as well as theory, it would seem that such decision is correct, for the maxim, respondeat superior, is of universal application, and qui facit per alium facit per se, is the rule applicable to all cases in which one engages another to perform an undertaking or a service for him. Notwithstanding this, however, the courts in this country are much divided in opinion upon the question, and numerically speaking, their decisions may be said to be against the principle above laid down; so much so, that only five of the States support this ruling; yet the fact must not be lost sight of, that their decisions although in the minority are supported by the Supreme Court of the United States.

The theory contended for by the bank in the principal case, and supported by the majority of the decisions in the State Courts, is, that a home bank, receiving from its customers foreign paper for collection, is relieved from liability, if, in the selection of its correspondents to whom it entrusts its business, it exercises due care and prudence, and gives proper instructions to collect and remit.

The courts which support the latter doctrine do so on the ground, that the customer has a perfect knowledge of the usage and custom of banks, that correspondents will be selected, and impliedly authorizes the employment of a sub-agent, and that being so selected and employed, there is a privity between the customer and the sub-agent, which relieves the bank first intrusted from all liability. They likewise draw a distinction between the case of a home and that of a

foreign bill. They admit that in the former case the bank would be liable for the acts and defaults of its

servants or agents to whose care such paper is consigned for collection, yet deny that the same principles of law should govern the latter case, and that upon the ground of usage and knowledge and implied authority as above stated. It is submitted that such distinction is not feasible and that it is contrary to all sound principles of law. Why should a person be made liable for the acts of his agents or servants in one case and not in the other? It would seem that the foreign correspondent is as much the agent of the bank as one of its home officers is. In each case the bank employs some agent or servant to transact its business, and therefore the same principles ought to apply in both

cases.

The question of consideration has been urged as an answer to this theory,and on this ground, namely, that in the case of a home bill, the bank receives the commission on collection, while in that of a foreign one the correspondent receives it; thus in Titus & Scudder v. The Mechanics' National Bank (1871), 35 N. J. Law (6 Vroom.) 588, it was relied upon by the defendant, but the Chancellor held the point was not well taken as "the consideration set forth and proved that the plaintiffs were dealers in the bank, and kept their deposits there, and gave their checks upon New York, by which the defendants had the advantage of the rate of exchange, or the greater value of funds in New York than at Trenton is a sufficient consideration." In the case of Allen v. The Merchants Bank of the City of New York, infra, page 644, the same doctrine is upheld, and in the case. of Exchange National Bank v. Third National Bank of the City

of New York, infra, page 647, the theory is supported by the Supreme Court of the United States. There would therefore seem to be no reason for holding the want of consideration a defense to such an action. The question may be looked at from another point of view, namely, that of an attorney at law, or a collection agency. In these cases the law is well defined. They are liable for the acts of their correspondents to whom they transmit debts for collection, unless, as in the case of Bullitt v. Baird (1870), 28 AMERICAN LAW REGISTER N. S. 546, they expressly limit their liability by their receipt: Pollard v. Rowland (1826), 2 Blackf. (Ind.) 22; Bradstreet et al. v. Everson et al. (1872), 72 Pa. 124. It is difficult to conceive why the case of a bank should be looked at in a different light, for its position is in all points similar to that of an attorney and a collection agency. They both undertake to transact the same business, namely, the collection of money due from one person to another. That no such distinction really does exist, is clearly pointed out by the dissenting opinion of Chief Justice CAMPBELL in Third National Bank of Louisville v. Vicksburg Bank (1SS3), 61 Miss. 112: "It seems to be well settled that a collection agency which takes a claim for collection at a distant point, is responsible for the acts of its agent to whom the claim is sent for collection. I am not able to draw a distinction between a collection agency, by that name, and a bank, which is a collection agency, where it undertakes to collect claims for customers;" and by the case of Hoover v. Wise et al. (1876), 1 Otto, (91 U. S.) 308, where the action was brought to recover back

