This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 216.— A bank at Creditburg sent a promissory note for collection addressed to " The Express Company, Duntown." The agent of the express company collected the note and remitted proceeds in error to an endorser on the note, instead of to the bank, which endorser made an assignment a few days afterwards.
Are the express company liable ? Can they escape liability under the plea that the bank sent the note direct to the express company at Duntown instead of through the local agent at Creditburg?
Or is the agent only personally liable?
Answer.—Assuming that there were no instructions in the communication sent with the note which would justify the remittance of the proceeds to the endorser, the express company or the agent would be liable to the owner of the note. As to which is liable would depend on the extent to which the express agent is the agent of the company. It would seem to us that as the express company hold him out as their agent for their ordinary business, which includes the collection of money, they would be liable. They might say that a collection sent to him by mail from another point and not through the local agent, is not within the usual scope of their regular business, but we doubt very much if that affects the queestion of agency. He collected the money on their behalf, and the charge for the service was no doubt credited to them.