Bradstreet v. Everson

The opinion of the court was delivered, by

Agnew, J.

— There are but two questions in this cause which are required to be noticed. First, whether J. M. Bradstreet & Son authorized the receipt of June 2d 1865, by which they undertook to collect the claims mentioned in it, and, second, the nature of their liability. It is undisputed that J. M. Bradstreet & Son had a branch office in Pittsburg, of what they termed their “ Improved Mercantile Agency,” and that the persons employed in this office were their agents. They only deny that their business was a collecting agency, asserting that it was confined to giving to subscribers information of the mercantile standing of men in business in the different parts of the country. It is in testimony that the acceptances mentioned in the receipts were delivered, as the witness states, to J. M. Bradstreet & Son at the office of the agency, and the receipt given for them is in the name of J. M. Bradstreet & Son, and was made out by a person in the office, acting in their business. This was in 1865. In 1867 the plaintiffs were called on by a person belonging to the office for a power of attorney to be sent to their agent or attorney in Memphis, Tennessee, to enable them to collect the moneys for the acceptances from John W. Wood, the attorney to whom the acceptances had been sent by them, and who having collected the money had failed to pay it over to the defendants. This power, directed to J. B. Woodward, of Memphis, and dated August 30th 1867, was handed to the person in charge of the Pittsburg office, who gave for it a receipt of the same date in the name of the defendants, stating that the power was executed by the plaintiffs at the request of the defendants, and addressed to their agent, J. B. Woodward. Woodward himself testifies that he was called on in Memphis by J. De Soto, the agent of J. M. Bradstreet & Son in that city, and at his request and in his company went to John W. Wood and demanded of him the money he had collected on the acceptances. He also testifies that his correspondence was with J. M. Bradstreet & Son, and not with the plaintiffs, and that he was engaged to attend to the business by J. De Soto, the agent of the defendants at Memphis. There are some minor matters not necessary to be detailed. These facts were clearly sufficient to go to the jury upon the question whether the receipt was given by the defendants, and we see no error in the court below refusing to take the ease from the jury.

The next question is upon the nature of the liability arising upon the receipt. It is^in the following words: “J. M. Bradstreet & Son, Improved Mercantile Agency. Pittsburg, June 2d 1865. Received, of Messrs. Everson, Preston & Co. four duplicate acceptances for collection, versus Watt C. Bradford, Memphis, Tennessee, amounting in all to $1726.37.” (Signed) “ J. M. Bradstreet & Son.”

It is argued, notwithstanding the express receipt “ for collection,” that the defendants did not undertake for themselves to collect, but only to remit to a proper and responsible attorney, and made themselves liable only for diligence in correspondence, and giving the necessary information to the plaintiffs; or in briefer terms, that the attorney in Memphis was not their agent for the collection, but that of the plaintiffs only. The current of decision, however, is otherwise as to attorneys at law sending claims to correspondents for collection, and the reasons for applying the same rule to collection agencies are even stronger. They have their selected agents in every part of the country. From the nature of such ramified institutions we must conclude that the public impression will be, that the agency invited customers on the very ground of its facilities for making distant collections. It must be presumed from its business connections at remote points, and its knowledge of the agents chosen, the agency intends to undertake the performance of the service which the individual customer is unable to perform for himself. There is good reason therefore to hold, that such an agency is liable for collections made by its own agents, when it undertakes the collection by the express terms of the receipt. If it does not so intend, it has it in its power to limit responsibility by the terms of the receipt. An example of this limited liability is found in the case of Bullitt v. Baird, decided at Philadelphia in 1870; the only case in this state upon the subject of such agencies. There the receipt read, “ For collection according to our direction, and proceeds, when received by us, to be paid over to King & Baird.” Across the face of the receipt was printed these words: “N. B. The owner of the within mentioned taking all the risks of the mail, of losses by failure of agents to remit, and also of losses by reason of insurrection or war.” The limitation of the liability of Bullitt & Fairthom, by Mr. Bullitt, himself a good lawyer, is evidence of his belief that a greater liability would arise without the restriction.

