According 
 to the clerk's testimony, the defendants' clerk read to 
 him out of a book that Ernest M. Wilson was the son 
 of David Wilson ; was formerly in partnership with one 
 Phillips ; that he had $10,000 of stock ; that he had 
 $5000 or $6000 in the business ; that he claimed to be 
 worth $7000 ; that he mostly dealt in United States 
 eoods ; that his character and habits were good ; that he 
 was doing a fair trade ; and that his credit was good locally. 
 This information had been collected by the agency April 
 29th, 1875. The defendants' clerk admitted that he 
 had given the plaintiff's clerk substantially the informa- 
 tion which he had testified to, but denied that he gave 
 any information to the effect that Wilson's credit was 
 good locally. On the strength of this information Wil- 
 son in June obtained goods to the value of $524.17 on a 
 credit of four months. Wilson was really insolvent at 
 the time the report was made. In July he absconded 
 from Canada. McLean sued Dun, Wimau & Co., charg- 
 es
 
 MERCANTILE AGENCIES. 65 
 
 ing that they had not exercised ordinary care and ability 
 in ascertaining the mercantile standing, etc. of Wilson 
 before making the report, but that they had wholly neg- 
 lected so to do. 
 
 It was proved that on the steamboat City of Toronto 
 Wilson had told a person that he was going to New 
 York to buy goods and had ^7000 with him. The evi- 
 dence further showed that up to the time he absconded 
 he had a good bank account ; that he always had a good 
 balance in his favor, and that he never required any dis- 
 counts. There was testimony as to his habits of living, 
 transactions as a business man, and so forth, w^iich was 
 not favorable to him. There was conflicting testimony 
 as to whether he stood in good credit or not. It was 
 shown from what source the defendants had obtained 
 their information, and it was admitted that they had 
 acted honestly and in good faith. 
 
 The plaintiff's counsel in opening the case admitted 
 that the representations as to W^ilson made by the 
 agency were not in writing, and the defendants' .counsel, 
 claiming that a writing was necessary, moved for a non- 
 suit. The judge, although in doubt, allowed the case to 
 go to the jury, reserving leave to the defendants, if neces- 
 sary, to move to enter a nonsuit. The judge left to the 
 jury certain questions, and on their finding entered a 
 verdict for the plaintiff. A rule was obtained from the 
 Court of Queen's Bench for Upper Canada calling on 
 the plaintifl' to show cause why the verdict should not 
 be set aside, etc. The case was argued before the Court 
 in x\ugust 1876. Several interesting questions were 
 discussed, but we shall confine our attention to the 
 opinion of the Court as to the statute and its relation to 
 the case. The defendants claimed that, unless the re- 
 presentation or report be proved by writing, signed by 
 
 69
 
 66 MERCANTILE ANENCIES. 
 
 the (lofcndants, there was in law no such representation 
 or ri-port as alleged ; in other words, that it came witli- 
 in the words of the statute. 
 
 The Court, Harrison, C. J., admitted that the repre- 
 sentation fell within the very words of the statute. 
 " But," said the Court, " it is not enough for defendants 
 in order to defeat the plaintiff's action to show that the 
 representation is under the statute. The defendants 
 must satisfy the Court in the language of the statute, 
 either that the action is iipon the representation, or hy 
 reason of the representation. The action here is no 
 sense upon the representation. The action is for a 
 breach of contract. . . . Where the foundation of the 
 action is contract, although the declaration contain alle- 
 gations of fraud or fraudulent representations, these need 
 not be proved and may be struck out of the declaration 
 as surplusage. If the contract were not proved in this 
 case, and the plaintiff for remedy were driven to resort 
 to the false representation, he would, we think, fail for 
 want of the writing signed by the defendants, but the 
 substance of his declaration is the contract, the duty 
 arising from contract, and the breach of that duty. 
 While Lord Tenterden's Act requires such a representa- 
 tion to be in writing signed by the defendant, there is 
 no statute which requires such a contract to be in writ- 
 ing." 
 
 Morrison, J., concurred. Wilson, J., was not present 
 at the argument, and took no part in the judgment. The 
 rule nm was discharged. 
 
