8. This case is held to be a proper one for the application of Supreme Court Rule No. 59, which provides that whenever any record in a case at law is so prolix as to cause vexation by reason of the multiplicity of frivolous assignments, or by any other abuse, it shall be within the discretion of the Court to grant such costs against the prevailing party, who is responsible for such abuse, as may offset, in whole or in part, the costs to which he would otherwise be entitled; and the judgment is therefore reversed, but without costs.

Error to Gogebic. (Haire, J.) Argued April 14, 1893. Decided July 26, 1893.

Case. Defendants bring error. Reversed. The facts are stated in the opinion.

Button & Norris, for appellants, contended:

1. The first count of the declaration shows that the draft was placed in the hands of the Champ Collection Agency for collection, and that the agency was the agent of the plaintiffs, and fails to show any privity between the defendants and the plaintiffs, for the party receiving a collection, although it is to be transmitted to a distant point for actual collection, is the agent of the owner, and the party actually making the collection is the agent of such agent; citing Simpson v. Waldby, 63 Mich. 439; Exchange Bank v. National Bank, 112 U. S. 276.

2. A bank cannot be required to attend to business outside of business hours, or to exercise more than usual diligence; citing Morse, Banks, § 45a; and banking hours are recognized by How. Stat. § 3141, which provides that process shall be served on the officers only during such hours.

8. The draft was returned by the bank to the collection agency, and this closed that transaction, and upon its return the defendants were bound only by the instructions contained in the accompanying letter, "to collect at once and remit," and reasonable care and diligence was all that could be required of them, and they were not required to sue; citing Morse, Banks, § 246; nor were they required to disclose their dealings with the debtors; citing Id. § 294a.

4. The best judgment of the bank is all that the principal can require, and in case of doubt, arising from neglect to give specific instructions, if such judgment is exercised the bank will be acquitted, even if its judgment is erroneous; citing

Morse, Banks, § 218; National Bank v. Merchants' Bank, 91 U. S, 92; and it is only liable, in any event, for actual damages, and if the draft could not have been collected by the exercise of the utmost diligence there can be no recovery against the bank; citing Mechem, Ag. § 518; Fox v. Bank, 73 Iowa, 649.

5. A valid contract can be made by which a collection agent will be simply a transmitter; but, if he is both transmitter and collector, it is different; citing Hoover v. Wise, 91 U. S. 308; Bradstreet v. Everson, 72 Penn. St. 124; Sanger v. Dun, 47 Wis. 615.

Charles E. Miller, for plaintiffs, contended:

1. A bank receiving paper for collection is agent for the owner; citing Morse, Banks, § 214.

2. A bank receiving paper for collection contracts to use diligence in the business of the collection, and if it fails to perform this duty with reasonable skill and care it is liable for the resulting damage; citing 2 Amer. & Eng. Enc. Law, 111, and cases cited; Morse, Banks, § 252; Trinidad Nat'l Bank v. Denver Nat'l Bank, 4 Dill. 290; Bank v. Triplett, 1 Pet. 25; Wilson v. Smith, 3 How. 763; Whitney v. Express Co., 104 Mass. 152; Fabens v. Bank, 23 Pick. 330; Bank v. M'Kinster, 11 Wend. 473; Bank v. Smith, 3 Hill, 560; Tyson v. Bank, 6 Blackf. 225.

3. A bank, as agent, must do all that the owner would be required to do to protect his rights, and is liable to the owner for failure in such duty; citing Morse, Banks, § 252e; Davey v. Jones, 42 N. J. Law, 30; Beale v. Parrish, 20 N. Y. 407; Shipsey v. Bank, 59 Id. 485; Phipps v. Bank, 8 Metc. 79; State Bank v. Capitol Bank, 41 Barb. 343.

4. A bank must obey the instructions of its principal; citing Central Bank v. Cleveland Bank, 59 Ga. 667; National Bank v. City Bank, 103 U. S. 668.

5. It is the duty of an agent to furnish his principal all information he may have affecting the rights of the principal in relation to the subject-matter of the agency; citing Story, Ag. § 208; 1 Amer. & Eng. Enc. Law, 371 (note 4); Moore v. Thompson, 9 Phila. 164; Pierce v. Railway Co., 36 Wis. 283; Rochester v. Levering, 104 Ind. 562; Dickson v. Screven, 23 S. C. 212.

6. An agent will not be allowed to place himself in a position in which his duty and interest conflict; citing 1 Amer. & Eng. Enc. Law, 372, and cases cited; Story, Ag. §§ 210, 214.

