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Mercantile Agency

financial, business, information, agencies, third and subscribers

MERCANTILE AGENCY. "An institution which, for a subscription price, agrees to collect t information as to the financial condition and re sponsibility of business men and to transmit the same to its subscribers." At times it also un dertakes the collection of debts for its ens touters. It originated in the United States, dur ing the period of depression following the panic of 1837, and its avowed object was to uphold, extend, and render safe and profitable to all con cerned the great credit system which had grown up with the increase of commeree. The first mer cantile agency was established in New York dur ing the year 1S41 by Lewis Tappan, and was " followed the next year by a similar agency un der the control of Woodward and Dusenbury.

While originally established for the purpose of answering questions about the financial stand- c ing of particular persons. the scope of the agency has been extended, until its records con tain the financial ratings of nearly every business man in the country. In addition to the general agencies, such as Dun & Co. and the Bradstreet Company. there are many special agencies which ennline themselves to particular lines of trade. By the general agencies the country is divided into districts, in (melt of which is a managing agent with various correspondents in the several localities. if a subscriber wishes more minute or more recent information than that contained in the agency's periodical reports, he asks for and receives a special report brought down to While a mercantile agency is employed by its subscribers to do certain things for them, it is not in the strict sense their agent (q.v.) in these transactions; it is rather an independent eon tractor. It engages to accomplish a stipu lated result, but is entirely free to neeomplish this in its own way and with its own instrumen talities. If, in and puhlishing

mation, it does a legal wrong to third persons, it is responsible therefor, but its employers are ant. A statement made to a subscriber asking for it is generally held to he conditionally privileged, but when made to other subscribers who have no interest in the information it is not privileged. In a ease of the former kind the plaintiff would be obliged, therefore. to prove actual malice, or malice in fart. to sustain an actinn for lihel, slander. or the like, on the part of the agency: but in the latter case lie would not.

A suliscriber who is misled to his injury by aiding upon false information supplied by the agency is generally entitled to damages against it. Most agencies, however, require their pa tron• to that the agency shall not he re spet sible for any loss caused by the neglect of any of it s servants, clerks, attorneys, or employees in proeuring. collecting, and eommunivating in humation. Such agreements have been upheld by several mints. If, however, after correct infor mation has been received Ity the agency, a blunder is made by its managers in printing it, the agency should be held liable, and such a decision was made by the Supreme Court of Pennsyl vania. When a business man makes false state ments about his financial condition to a mercan tile agency, and this is communicated to a third party who nets upon it•to his injury, the third party has as good cause of action in deceit (q.v.) against the business man as though the state ment liad been made directly to him. Consult: Errant, The Late Relating to Mercantile :Iyencies (Philadelphia, 1889) ; Reinhard, Trratisc car the Law of _tycncy (Indianapolis, 1903).