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that the dominium directum, whatever it may be, does not reside in a feoffor, with reservation of rent, in Virginia. Under the common law of England, it certainly would rest in any feoffor, not himself a tenant, by the mere fact of reserving the rent; and if the reservation have not the same effect in Virginia, it is because of some modification of that law, other than any with which we are acquainted.
The only point remaining to be touched upon, is the idea introduced by the writer under consideration, that rent was a service, which, unlike certain other services, did not make tenure : in support of which a passage from Lord Coke is quoted. This passage has been already adverted to. We do not think it susceptible of the construction put upon it; and, if this were otherwise, that it could stand against the evidence to the contrary, afforded by other passages of the same writer and every other on the subject.
ART. II.-PLEDGE OF GOODS BY FACTORS AND
ACCORDING to the common law, as it now prevails in a greater part of the United States, and as it was, until very recently, administered in England, if a factor having goods of his principal, pledges them to another person for money advanced to him upon the goods, though the person making the advance on the credit of the goods, does not know that they are not the property of the factor, or may suppose, and should have good reason to suppose, that they are the factor's own property, and though the principal has so placed the goods in the factor's hands, that he may sell them, or treat them, in respect to all the world excepting the principal, as his own goods, still the pledge is not valid, and the principal may reclaim the goods from the pledgee, without refunding the advance made upon them. The equity and commercial policy of this rule, have been much discussed, both in England and the United States, and the law has been altered in England by the statute of 6 Geo. IV. c. 94, and a similar alteration has been made in New York, by a law passed in April last. The general principle of these alterations, is, that where a man puts his goods into another's hands for sale, or in such
way that he may treat them as his own, any person treating with him as owner of the goods, and having no means of knowing that he is not so, shall not suffer by so doing. The intention of these statutes is to throw the loss upon the principal, where the pledgee has been guilty of no negligence, or collusion with the factor.
The same subject has been, and will no doubt continue to be discussed in the other states, and as the history of this law, and the provisions of the new statutes are not, that we are informed, at present published in any form rendering them accessible to the profession in general, we shall devote a part of our present number to the subject. And we will in the first place call the attention of our readers to the report of the select committee of the British House of Commons, made January 13, 1823, in relation to the state of the law upon this subject, and its effect upon the interests of commerce.' The investigations of this committee, and the facts and arguments embraced by their report, are in general, applicable to the United States; and as this report has not been published in this country, we will, therefore, state it pretty fully. It commences,
• Your committee entered upon the investigation with a strong feeling of the importance of the subject, as affecting the commerce of the country; and they pursued it with unwearied attention, until a great body of evidence had been collected upon their minutes; but they found that even where seeming differences of opinion existed, a more minute examination proved that there was, in reality, an unusual degree of unanimity, upon the propriety and necessity of an immediate alteration of the law for the protection of commerce.'
After some observations, they proceed to an examination of the state of the law at that time in England, which was the same as its present state in the greater part of the United States.
The principle which regulates the obligation of an agent to confine himself within the authority, express or implied, derived from his principal, is not only self evident, but has been recognised by courts of law and equity, from very early times; and those courts have always visited, upon a negligent or unfaithful agent, the legal consequences of his breach of duty; but, after the most diligent search within their power, the committee have been unable to discover any early instance of an extension of those consequences beyond the personal liability of the agent; and, on the contrary, your committee have reason to believe, that no instance will be found, until comparatively modern times, in which the title of an innocent person, who has acquired merchandise by way of security from an agent for actual advances of money, and without knowing that he was dealing with an agent, has been affected by the departure of that agent from the strict line of his authority.
In 1742, a case appears to have been tried before Lord Chief Justice Lee, in which the true owner of goods recovered them, or their value, against a person with whom they had been deposited in pledge by his agent or factor: the name of that case is Paterson v. Tash; the facts of the transaction are no where recorded; and the only report of that decision is in Sir John Strange's Reports. This case is constantly referred to in subsequent decisions, as the precedent upon which the courts of law have acted; but
committee entertain a confident opinion, as well upon evidence adduced before them, as upon the internal proof which the case furnishes, that the pledgee was aware that the agent or factor was not the proprietor of the goods; and your committee need scarcely state, that cases, in which persons making an advance of money have notice that the individual with whom they are dealing is an agent, do not aflect the question, because in those cases the knowledge of the fact imposes upon them the necessity of investigating the title of the individual to do that, which may be beyond the extent of his authority, and they accept the security from him at the risk of his having no such power from bis principal. Upon the subject of the case of Paterson v. Tash, your committee are under considerable obligation to Mr. Manning, an eminent barrister, and to whom the late Lord Chief Justice Gibbs had declared, shortly before his death, that this case was misreported, and his lordship treated the law that a factor could not pledge, as an anomaly.
