THE Index to vol. VII of the ALBANY LAW JOURNAL will be sent to subscribers with the next number.

The Albany Law Journal.

ALBANY, AUGUST 2, 1873.

MERCANTILE AGENCIES.

The most important question with regard to mercantile agencies is, as to how far their communications made to their patrons and customers and affecting the credit and commercial standing of others are to be regarded as privileged communications. However useful these agencies may be to traders and merchants when properly conducted· and that they are useful there can be little question- - they may yet, if recklessly and dishonestly managed, become engines of great evil, and sources of great injury to the worthiest and most solvent business men of the country.

As these agencies are an outgrowth of modern times, there are but few cases to be found in the reports relating particularly to them, but it is believed that enough may be found to settle, pretty clearly, the extent of their rights and liabilities in the matter of communicating information.

The earliest case bearing upon the subject is that of Goldstein v. Foss, 2 Carr & Payne, 252 (1826). The facts were these: A society had been formed called "The Society for the Protection of Trade against Swindlers and Sharpers," into which all fair traders were admissible. It was the duty of defendant, its secretary, to ascertain and designate to the members, the names of such persons as were deemed improper persons to be balloted for as members. The libel complained of was a communication addressed to the members of the society, in which it was stated that the plaintiff was reported to this society as improper to be proposed to be balloted for as member thereof. Lord Tenterden told the jury that there could be no doubt that such a communication was libelous, and the jury gave a verdict for plaintiff.

The case of Fleming v. Newton, 1 H. L. Cas. 363 (1848), is, however, more nearly akin to the precise subject we have in hand. There the appellants were directors of a Scottish mercantile society, formed "to concentrate and bring together, from time to time, a body of information for the exclusive use of the members, relating to mercantile credit of the trading community, with a view of diminishing the hazards to which mercantile men were exposed." The rules required the secretary to collect from the public records of protests, etc., the names and designations of debtors, in trade, etc., and to print his information and forward it monthly to each member of the society. The respondent had dishonored two notes and procured an interdict against the publication of the protests by the appellants. The laws of Scotland required all protests to be registered in a public register, and

it was conceded that the extracts complained of were taken from this record, and were made for a limited purpose, and for the use of the society. The House of Lords dismissed the interdict. In the course of the judgment the lord chancellor spoke as follows: "They (the society) are engaged 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 might go or send to the office and search the register, is not disputed, and that they might communicate to each other 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 is a libel, this is a publication of it; but the transaction disproves any malice and shows a legitimate object for the act done." The turning point in this case was probably the fact that the matter claimed to be libelous was copied from a public record.

The earliest case in this country, so far as we have been able to ascertain, was that of Billings v. Russell, 8 Boston Law Reporter, 699, tried before Dewey, J., at Nisi Prius. The plaintiff was a merchant and the defendant the proprietor of the "Boston Mercantile Agency." The defendant had received from his agent, on what was supposed to be reliable authority, a report injurious to the credit of the plaintiff. This report had been read by defendant's clerks to regular subscribers to defendant's agency, who were interested in knowing the standing of the plaintiff. The report was incorrect and unjust. The court charged that if the defendant, as the constituted agent of a commercial house, upon the application of his principal, made inquiries at the proper places and under proper and reasonable guards to insure accuracy and privacy as to the information thus obtained, and the information which he thus obtained was repeated bona fide to his employer, and to him alone, as the result of such inquiries, 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 justifiable as a confidential communication, and the defendant would not be responsible athough the information was incorrect and unfounded in fact, the defendant acting in good faith, and believing it to be true at the time he communicated it; but that the privilege of a confidential communication would be confined to the agent, and if the principal repeated it to others he would be responsible.