 The case was appealed to the Court of Appeals for 
 Upper Canada, and was argued before the Court in 
 March, 1877, four judges being pr(>sent. The principal 
 question presented by the appeal related to the defence 
 rested on the statute. Hagarty, C. J. C. P., agreed with 
 70
 
 MERCANTILE AGENCIES. 67 
 
 the court below. Burton, J. A., held that the statute 
 was a good defence. Commenting upon Justice Harri- 
 son's opinion, he says : " Granting that the action is 
 founded on the defendants' want of care in performing 
 their contract, the plaintiff fails to show any right to re- 
 cover the damages awarded, unless he proves the repre- 
 sentation, and that he acted upon it. To do this he is 
 driven to prove the representations given verbally to his 
 clerk, and if the statute forbids this, his action to that 
 extent fails. As before remarked, if the plaintiff did 
 not furnish the goods in reliance upon such representa- 
 tion there is an end of the inquiry. He has sustained 
 the loss through the confidence which he has mistakingly 
 placed in the customer, and not by reason of his having 
 relied on the representations of the defendant ; but if he 
 did part with his property in reliance upon the represen- 
 tations . . . can it be plausibly urged that it docs not 
 come within the very terms of the statute, and is there- 
 fore not receivable in evidence unless in writing, and 
 signed by the defendant'?" Patterson, J. A., said: "I 
 see no difficulty in holding that the application of the 
 statute is not excluded by the mere circumstance that 
 the representation is made in pursuance of a contract 
 which requires a true representation." Blake, V. C, 
 said: "The injury in the present case arises from the 
 defendants having given certain unreliable information 
 to the plaintiff as to the credit of another, on which he 
 acted, and whereby he has lost the amount for which 
 credit was given. There was by the defendants a repre- 
 sentation . . . made . . . concerning . . . the credit of 
 a person to the intent or purpose that such other person 
 miglit obtain goods or credit thereupon." He held that 
 the statute clearly applied to the case, and that the only 
 way in which its effect could be done away with would 
 
 71
 
 68 MERCANTILE AGENCIES. 
 
 be by adding a clause that it sliall not apply to dealings 
 Avitli mercantile agencies. Tlio apjxnd was allowed with 
 costs, and the defendant in the appeal was given liberty 
 to take a verdict for nominal damages, or a nonsuit. 
 
 The next case in which this question arose was the 
 case of Sprague vs. H. G. Dun & Co.^ It was tried in 
 the Philadelpliia Court of Common Pleas in 1878. The 
 plaintiff, who was a druggist and a customer of the 
 agency, inquired at its office in Mobile with regard to 
 the credit and character of one Getz. He was informed 
 that both were good, and was also shown a book in which 
 Getz was described as possessing a considerable amount 
 of real and personal property, and as one who might be 
 trusted to any reasonable amount. The plaintiff had 
 been for some time associated in business transactions 
 with Getz, and was in tlie habit of raising money with 
 his aid, and extending a like help to him. The plaintiff 
 claimed that in consequence of the information received 
 he was led to put his name to various accommodation 
 notes which were also signed or indorsed by Getz, and 
 discounted at the bank, and the proceeds divided be- 
 tween Getz and the plaintiff. Getz failed not long 
 afterwards without having contributed his share to the 
 payment of these instruments, wliich the plaintiff was 
 compelled to take up, and the action was brought to re- 
 cover damages for loss caused by the defendants' negli- 
 gence. The plaintiff, when he made his contract with 
 the agency, signed a stipulation that the information de- 
 rived by him therefrom would be used exclusively for 
 the " legitimate business of his establishment," and it 
 was claimed as a defence that the floating of comm^ercial 
 paper was not a part of the legitimate business of plain- 
 tiff, and that the defendants w(;re not liable for any loss 
 
 » 12 Phila. 31U. 
 72
 
 MERCANTILE AGENCIES. 69 
 
 that might happen therefrom. A further defence was 
 that the representation as to Getz's responsibility not 
 being in writing, signed by defendants, was void under 
 a statute of the State of Ahibama, which is substantially 
 the same as Lord Tenterden's Act. The plaintiff's 
 counsel maintained that the statute did not apply to a 
 case like the present, which, though worded in tort, had 
 its origin in contract, and where a recovery may conse- 
 quently be had for negligence in the absence of actual 
 or constructive fraud. 
 
