COMMERCIAL AGENCY

A person, firm, or corporation engaged in the business of collecting information as to the financial standing, ability, and credit of persons en- gaged in business and reporting the same to subscribers or to customers applying and paying therefor. "They have become vast and extensive factors in modern com- mercial transactions for furnishing infor- mation to retail jobbers as well as to whole- sale merchants. The courts are bound to know judicially that no vendor of goods at wholesale can be regarded as a prudent business man if he sells to a retail dealer, upon a credit, without first informing him- self through these mediums of information of the financial standing of the customer, and the credit to which he is fairly en- titled: "1 Ind. App. 573; s. c. 28 Ν. Ε. Rep. 103. See also 83 N. Y. 31; 20 Mo. App. 661. How far the agency may contract against its own negligence. An exception is made to some extent in favor of such agencies to the rule against stipulations by a person against liability for his own negligence. The agency usually contracts that their agents shall be considered as the agents of their patrons, and that they shall not be liable for the negligence of their agents. Where in an action upon such a contract the plaintiff contended that under it the agency was protected only against gross anu not against ordinary negligence, the court thought otherwise, and on motion to take off a non-suit said:- "By the contract the plaintiffs expressly agreed to take such loss upon themselves. The authorities to which we have been referred have, in our judg- ment, no application to the case. Common carriers, innkeepers, and others, engaged in the exercise of a public calling, cannot thus protect themselves against the consequences of gross negligence in the agents whom they employ. This limitation of the right to contract, as parties may choose, is an excep- tion from the general rule and confined to the class of cases named, when the public interests are sup- posed to demand its application. It has no place here. The contract which these parties entered into must be enforced as they made it. It may have been unwise, but with that we have nothing to do. One or the other must bear the risk involved in de- pending upon agents scattered over the country, of whom neither could know much. The plaintiffs agreed to bear it and they must take the conse- quence; " 7 W. N. C. Pa. 248. Under a contract that the actual verity or correctness of the information was in no manner guaranteed, the agency was not liable for loss occasioned to a subscriber by the wilful and fraudulent act of a sub- agent in furnishing false information; 58 Fed. Rep. 174, reversing 51 id. 160. Where the inquiry was made concerning a grocer and the agency reported concerning the wrong person, who had the same name and was a grocer and saloon keeper, the plaintiff could not recover from the agency the value of goods sold on the strength of the report, the evidence being held to show that there was not such gross negligence as would render the agency liable; 70 Hun 334; but such a contract does not protect the agency from an error made in the publica- tion of its books of reference giving the financial responsibility of merchants and others, and upon which a subscriber of the agency relied in selling goods and suffered a loss, and in such case it is unnecessary to thus establish the insolvency of the pur- chaser by suit before suing the agency; 134 Pa. 161. When reports are privileged and when libellous. Such an agency is a lawful busi- ness and beneficial when lawfully con- ducted, but not exempt from liability for false and defamatory publications when other citizens would not be exempt. Its communications to a person interested in the information are privileged even if false, if made in good faith and without malice, but if communicated to its subscribers gen- erally they are not privileged; 72 Tex. 15; 116 Ν. Υ. 211; id. 217; 81 Mich. 280; 116 Mo. 226; 48 Wis. 348; 18 Fed. Rep. 214; 4 McCrary 160; 77 Ga. 172; 8 Phila. 617. See also 3 Montreal, Q. B. 83; 5 id. 42; 18 Can. S. C. 222. The contract of the agency to furnish information to all its subscribers, including those who have no special inter- est in it, is no defence to an action for libel; 49 Ν. Υ. 417; nor was the fact that the in- formation was given by printed signs of which each subscriber had the key; 46 Ν. Y. 188; the matter is privileged if com- municated to the proper person by a clerk or agent as well as by the proprietor of the agency; 49 N. Y. 417; 12 Fed. Rep. 526; (but see 5 Blatchf. 497 and s. c. 10 Wall. 427, criticised in the two cases just cited;) or if specially reported upon proper occasion to subscribers having special interest in them, though not applied for by such subscribers; 22 Fed. Rep. 771; but if a subscriber apply for special information from the agency, a false denunciation of the person inquired about, coupled with the report, is action- able; 22 S. W. Rep. (