In Taylor v. Church, 8 N. Y. 452 (1853), the question was fully discussed before the court of appeals of this State. Several mercantile firms of the city of New York associated together and employed the defendant to travel in the southern and western States, to obtain information in relation to the standing of merchants and traders residing there. The information obtained was transmitted in the form of a report to one of the associated firms, and by them

printed and a copy sent to each member of the association. The defendant having made a report unfavorable to the credit and standing of the defendant, a merchant in Mississippi, which report was circulated in the usual manner, the plaintiff brought an action for libel and recovered judgment, which being affirmed by the court in banc, an appeal was taken to the court of appeals. The judgment was reversed on the ground of improper rejection of evidence; but on the question of libel or no libel, Jewett, J., who delivered the opinion, said: "I think the court below was right in holding that the publication could not be included within the protection of privileged communications. In this case the communication was not even confined to 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." This was all that was said on this point. But on the question being propounded to the court: "Was the alleged libel a privileged communication?" all the members of the court who heard the argument were of the opinion that it was not.

This decision must rest solely upon the ground that the information claimed to be libelous was communicated to persons other than those who had a direct and special interest in it, and, as we shall see, it is an authority for nothing beyond that.

Ormsby v. Douglass, 37 N. Y. 477 (1868), was an action of slander against the owner of a mercantile agency in New York. By the terms of the subscription to this agency which constituted the contract between the defendant and the person to whom the alleged slanderous words were uttered- all information was to be considered strictly confidential and furnished only for the use of subscribers. One Benton, a subscriber, holding a note indorsed by the plaintiff, applied to the defendant for information as to his credit, responsibility, etc. The books of the agency were consulted by the clerks, and the result communicated to the defendant, who thereupon informed Benton that plaintiff was a man of no responsibility; he was a bad man and worked for counterfeiters, and was a counterfeiter." On the trial, a nonsuit was granted on the ground that the communication was confidential and privileged. This judgment the court of appeals affirmed, on the ground that the words were communicated by the defendant in the performance of a duty imposed upon him, to a person who had an interest in the matter, and who had a right to require the information. This decision is in accordance with the rule so well stated by Parke, B., in Toogood v. Spryling, 1 Comp. M. & R. 143 — and which has been since universally approved - that a communication is privileged, if fairly made, by a person in the discharge of some public or private duty, whether legal or moral, or in the conduct of his own affairs, in matters where his interest is concerned.

The doctrine laid down in Taylor v. Church, that communications derogatory to the credit or standing of another, were not privileged if made to those who had no special interest therein, was re-asserted in Sunderlin v. Bradstreet, 46 N. Y. 188; 7 Am. Rep. 322. In that case the defendant had a commercial agency, and distributed to his subscribers, semiannually, 10,000 copies of a publication, giving the credit and standing of merchants. He also issued a weekly sheet of "corrections," which was sent to all subscribers to the semi-annual publication, and which contained the alleged libelous matter -to wit: that the plaintiffs had failed-which was false. The defendant appealed from a judgment against him, and the judgment was affirmed for the reason above stated. The court said: Whether a libel or slander is within the protection accorded to privileged communications, depends upon the occasion of the publication or utterance as well as the character of the communication. The party must have a just occasion for speaking or publishing the defamatory matter. A communication is privileged within the rule when made in good faith, in answer to one having an interest in the information sought; and it will be privileged, 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." Precisely the same conclusion and on the same grounds, was reached in Commonwealth v. Stacey, 3 Phil. Leg. Gaz. 13, which was an indictment for an alleged libel contained in the circular of a commercial agency.

It follows, then, from these decisions that a communication from a commercial agency to a subscriber is privileged, provided the subscriber have a special interest in the particular information communicated, but that if the communication be published to all subscribers, whether having a special interest in it or not, it is not privileged, and if defamatory may be made the subject of an action.

WHERE TO COMMENCE THE PRACTICE OF THE LAW.

Any one who has had the fortune to peruse the twenty odd addresses that have, within the last two or three months, been delivered to the graduating classes of the various law schools of this country, will concede that old Roger North's words are quite true even to this day, that, "of those who are so civil to assist a novice with their advice, what method to take, few agree in the same-some say one way, some another, and among them rarely any one that is tolerably just." "Nor is it so easy a matter to do it," he continues "that every one should pretend to advise, for most enter the profession by chance, and all his life is partial to his own way, though none of the best; and it is a matter of great judgment, which

requires a true skill in books and men's capacity, so that I scarce think it is harder to resolve very difficult cases in law, than it is to direct a young gentleman what course he should take to enable himself so to do."