a sum of money collected from the bankrupt after the occurrence of several acts of bankruptcy. It appeared that an account was delivered by its owners to a collecting agency in New York, and received by them, with instructions to collect; that they transmitted the claim to a firm of practicing attorneys in Nebraska, who persuaded the debtor, notwithstanding the acts of bankruptcy, to confess judgment, which he did, and the money was collected and remitted to the agents in New York, but never paid to defendants. The debtor was declared bankrupt within four months after such confession and the attorneys were aware of his condition at the time. Justice HUNT delivered the opinion of the Court and after reviewing the authorities remarked: "The cases show that where a bank, as a collection agency, receives a note for the purposes of collection, its position is that of an independent contractor, and that the instruments employed by such bank in the business contemplated are its agents, and not the subagents of the owner of the note. It is not perceived that it can make any difference that such collection agency is composed of individuals, instead of being an incorporation. These authorities go far towards establishing the position that Archer & Co. [the collection agents] in the case before us were independent contractors, and that the parties employed by them were their agents only and not the agents of [defendants] in such manner that [defendants] are responsible for their negligence or chargeable with their knowledge. * *We are of opin

ion that these authorities fix the rule in the class of cases we are now considering, to wit. that of attor

neys employed not by the creditor, but by a collection agent who undertakes the collection of the debt. They establish that such attorney is the agent of the collecting agent, and not of the creditor who employed that agent.

A distinction has been drawn by the Courts between those cases in which the bank receives the paper merely for the purpose of transmission, and those in which it has received it for collection. They hold that in the former case the fact of receiving the documents for transmission for collection only, limits the responsibility to good faith and due discretion in the choice of an agent, while in the latter their opinions differ.

The question therefore would seem to be one of contract, namely, what is the real contract entered into between the parties? Is the contract only for the immediate services of the agent, and his acting faithfully, or, does it look to the thing to be done? If it be for the former, then responsibility ceases with the limits of the personal services undertaken, while if the latter, it covers all necessary and proper means for accomplishing the object, by whomsoever used or employed: Allen v. The Merchants' Bank of the City of New York, infra, page 644; Titus & Scudder v. The Mechanics' National Bank, infra, page 643; Exchange National Bank of Pittsburgh v. Third National Bank of the City of New York, infra, page 647; The Bank of Washington v. Triplett & Neale, infra, page 656; The Mechanics' Bank of Philadelphia v. Earp, infra, page 654; Bellemire V. The Bank of the United States, infra, page 654; Wingate v. The Mechanics' Bank,

infra, page 655; and Merchants' National Bank of Philadelphia v. Goodman, infra, page 656.

Notwithstanding these distinctions have been so clearly defined, they do not seem to be fully understood or followed by the Courts of some States, especially those of Illinois. This is indicated by the the case of The Etna Insurance Co. v. The Alton City Bank, infra, page 650, the agreed facts of which showed that the bill in question was "received for collection," and not merely for "transmission for collection," in which light it was treated by Justice WALKER who referred to the cases, The Bank of Washington v. Triplett & Neale; Allen v. The Merchants' Bank of New York City, infra.

In many cases, the negligence complained of, has been that of a notary employed by the bank, and the point has been successfully taken, that for such acts, the notary being a commissioned public officer appointed by the executive authority of the State, the bank was not liable. Here, again, the authorities differ, some cases drawing a distinction where such laches were committed by him in that part of his office which is peculiarly official, holding that in such case alone would the bank be relieved from responsibility: Allen v. The Merchants' Bank of New York City, infra, page 644, in these words: "If this laches had been committed by that officer in that part of his duty which was peculiarly official, and could only be performed by himself or some other notary, he having been requested or instructed to perform such duty, I doubt whether the collecting bank or any other institution or person employing him, would be responsible for

his neglect in that which was not voluntarily confided to him, but wherein his official duties were rendered necessary by the requirements of the law; and where his employer had done all that was within his power for the performance of the original undertaking. Then it would seem that the notary would alone be responsible."

In considering this subject which involves principles governing a wide range of commercial interests, sight must not be lost of the question of public policy. Upon this phase of the question, Senator VERPLANCK, in Allen v. Merchants Bank of New York, infra, remarks: "I cannot but think that if the law of this case were now to be settled, not judicially, but legislatively, upon considerations of public policy alone, the doctrine I have maintained ** would be found the safest and wisest. If the present judgment be affirmed, no small doubt will be thrown upon the responsibilities of collecting banks and bankers, even in domestic collections, for the acts of any of their officers. As in the case of corporate banks, or those under our general law, all the business is practically done by agents, that doubt would cover the whole of our banking transactions. The same difficulty may arise in numerous analogous commercial affairs, the law as well as the usage of which is now settled, unless it be shaken by the influence and authority of decisions and reasoning like that of the Supreme Court in this case. On the other side, if we hold collecting banks and bankers, to be liable for all neglect or omission of the necessary and proper means for the due performance of that which they have in general terms underVOL. XXXVIII.—41

