Snow, Church & Co. v. Hall

The action is by plaintiff, a domestic corporation engaged in carrying on a law and collection agency, to recover for services performed for the defendant at his request, pursuant to a contract in writing in which the rate of compensation is particularly specified. The amended complaint enumerates seven different matters in which legal services were performed, and it alleges that they were rendered by the plaintiff through its representatives, Campbell & Murphy, attorneys and counselors at law, three of the matters resulting in settlements, and four in judgments. The justice gave judgment for the plaintiff for $99.77, which includes interest; and the evidence, interpreted in thé light of the contract fixing the rate of compensation to be charged, fully sustains the recovery.

The main dispute was as to the $50 fee in the Smith case. The claim there was $1,014. Suit was commenced. The defendant appeared, and demanded a bill of particulars, which was afterwards served. Several propositions looking to a compromise were made, and finally one was accepted, whereby Smith paid to the defendant one-quarter of the claim in- cash, and gave notes for the balance. Mr. Bradley, an attorney, testifies that, if the notes were paid, $50, the sum charged, would be reasonable for the services rendered in that matter. This sum is less than the defendant agreed to pay by the contract, which provides that, where collections are made by suit, on sums less than $1,000 the plaintiff is to have 10 per cent., and on all over $1,000 5 per cent. The agreement would there- • fore entitle the plaintiff to a fee of a little over $100. The Smith suit was brought about January, 1893, and the present action was commenced March, 1896, more than three years afterwards. The defendant was sworn as a witness, but did not even intimate that the Smith notes had not been paid. He, of all others, had peculiar knowledge of the fact whether they had been paid, and the officers of the plaintiff had none. If he wanted to reduce the charge under Bradley’s evidence, the onus of mitigating it was on him; and, not having testified that the notes were unpaid, the presumption attaches that Smith performed his contract, and discharged his obligations at maturity.

The legal objections to the recovery will next be considered.

The allegation that the plaintiff was,, and still is, a domestic corporation, engaged in conducting a general law and collection agency, was not so controverted as to require proof upon the trial, the answer merely alleging “that defendant has no knowledge or information sufficient to form a belief as to said allegations.” Code, § 1776; Schmidt v. Lithographic Co., 17 Misc. Rep. 124 , 39 N. Y. Supp. 353 . If the defendant intended to put in issue the corporate existence of the plaintiff, the answer should have contained an affirmative allegation that the plaintiff was not a corporation. Id.

The defendant further objects that a corporation cannot practice law, and what it cannot do itself it may not do by others act

While it is true that a corporation, as such, cannot practice law, it is within the scope of its powers to employ lawyers to conduct suits upon claims placed with it for collection, the same a,s any unincorporated agency might. If this were not so, the business of incorporated collection agencies, no matter how extensive the power conferred by the employer, would have to end with the refusal of the debtor to pay the account presented. Contracts of corporations are said to be ultra vires when they involve adventures outside of, and not within the scope of, the powers given by their

Judgment affirmed, with costs. All' concur.