 The Court, Hare, P. J., held that the first ground of 
 defence was tenable. x\s to the second ground of 
 defence the Court said : " The question is not free from 
 difficulty, but we incline to consider the plaintiff's inter- 
 pretation as correct. It is an established rule that 
 remedial statutes shall be read with a due regard for the 
 object which the Legislature had in view, and this in 
 the case of the act in question was not to relax the 
 bonds of contract, but to guard against loose and un- 
 founded charges of fraud — modus et conventio vincunt 
 legem — and the agreement into which the defendants 
 entered was a waiver of the right to take advantage of 
 the statute. 
 
 " One who is under an express or implied obligation 
 to keep his principal or employer well informed, is 
 answerable not only for false statements, but also for not 
 usinsf due dilisrence to ascertain the truth and communi- 
 cate it when occasion requires, and as the statute will 
 not preclude a recovery on the former ground, so it 
 should not be a defence to a suit brought on the latter. 
 The criterion seems to be, is the alleged tort also a 
 breach of contract for which a recovery could be had 
 without proof of a scienter, although, where the circum- 
 stances are such that the defendant would be answerable 
 
 73
 
 70 MERCANTILE AGENCIES. 
 
 ex contractu^ the case will not be witliin the statute, 
 because the fault is so gross as to be e([uivalent to a 
 fraud, or such as would have sprung from a fraudulent 
 intent. ... If the defendants mean to rely upon the 
 statute, they should either make written communications 
 to tlunr subscribers or else inform them that they are not 
 legally responsible for the truth of what they say." 
 
 Vv'ith all due respect to the opinions of Harrison, C. 
 J., llagarty, C. J. C. P., and Hare, P. J., we think that 
 the law is with the decision of the Court of Appeals for 
 Upper Canada. It is not surprising that tlie judges 
 have found some difficulty in settling the law applicable 
 to these cases. The circumstances were new and start- 
 ling. Here was a statute whose provisions were clear 
 and distinct, but could this apply to a case in which one 
 party had contracted to do certain services for another, 
 and those services were of the very nature of those rep- 
 resentations which the statute required to be in writing] 
 Surely there was reason for concluding that the statute 
 was either waived or did not apply to such cases. But 
 Lord Tenterden's Act is an act which relates to the sub- 
 ject of evidence. To prove a breach of contract or 
 negligence it is necessary to introduce in evidence the 
 representations. Tliis cannot be done unless the repre- 
 sentations are in writing. The action would therefore 
 fail. We shall therefore qualify our statement that 
 mercantile agencies are liable for br(nich of contract and 
 negligence, by saying that in those States in which Lord 
 Tenterden's Act has been adopted, they could only be 
 \\v\i\ responsible if the representations which they make 
 to subscribers are in writing. In the States in which that 
 act has not been adopted this rule would not hold good. 
 The tendency, however, is to adopt in other States the 
 requirements of the act, and for this reason this question 
 
 is one of growing importance. 
 74
 
 TABLE OF CASES. 
 
 Note; 
 
 Mich 
 
 Beardsley vs. Tappan, r> Blatch. 4n7 
 Billings vs. Russell, 8 Boston L. R. 699 . 
 Cockayne vs. Hodgkisson, 24 Eng. Com. Law, 543 . 
 Commonwealth vs. Call, 21 Pick. 515 
 
 vs. Harley, 7 Mete. 4G2 
 
 rs. Staeey, 8 Phila. 617 
 
 Coxheady.f. Richards, 10 Jurist, 984 
 Daries vs. Snead, L. R. 5 Q. B. 611 
 Duncan, Dale & Co. vs. Dunn, Barlow & Co., 7 Weekly 
 
 Eaton ys. Avery, 83 N.Y. 31 
 
 Erber & Stickler vs. R. G. Dun & Co., 4 McCrary, 160 
 
 Fleming vs. Newton, 1 H. L. C. 362 
 
 Gassett vs. Gilbert, 6 Gray, 97 
 
 Genessee County Bank vs. Michigan Barge Co. et al., 52 
 
 Goldstein vs. Foss, 12 Eng. Com. Law, 252 
 
 Harman /•.';. Delany, 2 Str. 898 .... 
 