Your committee found another case which was tried in 1767; and although it was a case in which the goods of the principal had been pledged by his factor, the court did not decide that the factor had no right to pledge; but the decision having been, on the first trial, in favor of the assignee of the pledgee, a new trial was directed, to try whether the transaction was bona fide, or fraudulent between the factor and the pledgee, which was wholly immaterial if the rule of law had affected the rights of
third persons by want of authority in the factor; and Lord Mansfield, in delivering his judgment, seems carefully to have confined the rights of the principal within proper bounds : his lordship saidThis is clear, that if there be an authority, without disclosing that the endorsee is a factor, the owner (as between him and the factor) retains a lien till delivery of the goods,and before they are actually sold and turned into money.'
The earliest direct authority for the rule, that the want of authority in the factor shall affect a bona fide third person taking merchandise as a security for money advanced, your committee believe to be a decision in 1794, in which, however, the principle appears to have been assumed, and was probably founded altogether upon the case of Paterson v. Tash, and the discussion turned upon the necessity of a tender being made by the principal to the pledgee, of the balance of account due from the principal to the factor. But the rule of law was so far from being settled or generally understood, that in the year 1800 your committee find a case involving a very considerable amount of property, between Sir William Pulteney, baronet, and Messrs. Kymer & Co.; and in that case the defendants were allowed to retain out of the sugar belonging to Sir William Pulteney eighteen thousand pounds, which they had advanced to his factors upon the security of the sugar. This case was tried before Lord Eldon, who had the assistance of very eminent persons as counsel in the cause; and your committee have ascertained, by the examination of a witness, that the decision was considered binding upon all parties, and the balance remaining, after deducting the eighteen thousand pounds from the sum for which the sugar sold, which balance amounted to about five hundred pounds, was the only sum paid ultimately to Sir William Pulteney.
Your committee cannot express too strongly their satisfaction, that a case, of so much importance, is to be found, and decided at so late a period, which appear to them in accordance with justice, and the true interest of trade. Subsequently, however, to that decision many cases have occurred in which a different course has been pursued; and it may now be taken as a settled rule of law, that if a factor pledges the goods of his principal, the person who has advanced money upon them, in ignorance of his being a factor, cannot hold the goods as a security for his advance; and it is a circumstance deserving of notice, that the application of the principle lias been pro
VOL. IV.NO. VIII.
gressive as ingenuity has suggested the extension of that application; in the first instance it was applied to a case of direct, unquestionable pledge of goods, in order to obtain a loan of money which was to be repaid when the goods were taken back; it was there applied to a transaction in which coffee was delivered by a factor to the broker for sale, in the usual course of business, in which no stipulation was made at the time for a loan of money, but subsequently, and when the coffee was in the course of sale, sums of money having been paid by the broker from time to time to the factor, on the faith of the coffee in question, and of other goods, it was considered that the transaction acquired the character of a pledge. It was afterwards determined that a bill of lading could not be made a security for an advance of money ; it was also decided that goods purchased by a factor in bis own name, and standing in that name, in the king's warehouse, and afterwards pledged by him for a sum of money advanced, without knowing, or the means of knowing, that he was in fact a factor, might be recovered by the principal without repaying the money advanced. In another case it was decided, that where an insolvent factor delivered over the goods of his principal to another merchant to sell, and thereby prevented the proceeds from being mixed with his own funds, to the probable loss of the principal, to the extent of the whole proceeds, such principal was entitled to recover his goods from the merchant to whom the factor had delivered them, and that the merchant had no claim upon them for any part of the freight and duties which he had paid, amounting to two thousand two hundred pounds, although the principal must have paid that sum if he had employed any other agent to protect his property, in consequence of the insolvency of his factor. In another case, it appeared that seed was sold by one merchant in London to another merchant in the same place, and paid for by the latter, and left under the care of the seller by the desire of the purchaser, waiting an opportunity to resell to advantage, and the seller afterwards made an advance of two thousand pounds upon the security of the seed, which was recovered out of his hands without paying his advance, in an action brought in the name of a person at Antwerp, who proved that he had given orders for the purchase of the seed, which was made on his account, and the buyer was therefore his factor, although the person who lent his money could not know that he was a factor, and, op