It is, of course, unfortunate that this is, to-day, true of a science that takes up in its ashes "the sparks of all sciences in the world; " but it is, we fear, a melancholy fact, that in the matter of legal education or direction, the nineteenth century is not much, if any, in advance of the century or two centuries preceding.

But the especial point to which our attention has been directed is the various advice given in these addresses as to the best place to commence the practice of the law whether in city or country, in the east or in the west. To a large number of the thousand or so young men who have recently come to the bar, this is a matter of considerable importance — for in the legal, as well as in the military, campaign, is Napoleon's celebrated axiom true-c'est le premier pas qui conte.

On the primary question of location, the burden of advice appears to be to "go west." Being somewhat familiar with the relative chances for the young lawyer, both at the east and at the west, we are satisfied that this advice is fatuous. There is, to be sure, something fascinating about a new, growing, enterprising town, such as is to be found almost anywhere in the west-but it is a fascination of which the young lawyer should beware. It has already filled the west with a surplus of young and ambitious lawyers, and any hopeful neophite who now goes to the west in the expectation of finding a profitable field unoccupied, will, in the end, be wofully disappointed. It is quite true that business does not there run in such well-worn ruts as in the east, and that wisdom and capacity are not there thought to be found only under gray hairs; but it is equally true that the field is more thoroughly occupied that there are more ambitious, enterprising young lawyers at the west than in the eastern States.

Again, litigation is a sort of luxury and flourishes best where money is most plentiful. Of money, the west is comparatively destitute, and litigation, therefore, languishes. There is probably more, and, to the lawyers, more profitable, litigation in some of the counties of this State, than in the whole of some of the western States. In fine, we are thoroughly convinced that any young lawyer who goes west solely to find a good "location," will have occasion to rue it.

Another point of these advisory addresses is as to the comparative merits as a starting point, between the city and the town. And here again the bulk of the advice seems to us erroneous. We are fully conscious that the city has its advantages. The courts are wont to sit more frequently there- there is more of a "legal atmosphere," more to stimulate one's ambition, more business. But after all we believe

that the best training-school for the young lawyer is the country. It is the school in which most of our great lawyers have been trained. There a young lawyer's practice will be much more varied than in the city, and though the sums involved may be much less, the legal questions will be just as important and just as intricate. He will also come into closer contact with his neighbors, will come to know men better, and will be more closely watched and criticised – an important matter to a man beginning his profession. For instance, a young lawyer in a city has a case before a justices' court. The chances are that no one is present at the trial but the parties interested, the witnesses and the justice all anxious to have the case disposed of as speedily as possible. Nine times out of ten he will do his part hastily if not carelessly, submitting the case to the court, with few, if any, comments. Take the same case before a justice of the peace in a country tavern, with a score or so of the "neighbors" looking on- and on such an occasion there is seldom lack of spectators - and it would be tried very differently. Every young man of mettle would feel that he was himself on trial, and would look to acquit himself most worthily. Much would be expected, and he would seek to meet the expectation. The presence of an expectant audience— boorish though it might be would nerve him up to efforts that he would never think of making without it that he would probably never have made in a deserted city court-room. In such a contest -- in doing one's "level best" always, and under all circumstances, is gained the real sinew and muscle-the discipline and development which make the successful lawyer.

We, of course, do not advise any young lawyer to make a country practice his ultimate aspiration - unless he finds himself to be a failure - but we confidently assert that it is much better that the first five years after a call to the bar be spent outside of a city.

CURRENT TOPICS.

The attorney-general of Iowa has been called upon for an opinion upon the curious question of the power of the State to copyright its laws - the legislature having provided that the Code should be printed, and sold for the benefit of the State. The attorney-general replied that "it is quite probable that it would have been competent for the legislature when providing for the publication of the Code, to also have provided for securing to the State the copyright of such publication," but that, as the legislature did not do this, there was no authority for restraining any publication of the Code. It would certainly be a most mean and pitiful piece of political economy, to say no more, for a State to attempt to limit by copyright a diffusion and knowledge of its laws. It would be much more worthy of a State, and better economy in the long run, to compel the publishers to

sell the laws at the lowest possible price, and thereby help to disseminate a knowledge of the laws among the people. There is little difference in principle between the Roman emperor's plan of writing the laws so high as not to be readable, and a plan to so control their publication as to put the price beyond the means of the people.

