158. Townsend V. Corning, 23 Wend. 435. Townshend V. Hubbard, 4 Hill n. Y.

851.

12

I78 mercantile persons.

Rights of third Persons against Principal.

negotiable instruments, must take care not to do so in his own name,

for, if he do, he will himself be liable to the holder, (v)

As to his power to bind the principal by a disposition of his

goods, the common law rule was, as may be collected from the fore-

going observations, that to acquire a good title to the employer's

property by purchasing it from his agent, such purchase must have

been, either in market overt and without knowledge of the seller's

representative capacity, or from an agent acting according to his in-

structions, or from one acting in the usual course of his employment,

and whom the buyer did not know to be transgressing his instruc-

tions, {w) The reason of this is clear ; for unless the transaction

took place ho7ia fide in a market overt (in which case, a peculiar

rule of law steps in for its protection), {x) an agent selling without

exjjress authority must, that his act might be supported, have sold

under an imjjlied one. But we have seen that an implied authority

always empowers the person authorized to act in the usual course of

his employment; consequentl}', if he sold in an unusual mode, he

could have no implied authority to support his act ; and as he had

no express one, his sale of course fell to the ground. For instance,

the usual employment of a factor being to sell^ it was repeatedly

decided that he could not pledge the goods intrusted to him. {y)

Such was the rule of the common law ; but, being considered

prejudicial to credit by the greater number of mercantile men, it

was altered by statute 4 Geo, 4, c. 83, and afterwards by the amend-

ed act of 6 Geo. 4, c. 94, usually called "The Factor's Act," and

from which, taken in conjunction with the statute 5 & 6 Vict. c. 39,

the law on this subject must new be collected.

iy) Leadbitter v. Farrow, 5 M, &, b. 845. Le Fever v. Llo3'd, 5 Taunt 749.

Sowerby v. Butdier, 2 Cr. & Mee. 371; 4 Tyrwh. 325. Rew v. Pettet, 1 Ad. <fe E.

196.

(io) Vide 12 Mod. 514. Wiltshire v. Sims, 1 Camp. 258. Newson v. Tliornton,

6 East, 17. M'Combie v. Davies, 6 East, 538. De Bouchot v. Goldsmid, 5 Ves jun.

211.

{x) See Book 3, cap. "CoD'tracts of Sale."

(y) Patterson v. Tash, 2 Str. 1182. Daubigny v. Duval, 5 T. R. 604. De Bouchot

V. Goldsmid, 5 Ves. jun. 211. See Pickering v. Busk, 15 East, 44. Martini v. Coles,

1 M. <fe S. 140. Shipley v. Keymer, 1 M. &, S. 484. Solly v. Rathbone, 2 M. & S. 298.

Cockran v. Irlam, ibid. 301. Williams v. Barton, 3 Bingh. 139. Duclose v. Ryland,

5 Moore, 418, n.

PRINCIPAL AND AGENT. I79

Rights of third Persons against Principal.

By tliis statute, the person (z) in whose name goods are shipped

is to be deemed the true owner thereof, so far as to entitle the con-

signee to a lien thereon, in respect of any money or negotiable se-

curity advanced by him to such person, or received by such person

to his use, if he has not notice by the bill of lading or otherioise^ at

or before the time of the advance or receipt, that such person is not

the actual and bona fide owner of the goods, and such person shall

be taken, for the purposes of this act, to have been intrusted with

the goods for the purpose of consignment or of sale, unless the con-

trary be made to appear.

A person (a) intrusted tvith^ (h) and in possession of, any bill of

lading, India warrant, dock warrant, warehouse-keeper's certificate,

wharfinger's certificate, warrant, or order for delivery of goods,

{z) Sect 1.

(a) Sect. 2.

(6) In Close v. Holmes, 2 M. &, Rob. 23, these -words are said to have been ruled

by Alderson, B., to give validity to pledges of documents intrusted to the factor by

his principal, not to pledges of documents created by the factor himself. It seems,

however, from Baron Alderson's observations at page 580 of Phillips v. Huth, 6 MeВ«.

<fe Wels. 5*72, that there was some misconception about the point really decided in

Close V. Holmes. In Phillips v. Huth, 6 Mee. & "Wels. 572, the Coui't of Exchequer

held that it did not follow that documents were intrusted to a factor by his principal,

because the principal had put into his hands the means of obtaining possession of

them. In that case factors were intrusted with the bills of lading of two cargoes of

tobacco, by means of which bills they were enabled to obtain the dock warrants. It

в– was proved that tobacco was sold sometimes by delivery order, sometimes by war-

ranty which latter is, however, not convenient unless an entire cargo be sold. The

factors having, before any necessity for a sale arose, obtained the warrants and

pledged them for debts of their own, it was held, that the pledges were not protect-

ed by this section. "It is not enough (said the Court) to show that the plaintiffs em-

powered the factors to possess themselves of the warrants whenever they chose; it

must be shown that they really intended the factors should be possessed of them at

the time they pledged them, or it must be shown, that they meant them not only to

have the power the possession of the bill of lading would give — of getting the war-

rant when they liked — but to exercise it by obtaining it whenever they in their dis-

cretion might think fit." In Hatii.-ld v. Phillips, 9 M. & "W. 647, & 14 M. & W. 665,

the E.\-chequer Chamber and House of Lords were of the same opinion on a bill of

exceptions, and the former court tiiouglit that the question whether the factor was