HOOKER, C. J. The voluminous record and the great number of assignments of error in this case forbid the consideration of each assignment separately. The case may be conveniently disposed of upon the following questions: 1. Was the declaration such as to permit the introduction of any proof?

2. Did the evidence leave any question of fact for the jury?

3. Specific questions upon the introduction of evidence. 4. Refusals to give defendants' requests to charge.

5. Alleged errors in the charge as given.

The Declaration.

The plaintiffs, a mercantile firm at St. Paul, Minn., had a claim against Peter Johnson & Co., of Ironwood, Mich. To collect it they drew upon Peter Johnson & Co. in favor of "The Champ Collection Agency." This draft was indorsed as follows, viz.: "Pay to order of Bank of Ironwood, Ironwood, Mich., for collection. [Sgd.] John B. Champ & Co.,"-and forwarded to the bank, which, failing to collect, was instructed to turn the paper over to certain attorneys in the place. Before doing so the bank took a mortgage upon the assets of Peter Johnson & Co. for a large sum owing from said firm to the bank, whereby plaintiffs claim that they were prevented from collecting their debt.

Counsel for defendants objected to the introduction of any evidence under the declaration, claiming, as to the first count:

1. That the draft was placed in the hands of the Champ Collection Agency for collection, and that the agency was the agent of the plaintiffs, and that privity between the plaintiffs and defendants is not shown.

2. That it does not show that the account was lost to the plaintiffs by the alleged neglect of the defendants.

3. That it does not show that the attorneys could have collected or secured the debt if it had been turned over to them.

4. That it does not show that the plaintiffs were unaware of the insolvency of Peter Johnson & Co., and that the loss, if any, was attributable entirely to the action of the defendants. In other words, it does not negative the negligence of the plaintiffs.

As to the second count it was claimed:

1. That it fails to show defendants to be the plaintiffs' agents.

2. That it does not, by express words or necessary implication, negative the placing of the draft in the hands of the collection agency for collection, and that the defendants were acting as the agent of the collection agency, and not of the plaintiffs.

3. That it fails to negative knowledge by the plaintiffs of the insolvency of Peter Johnson & Co.

4. That it does not show that plaintiffs were without fault or negligence.

5. That it fails to show that Peter Johnson & Co. were indebted to the plaintiffs.

This objection was overruled, and an exception taken. The first point is based upon the proposition that, where a claim is sought to be collected through a bank or collection agency, which selects its own agencies, the bank or collection agency is liable for loss resulting from a failure. through the neglect of itself or its agents, and that the redress of the owner is against the bank or agency, and not against the subagent or correspondent of the bank or agency. Cases are cited to sustain this proposition. The first count of the declaration, however, alleges that the plaintiffs drew the draft, delivered it to the Champ Collection Agency, procured its indorsement, and "caused said draft, so indorsed, to be sent by mail, together with a statement of their account, * to the said

Bank of Ironwood, for collection." This allegation is consistent with the claim that the Champ Collection Agency was merely acting under the direction of the plaintiffs.

Whatever confusion may have arisen over the relations between the creditor and banks, local and foreign, where

paper is left with the former by which it is transmitted to the latter, there is no uncertainty about the rule that a collection agency which assumes to collect a debt is responsible for the negligence of its employés, resident or foreign. Possibly, under some circumstances, both may be answerable to the creditor. But, whether this is so or not, the general rule is well settled that

*

*

"If an agent employs a subagent for his principal, and by his authority, expressed or implied, then the subagent is the agent of the principal, and is directly responsible to the principal for his conduct. But if the agent, having undertaken to transact the business of his principal, employs a subagent on his own account, to assist him, there is no privity between such subagent and the principal." Mechem, Ag. §§ 197, 513, and cases cited.

See, also, Montgomery County Bank v. Albany City Bank, 7 N. Y. 459; Bank v. Smith, 3 Hill, 560; Wilson v. Smith, 3 How. 763.

It is competent to employ an agent through another agent, and this declaration is so framed as to permit the introduction of such proof. It does not allege that the Champ Collection Agency, having this claim to collect, employed the defendants as its agents. It will bear no such construction, and would not admit of proof upon such theory.

Counsel contended, further, that this count does not charge the loss upon defendants' failure to perform their duties. After alleging that it was the duty of defendants to use due and reasonable diligence, etc., the count proceeds:

"Yet said defendants,

well knowing

that if they had been prompt and diligent they could have collected said account, * negligently and carelessly and fraudulently and corruptly retained said draft in their possession, without using any diligence or care to collect the same, until October 25, 1890,