The newspapers of the State seem very generally to hold the opinion that the new law of murder will result in a practical abolition of capital punishment. Our own opinion is, that it will do nothing of the kind,that there will be nearly or quite as many convictions of murder in the first degree as under the old law, but that fewer will escape with the slight punishment attached to manslaughter in the third degree. However this may be, there can be little question as to the wide-spread conviction, that the pardoning power should be lodged in hands other than those of the executive. The reasons for this change we stated somewhat in full in a former number, and those reasons, and the plan there suggested of a commission or court of pardons, have been very generally adopted. So long as courts are fallible, and men are unjustly convicted, the pardoning power must necessarily rest somewhere, but it should be placed as far as possible beyond any influence, save that of exact justice. Intrusted to a few wise and good men, acting with the solemnity and impartiality of a court, it will be much less liable to abuse than in the hands of the average governor.

The Mordaunt divorce case has again been intruding itself on the notice of the English public; but on the present occasion it is free from all the crowd of peculiar details with which we have become accustomed to associate its appearance. A question of law of a very important character has been raised in the course of the suit, and is now referred for ultimate decision to the tribunal of the House of Lords, with the assistance of the common law judges. The whole point of the question raised may be summed up in the case put to the judges by Lord Chelmsford: "Whether proceedings for dissolution of marriage can be instituted or proceeded with either on behalf of, or against, husband or wife, who, before proceedings were instituted, had become incurably lunatic?" There is no precedent to guide the decision which turns upon the construction to be put on the act of parliament, which established the court of Divorce. The practical difficulties of a decision either way are obvious. If no such proceedings can be taken, then the injured husband or wife will be permanently without relief from no fault or shortcoming of their own, while, on the other hand, it is urged, if such proceedings are allowed, it will be possible to condemn unheard any unfortunate person who may happen to have become lunatic. The judges have reserved their decision.

The Ohio Constitutional Convention seems to be timid about recommending an appointive instead of an elective judiciary, fearing that they will be charged with a desire "to take away power from the people." But the better portion of the press of the State is beginning to urge the Convention to decisive action. The Cincinnati Gazette sums up its objections to the elective system as follows:

"It has not kept up the character of the Ohio judiciary. The good judges cannot redeem the system from the poor. It has not done its worst with us, but is continually growing worse. New political institutions generally start out with high resolves, which in the beginning fill them with good officers. The debasement to the common level comes by degrees. The nomination or election of a judge is not now regarded by lawyers nor by any intelligent persons as an evidence of judicial fitness. The judicial office is by degrees settling down to the level of the small lawyer, who supplements his small legal capacity by being a small politician. Respect for the judiciary is on the decline. Judges are more and more looking to popular influences in their acts. Judicial decisions are losing more and more the weight of that learning, which may give an approach to exactness and certainty, and are taking on the character of a trial of chances, to be repealed through courts of different degrees."

The New York Evening Post adheres to the opinion that Senator Conkling is constitutionally ineligible to the office of chief justice. It argues as follows:

"The object of the framers of the constitution was clearly this: That no person, while still a member of either house of congress, should be appointed to an office for the creation of which, or for the increase of the pay of which, he could be supposed to have voted. They did not limit the prohibition to the term for which the member had been elected, but extended it to the time for which he was elected, whether it covered, that is, one term or more. Should Messrs. Howe and Conkling live six years longer, they will both have been United States senators for twelve consecutive years, and during that time the emoluments of the office of chief justice have been increased. Obviously the intent of the constitutional prohibition, if this distinction between term and time be well taken, excludes them from the office. Technically their term of office expired in March last, and they had to be re-elected; but they were re-elected before their terms expired, and the time during which they are senators is continuous."

Whatever may have been the intention of the framers of the constitution, and however much the appointment of Mr. Conkling might violate the spirit of the constitution, there can be no serious question that his case does not come within the letter of that

provision. The word "time" was very clearly used as a synonym for term.