to ask a witness to the effect of such state- ment, whether if he had known the actual fact his conduct would have been the same; 141 Pa. 501. The burden of proof is upon the agency to show privilege prima facie, and after its character is established the burden is on the plaintiff to show malice; 12 Fed. Rep. 526; 87 Ν. Υ. 477; and it is matter of law for the court to determine whether the matter published is libellous per se; 85 Hun 16. Blacklisting. An action for libel may be brought by a person whose name is pub- lished in a book containing a list of delin- quent debtors, printed and distributed to subscribers, manifestly for coercing the payment of claims, who is denied credit be- cause of such publication, or by one to whom a letter is sent in an envelope on which is printed the name of an association and a statement that it is an organization for the purpose of collecting bad debts; 77 Wis. 236; but the publication and circula- tion by a corporation among its officers and employés, of a list of discharged employés, who are considered incompetent or untrust- worthy, is not libellous, and a person whose name is on the list has no action unless he can show that the publication was mali- cious or known to be false; 78 Tex. 568. Effect of fraudulent representations by vendee to agency upon vendor who relies upon them. An action for deceit will lie against persons or corporations making false representations of pecuniary responsi- bility to an agency in order to obtain credit and defraud those who may rely upon the reports; 50 Mo. App. 94; 83 N. Y. 31; 18 Hun 44; in such action the statements falsely made to the agency are admissible, if relied on by the vendee; 1 Ind. App. 578; or if approved by him after being written out by the agency, but not if not known to the vendor until after thesale; 81 Ala. 134; 75 Mich. 188. A contract for the sale of goods to the person making such represen- tations, who proves to be insolvent at the time of making them and of the sale, may be rescinded and possession of the goods re- covered; 58 Hun 610; 42 N. Y. 802; 31 Mo. App. 199; 85 Mich. 535; 61 Ia. 667; 77 Tex. 48; but where there were no representations other than those obtained by the agency from the seller, a fraudulent intent on the part of the vendee to use the agency as an Instrument of fraud must be clearly shown; 33 Hun 549; 2 Cent. Rep. (Md.) 620; 99 Ν. Y. Rep. 9; s c. 2 N. E. Rep. 19; 2 N. E. Rep. (N. Y.) 19. The vendor may show that he refused to make the sale until he received the report of the agency, and the agent may show his business methods; 85 Mich. 535. The right to rescind the sale is not affected by a refusal of the vendee to give further statements of his condition, as the original one is presumed to continue if not recalled by the agency; 36 N. Y. St. Rep. 728; but if the vendee has made subsequent reports showing an impaired responsibility, the sideration, and not only on the original one; vendor must take all the reports into con- sequent reports unless he actually becomes but the vendee is not required to make sub- insolvent or knows that he will soon be; 83 Mich. 419; 75 id. 188. Reports made six weeks before the sale may be relied on; 20 Mo. App. 173; but not those made from five to seven months before; 88 Mich. 418; 85 id. 535; 58 Hun 606; 99 N. Y. 353; 49 id. 417. How affected by the statute of frauds. With respect to the liability of the agency for representations not made in writing when the liability was contested, on the ground that the contract was within the statute of frauds, there is not a satisfactory result to be found in decisions; but it has been held that the action was upon the ori- ginal contract with the customer, which was by no statute required to be written; U. C. 39 Q. B. 551; (reversed on other points and doubted on this; 1 Ont. App. 153;) and also that the action was sustainable on the origi- nal contract to furnish accurate statements, in response to inquiry respecting any per- sons; 12 Phila. 316. No remedy in equity against publication. An injunction will not be granted to restrain the agency from the publication of matter