 Harrison vs. Bush, 85 Eng. Com. Law, 173 . 
 
 Lawless vs. Anglo-Egyptian Co., L. R. 4 Q. B. 262 
 
 Lewis t7s. Chapman, 16 N. Y. 373 .... 
 
 MacuUar vs. McKinley, 49 N. Y. (Superior Ct.) 5 . 
 
 McLean vs. Dun, Wiman & Co., Upper Canada, 39 Q. B 
 
 Moore ys. Farrall, 4 B. & Ad. 871 .... 
 
 Morgans.'?. Skiddy, 62 N. Y. 319 .... 
 
 Newbury vs. Garland, 31 Barb. 121 
 
 Ormsby vs. Douglass, 37 N. Y. 484 
 
 Pasley vs. Freeman, 2 Smith's Lead. Cas. 55 ; 3 T. R. 51 
 
 Roesnervs. Herrmann, 8 Fed. Rep. 782 ." . . . 
 
 Scott vs. Shepherd, 1 Smith's Lead. Cas. 210; 2 Wm. Bl. 89 
 
 Shipley vs. Todhunter, 32 Eng. Com. Law, 7 C. & P. 680 
 
 Sprague vs. R. G. Gun & Co., 12 Phila. 310 . 
 
 State ex reZ. Lanning vs. Lonsdale, 48 Wisconsin, 348 
 
 Sunderlin vs. Bradstreet, 46 N. Y. 188 . 
 
 Tarling vs. Cooper, Law Times 
 
 Taylor vs. Church, 1 E. D. Smith, 279 . 
 
 Thomas vs. Winchester, 6 N. Y. 397 
 
 Toogood vs. Spyring, 1 C. M. & R. 180 . 
 
 Trussel vs. Scarlett, 18 Fed. Rep. 214 . 
 
 Washburn vs. Cooke, 3 Denio, 110 . 
 
 Wright vs. Woodgate, 2 C. M. & R. 573 . 
 
 551 
 
 246 
 
 164 
 
 5, 24, 
 
 16. 
 
 FA8B 
 
 21, 36 
 15 
 12 
 45 
 45 
 27 
 12 
 41 
 59 
 
 43, 51 
 33 
 13 
 11 
 54 
 13 
 7 
 11 
 
 29, 40 
 
 8 
 49 
 63 
 28 
 44 
 44 
 37, 51 
 62 
 56 
 43 
 28 
 68 
 31 
 30 
 57 
 
 30, 39 
 43 
 10 
 
 10, 38 
 12 
 11 
 
 75
 
 INDEX. 
 
 ADVERTISEMENT, liability for false, 44. 
 AGENCY (See Mkucantile Agency), 5, 6. 
 
 general, 53, 54. 
 
 special, 53, 54. 
 
 BILL OF PARTICULARS, when demandable, 42. 
 
 BONA FIDES ESSENTIAL TO nUVILEGED COMMUNICA, 
 TIONS, 28, 31. 
 
 CIPHER, ofTect of statements in, 31. 
 CONFIDENTIAL COMMUNICATIONS, 9. 
 CONTRACT, 5, 56, 57, 58, 59. 
 
 with mercantile agency, 5. 
 
 liability of mercantile agency for breach of, 56, 70. 
 
 action ibiinded on, witli allegations of fraud, 63, 69. 
 CONTRIBUTORY NEGLIGENCE (See Nkgligence), 58. 
 COO LEY, remarks of, on Privileged Communications, 9. 
 CREDIT-MAN, status of, 35. 
 CRIME, charge of, as affecting financial credit, 25. 
 
 DECEIT, action for, when it lies, 45. 
 
 ESTOPPEL, 47. 
 
 as to third persons, 47. 
 requisites of an, 48, 52. 
 