taken to do, whether such omission or negligence be their own or that of others in their employ, we preserve that harmony of the law which is so essential to its being understood by those who are to regulate their dealings by it; and unquestionably much doubt and litigation will be excluded. If the responsibility thus imposed be onerous or inconvenient as to foreign bills, or to any special class of transactions, it is very easy for banks and bankers to avoid that inconvenience by stating the terms upon which they will receive the deposited paper."

The English cases establish the doctrine of principal and agent between the parties, and hold the bank liable for all acts of its subagents: Mackersy v. Ramsays (1843), 9 Cl. & F. 818; and Van Wort v. Woolley and others (1824), 3 B. & C. 439; which are much relied on by the Courts in this country. In the former case it appeared that the defendants in the way of their business as bankers, were employed, for reward, by a customer with whom they had a cash account, to obtain payment of a bill of exchange drawn on a person in Calcutta payable to their order. The defendants employed agents, who in turn employed others; the bill was duly paid to the latter, who after giving their direct employers credit for it, became bankrupt. The Court held the defendants liable. Lord CAMPBELL, thus stating the law: The general rule of law, that an agent is liable for a sub-agent employed by him, is not confined to cases where the principal has reason to suppose that the act may be done by the agent himself without employing a sub-agent; and here I conceive that the money is to be considered as received by

[the agent] whose correspondents -actually received it, and credited them with the amount✶✶ before their failure." To Lord COTTENHAM'S mind, it was "not necessary to go deeper than to refer to the `maxim "qui facit per alium, facit . per se," to solve the question. In the latter case, Chief Justice ABBOTT proceeded as follows: "Upon these facts, it is evident that the defendants (who cannot be distinguished from, but answerable for their London correspondents ) have been guilty of a neglect of duty which they owed to the plaintiff, their employer, and from whom they received a pecuniary reward for their services. The plaintiff is therefore entitled to maintain his action against them, to the extent of any damage he may have sustained by their neglect."

**

The Indiana courts hold the bank liable, and follow the English cases. In Tyson v. The State Bank of Indiana (1842), 6 Blackf. (Ind.) 225, the bank, through one of its branches, had undertaken to collect the plaintiff's debt, but neglected to do so, and the Court held it Tiable, Justice SULLIVAN saying: "The State Bank, through one of its branches, having undertaken, for a reasonable reward, to collect the plaintiff's debt, placed itself in the situation of an agent or attorney, who, for reward, undertakes to perform services for another in the the line of his business or profession. He is bound to a faithful discharge of his duty, and is responsible to his employer for all damages arising from his neglect." In The American Express Company v. Haire and others (1863), 21 Ind. 4, the bill was a foreign one, and was handed to the company for collection. The company handed it to

the notary who failed to demand and protest the bill at the proper time. Here the Court followed the New York case of Allen v. The Merchants' Bank, infra, and held the company liable for the acts of its agent. The case of Tyson v. The State Bank of Indiana, supra, was cited and approved. Chapman v. McCrea, et al. (1878), 63 Id. 639, is to the same effect.

The law upon the question seems to have remained unsettled in Michigan until the case of Simpson v. Waldby & Clay (1886), 63 Mich. 439, came before the Supreme Court of that State. The action was brought to recover a balance claimed to be due from the defendants to the plaintiff in respect of five drafts drawn by the latter upon a party in Vermont. The drafts were made payable to the order of the defendants, who undertook the collection of the same, and forwarded them to the First National Bank at St. Albans, who after collecting, sent its own draft on New York to defendants for the money. It appeared that a large number of drafts had been drawn by and upon the same parties before, and collected in the same manner. The defendants claimed that the amounts of the last three drafts were never received by them owing to the failure of the St. Albans bank, as a draft or drafts of that bank upon New York received by them was protested and not paid in New York. In the opinion Justice MORSE says: "The question is * * directly before us. What is the law of the case when a person steps into a bank, in the ordinary course of business dealings, and entrusts to it the collection of a draft drawn upon some person residing at a distance, in case the home bank, through the