Recurring to the analogy of attorneys at law, the first point to be considered is the interpretation given by the courts to the terms of a receipt “for collection.” In our own state we have several decisions in point. In Riddle v. Hoffman’s Ex’r., 3 Penna. Rep. 224, Riddle, an attorney in Franklin county, gave a receipt in these words: “ Lodged in my hands a judgment-bill granted by Henry H. Morwitz to Henry Hoffman for the sum of $1200, due with interest since the 15th of May 1811, which is entered up in Bedford county, which I am to have recovered if it can be accomplished.” Riddle sent this bill to his brother, a practising lawyer in Bedford. The money was made by the sheriff', but by the neglect of the Bedford Riddle was not received from the sheriff, who became insolvent, and the money was thus lost. Hoffman sued the Franklin county Riddle on his receipt and recovered. On a writ of error it was contended that the words of the receipt, “which I am to have recovered if it can be accomplished,” imported only a limited undertaking to have it collected by another, and not to collect it himself. But this court held that the receipt contained an express and positive undertaking for the collection of the money, if practicable, and not merely for the employment of another to that end; and that the defendant was bound by every principle of moral and legal obligation to make good the collection of the judgment by the application of reasonable diligence, skill and attention.

The next case is Cox v. Livingston, 2 W. & S. 103. This was the receipt: “ Received of Mr. Thos. Cox, of Lancaster, Pa., for collection, a note drawn in his favor by Mr. Dubbs, calling for $497.65, payable three months after date.” The note was left with an instruction to bring suit. The receipt was dated August 30th 1837, and Livingston died in January following without having brought suit. Dubbs became insolvent. It was held that Livingston was liable for the collection, though only two terms intervened between the receipt and his death.

Krause v. Dorrance, 10 Barr 462, was assumpsit against two attorneys for money collected and not paid by another attorney to whom they sent the note for collection. The liability of the original attorneys for the collection was admitted, but the point was made and succeeded, that a demand before suit was necessary. Rogers, J., says expressly they were liable for the acts of the agent whom they employed, but being without fault themselves, a demand was necessary before a resort to an action.

In Rhines v. Evans, 16 P. F. Smith 192, the receipt was: e- Received for collection of A. Rhines one note on Lukens & Beeson, of Rochester, dated October 30th 1857, for $365.” The liability of Evans, the attorney, was conceded, and the question was on the Statute of Limitations, and it was held the action was barred by the lapse of seven years and five months from the date of the receipt.

These eases show the understanding of the bench and bar of this state upon a receipt of claims for collection. It imports an undertaking by the attorney himself to collect, and not merely that he receives it for transmission to another for collection, for whose negligence he is not to be responsible. He is therefore liable by the very terms of his receipt for the negligence of the distant attorney, who is his agent, and he cannot shift responsibility from himself upon his client. There is no hardship in this, for it is in his power to limit his responsibility by the terms of his receipt when he knows he must employ another to make the collection: Bullitt v. Baird, supra.

We find cases in other states holding the same doctrine. In Lewis & Wallace v. Peck & Clark, 10 Alabama Rep. 142, both firms were attorneys. The defendants gave their receipt to the plaintiffs for certain notes for collection, and after collecting the money transmitted it to the payees in the notes instead of the attorneys who had employed them, the payees having however endorsed the notes: Held that Peck & Clark were liable to their immediate principals, the plaintiffs, there being no evidence that the payees had given them notice not to pay over to Lewis & Wallace, the original attorneys. This is a direct recognition of the liability of the collecting attorney to the transmitting attorney. The case of Pollard v. Rowland, 2 Blackford (Ind.) Rep. 22, is more directly in point. Rowland received from Pollard claims for collection, and sent them to Stephen, an attorney in another county. Stephen obtained judgment, and collected the money: Held that Rowland was accountable to Pollard for the acts of ,Stephen to the same extent that Stephen was, and could make no defence that Stephen could not; and that Rowland was liable to Pollard for the money. Cummins v. McLain et al., 2 Pike (Ark.) Rep. 402, was a case nearly similar to the Pennsylvania case of Krouse v. Dorrance, supra. The attorney sent the claim to another attorney at a distance, and was held liable, but for the omission of the plaintiff to make a demand, he failed to recover. The court say the attorney is liable for the acts of the attorney he employs. In a Mississippi case two attorneys, Wilkison and Willison, received of plaintiff a claim for collection, and brought suit and obtained judgment. They dissolved partnership, Wilkison retiring from the practice; and Willison to.ok another partner, Jennings, who received the money from the sheriff. In a suit against Wilkison as surviving partner of Willison, he was held liable for the receipt of the money by Jennings: Wilkison v. Griswold, 12 Smedes & Mar. Rep. 669.

In view of these reasons and authorities, we hold that a collecting agency, such as the defendants have been found to be, receiving and remitting a claim to their own attorney, who collects the„ money and fails to pay it over, is liable for his neglect.

Judgment affirmed.