FACTORS. 3. So if he buy goods according to orders and then the price rises, and he fraudulently send them to another, against his orders, and take the benefit of the rise of price, the merchant shall recover damages against him by the law merchant. So if he by his principal's advice, or with his money or credit, buy goods on his account, and give no notice thereof to him, but sells them on his, the factor's, account and benefit, the principal shall recover the benefits. 4. So if the factor sell his principal's goods to a man discredited, and who cannot usually buy goods at the ordinapay his ry price, as others can, and he fails, the factor shall principal for the goods, unless he can prove he was ignorant of the party's insolvent condition, or that he sold him goods of his own, &c; or that he had a commission from his principal, to deal with him as if it were for his own proper goods. 613 CH. 30. Art. 9. And a factor of common right is to sell for ready money, 12 Mod. 514. unless the usage be otherwise, and even perishable goods. Rex v. Lee. Willes 406; 3 Bos. & P. 489; 1 Bay. 294; 3 Johns. R. 314; 2 Cain. Er. 341. 485, Hough§ 5. In this case A, a factor, sold B's goods in his own name 3 Bos. & P. to C; he, without paying for them, sent another parcel to A to ton & al. v. seil for C, not having employed A as a factor before. C be- Matthews. came a bankrupt, and his assignees claimed the goods, C so sent to A, which remained unsold, tendering the charges on them. A refused to deliver them, claiming a lien on them for the price of his goods he had sent to C, and sold to him; the balance between A and B being in A's favour. C's assignees recovered in trover against A, for the value of the goods sent him by C. 348.-Bul. N. P. 130. 6. If the factor sells the principal's goods at a less price Reeves' D. R. than directed, yet the buyer holds them; and the factor in his own name may sue him, and though the buyer knew they were the principal's. § 7. Brokers. A broker sues for a commission for getting freight it is no objection the charter-party procured was such that if the charterer failed to procure certain licenses the voy5 Taunt. R. 521, 529, Haines v. age would be illegal. Bush. § 8. The owner of goods consigns them to A, directing him to pay the net proceeds to B; A employs C, a broker, to sell them and receive the money; B can recover from C only the proceeds, subject to the same deductions and allowances as A was entitled to make in account with the owner consigning them. 5 Taunt. R. 584, 587, Blackburn v. Kymer. 9. A broker is employed to sell goods, and sells them for a bill at two months, and himself draws on the buyer for the 78 VOL. I. Сн. 10 Johns. R. reis v. Paris & al. amount; he is answerable on the bill to the principal. 5 Taunt. R. 749, 751, LeFevre v. Lloyd. 10. The plts. consigned goods to their factor, who for want of funds to pay freight and duties, agreed with the defts. to take charge of the goods, pay the freight and duties, and sell the goods, and have half of the commissions on the sale; defts. paid the freight and duties and received the goods; after which the factor become a bankrupt, having before told the defts. the goods were the plts'., but the deft sold them. Held, in trover, the defts. could not retain for freight and duties, after deducting the balance due from the factor to the plts. at the time of the bankruptcy. 2 Maule & Sel. R. 298, 301, Solley & al. v. Rathbone. The agreement with the defts. was a fraud on the plts.: there was no privity between them and the defts. § 11. The plt., a merchant of New-York, brought assump285, 286, Fer sit to recover of the defts., merchants in Martinique, the proceeds of goods consigned; and beld, if a factor or consignee inform his principal of the sale of his goods, consigned to the factor &c., he may wait the principal's direction, as to the mode of remittance of the proceeds; and is not liable to an action, till in default, in not remitting the proceeds, or paying them according to his principal's order. The defts. often asked for orders, and it seems they conducted according to the course of that trade. Co. L. 89. ments. ART. 10. Account at common law lies against a factor as 3 Bac. Abr. against a bailiff; and he has his reasonable allowance. 1. And it is a good discharge before auditors to say the ship was overloaded, and the goods thrown overboard in a tempest. Also, that he was robbed of them without his fault or negligence. Bul. N. P. 130-2 Stra. 1182.