 FRAUD, 42, 55. 
 
 liability of mercantile agency for, 55. 
 
 in representations made to mercantile agency, 42, 43, 44, 45. 
 
 allegations of, in action founded on contract, 63. 
 
 GAIN, reporting for, does not vitiate statement, 26. 
 
 INFORMATION, refusal of mercantile agency to furnish subscribers with, 
 
 66. 
 INTEREST ESSENTIAL TO PPJVILEGED COMMUNICATIONS, 
 
 28, 33, 37, 40. 
 
 JUDICIAL NOTICE OF MERCANTILE AGENCIES, 47. 
 
 LIBEL, 7. 
 
 LDIITATION OF LIABILITY FOR NEGLIGENCE (See Negli- 
 gence), 56. 
 LORD TENTERDEN'S ACT, 62. 
 
 wliere enacted, 63. 
 eifeet of, 66, 67, 68, 69. 
 
 6 77
 
 74 INDEX. 
 
 MALICE. ofTocr o., on PriviU'irt-d Communications, 8, 9, 10, 11, 33, 43. 
 MEKCANTILK AGENCY, dcanitiou ol', 1. 
 
 liistory of, 1. 
 
 liahility of, for fraud, 55. 
 
 lialillity of, for its representations, 56. 
 
 lialiility of, for breacli of contract, 50", 70 
 
 is the airt'nt of its siibserlliers, 5. 
 
 may employ siih-aixents and clerks, 39. 
 
 may furnisli printed statements, 39. 
 
 statements of, privilejred, 6, 31. 33, 34, 35, 36, 37, 39. 
 MISTAKE, effect of, on statement by mercantile agency, 30. 
 
 NEGLIGENCE, definition of, 56. 
 
 liability of mercantile agency for, 56, 70. 
 
 limitation of liability for, by special contract, 56. 
 
 of ajieiit, 59. 
 
 limitjition of liability for agents, 59, 61. 
 NOTIFICATION SHEETS, 33. 
 
 ODGERS, remarks of, on Privileged Occasions, 8. 
 
 PRINTED STATEMENTS BY MERCANTILE AGENCIES, 20. 
 PRIVILEGED COMMUNICATIONS, 32, 33, 34, 35, 36, 37, 38, 39, 40, 
 41. 
 
 definition of, 11, 31, 
 
 interest essential to, 28, 33, 37, 40. 
 
 bona fides essential to, 28, 31. 
 PRIVILEGED OCCASIONS, classification of, bv Odgers, 8. 
 PROSPECTUS, liability of tradesman for false, 44. 
 
 REPRESENTATIONS MADE TO MERCANTILE AGENCIES, 42, 
 
 43, 44, 45, 46, 47, 48, 49, 5(i, 51, 65. 
 when thev amount to an estoppel, 48. 
 RESPONDEAT SUPERIOR, doctriue of, as applied to mercantile agen- 
 cies, 59, 61. 
 
 SECRECY, when essential to privileged communications, 23. 
 
 SLANDER, 7, 24. 
 
 STATEMENTS BY MERCANTILE AGENCIES, 48, 70. 
 
 how long tliey liold good, 51. 
 
 etlect of, when printed, 20. 
 
 eifect of, when written, 20. 
 
 effect of, when oral, 70. 
 STATUTE OF FRAUDS, 62, 63, 64, 65, 66, 67, 68, 69, 70. 
 
 efl'ect of, on contracts of mercantile agencies, 70. 
 STRANGERS, information volunteereil to, 40. 
 SUBSCRIBERS OF MERCANTILE AGENCY, rights of, 56. 
 
 TRADE PROTECTION SOCIETIES, 4. 
 
 WHARTON, Dii. FRANCIS, remarks of, on Privileged Communications, 
 10. 
 
 78
 
 University of California Ubrary 
 
 Los Angeles 
 
 This book is DUE on the last da^^stampedbe^ 
 
 RECEIVED 
 JAN 3 ZOOl 
 UCLA LAW LIBBAKY
 
 UC SOUTHtRN REGIONAL LIBRARY FAClLiTv 
 
 AA 000 732 625 9