-1 Esp. 107, 108. § 2. Where a factor may sue, or be sued in his own name; see art. 1, Gonzales v. Sladen & al. Where he may be a witness; see above, and Peake on Evidence; and Evidence, post. § 3. Generally a factor's sale creates a contract between the owner and buyer. Hence, if the factor sells for payment at a future day, and the owner gives notice to the buyer to pay him, the owner may recover; but it may be otherwise, if the factor sells the goods at his own risk: that is, to be liable to the owner at all events, and if the buyer never pay. This may be the case if the owner give a del credere commission; for then such a sale is in pursuance of his authority; but if there be no such commission, it is difficult to see how the factor, by so selling, can limit to himself the owner's security. 4. A factor can never sue or be sued, or plead in âuter droit. If he sue or be suable at all, it is in his own right, upon his own contracts. Hence, in pleading, the only question peculiar to him, is the question, when he may himself sue or be sued in his own name; or when his principal must sue or be sued. But if the principal call on the buyer of the factor to pay the principal, he gives up his claim against the factor, for not pursuing his instructions; as by calling on the buyer he ratifies the factor's sale. Reeves' D. R. 348; Bul. N. P. 130; 7 D. & E. 359. ART. 11. Further American cases. CH. 30. Art. 11. 1. In this case the court decided, that where A sent cer- 3 Mass. R. tain lottery tickets to B, for sale, with a request to put them 211, Brown into such hands as B should think safe, this was not an authority to sell the tickets on credit at A's risk. v. Bull. 2. In this case Pearce, the deft. sent his ship, Samuel 4 Mass. R. Calder master, to St. Petersburg; there, June 19, 1803, 258, Van Staphorst v. Calder, according to orders, drew bills on Pearce for 25,000 Pearce. rubles, balance of cargo received from Blandow & Co. for Pearce, payable at Amsterdam, at Messrs. Van Staphorst & Co. June 23, 1803, Blandow & Co. endorsed said bills to the plts. thus, "pay to the order of Messrs Van Staphorst & Co. value in account. St. Petersburg, June 23, 1803, (signed) Blandow & Co." No payee was named in the bills, but they were delivered to Blandow & Co. who, as above, endorsed them to the plts., who as agents of Blandow & Co. sent them to the deft. who accepted them. The third count stated the contract as a bill drawn by Blandow & Co. on Pearce in favour of the plts., and accepted. And on this count the plts. recovered, "because every endorsement of a bill may be considered as a new bill drawn by the endorser on the acceptor in favour of the payee ;" and "upon an express promise to pay the factor of any one for the use of the principal, the factor may maintain an action in his own name." "And as the endorsement expresses value in account, if the endorsee holds it for the use of the endorser, he is his factor as to this bill." "If Pearce had after his acceptance paid the bill to the principals, [Blandow & Co.] he might be allowed to avail himself of such payment against the factor." And the creditors of Blandow & Co. could not discharge Pearce from his express promise made to the factors of their debtors. Pearce was also sued as trustee of Blandow & Co. ham v. Davenport. 3. In this case the court held, that when A, owner of a 6 Mass. R. ship abroad, directed B, his factor here, to get insurance on 258, Abraher, and he could not in his town or vicinity, nor did he obtain it in more distant places, where he limited the premium below what it could be done for, B was not liable to the owner for not having got the insurance. The defts. lived in Boston, and the distant place was New York. Сн. 30. 7 Mass. R. 36, Goodenow v. Tyler. 7 Mass. R. Munson. 13 East 432. § 4. The deft. was a commission merchant in Boston, and sold as the factor to the plt. a pipe of gin to one Joseph Chapin for $81 36, and in payment took his note payable to the deft. or order in ninety days. Chapin failed before the note became payable, and never paid any dividend among his creditors. The plt. gave no particular orders as to selling on credit. It was proved to be the custom in Boston, and particularly at the deft's. store, to sell on credit by factors, and at the risk of their principals, unless an additional premium was allowed for taking the risk upon themselves. Verdict for the plt., because the deft. had received from Chapin a negotiable note; and a new trial was granted. And also held, that evidence ought to have been admitted to prove it was the usage for factors to take such notes in such cases on the account of their principals; though it was allowed that such a note taken for goods sold, is payment as much as cash, and that by it the original contract was merged and discharged. And the Chief Justice was of opinion, that the deft. was not liable, on general principles, independent of any usage in Boston. The majority of the court went on the principle, that the deft. received the note in trust for the plt., and would have become personally liable to him for the amount of the gin, if, first, he had neglected seasonably to collect the note: 2. If he had sold or disposed of it: and 3. If he had refused to assign it to the plt. on his demanding it and offering to pay the deft. his commission and charges, and allowing an endorsement that would not have made the plt. personally liable; for in either of these cases the deft., the factor, would have made the note his own. § 5. Assumpsit for the proceeds of eighteen hogsheads of 319. Kelley v. molasses, the property of the plt., sent by his factor to the deft. and claimed by the factor. Notice to the deft. not to pay him. Held, first, a sale by a factor creates a contract between the owner of the property and the purchasers: 2 If on credit, the buyer may not pay the factor after notice from the owner not to pay him; except, 3. Where the factor sells in his own name and is responsible to the owner for the price, collected or not: or 4. Where he sells to his own creditor, there being mutual dealings between them. Judgment for the plt. Reeves' D. R. 349. 6. It is said in some books, it is doubtful how far a factor may sell on credit. It is true there are authorities both ways; but the general principle is on the whole settled, that a factor cannot sell on credit, except there be a usage and course of trade to justify him in so doing, and where there is, principal and factor are presumed to know the usage and to understand the business will be done according to it. 7. If a factor purchase goods at a price higher than his instructions from his principal, but he receives and sells them at a less price, he must account with his factor at the price he gave; for by receiving and selling the goods he adopts the factor's purchase, and waives his right to reject them; and this, though he declares he will not allow the factor's purchase. And the principal will not be permitted to say he received and sold them as the factor's agent. СH. 30. Art. 11. 69, 73, Van § 8. One as a factor receives goods to sell for another, and 6 Johns. R. no special orders given to sell for cash or not on credit. Held, Allen. Vanhe may sell on credit for the period usual in that market, and derpoot. See selling on credit in the usual way, and using due diligence to a. ascertain the buyer's solvency, if he prove insolvent the factor will not be liable; but he is always liable for his due diligence or want of it. 9. Wherever the factor by his own acts, by mistakes, or by breach of trust or of orders, substitutes himself in the place of the principal's debtor or the vendee of goods of the principal sold by the factor, he on the one hand is liable to all the engagements of such debtor or vendee, and on the other has every defence when sued, such vendee or debtor would have if sued, either by shewing fraud or any other matter of defence. Therefore, if the factor sell his principal's goods by his express direction to A on credit, and the factor takes his note, and refuses to deliver it to his principal when demanded, the factor by such refusal is guilty of a breach of trust and substitutes himself in A's place and becomes liable to his principal for the contents of the note of A, and whatever defence A would have if sued on it, the factor has, and he retains his right to deduct his commissions &c. as factor. 8, s. 1. Also 6 D. & E. 12, 13. Johns. Ca. r. Gouverneur & al 437, Le Grun 4 Johns. R. 103, 113. v. al. Moore So if the insured employ a factor or agent to settle with the 3 Johns. Ca. underwriter for a total loss on a legal abandonment, and the 36, Rundle & factor misapprehend his principal's instructions, or negligently & al. adjust the loss with the underwriter at two per cent. as an average loss and cancels the policy, the factor becomes liable to his principal for all the underwriter was liable for, that is, the total loss. 103. 10. Wherever the factor has a lien on his principal's 4 Johns. R. goods, or ship, &c. the factor may convey or deliver them to a third person for the purpose of preserving that lien, though he cannot pledge them. 11. A merchant's factor promised he would write to his 3 Cranch 503, Randolph v. principal to get insurance done. Held, this did not bind the Ware. principal to insure; 1 Wash. 23, Hooe & al. v. Oxley & al.; 1 Cain. 342, Molloy 421. §12. Where a principal gives written instructions to his 3 Cranch factor, he will be justified in departing from them by the 415, Manilla v. Barry. 2 Cain. 310, Drummond v. Wood-4 Dall. 389, Walker v. Smith. |